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

4. Handling licence applications

4.1. Licensing authorities will be familiar with the processes under the 1982 Act for determining licence applications. This chapter focuses on obligations and considerations that are specific to the short-term let licensing scheme.

(a) Prioritisation

4.2. The Scottish Government recognises that new hosts may be concerned that they may have to wait up to 9 months for their licence application to be determined. Processing times will depend on various factors including the volume of applications being processed and the complexity of each application. However, particularly during the transitional period where existing hosts can continue to operate whilst their application is being determined, we would encourage licensing authorities to prioritise applications from new hosts to enable them to start trading in a timely manner.

(b) Additional information from applicants

4.3. Licensing authorities may request, and the Scottish Government recommends they do request, additional information on licence application forms.^[11] The following information, if requested, would need to be included in the public register:^[12]

• the number of bedrooms in the premises,
• contact details for the manager of the premises, if different from the applicant, and
• the Energy Performance Certificate rating.

(c) Planning considerations

4.4. A licensing authority may refuse to consider a licensing application it considers that the use of the premises would breach planning control.^[13] This power is designed to assist licensing authorities in handling applications for secondary letting but licensing authorities can use it in other circumstances too, such as letting rooms in your own home. Further details can be found in planning guidance for hosts and operators.^[14] The licensing authority has 21 days from receipt of a valid application to decide to refuse to consider the application on these grounds.

4.5. If a licensing authority refuses to consider an application for this reason, they must tell the host or operator within seven days and explain why they are refusing to consider the application.

4.6. A host or operator who has subsequently obtained planning permission (or a certificate of lawfulness of use or development), can resubmit their licensing application and the licensing authority must not charge any additional fee, provided the host or operator submits their application within 28 days of obtaining planning permission (or certificate).

4.7. Existing hosts or operators who have made a licence application by 1 October 2023 can continue to operate in the time it takes for their licence application to be finally determined, which means it is granted, refused or the licensing authority refuses to consider the application because it considers that use of the premises for a short-term let would constitute a breach of planning control.

4.8. Before 1 October 2023, licensing authorities cannot determine a licence application on the basis it breaches planning control unless they have given existing hosts a chance to submit an application for planning permission or for a certificate of lawful existing or proposed use or development ("CLUD"). Licensing authorities can determine a licensing application before this date where planning permission or a CLUD has already been refused.

4.9. The applicant has three months to submit an application for planning permission or for a CLUD. If they do not do so within three months, the application is finally determined for these purposes and the applicant must cease providing short-term lets. The final deadline for all short-term lets to be licensed is therefore 1 January 2025. This is calculated from the deadline for existing hosts (1 October 2023), adding 12 months that the authority has to process applications from existing hosts, plus three months if the existing host has applied for planning permission or a CLUD.

Links with control areas

4.10. The high-level policy purpose behind control areas is as follows:

• to help manage high concentrations of secondary letting (where it affects the availability of residential housing or the character of a neighbourhood);
• to restrict or prevent short-term lets in places or types of building where it is not appropriate; and
• to help local authorities ensure that homes are used to best effect in their areas.

4.11. Within a control area a mandatory licence condition relating to planning permission applies from the point of designation. This licensing condition is only relevant if:

• their premises is in a control area, and where the use of the premises for a short-term let requires planning permission;
• they are using it for secondary letting^[15]; and
• it is a dwellinghouse.

4.12. In these circumstances, the host or operator must have made an application for planning permission or already have planning permission before they apply for a licence. In most cases, planning applications are determined within two months.^[16]

4.13. Licensing authorities should be aware that planning authorities could designate control areas affecting licensed premises after they have been licensed. Licensing authorities should ensure that licensed hosts or operators who may be affected by the designation of a control area are alerted as part of the planning authority's consultation process.

4.14. Licensing authorities should give licensed hosts and operators a reasonable opportunity to comply with this mandatory condition by submitting a planning application. The host or operator should do this as soon as possible after the control area is designated.

4.15. Where a control area is designated, licensing authorities should publish details of this on their website. This will assist hosts in determining whether or not to apply for a licence, in the knowledge that planning permission or a certificate of lawful use or development will be required.

Where planning permission is refused

4.16. Licensing authorities should be advised by planning authorities where they refuse planning permission for short-term lets (see Planning Circular 1/2023). The licensing authority should then ensure that any application or licence contingent on the planning permission is refused, varied or revoked as appropriate.

4.17. Note that it will not always be necessary for an application to be refused or licence to be revoked. For example, a host or operator may have a licence to let out one bedroom in their own home but have submitted an application to vary the licence, and an accompanying planning application, in order to let out three bedrooms. In this case, the applications might be declined but the existing licensed activity can continue.

(d) Licence numbers

4.18. Licensing authorities must issue a unique licence number to existing hosts and operators who apply for a licence before 1 October 2023, as soon as reasonably practicable after an application for the licence has been made.^[17] This is known as a provisional licence number (not to be confused with a licence number for a temporary licence) and is to allow existing hosts to continue operating until their application has been determined (licensing authorities have until 30 September 2024 to do this).

