Short-term lets - licensing scheme and planning control areas: consultation

6. Licensing Order under the 1982 Act

6.1. All short-term lets will require a licence.

6.2. Research commissioned by the Scottish Government into the incidence of short-term lets in Scotland found that, in May 2019, there were just under 31,900 active listings on Airbnb. The majority (69%) of these active listings were for whole properties, with the remainder largely composed of private rooms (30%).

6.3. The licensing system aims to address the safety concerns and enable local authorities to better understand how and where short-term lets are operating in their area. The licensing system is to be delivered by local authorities but the Scottish Government will specify the mandatory and other possible conditions for the licence. Local authorities will have the power to introduce licensing conditions from a menu of options to address local issues of concern, e.g. imposing restrictions on noise levels at night or littering.

Coming into force

6.4. Subject to the Scottish Parliament approving the Licensing Order, local authorities will be able to implement a licencing scheme from 1 April 2021. We recognise that some local authorities will be more advanced in their planning to do this than others. For this reason, we are giving local authorities discretion as to when they bring the provisions into force in their area. However, all local authorities must have a live licencing scheme open to receive licensing applications by 1 April 2022.

6.5. Even when the scheme comes into force in a local authority area, transitional arrangements will be required to allow existing hosts time get a licence and local authorities time to process the licence applications, see paragraph 6.84 below.

Mandatory conditions

6.6. The mandatory conditions for the licensing scheme will apply across Scotland (i.e. in all local authority areas) and for all types of short-term let. Most of these relate to safety. At the application stage, some conditions will rely on self-declaration and others will require verification. A list of all proposed mandatory requirements, and whether we consider they are likely to require verification or would be self-declaratory, is set out at Annex C. They are explained further below.

6.7. Properties must be in compliance with the mandatory conditions at the time of application. Where verification is required, it must be possible to complete verification at the point an application is submitted. The method for verification shall be determined by the local authority. They might request photographs and documentary evidence or they may wish to visit the property to inspect it and/or relevant documentation.

6.8. Compliance with licence conditions is the host’s responsibility (even where they are not the owner of the accommodation).

Existing standards

6.9. A number of standards and requirements already exist for residential properties including: the Tolerable Standard; the Repairing Standard; standard terms for HMO licensing; landlord registration requirements; and various Fire Regulations. The proposed mandatory conditions are drawn from these existing standards and requirements. Many hosts will already be complying with these standards as some are already legal requirements and others are a matter of good practice.

Repairing Standard

6.10. The Tolerable Standard is the minimum standard for all housing, and a home which falls below this standard is considered to be unfit for human habitation^[13].

6.11. The Repairing Standard is higher (and all housing which meets the Repairing Standard must meet the Tolerable Standard). Currently, private residential tenancies and HMOs are required to meet the requirements of the Repairing Standard. But tenancies of less than 31 days for the purpose of a holiday are not subject to the Repairing Standard.

6.12. There was a general consensus from consultation responses that there should be parity in standards between short-term lets and private residential tenancies. We consider it appropriate that short-term lets must meet the Repairing Standard.

6.13. A tenement flat does not fail the Repairing Standard if work cannot be undertaken due to the majority of owners refusing consent. We propose that this would apply to short-term let accommodation in tenements.

Displaying of licence in the accommodation

6.14. The host must display the licence in a prominent place within the property, alongside any licence conditions, so that guests can see it.

Safety awareness

6.15. The host must clearly and prominently display the following information in the property for guests to see:

• Information highlighting issues of electrical and fire safety in the property.
• Details of how to summon the assistance of emergency services if necessary.
• A copy of the Gas Safety Record.
• A copy of the Electrical Installation Condition Report (EICR).
• A copy of the Portable Appliance Testing Report (PAT).

Gas safety

6.16. For all properties with a gas supply, the host must arrange for a gas safety check to be carried out by a gas safe registered engineer, on all gas pipes and appliances (for example fire, hob, oven and boiler) in the property which have been supplied by the host. This must be done every year.

6.17. After each annual check, the engineer signs a Gas Safety Record, which notes the results of the checks and confirms whether each gas appliance meets the safety standard it needs to. The Gas Safety Record should be made available for guests to see.

Carbon monoxide safety

6.18. The host must ensure the accommodation has a way to warn if carbon monoxide is present in a concentration that is dangerous for people. The property must meet requirements in relation to satisfactory carbon monoxide detection as set out in the Tolerable Standard:

“There must be installed a CO alarm which meets the requirements of BS EN 50291:2001 in the same room as any gas appliance.”

