Short term lets - licensing scheme part 1: guidance for hosts and operators

1. Introduction

1.1. The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022^[1] (referred to in this guidance as the Licensing Order) was passed by the Scottish Parliament on 19 January 2022 and came into force on 1 March 2022. Amendment Orders to the Licensing Order were made in 2023^[2] and 2024^[3].

1.2. This guidance is intended for hosts and operators of short-term lets in Scotland to explain their responsibilities to comply with this legislation. Hosts and operators may be individuals or organisations such as partnerships, charities, trusts or companies who provide short-term lets.

1.3. There is also supplementary guidance for licensing authorities^[4] (about establishing and operating licensing schemes for short-term lets), which you can refer to for more detailed information.

1.4. Separate planning guidance^[5] has been produced for hosts and operators. You should check if your accommodation lies within a control area, as, if so, obtaining planning permission may be required when you apply for a short-term let licence. Outwith a control area, planning permission may still be required. The licensing authority may refuse to consider a licensing application if it considers that the use of the premises would breach planning control (See paragraph 2.3).

1.5. This guidance is non-statutory and should not be interpreted as offering definitive legal advice. Where there is any confusion, the wording of the legislation takes precedence. If in doubt, you should seek your own legal advice.

1.6. On 8 June 2023 Lord Braid set out his decision on the Judicial Review against the City of Edinburgh’s licensing policy. The Council has subsequently revised its policy. The ruling was purely in relation to the City of Edinburgh Council’s local licensing policy and not the wider licensing regime. It remains the Scottish Government’s view that licensing of short-term lets can be operated effectively by councils so as to respect the rights of hosts and guests in short-term let accommodation, and is appropriate for the whole of Scotland.

(a) Purpose of guidance

1.7. This guidance will help you understand:

• whether your accommodation falls within scope of the legislation (see Annex A)
• what you need to do to apply for a licence
• what you need to do to comply with the requirements of the licensing scheme and relevant regulations
• your responsibility to comply with the conditions set out in your licence
• how to renew your licence

1.8. This guidance is intended for hosts and operators who have established their accommodation and premises is within scope. Annex A can help you to establish whether your accommodation and premises are classed as short-term lets under the definition set out in the legislation.

1.9. Words highlighted in bold are explained where they first appear and repeated in the glossary at the end of this guidance.

(b) Purpose of the licensing scheme

1.10. Short-term lets can offer people a flexible and cheaper travel option, and have contributed positively to Scotland’s tourism industry and local economies across the country. The Scottish Government has put in place this licensing scheme to ensure basic safety standards are in place across all short-term lets operating in Scotland, while also providing discretionary powers to licensing authorities to address the needs and concerns of local communities. Improved visitor experience and confidence will benefit tourism and the economy.

1.11. The aims of the licensing scheme are:

• to ensure all short-term lets are safe;
• to facilitate licensing authorities in knowing and understanding what is happening in their area; and
• to assist with effectively handling complaints and address issues faced by neighbours.

(c) What the licensing scheme is and where it applies

1.12. The licensing scheme applies to the whole of Scotland and is implemented by licensing authorities. This is the local authority^[6] in whose area your accommodation is located.

Since 1 October 2022 new hosts and operators must obtain a licence before they can accept bookings or receive guests. Transitional arrangements apply for hosts that operated before 1 October 2022.

1.13. By law every short-term let in Scotland must now comply with mandatory conditions that are primarily about safety. Many hosts and operators will already be complying with these mandatory conditions because some of them are required by existing law and others are best practice.

1.14. Licensing authorities can also set additional conditions to address local circumstances or concerns.

(d) How licensing works

1.15. You will need a separate licence for each short-term let accommodation unit.

1.16. There are exceptions to this if you let out more than one separately bookable accommodation unit on the same premises or more than one room in your own home. In these instances, the licensing authority may grant one licence^[7].

1.17. Your licence will specify the type of short-term let accommodation it is granted for:

• home sharing;
• home letting (including home exchanges);
• home sharing and home letting; or
• secondary letting

(e) Temporary exemptions

1.18. By law licensing authorities must publish temporary exemptions policy statements on their websites, stating whether they intend to offer temporary exemptions. If your licensing authority decides to grant temporary exemptions to the requirement to have a licence^[8], you are able to apply for a maximum of three exemptions not exceeding a combined total of 6 weeks in a calendar year. You will need to apply to the licensing authority where your accommodation is located for a temporary exemption.

