In September 2021, we blogged to advise Private Landlords that proposals to introduce a new licensing scheme for short-term lets would be laid before the Scottish Parliament.
On 19 January 2022, The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 (“Licensing Order”) was passed by the Scottish Parliament. The Licensing Order came into force on 1 March 2022.
This blog will provide an update on everything we know about the Order and how it works in practice.
What is the Licensing Order?
The Licensing Order introduced a new mandatory licensing system for short-term lets which local authorities were required to establish, ready to receive applications by 1 October 2022. The system aims to control provision of short-term lets, ensure they are safe and to provide means to address complaints and concerns from neighbours.
Where does the Licensing Order Apply and How Does Licensing Work?
The Licensing Order applies to the whole of Scotland and will be implemented by local authorities, each with their own individual policies. A public register of licensed short-term lets will be maintained by local authorities and will be available for the public.
Licence holders must comply with certain mandatory conditions which will apply for all short-term-lets across the country. Local authorities may also attach additional conditions to licences. The Scottish Government has said the mandatory conditions reflect what is already best practice, so should not be considered onerous.
Operators may require separate licences for each of their premises, even if those are located within the same local authority. Generally, one license will cover all property on the same title/postal address; for example, two rooms within one house. A single licence may also be issued for ‘unconventional accommodation’ where there is more than one separately bookable property on the site; for example, yurts or pods in a field.
If the accommodation lies within a control area, planning permission may be required before making an application for a licence. There is currently only one control area covering the City of Edinburgh Council.
What is a ‘Short-Term Let’?
The term is not easily defined and will cover a wide variety of circumstances. Perhaps strangely, the length of a guest’s stay is not a relevant consideration.
“Short-term let” means the use of residential accommodation provided by a host in the course of business to a guest, subject to certain criteria and exemptions.
A short-term let will apply where the accommodation is not the guests only or principal home, the let is for commercial consideration and the guest is not a joint-owner or immediate family member.
There are exemptions for certain tenancy and accommodation types, including hotels and student accommodation. As each exemption has their own specific definition, we would recommend seeking legal advice as to whether a licence is required.
When do you need a Licensing Order?
New Hosts
New hosts are those who have not provided a short-term let before 1 October 2022. From 1 October 2022:
- You can advertise but you cannot accept bookings until you hold a short-term let licence.
- You cannot operate your short-term let while your application is pending.
Existing Hosts
Existing hosts are those who were operating short-term lets before 1st October 2022.
You will have until 1 April 2023 to apply for a short-term let licence, providing evidence that you were operating before 1st October 2022. The Scottish Government have suggested this means a guest had physically stayed before that date, as opposed to simply having a booking accepted.
After 1 April 2023, you can only continue to provide short-term lets if you have obtained a short-term let licence or your application is being determined.
By 1 July 2024, all hosts must have a licence.
What if You Don’t Comply?
It is a criminal offence to operate a short-term let without a licence.
Hosts may be subject to a fine of up to £2,500 and banned from applying for a licence for a year. At the time of writing, we understand the Scottish Government intends to increase the fine to £50,000.
How long is a Licence in place?
Most licences will be valid for an initial period of up to 3 years, but this could be shorter.
Operators must apply to have their licence renewed before the expiry of the current licence and the Order allows licensing authorities to grant renewals for longer periods.
The Scottish Government’s guidance document is fairly comprehensive and should assist existing in preparing for the application process. It can be accessed here.
For more information or advice please contact our Private Rented Sector Team.