Electrical safety

6.19. The host must comply with the following conditions in relation to electrical safety:

a) The host must ensure that all electric fittings and items in the property are in a reasonable state of repair and in proper and safe working order.

b) As part of this duty to keep electric fittings and items in a reasonable state of repair, the host must arrange for an electrical safety inspection to be carried out at least every 5 years.

c) That inspection must be carried out by a qualified person who then issues two reports:

• an Electrical Installation Condition Report (EICR) on any fixed installations; and
• a Portable Appliance Testing Report (PAT) on moveable appliances - and the inspector should also stick a label on each tested item which sets out the inspection date, and each label should be signed by the inspector.

6.20. The host must make copies of both reports available for guests to see.

6.21. If the tester says that testing should be more frequent than once every five years (for example, once every 3 years), then the host must follow this advice.

Fire safety

6.22. The host must ensure compliance with Fire Safety Regulations made under Part 3 Fire (Scotland) Act 2005 which state that:

“It is for the person or person with duties under the legislation to determine what fire safety measures are appropriate to provide on the basis of an assessment of risk.”

6.23. All hosts must ensure that a suitable and sufficient Fire Risk Assessment is carried out to identify and determine what safety measures are appropriate for their particular property, and put in place those measures. Due regard should be given to Fire safety guidance for existing premises with sleeping accommodation^[14] guidance, with the property encompassing the accommodation as a “relevant premises”.

Smoke detectors and heat alarms

6.24. The host must ensure the property meets requirements in relation to satisfactory smoke and heat alarms as set out in the Tolerable Standard.

Furnishings

6.25. The host must ensure that all furnishing comply with the standards set out in the Furniture & Furnishings (Fire Safety) Regulations 1988 (as amended). This means all upholstered furniture (like settees, arm chairs and dining chairs with soft seat coverings), and all mattresses, should have labels attached to them which show that they meet these Regulations.

Legionella risk assessment

6.26. The host must assess the risk from exposure to Legionella to ensure the safety of their guests, in accordance with HSE guidance on Legionella and Landlords’ Responsibilities^[15].

6.27. This applies to all accommodation, not just those with a private water supply.

Maximum occupancy

6.28. Overcrowding in a property can cause safety issues (for example by impeding quick and safe fire evacuation), as well as other concerns for neighbours, for example around noise or antisocial behaviour. Therefore, we propose that local authorities will specify a maximum occupancy condition with each licence. Local authorities must do this but may use their own criteria to set appropriate occupancy limits.

6.29. In the case of home letting or secondary letting, local authorities might want to set a figure based on the number of single and double bedrooms. For example, a property with four double bedrooms might have a maximum occupancy of eight people.

6.30. In the case of home sharing, the home will be occupied by not only the guests but also the host’s household and any family or friends they have staying over. For home sharing, local authorities may wish to specify both:

a) a limit to the number of guests staying in the property based on the size of the accommodation; and

b) a limit to the total number of people staying in the property whilst guests are also staying.

6.31. For example, if a host is letting one double bedroom in a two bed flat, the maximum occupancy would be two guests. But the local authority may also wish to specify that no more than four people in total stay overnight in the property whilst guests are residing.

6.32. In order to determine an appropriate maximum occupancy limit, local authorities may wish to request further information about the household size and physical space, such as floorplans showing sleeping areas including beds, bathrooms, living areas and kitchen facilities. Local authorities may also wish to physically inspect the property.

6.33. Local authorities will also have the power to set lower maximum occupancy limits for reasons other than safety (see paragraph 6.45), for example to manage noise and nuisance around larger properties.

Other mandatory conditions

6.34. Other mandatory conditions on hosts (not relating to safety directly) include:

a) Licence number - the licence number must be displayed on any advert or booking platform.

b) Energy Performance Certificate (EPC) rating - the EPC rating must be displayed on any advert or booking platform^[16].

c) Insurance - the host must confirm that they have appropriate insurance cover for buildings and public liability.

d) Taxation - the host must confirm that they are aware of their obligations to pay tax on profit earned from short-term lets, as well as any local taxes for which they are liable.

e) Mortgage (or tenancy) terms - the host must confirm that letting the accommodation would not breach any mortgage lending conditions (or tenancy terms), if applicable.

f) Planning permission – the host must confirm they have applied for, or obtained planning permission (if required), that it remains current and that they are complying with any planning conditions.

6.35. The requirement (a) to display the licence number extends beyond the host to any platform, holiday letting agency or channel manager. It applies to any listing for a short-term let, whether published in print or electronically (e.g. website or app).

