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

1. Introduction

1.1. This guidance is intended for hosts and operators of short-term lets in Scotland. There is also supplementary guidance for licensing authorities to which you can refer for more detailed information.

1.2. Separate guidance has been produced in respect of planning considerations. Hosts and operators must comply with both planning and licensing law.

1.3. This guidance is non-statutory and should not be interpreted as offering definitive legal advice. If in doubt, you should seek your own legal advice.

Purpose of guidance

1.4. This guidance will help you work out whether you need to apply for a licence and, if so, how to make an application and comply with the requirements of the licensing scheme.

1.5. This guidance will take you through all the considerations in making a licensing application, including making sure that your property is ready. You may need to make some changes to your property or get some things checked out.

1.6. This guidance includes information to help you make sure you comply with your licence conditions and how to renew your licence when it expires.

1.7. Words with a particular meaning are highlighted in bold and explained where they first appear and the explanation is repeated in the glossary at the end of this guidance.

Purpose of the licensing scheme

1.8. 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. However, we know that in certain areas, particularly tourist hot spots, high numbers of short-term lets can cause problems for neighbours and make it harder for people to find homes to live in.

1.9. We will explain what is (and is not) a short-term let in chapter 2. Hosts and operators[1] are people or companies who provide short-term lets. It is very important to make sure that you know whether you are providing short-term lets.

1.10. If you are providing short-term lets, then you must comply with the terms of the licensing scheme.

1.11. The licensing scheme is established by legislation called the Licensing Order[2], which has been approved by the Scottish Parliament.

Drafting Note: The draft guidance is written as if the Licensing Order has been approved.

1.12. The Scottish Government has put in place this licensing scheme to help make sure that the economic and tourism benefits from short-term lets are balanced with the needs and concerns of local communities.

1.13. The aims of the licensing scheme are:

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

1.14. The licensing scheme will be implemented across Scotland by licensing authorities. Your licensing authority is the local authority[3] in whose area your property is located.

1.15. In this guidance, property (or accommodation) means any building or structure that you are letting out for residential use or any part of the building or structure. It may be rooms in your home, a whole house or something more unusual like a yurt or a treehouse. You need a licence for each premises in which you let out property. Premises means the property and land on one site; normally premises have their own postal address. So, for example, two neighbouring cottages are likely to be separate premises which will each require a licence, whereas 15 yurts in one field are likely to be 15 properties on one premises, requiring one licence in total.

1.16. For a self-catering cottage, the property and the premises are one and the same. If you are letting out two rooms in your own home, the two rooms are two properties (assuming they can be let out separately) and the whole home is the premises. This distinction is important as some licence conditions will apply to the premises and others just to the property.

1.17. In this guidance, your own home means your only or principal home (the place where you normally live).

1.18. There are some conditions that every short-term let in Scotland will need to follow – these are called mandatory conditions. They are set out in the Licensing Order and licensing authorities have no choice about implementing these. Many hosts and operators will already be complying with these mandatory conditions because some of them are already meant to be happening and others are best practice now.

1.19. These mandatory conditions are primarily about ensuring that guests and neighbours are safe. We use guests to mean anyone staying in your property and neighbours to mean anyone living nearby who might be affected by the guests staying in your property or by the condition of your property.

1.20. Licensing authorities can also set additional conditions to address any more specific local circumstances or concerns. These additional conditions might apply to everyone in that licensing authority area or might be specific to your property.

What happens next

1.21. The Licensing Order was laid at the Scottish Parliament in September 2021 and comes into force on 1 January 2022.

1.22. Licensing authorities should have their licensing scheme ready to receive applications on 1 October 2022. After 1 October 2022, new hosts and operators will need to have a licence. This means that, if you were not using your premises to provide short-term lets before 1 October 2022, you cannot take bookings or receive guests until you have a licence. This applies to each of your premises separately.

1.23. Using the property means that you have had guests to stay. You can advertise and promote your property before you have a licence.

1.24. If you have already been using your property to provide short-term lets before 1 October 2022, then you have until 1 April 2023 to apply for a licence. Such hosts and operators are called existing hosts in this guidance. You will need to be able to prove that you used the property for short-term lets, for example through evidence of bookings and payments.

1.25. All short-term lets in Scotland will need to be licensed by 1 April 2024.

1.26. Until 1 April 2023, existing hosts can operate a short-term let without a licence. Until 31 March 2024, existing hosts can operate a short-term let without a licence, provided they made an application by 1 April 2023. On or after 1 April 2024 operating without a licence is unlawful in all cases. On or after 1 October 2022, it is an offence for any person to continue to operate after their licence application has been determined and refused. All hosts and operators in Scotland must be licensed by 31 March 2024 at the very latest.

1.27. This is summarised in the following table:

Period

From 1 October 2022

Rules for hosts and operators

• Existing hosts can operate without a licence (but must obviously continue to comply with existing laws and regulations)
• Existing hosts should use this time to make a licence application
• New hosts must not operate without a licence
• Any host must cease operating if their licence application is refused

Period

From 1 April 2023

Rules for hosts and operators

• 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

Period

From 1 April 2024

Rules for hosts and operators

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

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

Example

Adrian has been letting out a whole house for short-term lets since 2019. Adrian wants to start letting out a cottage from December 2022. Adrian does not need to apply for a licence for the use of his house until 1 April 2023. Adrian must have a licence before taking bookings or receiving guests at his cottage. However, he can advertise for both the house and the cottage at any point.

Development of the licensing scheme and guidance

1.29. 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)

1.30. This guidance has been produced by the Scottish Government. A stakeholder working group was established in February 2021 in order to help the Scottish Government to write this guidance with the aim that it is comprehensive, helpful and easy to understand.

1.31. Representation on the group reflected the diverse nature of the short-term letting market, and included members from: local authorities, trade associations, letting agencies and platforms, Visit Scotland, representatives of urban and rural residents, Police Scotland, Scottish Fire and Rescue Service, and the Scottish Government's independent Regulatory Review Group. A full list of members can be found on the website.

Updates

1.32. This version of the guidance is draft to accompany the publication of the draft Licensing Order, for consultation, in June 2021. The Scottish Government intend to lay the Licensing Order at the Scottish Parliament in September 2021.

1.33. A final version of the guidance will be published in autumn 2021.

1.34. This guidance may need to be updated from time to time due to a range of factors, such as changes to legislation or suggestions for improvements from stakeholders.

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

1.36. We will notify licensing authorities of any updates.