Twelve patients, four of whom are terminally ill and unable to walk, were evacuated from the building on only a few hour notice.
The hospice was funded by the Elton John Foundation and operated by Blue Diamond Society, Nepal’s only LGBT rights organization.
The patients were moved to Blue Diamond's tiny office. Beds were set up in a hallway and Blue Diamond said that it does not know how long they will be allowed to stay there because the office is not designed for patient needs.
Sunil Pant, the organization's founder, said it was the fourth time the hospice has been forced to move in its two-and-a-half year existence.
"Though we are prompt in paying the rent, the landlord comes under pressure from his neighbours to throw us out once it becomes known that there are AIDS patients in the hospice," Pant told the Indo-Asian News Service.
Gays and people working in the areas of HIV prevention are regularly harassed by police.
Homosexual acts are punishable in Hindu-majority Nepal by up to two years in prison.
Last December Nepal's Supreme Court ruled that the government must create new laws to protect gay rights and change current ones that might be tantamount to discrimination. (story)
So far the government has resisted the court's directive.
Members of Nepal's LGBT community are arbitrarily arrested, held without a hearing and beaten and tortured by prison guards.
In 2006 police arrested 26 transsexuals in one raid. According to Blue Diamond they were taken to the Hanuman Dhoka central police station in Kathmandu where they were held for weeks without being allowed to contact anyone.
Nepal was one of several countries named in the State Department report on human rights violators in 2006. (story)
In April last year, two young lesbians captured by Maoist guerrillas in southern Nepal in March were been released after promising to join the rebels. (story)
Nepal holds general elections next month. It will be the country's first general election since 1999.
Blue Diamond has fielded a slate of 12 candidates, all running for the Nepal Communist Party, a junior partner in the coalition government.
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