Other licence conditions which local authorities may require

6.36. Local authorities will have discretionary powers to add licence conditions to address local needs and concerns. These conditions can be applied generally (to all licences), in certain circumstances (e.g. tenement buildings) and individually to a specific licencee (though this is only likely if problems have arisen).

6.37. Some local authorities might want to set out standard conditions (which must be published) which would apply to all short-term lets in their area (possibly differentiating between the different types of short-term let).

6.38. We have set out below the conditions which local authorities might want to consider applying.

Preventing anti-social behaviour

6.39. There are already a range of powers available to local authorities to deal with antisocial behaviour through provisions in the Antisocial Behaviour etc. (Scotland) Act 2004. Incidents involving antisocial behaviour should be reported to the local authority who will be able to investigate and take appropriate action.

6.40. We wish to allow local authorities to be able to include a condition requiring the host to manage their property in a way to prevent anti-social behaviour as far as reasonably practicable, and to effectively deal with any instances of anti-social behaviour. This is common in HMO licence conditions.

6.41. Local authorities may wish to combine any discretionary condition relating to anti-social behaviour with a condition requiring hosts to meet all guests at the property (see paragraph 6.52 below) in order to explain safety arrangements, and set out house rules.

Limitations on alterations to property layout

6.42. Local authorities may wish to specify that no alterations may be carried out to the layout of the property without the prior written approval of the licensing authority. This could, for example, include an increase to the number of beds (for example replacing two single beds in a room with two bunk beds).

6.43. It may be the case that local authorities request this information as part of determining an appropriate maximum occupancy limit, as required by mandatory safety conditions. In which case, they may want to require the host to submit a floorplan of the property showing the following:

• bedrooms, including the number of beds per bedroom;
• bathrooms and toilets;
• living areas, including details on any sleeping facilities within these areas, for example sofa beds; and
• kitchen facilities.

6.44. The floorplan should contain dimensions and/or areas for each room.

Further limits on occupancy

6.45. Local authorities must set occupancy limits as part of ensuring that the short-term let operates safely (see paragraph 6.28). However, the local authority may wish to set additional limits on occupancy (over and above those required for safety reasons) to help address other issues, such as noise, litter and anti-social behaviour.

Littering and waste management

6.46. Littering can be a problem in common areas in properties with shared facilities, such as tenements, as well as public areas within the vicinity of a short-term let.

6.47. Additionally, some short-term lets generate a larger amount of waste (due to increased turnover of guests and cleaning) than typical residential use, putting strain on waste storage and bins. This can lead to intentional or unintentional littering (from waste overflow).

6.48. Therefore, any reference to littering can be taken to extend to commercial premises using residential waste provision and putting a strain on shared facilities.

6.49. Local authorities may wish to require that adequate facilities must be provided for the storage and disposal of refuse, and recycling. They may wish to require the host to make the guests fully aware of their responsibilities.

Noise conditions

6.50. Local authorities may wish to impose conditions to minimise noise impact on neighbouring properties to short-term lets, particularly those in flatted, terraced or semi-detached dwellings. Noise conditions may include:

a) physical moderations to the property in order to minimise noise impact on neighbours, such as:

• replacing wood floors with carpeted or vinyl flooring;
• installing door closers to prevent doors being slammed; or

b) installation of noise monitoring kit within the property to log noise, and notify the host or hosting intermediary of any noise above a certain specified limit.

6.51. Where physical alterations are required, local authorities may wish to visit the property or accept photographic or video evidence that the alterations have been completed to their satisfaction.

Meeting guests on arrival

6.52. Local authorities may require the host to ensure that the principal guest is met in person on arrival to receive the keys to have the “house rules” (including relevant licence conditions) explained to them. This may be done by the host or hosting intermediary. Points to cover might include:

a) maximum occupancy;

b) being considerate of neighbours (noise and nuisance);

c) waste and recycling arrangements; and

d) security and departure arrangements.

6.53. This would also provide additional benefits to hosts in ensuring that the number of guests staying in the property was within the occupancy limit, as well as an opportunity to share local knowledge and recommendations with guests in order to improve the visitor experience, and promote local businesses.

Arrival and departure curfews

6.54. We consider that a meet and greet condition (as above) is preferable to setting a curfew, as it easier to enforce and more flexible (e.g. if guest arrival is delayed through no fault of their own). However, local authorities may impose a condition prohibiting guest check-in and check-out from the property within a defined time period. This might help minimise noise impact in common areas, particularly from luggage.

6.55. To avoid arbitrary variation across Scotland, Scottish Government will set out in guidance the preferred approach to setting any such curfew. This might be, for example, that guests should not check-in or check-out between 11 pm and 7 am without reasonable excuse.

