Short-term lets – licensing scheme and planning control areas: business and regulatory impact assessment

N: Enforcement, sanctions and monitoring

136. Local authorities will be responsible for considering applications, variations, monitoring compliance and for enforcement. The monitoring and enforcement costs to local authorities can be included within the application and renewal, or monitoring, fee costs or covered, at least in part, through some fees for site visits.

137. The 1982 Act 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. These attract fines on the standard scale^[27]:

138. 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 (£2,500) on the standard scale. We will amend the maximum level of fine to £50,000 through primary legislation in the next Parliament. This is because 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.

139. 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 (£1,000) on the standard scale. We will amend the maximum level of fine to £10,000 through primary legislation in the next Parliament. 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.

140. It is an offence for a licence holder, without reasonable excuse, to: fail to notify the licensing authority of a material change of circumstances, with a fine not exceeding level 3 (£1,000) on the standard scale); make or cause or permit to be made any material change in the premises, with a fine not exceeding level 3 (£1,000) on the standard scale; or fail to deliver the licence to the licensing authority, with a fine not exceeding level 1 (£200) on the standard scale.

141. It is an offence to make a false statement in an application. The default is a fine not exceeding level 4 (£2,500) on the standard scale. We will amend the maximum level of fine to £10,000 through primary legislation in the next Parliament. Some property owners may make a false declaration about where they live, in order to apply for a home sharing or home letting licence, rather than a secondary letting licence. The incentive for the owner could be that the licence process may be more straightforward, cheaper and avoid the need to obtain planning permission.