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

2. Do you provide short-term lets?

Introduction

2.1. If you are providing short-term lets, you will sooner or later require a licence in order to continue doing so. This applies to all types of short-term lets, whether this is a room in your own home or a whole property, because basic safety for guests and neighbours is important in all circumstances.

2.2. Many people think they know what a short-term let is. However, it is important to be precise about what is and is not a short-term let, as it would be an offence for you to provide short-term lets without a licence when one is required. This section of the guidance will help you work out whether you are providing short-term lets.

2.3. If you are providing anyone with residential accommodation anywhere in Scotland, then you might be providing short-term lets. It does not matter whether the property is provided for work or leisure purposes and whether the property is in your own home or in a different place. It does not matter whether you are the owner or the tenant of the property. In all of these cases you may be providing short-term lets.

2.4. Broadly speaking, the way the legislation works is that all uses of residential accommodation are included unless they are specifically excluded. So you need to check whether the purposes for which you are using your property are excluded. Before we go into this in more detail, it is useful to understand the types of short-term let and what the licences cover.

Types of short-term let

2.5. The legislation^[4] defines three types of short-term let as follows:

• "home sharing" means using all or part of your own home for short-term lets whilst you are there;
• "home letting" means using all or part of your own home for short-term lets whilst you are absent, for example whilst you are on holiday; and
• "secondary letting" means the letting of property where you do not normally live, for example a second home.

2.6. It is sometimes useful to make these distinctions, so we will use the terms in this guidance.

How licensing works

2.7. You will need a separate licence for each of your premises, whether or not they are in the same licensing authority area. However, a single licence may be issued in respect of unconventional accommodation (not a dwellinghouse) where there is more than one separately bookable property on the site.

Example

Bob owns and operates three properties in Glasgow which he operates as short-term lets. Bob must apply to Glasgow City Council for three separate licences, one for each property. Bob is found to be a fit and proper person and two of his applications are granted. However, one property is in a control area and for which Bob has not made an application for planning permission. The third application is refused, pending determination of a planning application for the property.

Michael owns a property in the Highlands, and another in Perth and Kinross, both of which are operated as short-term lets. Michael must apply for a licence from Highland Council and another from Perth and Kinross Council.

2.8. We use dwellinghouse in this guidance to mean house, flat or cottage; an independent dwelling (with its own front door, kitchen and bathroom).

Example

Isobel operates 30 yurts within the same field and only requires a single licence. But Michaela operates 15 yurts in one field at one end of the village and 15 yurts in another field at the other end of the village requires two separate licences.

2.9. You do not need a separate licence for short-term lets on the same premises. For example, if you are letting out two rooms in your home, that would be covered by one licence.

2.10. Your licence will normally specify the type of short-term let for which the premises can be used. Licensing authorities will normally issue a licence for a premises for either:

• home sharing and home letting; or
• secondary letting.

2.11. You must not use your premises for a type of short-term let that is outside the scope of your licence. If you want to make a change, you must apply to the licensing authority that issued the licence.

Questions to consider

2.12. The definition of a short-term let is set out in the Licensing Order and explained in the accompanying Policy Note. The following questions will guide you through the definition. You might also find it helpful to refer to the application checklist at Annex A.

Have you made an agreement in the course of business?

2.13. An arrangement in the course of business will normally involve setting out some terms and conditions in a contract which your guest has accepted. An agreement in the course of business includes taking a booking on-line or over the phone, for example. It does not matter whether your guests are staying for work or leisure purposes; the business transaction here is between you and your guest or guests.

2.14. However, having a friend over to stay with you would not normally be an arrangement in the course of business.

2.15. This agreement is included in the activity requiring a licence, as well as having the guests reside in the property. That is to say, you do not need a licence to advertise a property for short-term lets but you will, in due course, need a licence to accept bookings (making the agreement).

Is it the guests' only or principal home?

2.16. If you are letting out property to your guests as their only or principal home, then it is not a short-term let. For example, if you are letting out your property as a private residential tenancy then that is not a short-term let. It does not later become a short-term let, even if it is no longer their only or principal home.

2.17. There are other tenancies, such as agricultural, crofting and social housing which are also likely to be the tenants' only or principal home and therefore excluded^[5].

2.18. Providing accommodation to a lodger in your own home (where it is the lodger's only or principal home) is also excluded.

How long are your guests staying?

2.19. This is not a relevant consideration in assessing whether or not you are providing short-term lets. A short-term let can be for one night or for several months. Remember that it is not a short term let where it is the guest's only or principal home.

Are you charging your guests?

2.20. If you are providing your property for free, then you are not providing short-term lets. However, the following arrangements would not count as free use of the property and potentially be a short-term let:

• where the guests do work for you or provide a service in lieu of payment and the work or service was not the principal reason for their stay (e.g. offering to mow the lawn in lieu of payment);
• where the guests provide you with goods of value in lieu of payment;
• where you suggest a donation as part of the agreement; and
• where they reciprocate (e.g. house swap).