Additional data on letting

6.56. Local authorities may wish to require hosts to provide details to the local authority on the number of nights their accommodation was let. For example, they may wish to specify the following details:

a) total number of (person-)nights let per year;

b) total number of lettings per year; and

c) total number of (person-)nights available to let per year.

6.57. This would provide useful additional data on short-term let activity in their area and potentially help with ensuring compliance with licensing conditions. This condition could be linked to monitoring and renewal processes.

Prohibited condition: nights per year limit

6.58. We propose to prohibit local authorities from setting a nights per year limit on secondary letting as a routine licence condition. For example, setting a 90 night limit may just mean that the property is unoccupied for 270 nights per year which is a wasted resource.

6.59. We may advise in guidance on other conditions that may not be appropriate because they could have unintended consequences.

6.60. Note that local authorities would be permitted to issues licences with specified shorter periods of letting for home sharing and home letting in conjunction with offering a discounted fee (see below).

Fees

6.61. Local authorities will be able to charge fees to cover the establishment and running costs associated with the licensing scheme. Establishment costs including setting up the system and preparing staff to run the scheme. Running costs include such matters as processing applications and renewals, undertaking site visits, handling complaints and other monitoring and enforcement costs.

6.62. We will not be specifying the levels that local authorities should charge, as this will depend on the volume of activity in their area and their cost base. However, we intend to specify the parameters for the fee charging regime, within which we would expect local authorities to operate. Local authorities might wish to consider:

a) Different fees for different types of short-term let, with lower fees for home sharing and home letting than for secondary letting.

b) A non-refundable application fee in conjunction with a monitoring subscription fee (payable monthly or annually). Any monitoring fee payable with the application fee would be refundable if the application was refused. (Alternatively, local authorities might want to charge a fee on renewal.)

c) Fees to vary by property size, with fees increasing based on number of rooms or occupants, as can be the case with HMO licencing, for example.

d) Discounts for low volume home sharing or home letting. For example, applying a 50% discount for someone only letting a spare room during August.

e) Incentives for compliance and disincentives for non-compliance. This might include, for example: granting longer licences on renewal (which has the effect of reducing the per annum fee cost to the host) if no issues have arisen; offering a discount on any monitoring fee if no issues have arisen; or charging a fee for visits resulting from a breach of licence conditions.

6.63. We do not expect local authorities to provide any refunds on fees paid, apart from in the circumstances in (b) above.

6.64. Local authorities will need to ensure their charging regimes are robust and fair, especially in respect of any changes requested or proposed by the host after a licence has been granted. There will be circumstances in which the change will mean that the host should be paying a different fee, for example because they want to accommodate more guests or operate for more of the year than qualifies for any discount. Similarly considerations apply where a host wishes to resume operation after a period without a licence; local authorities must avoid any perverse incentive for hosts to switch on and off a licence to minimise fees.

6.65. We will provide guidance to local authorities on how they might use the powers to set fees to best effect. Whilst we have provided a relatively broad empowering framework, some local authorities may choose to have a simple set of fees and others may choose a more elaborate structure; the choice will depend on local circumstances.

Application process

6.66. An application for a licence will be for either:

a) a licence which can cover both home sharing and home letting (i.e. where the host’s home is being used); or

b) a licence for secondary letting.

6.67. A licence can be for granted for a period of up to 3 years, after which it needs to be renewed. Local authorities will have flexibility as to the duration of licences they grant and may grant licences for different time periods to different applicants provided they have clear and transparent criteria for doing so.

6.68. We are seeking to make the application process as straightforward as possible but there are some important steps which will need to be followed.

Notification requirements

6.69. We are proposing that the applicant needs to notify neighbours within a 20 metre distance of the property, including all residents on a tenement stair and neighbouring tenement stairs.

Links to any planning application

6.70. Where planning permission is also required, we propose to give local authorities the power to combine the notification requirements so that neighbours are not notified twice about the same proposal.

6.71. In some cases, planning permission will be required for secondary letting, either by virtue of the property being in a control area or by virtue of the local authority’s planning policy. When an application for a licence is made in respect of secondary letting, either:

a) planning permission is not required;

b) planning permission is required and has already been obtained;

c) planning permission is required and a concurrent planning application has been made; or

d) planning permission is required and no application has been made.

6.72. Cases (a) and (b) present no difficulty (other than the local authority confirming the case) and the licencing application may proceed.

6.73. In cases (c) and (d), the local authority will have the power to refuse to consider the licensing application until the planning application has been made and determined or to pause the licensing application (and any statutory or other deadlines) until the planning application has been made and determined. Which of these approaches is more appropriate for each local authority may depend on the way their licensing and planning systems operate and/or the volumes of licensing and planning applications to be considered (remembering that the workload is not just generated by short-term lets).

