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

7. Complaints and enforcement

Handling complaints

7.1. Complaints are most likely to be received from neighbours and guests. However, anybody can make a complaint. Complaints from neighbours may be about an actual, or suspected, short-term let. Whether the complaint is from a guest or a neighbour, it may be justified or unjustified.

7.2. Licensing authorities, as local authorities, already have well-established complaints procedures^[27]. This chapter is concerned with complaints about the way that hosts and operators are operating their short-term lets, rather than complaints about the way licensing authorities are running their licensing schemes. Complaints about hosts and operators can be considered under powers in the 1982 Act^[28].

7.3. As a general principle, licensing authorities should seek to try to resolve a complaint through engagement with the host or operator in the first instance. If this is not successful, then the procedures under the 1982 Act should be used.

From guests

7.4. Guests might complain because they have concerns about safety which the host or operator did not remedy, for example around a faulty gas appliance. Obviously, guests should raise any concerns with their host or operator, letting agency or platform in the first instance in the hope that any issue can be speedily resolved. However, if they remain unsatisfied or the issue is sufficiently grave they may contact the relevant licensing authority. The licensing scheme makes it more likely that guests will be in contact with the licensing authority with concerns and licensing authorities should establish a clear process for handling contact from guests.

From neighbours

7.5. Neighbours might complain about the following, for example:

• the number of people staying at the premises;
• noise, disturbance or instances of antisocial behaviour;
• issues around maintenance, guests in common areas and accumulation of refuse (especially in flats or tenements); or
• suspected unlicensed short-term lets.

7.6. The credibility of the licensing regime will rest to a significant extent on reassuring neighbours that their concerns can and will be addressed quickly.

Clear information

7.7. In order to assist guests, neighbours and others in making a complaint, licensing authorities should publish details on how complaints can be made on their webpage, including: valid grounds for a complaint, relevant contact details, and estimated timescales for acknowledging and responding to complaints.

Single portal

7.8. Licensing authorities should consider providing a single portal for making a complaint about matters relating to a short-term let. Licensing authorities should consider providing an interactive web form which facilitates people in working out whether they have a valid complaint and whether the matter concerns a potential breach of licence conditions.

Triage and redirection

7.9. Licensing authorities should consider providing a single portal to cover both licensing and planning matters and direct to the complaint to the relevant local authority department themselves, rather than expecting neighbours to understand whether their concern is a licensing or planning or other matter.

7.10. Licensing authorities should be prepared to direct some complaints to planning authorities, letting agencies, platforms, VisitScotland, the police or other bodies for further investigation. It will save time for everyone if information is speedily and effectively shared, not least because it will prevent several versions of the same complaint being submitted to different bodies.

Case management

7.11. Licensing authorities should keep records of complaints. Complaints should be investigated or a note made explaining why no action was taken. For example, in the case of a malicious or persistent correspondent not furnishing any new information, it may be legitimate not to take action.

7.12. Some problematic short-term lets are likely to generate a number of complaints, either at the same time about broadly the same issue or over an extended period of time. Licensing authorities should have a mechanism to link complaints so that the complaints can be dealt with effectively without duplication and so that the authority has an accurate picture of the compliance or otherwise of that host or operator.

7.13. A series of relatively minor complaints about a particular short-term let may have an effect on the licensing authority’s decision in considering a renewal application or varying the licence to attach additional conditions.

7.14. Licensing authorities should be aware that VisitScotland operates a fully traceable complaints procedure for businesses in their quality assurance scheme. Complaints, depending on their nature, are recorded and either dealt with immediately (a business is asked to respond to any points of concern raised) and/or made visible to their Quality & Tourism Advisor team for addressing at the time of their next grading visit. In all cases, a reassessment of accommodation standards is made at subsequent live visits (usually on a biennial basis) and the appropriate award is allocated.

Speed of turnaround

7.15. Complaints should be acknowledged within five working days. Complainants should be appropriately kept up to date with the progress of their complaint; sometimes this may simply be advising them of the outcome.

Assessing complaints

7.16. Some complaints will require enforcement action from the licensing authority. Options for enforcement action are set out in paragraphs 7.44 and following below.

