Changes to short-term rental licensing legislation in Scotland

Your quick guide to TLT – Scotland’s leading licensing team

A new licensing regime is coming soon which will affect thousands of private residential and commercial properties across Scotland – Short Term Licensing.

Are there any exemptions?

There is a list of premises that are excluded from the scheme. These include:

  • Long-term leased premises which are certain types of legal leases, such as protected leases, secured leases, short-term secured leases, crofts, Scottish secure leases, various agricultural leases.
  • Premises with liquor license.
  • Hotels, hostels, nursing homes, student residences, a refuge, a bothy.
  • Accommodation provided to employees as part of their contract.

How much will it cost?

Each local authority will set its own fees and these are being worked out. We estimate charges to typically range between £300-£500 in most areas, but can be as high as £X.

The license will last for a maximum of three years and must be renewed. In some cases, local authorities will only issue one-year licenses. You may need to incur additional expenses to (a) produce layout plans for the property, (b) bring the property into compliance with regulatory regimes, and (c) take legal advice and representation for hearings.

What are the holdups ?

The deadlines for the new regime are as follows:

  • If you have an existing short-term rental and are taking reservations before October 1, 2022, you have until April 1, 2023 to submit a claim (proof of use will be required).
  • If you have a new short-term rental for which no reservations were made before October 1, 2022, you can apply from this date, but you cannot accept reservations or guests while a license is not granted.

What is the process?

The application process is administered by the local authority, ie the council. The decision is made by the licensing/regulatory committee of the authority.

Applications will go through a detailed consultation period, including posted site notices, notification to neighbors and consultation with responsible authorities such as Police Scotland and the Scottish Fire Service. Applications will be called for a hearing where the applicant will have to appear and convince the committee to grant the license, and deal with any objections or unfavorable reports.

What is the purpose of the license?

This new regime is rooted in concerns about (a) the regulatory certainty of private residential properties rented for profit on a commercial basis and (b) the wider community impact on properties used in this way, such as behaviors antisocial and crime.

What will be evaluated?

From our experience, we believe there will be three key areas that licensing committees will seek to assess:

  • Security of the property – is it as planned, with appropriate security certificates eg gas/electric, fire etc. ?
  • The suitability of the applicant – as a license applicant you will be exposed to a personal ‘fit and proper test’ – for example, if you have any convictions these must be declared
  • Impact on the local community – this is a broader test which may take into account your existing relationship with your neighbors and whether there are for example noise complaints

What areas are affected?

Every local authority in Scotland is introducing the scheme. In some areas the local councils will be more restrictive than others and some landlords will find that they are prohibited from using the property for short term rental whether or not they have applied for a license due to a combination of new planning control areas. , and local licensing policies.

Will it affect me?

If you are renting a property on a short-term basis, such as a residential apartment, cottage, vacation home, or serviced apartment (under certain circumstances), you will soon need a short-term rental permit. This will apply whether you use a platform such as AirBnB or more traditional methods of renting the property. Without the permit, it will be a criminal offense to leave it short term.

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