6.74. The grounds for objection to an application must relate to the purposes of the licensing scheme or planning rules. For example, concerns relating to:

a) safety (licensing)

b) noise or nuisance (licensing)

c) previous complaints (licensing)

d) availability of residential housing (planning)

e) impact on character of neighbourhood (planning) or

f) the suitability of the building (planning).

Information required on an application

6.75. A licence application will need to include information about the host and the property, including the mandatory safety requirements and other licence conditions.

6.76. The application will need to include some details about the property:

a) Address

b) Who owns the property

c) Number of bedrooms (and floor plan, if requested)

d) HMO Licence Number (if applicable).

6.77. Some details about the applicant (host):

a) Host contact details

b) Other short-term let licences held by the host (if applicable).

6.78. Some details about the proposed short-term lets:

a) Proposed maximum occupancy

b) Type of short-term let licence applied for:

i. Home sharing (and occupancy) and/or home letting (and occupancy)

ii. Secondary letting

c) Hosting intermediary contact details, including letting agent registration number (if applicable)

d) Out of hours contact details (in case of emergency)

e) Access arrangements for any local authority visits.

6.79. Additionally, the application form will include: information about mandatory licence conditions (see Annex C); any planning permission or application; and a list of neighbours notified.

Interaction with HMO licensing

6.80. We are proposing to keep HMO licencing and short-term let licensing separate: i.e. a short-term let licence is required, even if the host and property has an HMO licence already. This is because there is a difference between a property being occupied by longer-term residents and short-term guests. However, we are not requiring anybody applying for a short-term let licence to apply also for an HMO licence, even if the circumstances would otherwise require one.

Consultation with other bodies

6.81. The 1982 Act makes provision for consultation with statutory bodies, such as Police Scotland and Scottish Fire and Rescue Service, as part of the application process. There will be a significant volume of requests for information (given there are many thousands of short-term lets in Scotland) and we would encourage local authorities to consider collaborating with each other, and with Police Scotland and the Scottish Fire and Rescue Service, in terms of staffing and resourcing this work. We propose to ensure that local authority licencing officers have powers to consult with other internal departments within the authority and community councils as they see fit. Local authorities will also be able to share relevant information with each other about hosts licensed in more than one local authority area.

Property checks

6.82. Local authorities will have the power to visit a property as part of the application process but will not be required to do so.

Host checks

6.83. An applicant must be a fit and proper person to be licenced as a host of specified accommodation. We propose that relevant information includes (but is not limited to):

a) relevant criminal convictions (and police intelligence);

b) being disqualified from being a private landlord or having had letting agent or property factor registration revoked now or in the past;

c) having had a short-term lets or HMO licence revoked by any local authority;

d) having had an application for a short-term lets licence turned down by any local authority; and

e) providing false or misleading information in an application for a short-term lets licence, HMO licence or application to be a private landlord.

Transitional arrangements

6.84. We propose to make appropriate transitional arrangements to allow operators to continue operating until a licence has been granted or refused.

6.85. We anticipate that some authorities may receive large volumes of applications for licences and planning permission and sufficient time needs to be allowed for these to be processed.

6.86. As stated previously, we suspect that a number of properties across Scotland are operating without planning permission having been sought (i.e. operating illegally, either wilfully or in ignorance). These cases will come to light as the licensing scheme is rolled out across Scotland, whether or not in a control area. It is an important policy objective that hosts come forward to be licensed.

6.87. We are proposing to create two grace periods which follow each other. Hosts already operating at the time that the licensing scheme comes into force have until the end of the first period to submit a licensing application. Local authorities have until the end of the second to determine all such applications. In the first period, it is lawful to operate a short-term let without a licence. In the second period, it continues to be lawful to operate a short-term let without a licence, provided that an application has been made in the first period. At the end of the second period, operating without a licence is unlawful. It will also be unlawful to continue to operate at any time where a licence application has been determined and rejected.

6.88. This is summarised in the following table:

First period:

• Existing hosts can operate without a licence
• Existing hosts should use this time make a licence application
• New hosts must not operate without a licence
• Any host must cease operating if their licence application is refused

Second period:

• 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
• Any host must cease operating if their licence application is refused

After the end of the second period:

• All hosts must have a licence
• Any host must cease operating if their licence application is refused

6.89. Local authorities can determine the length of each grace period but the total may not exceed two years. Taken together with provision at paragraph 6.4, this means that all hosts in Scotland must be licensed by 31 March 2024 at the very latest.

