Short term lets - licensing scheme part 2: supplementary guidance for licensing authorities, letting agencies and platforms

1. Introduction

1.1. The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 ("the Licensing Order")^[1] was approved by the Scottish Parliament on 19 January 2022 and came into force on 1 March 2022.

1.2. The Licensing Order was subsequently amended by the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Amending Order 2023. The Amending Order came into force on 31 March 2023, extending the date by which existing hosts must apply for a licence by 6 months.

1.3. The Scottish Government originally published guidance for licensing authorities 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. This non-statutory guidance is split into two parts: Part 1^[2] is for hosts and operators and Part 2 for Scottish licensing authorities, letting agencies and platforms facilitating short-term lets in Scotland. It should not be interpreted as offering definitive legal advice and, if in doubt, you should seek your own legal advice.

1.4. Separate guidance has been produced in respect of planning considerations for hosts and operators and Planning Circular 1/2023 to assist planning authorities in establishing short-term let control areas. Hosts and operators must comply with both planning and licensing law.

(a) Purpose of guidance

1.5. This Guidance Part 2 is designed to help licensing authorities implement and operate a licensing scheme in their area which is:

• compliant with the statutory provision of the legislation
• in line with the Scottish Government's overall policy aims for the licensing of short-term lets (see Guidance Part 1);
• efficient, effective and proportionate; and
• customised to the licensing authority's local policies and the needs and circumstances of the licensing authority's local area.

1.6. Licensing authorities are working collaboratively together with other licensing authorities to consider opportunities to adopt a consistent operational approach, where it is possible to do so.

(b) Language used in Guidance Part 2

1.7. The glossary for Guidance Part 1 has effect for this Guidance Part 2.

1.8. We additionally use the following terms from the 1982 Act and Licensing Order, where the circumstances require it:

"applicant"

means the person making the application for the licence, normally the host or operator; and

"licence holder"

means any one of the persons named on the licence application including, but not limited to, the host or operator.

(c) Updates

1.9. Ownership of this guidance rests with the Scottish Government and the latest version will always be available at: Short-term lets: regulation information - gov.scot (www.gov.scot). We will notify licensing authorities of any updates.

(d) Information for applicants (and the application form)

1.10. The Scottish Government encourages licensing authorities to take active steps to publicise their licensing schemes to raise awareness amongst current and potential short-term let hosts and operators.

1.11. One of these steps is for licensing authorities to have a dedicated section on their website for their short-term let licensing scheme where hosts and operators can find all the information that they need to apply and comply. The landing webpage might helpfully include:

a. clear information about who needs a licence and that the licence must be obtained before hosts can accept bookings and receive guests (for the transitional period, this should also include the definition of an existing host and the deadline for submitting an application if they wish to continue operating while this is being determined by the licensing authority);

b. what types of licence can be applied for (including whether the licensing authority will consider applications for a temporary licence or exemption);

c. the maximum period for processing applications set out in the legislation (9 months for new hosts – the norm, and 12 months for existing hosts during the transitional period). The authority may wish to supplement this with information about local targets it has set to turnaround certain applications within a specified timeframe, for example applications for temporary exemptions;

d. information and guidance about short-term let licensing (ideally in one place/ document that provides users with a breakdown of contents to enable them to easily navigate to the authority's local licensing policy statement (including its policy on temporary exemptions), guidance notes, any frequently asked questions information, checklists and further links to other relevant guidance such as published by the Scottish Government);

e. a table of fees for applications and renewals (and any other fees), even if this is included in the licensing authority's policy statement;

f. the application form (this may be online but a pdf version should also be available so applicants can see what this covers in its entirety before starting the online process);

g. how to make an appeal;

h. the licensing authority's public register; and

i. contact information for the licensing department (or equivalent area leading on administration) including email address and telephone number.

1.12. Grouping information together enables applicants to find supporting information in one place/document and avoids applicants needing to open or click through multiple webpages/ documents to find answers. For example, applicants should clearly and easily be able to find information on:

a. mandatory conditions, including what is required to demonstrate compliance. If floor plans are requested, this should clearly state what is required (noting that hand drawn plans meeting these requirements should be acceptable if all required information is clearly shown);

b. additional conditions set by the licensing authority and how these will be applied (for example, whether these apply to all applicants or will be applied on a case by case basis);

c. how they should apply if they have multiple accommodation units on the same premises that may be suitable for a single licence;

d. what the licensing authority will do to facilitate requests from prospective purchasers of short-term let businesses where the lender is asking for clarification of licensing arrangements; and

e. whether it is the licensing authority's policy to visit all accommodation or types of accommodation as part of the application determination, or whether it will undertake visits on a risk based approach on the circumstances of individual applications.

1.13. Licensing authorities should consider writing to existing hosts and operators as part of an awareness raising campaign during the initial implementation of the scheme (the transitional period) and then periodically thereafter. This could include:

• properties registered on the non-domestic rates roll as self-catering, B&Bs or guest houses;
• properties registered as second homes and paying council tax, as they may be used occasionally as short-term lets; and
• properties that have been granted planning permission to operate as a short-term let.

1.14. The Scottish Government would like hosts and operators to be able to conduct as many transactions as possible with licensing authorities in an online or electronic format. It is therefore desirable for licensing authorities to work towards a digital first approach (in line with Scottish Government's Digital Strategy). Online information should be provided in line with Scottish Government's digital accessibility requirements and be compatible with assistive technology and licensing legislation.

1.15. Licensing authorities are expected to still have paper copies of relevant information, and the application form, available upon request for people who cannot access them online, and provide support to access online services at their offices.

Application checklist

1.16. Licensing Guidance Part 1 (Annex B) has an application checklist for hosts and operators. Licensing authorities may wish to augment this application checklist to cater for any additional conditions or other specific requirements and make this available on their website. As per 1.11, it is recommended this is provided as part of information for applicants that is accessible from the short-term let licensing landing web page.

(e) Information for residents and neighbours

1.17. In addition to the information on their website set out at 1.10, it would also be helpful for licensing authorities to include an Information Pack for Residents and Neighbours providing information on:

• how to make a complaint (licensing and planning authorities might wish to consider how to join up and triage complaints, see chapter 6);
• how to report suspected unlicensed short-term lets and breaches of licence conditions; and
• how to raise an objection after becoming aware of an application (licensing and planning authorities might consider how to join up and triage licensing and planning processes and objections, see chapter 6).

(f) Recent Court of Session judgement

1.18. On 8 June 2023 Lord Braid set out his decision on the Judicial Review against the City of Edinburgh's licensing policy. We encourage licensing authorities to take note of this judgement (and any subsequent case law) when developing/ reviewing their local licensing policies. It remains our view that the 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.