1.19. There are some important differences between applying for, and operating with, a temporary exemption and having a licence. Your licensing authority might:

• ask for the application to be made on a different (shorter) form;
• charge a different (lower) fee;
• ask for less information than on a licence application; and
• not apply some of the mandatory and/ or additional conditions.

1.20. Licensing authorities may choose not to issue any temporary exemptions under any circumstances or may have specific criteria that they apply.

1.21. Your licensing authority can grant or refuse an application for a temporary exemption. If they grant your application, you will be given a temporary exemption number (like a licence number).

(f) Temporary licences

1.22. Licensing authorities can decide whether to issue temporary licences^[9] in their area. If the licensing authority where your accommodation is located is willing to accept applications and grants a temporary licence, it can last for up to six weeks. If you have also made an application for a full licence at the same time, your temporary licence can be for longer than six weeks and last until your full licence application is determined. Please note that in applying for a temporary licence, hosts and operators must still comply with all the mandatory conditions.

1.23. Your licensing authority website will explain whether and how your licensing authority issues temporary licences, including how long it takes to issue them.

1.24. If you are granted a temporary licence, you will be given a temporary licence number. You must comply with all the mandatory conditions (and any additional conditions that your licensing authority decides apply to temporary licences).

(g) Transitional period

1.25. Existing hosts/ operators (those using accommodation to provide short-term lets before 1 October 2022) had until 1 October 2023 to apply for a licence.

1.26. After 1 October 2023, existing hosts can only continue to operate lawfully if they have:

a) Submitted an application for a licence before 1 October 2023 that has not yet been determined; OR

b) Been granted a full short-term let licence.

1.27. On or after 1 October 2022, it is a criminal offence for any person to continue to operate after their licence application has been determined and refused.

1.28. The transitional period will end on 1 January 2025. By this date all existing hosts that submitted their applications by 1 October 2023, and continued to operate while their applications were being considered, should have received a determination. (This is because under the Licensing Order, licensing authorities have up to 12 months to process applications for existing hosts from the date the application is made and can also suspend the application for an additional 3 months, if it notifies the host that it considers the use constitutes a breach of planning control that needs to be addressed).

1.29. The following table summarises rules for new and existing hosts

Period: From 1 October 2022

Rules for hosts and operators

• New hosts must not operate without a licence
• Existing hosts are treated as new hosts when applying for a licence for any accommodation they did not use as short-term let before 1 October 2022
• Existing hosts can operate without a licence provided they apply for a licence before 1 October 2023 (and must continue to comply with existing laws and regulations)
• Existing hosts must cease operating within 28 days

if their licence application is refused (guests should be asked to leave immediately if they are at serious risk of harm). Guests with affected bookings should be offered a full refund.

Period: From 1 October 2023

Rules for hosts and operators

• New hosts must not operate without a licence
• Existing hosts can operate without a licence but only if they have submitted an application before 1 October 2023 and it has not been determined. They should make it clear in their terms and conditions that bookings are conditional on compliance with the licensing scheme.
• Existing hosts must cease operating within 28 days if their licence application is refused (guests should be asked to leave immediately if they are at serious risk of harm). Guests with affected bookings should be offered a full refund.

Period: From 1 January 2025

Rules for hosts and operators

• All hosts must have a licence before they accept bookings and receive guests

1.30. Operating without a licence is a criminal offence so it is important to get a licence in good time if you need one.

(h) Development of the licensing scheme and guidance

1.31. The Scottish Government originally published guidance for hosts in March 2022, which was produced by the Scottish Government with input from a stakeholder working group. This version of the guidance has been revised taking on board feedback from Visit Scotland’s Industry Advisory Group and SOLAR’s short-term let licensing working group. You can find out more about how the licensing scheme was developed on the Scottish Government website: Short-term lets: regulation information - gov.scot (www.gov.scot)

(i) Updates

1.32. This updated version of the guidance relates to the Licensing Order approved by the Scottish Parliament on 19 January 2022, and subsequently amended in March 2023^[10] and 2024^[11]. It will be kept under review and updated as required.

1.33. The latest version will always be available at: Short-term lets: regulation information - gov.scot (www.gov.scot)