Repeat applications

6.90. The 1982 Act makes provision to prohibit repeated licence applications from the same person. Where an application is refused, the applicant cannot make another application in respect of the same property for one year. This helps provide certainty to neighbours.

Management and exit

6.91. Local authorities should be able to recover the costs of any monitoring and enforcement work that they undertake; the overall revenue from all fees should cover all establishment and running costs of the scheme.

Monitoring arrangements

6.92. The level of monitoring will be a matter for local authorities to determine and is likely to vary from area to area and, within areas, from property to property.

Monitoring fees

6.93. In terms of monitoring fees, we would like local authorities to be able to collect these either on renewal or as a subscription, collected no less often than annually.

6.94. On a subscription model, we suggest that the first subscription payment is payable at the time of application with the application fee. If the application fee is £a and the annual monitoring subscription is £b, the first payment would be £(a+b) followed by annual payments of £b. Local authorities will be able to increase (or reduce) the monitoring subscription in accordance with the increase (or reduction) in costs, including as a result of inflation, and any changes to revenue (from changes to levels of short-term let activity).

6.95. Local authorities may want to reward compliance and good practice with a reduction on the monitoring fees, in a manner similar to a no claims discount on insurance products.

6.96. If an application for a licence is unsuccessful, any monitoring subscription element of the fee charged with the application should be refunded to the applicant (but not the application fee).

Site visits

6.97. Once a licence is granted by a local authority, the licence must be operated in accordance with the conditions that are attached to it. To ensure this is the case, local authorities will have powers to inspect both the property and any records associated with the conditions attached to the licence.

6.98. Local authorities will have powers to visit properties to monitor compliance with the licence but will not be obliged to undertake any particular pattern of inspection. Visits may be part of a routine pattern of inspection, triggered by a complaint or other issue or follow-up visits to confirm that an issue has been resolved. The local authority must give a reasonable period of notice to the host (or their agent) of a routine visit.

6.99. An unusual feature of accommodation for short-term lets (compared to other licensed premises) is that most of the time there will be no licencee, employee or representative of the licencee present on the premises. This creates particular difficulties with unannounced site visits which can be a very effective way of ensuring licence terms and conditions are adhered to at all times. Furthermore, it is highly likely that guests will be out and about for much of the time of their stay. An unannounced visit may be the only way of proving a violation of some licensing conditions (e.g. overcrowding). We are proposing that local authorities should have the power to visit unannounced, and enter the premises forcibly if necessary, but only in very limited circumstances.

6.100. We are proposing to give local authorities the power to accept evidence provided by or through an accrediting organisation that a host is compliant with the (relevant) terms of their licence.

Fees for site visits

6.101. Hosts will not be charged a fee for routine site visits for application or monitoring purposes but may be charged if a visit results from a breach of licence conditions.

6.102. We do not propose to allow local authorities to charge fees for routine site visits. However, we propose that local authorities should be able to charge a fee for any follow-up visit, i.e. where accommodation does not reach the required standard on the first visit and enforcement action is required including a follow-up visit.

6.103. We also propose that local authorities should be able to charge a fee for a visit required in response to one or more complaints, where it is found that there are compliance issues (whether or not those are the issues that were the subject of the complaint(s)). However, no fee should be charged if the complaint was frivolous or vexatious.

6.104. We are proposing that any fees should be charged from a standard pre-set tariff (by each local authority).

6.105. Where a fee is charged to a host for a visit, the local authority must produce a brief report of its findings to the host within 28 days of the visit.

Hosts’ responsibility to ensure compliance

6.106. The host (licencee) will be responsible for ensuring compliance with the license conditions, including by the guests. Hosts must make sure that the guests are aware of relevant terms and conditions.

Potential issues

6.107. Some of the main concerns which residents and communities have raised in relation to short-term lets, through the 2019 consultation and research and elsewhere, include:

• overcrowding;
• noise and nuisance, including drunkenness, smoking and drug-taking;
• litter or other mess in communal areas;
• failure to maintain the accommodation property in a good state of repair;
• failure to maintain, or contribute to the cost of, communal area repairs and increased wear and tear;
• damage to property (e.g. from key boxes affixed to walls); and
• unlawful activity (e.g. using the property as a brothel).

6.108. In future, there will also be potential breaches of (other) licence conditions.

Controls and sanctions

6.109. The principal controls and sanctions for local authorities will be: licence conditions imposed on application; enforcement notices; variation of licence conditions imposed as a result of a problem, or suspension or revocation of the licence; and fines. Fines will follow summary conviction in respect of offences around: operating without a licence; failing to comply with the licence condition; failing to notify change; and provision of false information. These are explained in more detail in the following paragraphs.

