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A new licensing regime is now in force, which will affect thousands of private residential and commercial properties across Scotland – Short-Term Lets Licensing. Many individuals and commercial businesses have had properties available for short term lets and rentals for many years, be it holiday homes, leisure accommodation or letting out a second home or a room in your principal residence. The new scheme is complex and has attracted considerable press coverage. Although a large number of properties will be caught, meaning they will need to secure a licence, there is significant nuance and a number of exemptions and exceptions to consider. We've put together our initial guide to help you navigate the scheme.
Please note our helpdesk remains open for general queries – email@example.com.
Existing operators caught by the scheme have until Friday 29 September 2023 to submit an application for the licence. In most cases, the applicant will have to show proof they have planning permission, or have also applied for planning permission (either by a certificate of lawful use, or a full change of use planning application). The amount of detail required to submit an application is extensive and we urge anyone looking to instruct a specialist licensing lawyer to act now.
If you let a property on a short-term basis, such as a residential flat, cottage, holiday home, or home share, home swaps, bed & breakfasts etc, you will most likely need the short-term let licence. This will apply whether you use a platform such as AirBnB or more traditional methods to let the property. Letting a property without the licence will be a criminal offence.
If you have multiple properties within a single location, such as two adjacent cottages/apartments on the same piece of land, additional considerations may be needed as to whether a single licence is needed for the location as a whole, or whether individual licences will be needed per cottage/apartment. In our experience, local authorities are approaching this in relation to their understanding of what might term “conventional accommodation” and so, for example, multiple apartments in the same building/block might need separate licences, whereas a row of houseboats or a field of yurts may be covered by a single licence. Persons affected should take specialist licensing legal advice.
This scheme is not designed to capture landlords who have a tenant in their property in a long term lease or tenancy. A large number of legal tenancies are excluded from the scheme (see the link to the 2022 Order below, at Schedule 1(2) “Excluded Tenancies”) and if you are unsure if this affects you, you should seek legal advice. This scheme is separate from landlord registration, separate from HMO licensing laws, and is not related to changes in relation to rent controls.
There has been considerable controversy over the reasons for the new scheme. It should be remembered that the licensing scheme is not about wider issues over housing stock. The licensing scheme is supposed to be about addressing licensing related matters. Housing is not a licensing concern. Licensing is, broadly speaking, about public safety and standard. It is our view that the policy origin of short term let licensing lies in concerns over (a) regulatory safety of private residential properties being let for profit on a commercial basis and (b) the wider community impact on properties being used in this way such as anti-social behaviour and crime.
Every single local authority in Scotland is introducing the regime, as they are required to under law. However, the scheme is not the same in each area; because each local authority has their own policies, their own ways of working, and their own foibles. There has been significant press coverage, for example, over the successful judicial review of the Edinburgh City Council policy. In some areas, local councils will be more restrictive than others and some property owners will find that they are prohibited from using the property for short-term letting altogether regardless of whether they have applied for a licence due to a combination of new planning control zones, and local licensing policies. With the situation rapidly coming to a head at the end of September 2023, any operator concerned about their local authority policy or how it affects them should seek specialist legal advice.
The application process is administered by the local authority, i.e. the council. The decision is made (in most cases) by the authority’s licensing / regulatory committee. The process is under the Civic Government (Scotland) Act 1982 and is akin to the licensing processes in existence under the scheme for businesses like late hours catering premises, public entertainment, markets and so on. However, although the scheme is under these existing processes and structures, it is nuanced and has it’s own concerns and considerations which do not trigger with other licence types under the 1982 Act.
Applications will go through a detailed consultation period including site notices being displayed, notification to neighbours, and consultation with responsible authorities such as Police Scotland and the Scottish Fire Service. Applications will, in most areas, need to be accompanied by layout plans of the property as well as evidence of compliance with safety and other regulatory regimes. The supporting documentation required to submit the application does vary from local authority to local authority, but in cases is exhaustive. Applications may be called to a hearing at which the applicant would need to appear and convince the committee to grant the licence, and deal with any objections or adverse reports.
Application forms and details of what is needed are available from the individual local authority website.
The deadlines for the new regime are as follows:
Each local authority is setting their own fees. Whilst the Scottish Government originally estimated the fees will might range from £300 to £500, the fees are varying wildly across Scotland, and in some cases they are considerably higher. The fee structures can be complex, and in many cases are based on what type of licence you may be applying for, as well as higher costs for accommodation with higher capacity. If you are unsure what fees apply to you, contact our helpdesk.
The licence will last for a maximum of three years and will require to be renewed. In some cases local authorities will only issue one year licences. You may have to incur additional expenses to (a) produce layout plans of the property, (b) make the property compliant with regulatory regimes and (c) legal fees if you choose to instruct a solicitor.
There is a list of premises which are excluded from the regime. These include:
Long-term let premises which are certain type of legal tenancies, such as protected tenancies, assured tenancies, short assured tenancies, crofts, Scottish secure tenancies, various agricultural tenancies.
Premises with an alcohol licence where the accommodation is within the licensed area and where accommodation is an approved activity
Hotels, hostels, care homes, student accommodation, a refuge, a bothy.
Accommodation provided to employees in terms of their contract.
There are also possible exemptions for temporary use. The new scheme allows local authorities to agree a policy which would potentially allow up to 6 weeks use per year, without the need to obtain a licence. This very much depends on the local authority’s own approach as each one must have its own policy so you will need to check your own local area, or seek legal advice.
The scheme is not designed to catch lets where there is no commercial consideration
The scheme is not designed to catch a let to someone who is an immediate family member, or where the let is to an employee of the host to facilitate provision of work or services for that host, or if the guest is an owner of part owner of the accommodation.
As these exemptions have strict and complex legal definitions, if you are unsure how this affects you, then you should contact your local authority or seek legal advice.
Our team of specialist licensing lawyers is the largest in Scotland, and we are number one ranked by both independent legal directories. We represent and appear at hearings for licence applicants at every single local authority in Scotland and have curated relationships with the local licensing teams and other officers over many years.
Our licensing team won the “Client Care” award at the Scottish Legal Awards 2021 for our support of our leisure and tourism clients during the dark days of the pandemic. We are passionate about our clients, and we live and breathe licensing.
Our Team Head, Stephen McGowan, is the author of the only academic textbook on the Civic Government (Scotland) Act 1982, Local Government Licensing Law in Scotland, under which the new short term let licence regime has been introduced, and he contributed to the Scottish Government Working Group on the STL regime on behalf of the Law Society of Scotland. Together with specialist licensing solicitors Partner Caroline Loudon, and Senior Associate Lynn Simpson, we have been dealing with applications and advice for affected people across the whole of Scotland.
Contact us now for a free initial consultation: firstname.lastname@example.org.
The Scottish Government has set up a dedicated page to provide further advice and assistance: www.gov.scot/shorttermlets
Scottish Government Guidance for Hosts and Operators 1. Introduction - Short term lets - licensing scheme part 1: guidance for hosts and operators - gov.scot (www.gov.scot)
The 2022 Licensing Order - The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 (legislation.gov.uk)
This article was first published on 1 October 2022 and updated on 5 September 2023.
05 September 2023
Insights 14 FEBRUARY 2024