7.17. Some complaints may not require enforcement action from the licensing authority, for example:

• where the licensing authority determines that the complaint is frivolous or vexatious;
• the complaint relates to a matter which has already been investigated and the complaint was found to be unjustified;
• action has already been taken or is in progress; or
• the complaint relates to a matter which is outside the scope of the licensing scheme, for example around the quality of the stay.

7.18. Some complaints may be part of an orchestrated campaign, possibly where neighbours dislike the host or operator. Of course, it is the substance of the complaint that is relevant, not the motivation of the complainant nor the volume of complaints.

7.19. Licensing authorities may also learn more about the wider issues caused by short-term lets in their area by analysing complaints by postcode and other features of the short-term let (which licensing authorities will know a lot more about as more and more are licensed). Complaints may also bring to light short-term lets of which the licensing authority was not previously aware.

7.20. In some cases, complaints may bring to light breaches of licence conditions. Licensing authorities might be able to use information from complaints to improve the way that additional conditions are framed.

Taking a risk-based approach to ensuring compliance

7.21. Responding to complaints is an important, but reactive, way of ensuring compliance. Licensing authorities will also need to establish a proactive approach to ensuring compliance. The right approach is likely to vary from authority to authority, depending on local circumstances. Licensing authorities should take a risk-based approach to ensuring compliance in order to find the right balance between the costs of their compliance activities (which are passed on to hosts and operators as licence fees) and the benefits of these activities.

7.22. Licensing authorities should consider the appropriate balance of:

• self-declaration from hosts and operators;
• checking relevant documentation;
• allowing for third-party accreditation; and
• visits to premises by licensing authority and other local authority officials.

7.23. Licensing authorities should also take account of any input from Police Scotland and the Scottish Fire and Rescue Service, who may have their own views, suggestions or requirements around risk assessment and prioritisation.

7.24. Licensing authorities should establish criteria for handling licence applications and renewal applications and ensuring compliance at other times. Licensing authorities may want to complement a criteria-based approach with random checks; this will help provide assurance that the criteria are appropriate. (For example, if random checks of what were classified as low priority short-term lets highlighted a high proportion of problems, that would suggest that the criteria need to be adjusted.)

7.25. As set out in chapter 2, the first step in ensuring compliance is to make sure that hosts and operators have every opportunity to know what they must do. Licensing authorities should take active steps to publicise their licensing scheme. Publicising the licensing scheme will be especially important in the run up to 1 October 2022 when awareness may be lower.

Identifying unlicensed short-term lets

7.26. Operating without a licence, when required to have one, is an offence under the 1982 Act (see below). Note that some hosts and operators may legitimately be operating without a licence up to 31 March 2024; the transitional arrangements are set out in Guidance Part 1.

7.27. Note that there will be two types of licence for short-term let: home sharing and home letting; and secondary letting. Operating one type of short-term let whilst only having a licence for the other would be operating without a licence. For example, a host operator with a licence for home sharing and home letting who then let out their whole property as a secondary let, would be committing an offence. The licence number format (see chapter 8) makes it easy to distinguish between these two types of licence.

7.28. Licensing authorities are obliged to maintain a public register of licensed short-term lets and update this on a quarterly basis (see chapter 8). Unlicensed short-term lets will not appear on this public register.

7.29. Licensing authorities, letting agencies and platforms all have a role to play in identifying and eliminating unlicensed short-term lets.

Complaints to the licensing authority

7.30. Some unlicensed short-term lets may come to light through complaints to the licensing authority from guests or neighbours. If the subject of the complaint is that the premises is not licensed, the complainant should be directed to check this for themselves through the public register in the first instance. It is possible that the public register may be up to three months out of date so the complainant may have reason to believe that the premises is unlicensed when, in fact, a licence has recently been issued or is in the process of being determined.

Proactive action by the licensing authority

7.31. Licensing authorities should consider putting in place random checks of adverts and listings in their area. Licensing authorities should check that licensed numbers that are displayed on adverts and listings are real and have not expired.

7.32. Note that accommodation that falls outside the scope of the definition of short-term let (for example hotels licensed under the 2005 Act) will appear on adverts and listings without a short-term lets licence number.

7.33. Licensing authorities should investigate properties that appear to be within the scope of the definition of short-term let but does not have a licence number.