6.110. The monitoring of licence conditions through site visits, including the investigation of complaints, should be the primary route for ensuring compliance with licences and, ultimately, the vehicle for addressing issues, including the variation, suspension and revocation of licences. In other words, issues should not wait for any licence renewal process for resolution. The credibility of the licensing regime will rest to a large extent on reassuring neighbours that their concerns can and will be addressed quickly.

Enforcement notices

6.111. Where monitoring visits reveal non-compliance with a licence, local authorities will be able to require a licencee to take action to put it right. This will usually be done by serving an enforcement notice (“non-compliance” or “improvement” notice). Such notices are likely to specify a date or date(s) by which issues should be remedied. If satisfactory action is not taken by the required date(s) to address the issues set out in a notice, licensing authorities have powers to vary, revoke or suspend a licence.

Variation, suspension and revocation

6.112. A licensing authority can vary, suspend or revoke a licence in certain circumstances. Local authorities may do this without serving an enforcement notice if the seriousness of the breach justifies urgent action.

6.113. Licencees may appeal against being served with a variation, revocation or suspension notice.

Offences and fines

6.114. The 1982 Act^[17] sets out offences, including operating a short-term let without a licence. They also include non-compliance with the conditions of a licence and unauthorised changes to a property. It is also an offence to make a false statement in an application and this would also apply to renewal applications.

6.115. These attract fines on the standard scale^[18]:

Level on the scale	Maximum fine
1	£ 200
2	£ 500
3	£1,000
4	£2,500
5	£5,000

Operating without a licence

6.116. It is an offence, without reasonable excuse, to carry on an activity for which a licence is required without having such a licence. Depending on the activity, different punishments apply. The default is a fine not exceeding level 4 on the standard scale.

6.117. We are proposing to amend the maximum level of fine to £50,000. We know that secondary letting of a normal home can yield much more revenue than letting under the 2016 Act. With “party mansions”, the revenue may be significantly higher.

Failing to comply with a licence condition

6.118. It is an offence to fail to comply with a licence condition, though it is a defence to have used all due diligence to prevent the offence. The default is a fine not exceeding level 3 on the standard scale.

6.119. We are proposing to amend the maximum level of fine to £10,000. One licence condition may be to limit the number of guests in the accommodation. Breaching this condition might lead to significantly more revenue. The fine for failing to comply with the licence condition must outweigh the profit made from such a breach.

Failing to notify a change etc.

6.120. It is an offence for a licence holder, without reasonable excuse, to:

a) fail to notify the licensing authority of a material change of circumstances (level 3 on the standard scale),

b) make or cause or permit to be made any material change in the premises (level 3 on the standard scale),

c) fail to deliver the licence to the licensing authority (level 1 on the standard scale).

Making a false statement

6.121. It is an offence to make a false statement in an application (level 4 on the standard scale).

Antisocial behaviour legislation

6.122. Most of the issues with antisocial behaviour raised during the consultation related to residents who could not find any way of identifying the host of a short-term let and did not know whom to contact. The licensing scheme will make these details available. It is to be hoped that most issues can be resolved amicably between neighbours and hosts without escalation. Failing that, neighbours can complain to the local authority who would be able to investigate further.

6.123. In more immediate and severe cases, there are powers available to the police to serve fixed penalty notices under the Antisocial Behaviour etc. (Scotland) Act 2004.

Notification of changes

6.124. Licencees will be required to notify local authorities of any significant changes relevant to their licence. Some changes will require prior approval and possibly an additional fee. This might apply, for example, in respect of the number of rooms in their home which the host intends to let out.

Renewal

6.125. The 1982 Act allows for licences to be granted for up to 3 years. We are proposing to streamline the renewal process as much as possible. We consider that the monitoring and compliance process is more important than the renewal process in terms of maintaining standards. In cases where there have been no valid complaints, and any inspections have been passed and there are no proposed changes to the licence, it seems unnecessary to burden hosts with a complex renewal process. Where there are complaints, these will be investigated and appropriate action taken at the time.

6.126. Only where the renewal application proposes significant changes to the licence should it be necessary to notify neighbours. Local authorities will be required to publish a list of short-term lets operating in their area (see paragraph 6.140 below) which will include addresses and renewal dates.

6.127. It is proposed that an application for the renewal of a licence comprises:

a) confirmation that the matters set out in the application form or previous renewal are still correct and notification of any changes (e.g. around contact details etc.);

b) confirmation that the applicant remains a fit and proper person;

c) confirmation that the property remains in compliance with the licence conditions, including up-to date safety certification;

d) any request to make any changes to the terms of the licence; and

e) confirmation that neighbours have been consulted and notified (where significant changes to the terms of the licence are requested).