2.21. However, a "thank you" gift provided at the initiative and discretion of the guests (as often happens when a friend comes to stay) does not count as a charge.

Are your guests related to you?

2.22. If you are letting property to immediate family^[6], then this is not a short-term let. Immediate family is specifically defined in the Licensing Order. It is not a short-term let if one of the guests in the let:

a) is your partner;

b) is your or your partner's: parent or grandparent; child or grandchild; or brother or sister; or

c) is the partner of one of your: parents or grandparents; children or grandchildren; or brothers or sisters.

2.23. In this definition:

• partner means spouse, civil partner or someone you live with as if you were married to them;
• children with one parent in common are to be regarded as siblings; and
• stepchildren are to be regarded as children.

Are your guests staying to work for you?

2.24. There are some exclusions if your guests are staying principally to provide services to you or work for you or members of your household.

2.25. It is not a short-term let where your guests live with you for the principal purpose of providing work or services to you. For example, if you have somebody to live with you to provide you with health or personal care, this would not be a short-term let. However, this does not extend to any guests doing any work. If your guests mow the lawn to help out whilst staying, this is not the principal purpose of their stay and does not preclude it being a short-term let.

2.26. The same applies in respect of guests living in other premises. For example, if you provide a cottage for the use of a seasonal agricultural worker (e.g. night lamber) for the purpose of doing work for you, then this would not be a short-term let. However, this exclusion does not apply if you are providing accommodation for the guests to work for someone else.

Are your guests staying for educational reasons?

2.27. There are some exclusions if your guests are staying principally to advance their education.

2.28. It is not a short-term let where your guests live with you for the principal purpose of advancing their education and the arrangement has been a made or approved by a school, college, further or higher educational institution (such as a university). This excludes students living with a family for the express purpose of improving their English, for example. The reason for excluding these arrangements is that the student is more like a family member than a guest.

What kind of property are you offering?

2.29. Broadly speaking, if you are letting property that is part or all of a home or something more unusual, it is likely to be a short-term let. However, if you are offering institutional accommodation or are otherwise regulated then it is probably not. It does not really matter what you call your property, as terms such as bed-and-breakfast and hotel are not well-defined. This guidance cannot cover every permutation – if your circumstances are unusual, you may wish to contact your licensing authority or consider getting your own legal advice.

2.30. The following types of property are excluded:

a) Licensed accommodation, under the Licensing (Scotland) Act 2005 where the provision of accommodation is an activity listed in the operating plan, or which otherwise requires a licence for use for hire for overnight stays. If you operate a restaurant with rooms or an inn, for example, which is already licensed specifically to offer accommodation then you are not providing short-term lets. Many hotels are licensed under the 2005 Act and would be excluded. If you provide licensed caravans^[7], you are not providing short-term lets. However, if you have an HMO licence for your property, you would still need a short-term lets licence if it is also to be used for short-term lets^[8]. This is the case whether or not you live at the premises covered by your HMO licence.

b) Accommodation provided by your guests, for example where they bring their own tent (as opposed to glamping where the tent is normally fixed and provided by the host).

c) Mobile accommodation, which is capable of transporting your guests at the time of their stay. This would exclude, for example where you hire out canal boats or yachts. However, a previously mobile unit that had been immobilised, such as an old tractor or a caravan in a tree would not be excluded.

d) Hotels, with planning consent to operate as a hotel^[9]. Note that the majority of hotels are excluded through being licensed to provide accommodation under the Licensing (Scotland) Act 2005 (see (a) above).

2.31. The following types of more specialist types of accommodation are also excluded^[10]:

a) Aparthotels, comprising five or more serviced apartments in a residential building. (Note that serviced apartments are defined in the Licensing Order^[11].)

b) Health and care accommodation, such as residential care homes, hospitals and nursing homes.

c) Educational accommodation, such as residential schools, colleges, training centres and purpose-built student accommodation. Student halls of residence, for example, are excluded but houses and flats which are normally let to students are not excluded.

d) Secure residential accommodation, including prisons, young offenders institutions, detention centres, secure training centres, custody centres, short-term holding centres, secure hospitals, secure local authority accommodation or military barracks.

e) Hostels and refuges. A hostel provides residential accommodation and food, or shared facilities to prepare it, other than in a house. Refuges include accommodation for women escaping domestic violence, for example.

f) Shift accommodation. Property owned by an employer and provided to an employee in terms of a contract of employment or for the better performance of the employee's duties. This excludes accommodation provided by companies and other bodies to employees as part of a contract or to help them perform their duties. For example, caretakers or workers on an oil rig (insofar as the accommodation is within Scottish territorial waters), where shifts extend into multiple days.

2.32. Excluded property extends to property which is part of any of the above. So, for example, self-catering property in the grounds of a licensed hotel would also be excluded.

2.33. If you think any of these exclusions might apply to you, then please refer to schedule 1 of the Licensing Order and the Policy Note for more information.

Drafting Note: We propose to include worked examples of determining whether a property is being used a short-term let in the final guidance. We will include an example of a hotel with self-catering units on the premises.