Proactive action by letting agencies and platforms

7.34. Letting agencies and platforms have an important role to play in preventing unlicensed short-term lets from operating unlawfully. Hosts and operators are allowed to advertise their property without a licence. However, from 1 April 2024, letting agencies and platforms should not allow a booking to be made without a licence number first being provided by the host or operator. This is because the requirement to have a licence in order to accept bookings will apply to all hosts and operators from this date.

7.35. Where it appears that a host or operator is attempting to operate without a licence when one is required, or where the letting agency or platform has other concerns about breaches of licence conditions, they should report these to the relevant licensing authority.

7.36. As stated above, hosts and operators are permitted to advertise in advance of obtaining a licence and licensing authorities should issue a provisional licence number on receipt of a licensing application to facilitate this. Existing hosts applying before 1 April 2023 can accept bookings and accommodate guests whilst their application for a licence is being determined.

7.37. Hosts and operators:

• must ensure that any advert or listing placed on or after they are granted a licence includes their licence number;
• should update any on-line listing or advert as soon as reasonably practicable after receiving a licence number; and
• should make clear in their terms and conditions that the booking is conditional on the guests’ compliance with the licensing scheme.

7.38. Letting agencies and platforms should take steps to help hosts and operators comply with this by providing them with suitable reminders at key stages and dates in their listing process.

7.39. The Scottish Government has specified a consistent licence number format for the whole of Scotland (see chapter 8). The 16 digit part of the licence number would allow letting agencies and platforms to do some authentication of the licence number, but there is no requirement on them to do so. Letting agencies and platforms could help prevent invalid licence numbers being submitted as part of a request from a host or operator for a listing.

7.40. Licence numbers will also specify whether the licence relates to: either home sharing and home letting; or secondary letting. Letting agencies and platforms should consider automated processes for picking up inconsistencies between the licence type and the listing. For example, where a host operator is using a home sharing and home letting licence number but advertising the property as being a whole property let, as evidenced by, for example, it not being their billing or contact address.

Compliance with other licence conditions

7.41. Licence numbers will be included on licensing authority’s public registers making it easier to correlate a licence number with other data in relation to the short-term let, including some mandatory conditions. For example the public register will include information on the maximum occupancy. This means that licensing authorities, letting agencies and platforms could check that the advertised occupancy of any particular premises does not exceed the maximum occupancy as specified on the public register.

Automated processes

7.42. Licensing authorities should work with the Scottish Government to support technical systems that allow for the automated identification of unlicensed or non-compliant short-term lets. Letting agencies and platforms are asked to engage constructively in this work too. The Scottish Government wants to support the development of robust technical systems that use the public registers and apply automated rules to listing data to pick out problems.

7.43. An important step is to specify the data architecture and business messages precisely. This is discussed further in chapter 8.

Options for enforcement action

7.44. The options for enforcement action for licensing authorities provided through the Licensing Order and 1982 Act are:

• additional licence conditions on application (or through variation) – see chapter 5;
• enforcement notices – see paragraphs 7.45 and following below;
• variation, suspension or revocation of the licence – see paragraphs 7.49 and following below; or
• prosecution in respect of offences under the 1982 Act – see paragraphs 7.54 and following below.

Enforcement notices

7.45. Licensing authorities have the power^[29] to serve enforcement notices. Where complaints, visits to premises, or other information, suggest that any licence condition has been, or is likely to be, breached, licensing authorities can require a licence holder to take action to put it right. This will usually be done by serving an enforcement notice (“non-compliance” or “improvement” notice). Such notices must set out the matters constituting a breach or a likely breach, the action required to rectify or prevent the breach and the date by which the action must be taken.

7.46. The reference to future breaches might seem unusual but it would be based on evidence. This is to cover, for example, a host or operator advertising property as capable of taking ten guests in breach of a licence condition specifying no more than eight. This would be evidenced in a listing or advertisement.

7.47. The format of an enforcement note may be similar to an additional condition (see chapter 5). An enforcement notice must specify—

• the matters constituting the breach or likely breach^[30],
• the action to be taken by the licence holder which the licensing authority considers necessary for the purposes of rectifying or, as the case may be, preventing the breach, and
• the date by which the action must be taken.