6.128. Local authorities will be expected to approve licence renewal applications where there has been no change in circumstance since the previous application.

6.129. If the renewal application requests changes to the terms of the licence, then the local authority should consider these changes in a similar way as to a first application. If the local authority does not renew the licence, then the licencee will have a right of appeal.

6.130. In the case that a monitoring subscription is collected, there should be no additional fee for a renewal application. The costs to the local authority for processing renewals should be covered by the monitoring subscription.

Change of licencee

6.131. There will be circumstances which may result in the change of a licencee of a short-term let. Reasons for this might include personal or commercial considerations, such as death, health, divorce (of joint licencees) or a licencee who wants to sell their interests in a profitable or unprofitable entity. We propose that accommodation used for short-term lets can continue operating whilst there is a change in licencee. Anybody wishing to take over a licence of a short-term let will have to submit a new application.

Exit

6.132. The 1982 Act makes provision for the surrender of licences either voluntarily or following a decision by the local authority to suspend, vary or revoke a licence.

Resumption of activity

6.133. Local authorities may waive some or all of the application requirements where a host wishes to resume short-term let activity after a period without a licence having previously voluntarily surrendered their licence. This period may not exceed one year.

6.134. Where the local authority revoked the licence, no further application can be made by that host in respect of that property within one year of the date of revocation.

Temporary licences with a simplified procedure

6.135. We are proposing to give local authorities the power to waive some of the licensing requirements in certain circumstances, in a manner similar to that for late hours catering licences^[19]. A local authority will be able to grant a temporary licence for home sharing and home letting through a simplified process where the local authority needs a significant amount of additional capacity over a short period. This might be to ensure sufficient accommodation to support a large scale event, for example.

6.136. We are proposing that the procedure for granting a temporary licence would be as follows:

a) a reduced application form;

b) a reduced (or nil) fee;

c) no requirement to submit paperwork with the application form (i.e. 100% self-certified); and

d) no site visit prior to granting a temporary licence.

6.137. A temporary licence must not last longer than 28 days in any calendar year and the dates on which it is valid must be specified on the licence. A temporary licence would be subject to the same mandatory licence conditions, monitoring and enforcement powers. (I.e. the local authority would have the right to visit and enforce licence terms.) A temporary licence must have a licence number which is subject to the same requirements as a full licence.

6.138. We will set out in guidance more information as to how and when the Scottish Government considers this power might be used appropriately.

Data sharing

Register of short-term lets

6.139. Local authorities must maintain a register of hosts and licensed accommodation. The Scottish Government will specify the data to be included in the register, which will include the following as a minimum:

• Applicant (host) name;
• Hosting intermediary name (if applicable);
• Property address (and property URN);
• Council ward;
• Date of application;
• Licence status (refused, pending, live, revoked, lapsed etc.);
• Short-term let type (home sharing and/or home letting; or secondary letting);
• Maximum occupancy.

6.140. Local authorities must publish an update to their register at least quarterly. This published record will include the addresses where short-term lets are operating in a local authority area and will make it easy for residents to track activity. Scottish Government will amalgamate local authority data to produce a national report; but local authorities are responsible for maintaining an accurate register. This will ensure that we have a national picture of short-term let activity in Scotland, closing a significant gap in knowledge that currently exists.

6.141. Local authorities will get their data from licence applications. However, this may be supplemented by local authorities imposing a requirement on hosts to provide them with data on nights available to let, and nights booked, each year. This usage data would be useful to understand better the level of short-term let activity and build an evidence base to support further targeted policy interventions, where necessary.

Local authority information sharing

6.142. Local authorities will have the power to share information about the reasons for suspending, varying or revoking a licence with each other in the case that a host is licensed in more than one local authority area.

Nationally consistent format for licence numbering

6.143. Each licence will have a unique reference number (URN). We are aware that there are a number of URNs for property already in operation across Scotland, including those used by the Post Office, National Records of Scotland, the Land Registry and the valuation roll.

6.144. We are proposing to require a consistent licence numbering system for short-term lets across all Scottish local authorities. We will not use any of the existing URNs for the licence number but we will specify the format of a new URN. This is to prevent people using an existing URN to purport to have a licence. It will also allow local authorities to build in fraud prevention measures (i.e. not issuing sequential or predictable numbers). Finally, it will allow local authorities to issue a different URN on receipt of an application to that for a confirmed licence, if they wish to do so.

6.145. To avoid duplication, the licence number will include a local authority identifier (e.g. two digits or two letters) so that local authorities can issue licence numbers independently.