Scotland's short-term let licensing scheme came into effect in October 2022 and has quickly became one of the most topical issues within the licensing sector. The scheme is mandatory for all short-term let accommodation across the country. In this article, we take a look at the aim behind the legislation and summarise the main points to be aware of for anyone who may now require a licence.
WHY WAS THE LEGISLATION INTRODUCED?
The scheme was introduced under The Civic Government (Scotland) Act 1982 (Licensing Short-term Lets) Order 2022. The legislation was first proposed in response to concerns voiced by residents across Scotland involving short-term let accommodation and the subsequent impact on local communities. The legislation was designed specifically to ensure public safety and address complaints regarding noise, anti-social behaviour and housing demand.
The legislation aims to provide local authorities with the tools to control their own policy to pinpoint areas where there is specific concern and utilise the licences to improve these issues accordingly. As the scheme allows for local authorities to amend their policy to reflect their area, the intention is to minimise the issues that short-term lets may have previously caused – specifically in areas with a dense tourist population. An interim review of the scheme has been scheduled by the Scottish Government to ensure the scheme is being implemented as efficiently as possible.
KEY DATES TO BE AWARE OF:
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DATE
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DEADLINE
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From 1 October 2022
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- All licensing authorities should have a scheme in place to be able to receive applications.
- Existing hosts can operate without a licence (but must continue to comply with existing laws and regulations).
- New hosts must not operate without a licence.
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From 1 October 2023
(previously 1 April 2023)
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- Existing hosts and operators (in operation prior to 1st October 2022) must have applied for a licence.
- Existing hosts can operate without a licence but only if they have submitted an application and it has not been determined.
- New hosts must not operate without a licence.
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From 1 January 2025
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- All hosts must have a licence before they accept bookings and receive guests.
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WHO DOES THE LEGISLATION APPLY TO?
Short-term let licences will apply to any accommodation which is let to someone who is not using it as their main home. There are exceptions to this rule e.g. if you are a member of the owner’s family, using the accommodation to carry out work or service or student accommodation. The full list of the excluded accommodation is available here.
It is worth noting that short-term let licences are specific to the owner of the property. This differs from the likes of a premises licence, as if the premises is sold, the new owner will need a new licence for the property. There are some allowances available; for example, if the person who owns the property dies, his/her licence passes to his/her executor for a 3-month period before expiring unless the executor applies to the Local Authority for this period to be extended for the purposes of him/her winding up the deceased owner’s estate.
WHICH LICENCE SHOULD YOU APPLY FOR?
There are 4 types of licence available depending on the letting situation:
- ‘Home sharing’, meaning letting all or part of your principal home whilst you are there;
- ‘Home letting’, meaning letting your principle home when you're not there, for example, when you are on holiday;
- ‘Secondary letting’, meaning letting accommodation that isn't your principal home (e.g. a holiday home); or
- ‘Home letting and home sharing’, where you let out all or part of your own home. This occurs both while you are both while you are living there but also at times when you are not there.
HOW LONG WILL MY LICENCE LAST AND WHAT ARE THE APPLICATION FEES?
Short-term let licences will last for a maximum of three years but can be renewed for longer. Applicants are recommended to apply for their renewal on or around the 2nd anniversary of the licence as it can take 6-12 months for local authorities to process. Any application to renew an existing licence is normally granted for a further three-year period.
The application fees for a short-term let licence vary across the different local authorities and depend on the size, capacity of the premises and the type of licence applied for.
Any person or entity applying for the licence must pass a fit and proper test and satisfy the legal requirements for a short-term let licence which are available here. Additionally, each Local Authority may have further conditions contained within their policy that must be adhered to before a licence is considered. As mentioned, it is worth noting before proceeding with an application that each applicant must first consider if the relevant Local Authority has a specific policy in place, for example regarding temporary licences or exemptions.
A POTENTIAL NEGATIVE EFFECT?
Those operating within the short-term let industry have argued that the legislation will create a negative impact on national tourism and subsequent economic growth. Reports state many short-term let operators are now leaving the market to focus on long-term lettings due to the changes to the regulations and associated costs. This impact will be especially significant in rural and remote communities where short-term let accommodation is already less prevalent.
We would be happy to discuss your individual needs and provide assistance on applying for a short-term let licence, please get in touch.