7.48. If satisfactory action is not taken by the required date(s) to address the issues set out in a notice, licensing authorities have powers to vary, revoke or suspend a licence.

Variation, suspension and revocation

7.49. A licensing authority can vary, suspend or revoke a licence in certain circumstances, see Guidance Part 1. Licensing authorities may do this without serving an enforcement notice if the seriousness of the breach justifies urgent action.

7.50. The procedures to follow for variation, suspension and revocation are set out in schedule 1 to the 1982 Act.

7.51. Hosts and operators can appeal against being served with a notice of variation, suspension or revocation. Hosts and operators can take bookings and provide accommodation whilst they appeal a revocation or suspension and they have 28 days in which to lodge an appeal.

Variation

7.52. A licensing authority may vary the terms of a licence on any grounds they think fit^[31]. They can do this at any time. They can do this following an application made to them by the licence holder or of their own initiative.

Suspension or revocation

7.53. Licensing authorities may order the suspension or revocation of a licence^[32] if in their opinion—

• the licence holder is no longer a fit and proper person to hold the licence;
• the licence holder is managing the property on behalf of someone who would have been refused the grant or renewal of the licence;
• the short-term let is causing or is likely to cause undue public nuisance or a threat to public order or public safety; or
• a condition of the licence has been contravened.

Offences under the 1982 Act

7.54. Section 7 of the 1982 Act^[33] sets out four offences, as set out below. These currently attract fines on the standard scale^[34]:

Level on the scale	Maximum fine
1	£ 200
2	£ 500
3	£1,000
4	£2,500
5	£5,000

Operating without a licence

7.55. It is an offence, without reasonable excuse, to carry on an activity for which a licence is required without having such a licence. Depending on the activity, different punishments apply. The default is a fine not exceeding level 4 on the standard scale.

7.56. The Scottish Government intends to increase the maximum fine to £50,000 through provision in a suitable Bill early in this session (2021-26) of the Scottish Parliament. We know that secondary letting of a normal home can yield much more revenue than letting under the 2016 Act. With so-called “party mansions”, the revenue may be significantly higher.

• 7.57. Only imprisonment may be a sufficient deterrent in rare and extreme cases. The Scottish Government intends t make provision for imprisonment as a last resort for hosts who continue to operate without a licence. Imprisonment could be useful where the potential revenue for the host or operator from continuing to operate without a licence exceeded the maximum fine and the host or operator was continuing to operate in flagrant disregard of the law.

Failing to comply with a licence condition

7.58. It is an offence to fail to comply with a licence condition, though it is a defence to have used all due diligence to prevent the offence. The default is a fine not exceeding level 3 on the standard scale.

7.59. The Scottish Government intends to increase the maximum fine to £10,000 through provision in a suitable Bill early in this session (2021-26) of the Scottish Parliament.

7.60. The maximum occupancy condition limits the number of guests in the premises. Breaching this condition might lead to significantly more revenue. The fine for failing to comply with the licence condition must outweigh the profit made from such a breach.

7.61. Note that some mandatory conditions are also enforceable through other legislation. Hosts and operators must include an EPC rating in their listing where they are required to have a valid EPC certificate for the premises under building standards legislation. A host or operator who fails to hold a valid EPC certificate, where required to have one under building standards legislation, can be fined as follows as a minimum^[35]:

• £500 for failing to hold a valid EPC certificate; and
• £500 for failing to display a rating on any property listing.

Failing to notify a change etc.

7.62. It is an offence for a licence holder, without reasonable excuse, to:

a) fail to notify the licensing authority of a material change of circumstances (level 3 on the standard scale),

b) make or cause or permit to be made any material change in the premises (level 3 on the standard scale),

c) fail to deliver the licence to the licensing authority (level 1 on the standard scale).

Making a false statement

7.63. It is an offence to make a false statement in an application (level 4 on the standard scale).

7.64. The Scottish Government intends to increase the maximum fine to £10,000 through provision in a suitable Bill early in this session (2021-26) of the Scottish Parliament.

7.65. Licensing authorities should be aware that some hosts or operators may make a false declaration about where they live, in order to apply for a home sharing or home letting licence, rather than a secondary letting licence. The host or operator may be attempting to obtain a licence with a lower fee and to avoid overprovision or planning controls.