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

2. Licence types and policy

(a) Four types of licence

2.1. Licensing authorities can grant one of four types of licence for short-term let accommodation. The licence granted must be for either:

a) secondary letting;

b) home letting;

c) home sharing; or

d) home letting and home sharing.

2.2. Home sharing and home letting concern the use of the host or operator's only or principal home whereas secondary letting makes use of a separate premises.

(b) General policies

2.3. Each licensing authority should have regard to their planning authority's objectives and policies, including:

• the local development plan;
• other relevant planning policies; and
• any intended or designated control areas.

2.4. Licensing authorities must develop and maintain a policy on temporary exemptions as required by the Licensing Order, see paragraph 3.23. Licensing authorities are also encouraged to develop and maintain policies on:

• licence duration and renewal - see paragraph 3.16;
• temporary licences – see paragraph 3.35;
• additional conditions – see chapter 5; and
• compliance and enforcement – see chapter 6;

(c) Licence duration and renewal policy

2.5. Licensing authorities may decide to grant a licence for a period of up to 3 years initially, after which it needs to be renewed. Licensing authorities may grant licences for different time periods to different applicants and/or for different types of short-term let licence. Licensing authorities are expected to provide clear and transparent criteria for doing so.

2.6. Licensing authorities must specify the duration and expiry date of each licence on the licence itself. The duration applies from the date on which the licence is granted / or the licensing authority specifies that it will come into force. Where an application is made to renew a licence, the licence will continue to have effect until such a time as a decision is made on the renewal.

2.7. The Licensing Order allows licensing authorities to renew licences for such periods as they see fit (there is no time limit).^[3] However, licensing authorities must set out the circumstances in which they would use the power to set a licence period in excess of three years. Licensing authorities are encouraged to renew licences for a period of three years, unless they have good reasons to do otherwise.

2.8. The Scottish Government encourages licensing authorities to consider how they will ensure compliance with licence conditions for the duration of licences. This might include whether and how often they would want to see certain documentation or make visits during the licence period. This need not be a blanket approach, as the need to visit a premises during the licence period would depend on various factors.

(d) Temporary exemptions policy

2.9. Licensing authorities may grant temporary exemptions to the requirement to have a licence.^[4] They can do this for a specified single continuous period not exceeding 6 weeks in any period of 12 months. The 6 week limit is a maximum, and not a default. In order to obtain a temporary exemption from the requirement to have a licence, hosts and operators must apply for a temporary exemption, where this is offered by a licensing authority.

2.10. Licensing authorities must publish a temporary exemptions policy statement on their website and keep it under review. As a minimum it must publish a policy on or before 1 October 2022 and on or before 1 October every three years thereafter.

2.11. Licensing authorities must consult with such persons as they consider appropriate in preparing and reviewing their temporary exemptions policy statement. Their temporary exemptions policy statement must include information regarding:

• the fees chargeable for a temporary exemption application; and
• the time period within which the licensing authority will finally aim to determine the application.

2.12. Licensing authorities may also decide to adopt a policy of granting temporary exemptions for specific types of licences (for example home sharing and home letting only), if they wish. This could be used to facilitate those that are interested in trying out home sharing or home letting to do so by making an application for a temporary exemption or temporary licence before deciding whether or not they wish to do this permanently, requiring a full licence application.

2.13. Licensing authorities may choose to also attach conditions to an exemption. The Scottish Government therefore encourages licensing authorities' policy statements to include:

a) the likely conditions attached to an exemption;

b) the grounds for granting or refusing an application for an exemption, including any types of premises (or types of licence) for which an exemption would not be granted; and

c) information about how a decision can be appealed.

2.14. Licensing authorities can check and enforce any conditions that are attached to a temporary exemption. Licensing authorities have the right to visit premises and should develop a risk-based approach to prioritising any such visits. Licensing authorities can choose to, but do not need to, inspect every premises and are not liable for any failures of the host or operator.

2.15. Licensing authorities have the power to decide whether to consult the Chief Constable and the Scottish Fire and Rescue Service in respect of applications for temporary exemptions.

2.16. Licensing authorities can grant or refuse an application for a temporary exemption. If they grant a temporary exemption, they should provide the host or operator with a temporary exemption number (like a licence number), see chapter 4.

2.17. Where a licensing authority chooses not to use their powers to grant any exemptions, they can comply with this duty by publishing a statement on their website to the effect that applications for exemptions will not be granted under any circumstances.

Festivals and major events

2.18. Scotland is a visitor destination with the ability to host large scale events, which benefit national and local area economies. Temporary exemption powers may be used by licensing authorities as a tool to support demand for accommodation during these major events.

2.19. In setting temporary exemption policies to support major events, licensing authorities are encouraged to be mindful of:

• the likely demand for accommodation due to the event;
• the type of accommodation likely to meet demand (e.g. people letting out spare rooms or their primary homes); and
• the balance when setting the application process, compliance requirements and/or fee level and the impact of these with meeting demand, and subsequent economic impact / viability of future events

Interaction with planning policy

2.20. Planning policies still apply, although these will not commonly affect smaller scale home sharing and home letting.^[5] However, they are relevant for secondary letting, especially within control areas.

2.21. For very large, one-off events (such as the Commonwealth Games, Olympics or COP26), the Scottish Ministers can make a special development order to grant planning permission for change of use for an area and to require discontinuance of use after a certain period. In such circumstances, temporary exemptions could be granted in respect of secondary letting without any concern about breach of planning control.

(e) Temporary licences policy

2.22. Licensing authorities may also decide to grant temporary licences.^[6] The Scottish Government encourages licensing authorities to develop and publish a policy setting out:

• the licensing authority's criteria for issuing temporary licences;
• the fees payable; and
• any additional conditions which apply (in addition to the mandatory conditions which apply to all licences, including temporary licences).

2.23. It is desirable for licensing authorities to clearly state if there is an application form specifically to apply for temporary licences (and or exemptions).

2.24. Licensing authorities must consult the Chief Constable and Scottish Fire and Rescue Service in respect of an application for a temporary licence.

2.25. A temporary licence may be granted for a duration of up to six weeks, or longer if the host or operator has also made an application for a full licence. Please note that in applying for a temporary licence, hosts and operators must still comply with all the mandatory conditions. If they have applied for a licence, their temporary licence will last until their licence application is finally determined (this includes an appeal if one has been lodged within 28 days of the decision).

2.26. The issuing of a temporary licence to a host or operator who is also making a licence application does not extend the time for the licensing authority to make a decision on the full licence application. This remains up to 9 months.

2.27. Licensing authorities should issue a temporary licence number to accompany a temporary licence, see chapter 4.