4.19. Provisional licence numbers will not be issued to new hosts at any point, as they cannot operate whilst their application is being determined.

4.20. The Scottish Government encourages licensing authorities to issue licence numbers in a consistent format across Scotland. This consistency is to aid with data handling (see chapter 7) and to assist letting agencies and platforms in being able to host the licence number provided by the host or operator in their listings. The format is set out and explained in this chapter and specified in Annex A.

4.21. This consistency in format also applies to:

• temporary licences; and
• temporary exemptions.

4.22. This means that all hosts and operators in Scotland providing short-term lets will have such a number. For ease, we will call this the licence number throughout the rest of this chapter.

4.23. The format of the licence number, alongside information contained in the public register, will allow anybody to identify:

a) the licensing authority who issued the licence (and therefore the area to which the licence relates);

b) the type of licence (or exemption).

4.24. The licence number will also include a 5 digit number issued by the licensing authority. The overall licence number will be unique across Scotland when combined with the header data set out in 4.23.

(e) Notifying residents and neighbours

4.25. Applicants have responsibility for giving notice^[18] of an application for a new, or renewal of a, short-term lets licence.

4.26. Applicants are required to display a site notice at or near the premises so that it can be conveniently read by the public for a period of 21 days beginning with the date on which the application was submitted to the licensing authority.

4.27. A notice must state—

a) that an application has been made for a licence,

b) the main facts of the application,^[19]

c) that objections and representations in relation to the application may be made to the licensing authority, and

d) how to make objections or representations.

4.28. Applicants are required by para 2(4) of schedule 1 to the 1982 Act to certify compliance that they have displayed the site notice as soon as possible after the 21 days has expired.

4.29. A template site notice and certificate of compliance have been included in Licensing Guidance Part 1, however, licensing authorities may wish to develop their own forms for applicants to use.

Objections

4.30. An objection must specify the grounds, but the grounds are not limited by, or defined in, the 1982 Act.^[20] Objections not related to valid grounds for refusal will not be taken into consideration.

4.31. Licensing authorities may entertain a late objection if they are satisfied there is a sufficient reason as to why it was not made on time. Where a licensing authority entertains a late objection, they must satisfy themselves as to the sufficiency of the reason for lateness and explain why they have decided to entertain the objection.

(f) Maximum occupancy condition

4.32. It is a mandatory condition that hosts and operators ensure that they do not exceed the maximum number of guests for their premises. This includes making the maximum occupancy clear on adverts and listings and in booking terms and conditions.

4.33. Hosts and operators will state in their application how many guests they would like to accommodate. It would be helpful if licensing authorities could set out how they will determine maximum occupancy, to enable hosts and operators to understand how this will be calculated.

4.34. The Scottish Government encourages licensing authorities to consider criteria (a) and (b) below when determining maximum occupancy. They may also wish to take other factors into account as relevant, such as (c), using the lowest of these numbers to determine maximum occupancy:

a) the number requested on the application form

b) the maximum number that can be accommodated safely (broken down to the number of adults and the number of children)

c) the maximum number that can be accommodated within tolerable noise and nuisance standards for neighbours

4.35. Licensing authorities may ask applicants to submit (as part of their application) floor plan(s) for their premises indicating room sizes, fire escape routes and accommodation intended for guests with mobility impairment (where applicable).

4.36. Licensing authorities may also wish to ask for plans to show the location of any steps, stairs, elevators or lifts in the premises, as well as the extent and boundary of the building – if relevant.

4.37. The Scottish Government encourages licensing authorities to accept floor plans in different formats (including hand-drawn plans) subject to these plans providing the information in a clear way to meet their requirements.

4.38. In determining an appropriate maximum occupancy for a short-term let premises, licensing authorities should note that minimum space standards that apply to HMO licensing do not apply to short-term lets. Guests staying in a short-term let may be prepared to accept staying in a smaller room that does not meet the HMO bedroom space standards in a number of cases, such as city breaks where the room is only used as a bed for the night, or where the premises has large living accommodation.

Children

4.39. Licensing authorities may choose to specify on a licence that guests may bring a certain number of small children under a specified age limit and these would not count towards the occupancy of the premises. Children above the age limit and any additional children of any age would count towards the occupancy. Licensing authorities may wish to set the age limit as under 10 years, which is in line with the reference to children in the context of housing within the Housing Act (Scotland) 1987.

(g) Facilitating sale of existing short-term lets

4.40. There may be occasions when prospective buyers of short-term let businesses are asked by their lenders to obtain assurance about being able to get a short-term let licence in order to complete their purchase.

4.41. Licensing authorities have powers within Schedule 1 of the Civic Government (Scotland) Act 1982 to process variation applications and they may choose to do so where the short-term let host is a corporate entity, and the incoming purchaser is added as a director.

4.42. We will continue to work with licensing authorities and industry representatives to monitor the ongoing application of the scheme to hosts in these situations.