Short term lets - licensing scheme part 2: supplementary guidance

1. Introduction

1.1. The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022^[1] (referred to in this guidance as the Licensing Order) was passed by the Scottish Parliament on 19 January 2022 and came into force on 1 March 2022. Amendment Orders to the Licensing Order were made in 2023^[2] and 2024^[3].

1.2. The Scottish Government originally published guidance for licensing authorities in March 2022, which was produced by the Scottish Government with input from a short term lets stakeholder working group. The non-statutory guidance is split into two parts: Part 1^[4] 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.

1.3. 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

1.4. 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/ circumstances of the licensing authority’s local area.

1.5. 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

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

1.7. We additionally use the following terms from the 1982 Act^[5] and Licensing Order^[6], 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

1.8. 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)

1.9. 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.

1.10. 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;

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.

1.11. 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; and

d. 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.

1.12. Licensing authorities should consider writing periodically to raise awareness of licensing to:

• properties newly registered on the non-domestic rates roll as self-catering, B&Bs or guest houses;
• properties newly 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.

1.13. 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.

1.14. 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.

Information about who needs a licence and what accommodation is exempt

1.15. If an applicant for a short-term let licence is providing anyone with residential accommodation anywhere in Scotland, then they might be providing short-term lets.

1.16. In this guidance, accommodation means any building or structure that they are letting out for residential use or any part of the building or structure. It may be rooms in their home, a whole premises or something more unusual like a yurt or a treehouse.

1.17. Hosts need a licence for each premises in which they let out accommodation. Normally premises have their own postal address. So, for example, two neighbouring cottages are likely to be separate premises (each will require a licence), whereas 15 yurts in one field are likely to be counted as one premises (requiring one licence in total).

1.18. For a self-catering cottage, the accommodation and the premises are one and the same. If the applicant is letting out two rooms in their own home, both are classed as accommodation (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 only to the accommodation.

1.19. In this guidance, the applicant’s own home means their principal home (the place where they normally live).

Exclusions

1.20. The legislation does set out some exclusions, these are:

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 the applicant operates a restaurant with rooms or an inn, for example, which is already licensed specifically to offer accommodation then they are not providing short-term lets. Many hotels are licensed under the 2005 Act and would be excluded. If the applicant provides licensed caravans^[7], they are not providing short-term lets. However, if they have an HMO licence for their property, they 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 the applicant lives at the premises covered by their 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 the applicant hires 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. Note that the majority of hotels are excluded through being licensed to provide accommodation under the Licensing (Scotland) Act 2005 (see (a) above). Please see 1.23 to 1.27 for clarification of what this means for guest houses with planning consent to operate as a guest house.

e) Foster arrangements, foster children are treated as immediate family members and, even if the accommodation is not the main residence of the foster child, a licence will not be required.

1.21. The following types of more specialist types of accommodation are also excluded^[9]:

a) Aparthotels, comprising five or more serviced apartments in a residential building. (Note that serviced apartments are defined in the Licensing Order^[10].)

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

c) Guest rooms in certain types of residential accommodation. This also includes guest rooms that are available for people visiting residents in accommodation where personal care is provided or sheltered housing. Examples included within this are: guest rooms in hospitals, guest rooms in nursing homes and guest rooms in sheltered housing.

d) 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.

e) 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.

f) 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 people escaping domestic violence, for example.

g) Shift accommodation. Accommodation 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.

h) Accommodation that is provided for the principal purpose of facilitating the provision of work or services by the guest to the host or to another member of the host’s household.

1.22. 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 if it was included on the operating plan when the hotel was assessed for a licence under the Licensing (Scotland) Act 2005 or a subsequent variation.

1.23. Unless specified as exempt, under Schedule 1 of the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022, short-term let accommodation will require a licence to operate and this includes guest houses.

1.24. The exemption of hotels with planning permission to operate as a hotel at 1.20(d) has two components to it. Whether 1) the accommodation is a hotel and 2) it has planning permission to operate as a hotel. Hosts should take their own legal advice to consider if they meet both components for this exemption.

1.25. As part of enforcement activities, other information about short-term accommodation may determine whether an exemption is applicable. This may include information such as the core description of the premises held by the Scottish Assessors Association (SAA) for the purposes of non-domestic rates, which applies different practice notes for the valuation of hotels compared to guest houses.

1.26. The first point should therefore be established irrespective of point two - whether the premises can be considered to have planning permission granted for use within Planning Use Class 7 (this use class covers hotels and guest houses).

1.27. If you think any of these exclusions might apply to the applicant, then please refer to schedule 1 of the Licensing Order and the Policy Note^[11] for more information.

Application checklist

1.28. 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 1.10 and 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

1.29. 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

1.30. 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.