Short-term lets in Scotland — how to apply for your licence

The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 for the licensing of short-term let properties came into effect on 1 March 2022.

Your local authority issues these licences and this order means all 32 Scottish councils have to set up a scheme to regulate how these properties are rented by the 1 October this year.

I wrote an article recently that set out some of the background, and here’s an overview of what to expect over the coming months and what you’ll need to consider when you’re applying.

How will this work in practice?

If you’re operating a short-term let before 1 October, you need to apply for a licence before 1 April, 2023.

In the meantime, you can carry on operating until your application’s determined. Licensing authorities have 12 months to do this from the date you made the application.

This extended time limit is designed to help councils manage the volume of applications they expect to receive straight away. In all other cases, they have nine months from the date the application was made to consider each application.

After 1 October 2022, any new operator will have to apply for the property to be licensed before taking bookings. This also covers existing operators who plan to open a new short-term let accommodation after 1 October 2022. This is because, under the order, the property’s licensed, not you as the operator.

Between 1 October, 2022 and 1 July, 2024 it will be an offence for someone to start operating a short term let while their application is being determined, or for a new or existing operator to carry on running the short-term let when an application has been refused.

From 1 July, 2024, in all circumstances, it will be an offence to receive guest bookings or welcome guests into your accommodation without a licence.

Determining the application

As part of considering your application, your licensing authority will want to check you and your premises comply with mandatory requirements.

Each application will be sent to statutory consultees Police Scotland and the Scottish Fire and Rescue Service for their feedback. You will have to display a site notice to notify neighbours of your intention to operate the property as a short-term let.

Your licensing authority must grant your application unless there are grounds to refuse it.

Possible grounds for refusing your application may include —

• Anybody named on your application being disqualified from having a short-term lets licence

• Anybody named on your application not being a “fit and proper” person, i.e if they have a previous conviction or have had a licenced removed in the past

• If someone else benefitting from the short-term let license who would be refused a licence if they applied themselves

• The premises are not suitable or convenient in terms of — a) the location, character or condition of the premises; b) the nature and extent of the proposed activity; c) the kind of people likely to be in the premises; d) the possibility of undue public nuisance; and e) public order or public safety

• There is another good reason for refusing the application (this cannot be applied in a blanket fashion without considering the merits of a particular application)

• If you can’t demonstrate, or achieve, compliance of the mandatory licence conditions or any other conditions the licensing authority looks for in relation to your application

Which short-term lets need to be licensed?

Basically, any type of accommodation that is let on a short-term basis.

This list is non-exhaustive but the order applies to shared homes, or rooms within a home, treehouses, yurts, static boats, lighthouses or caravans (without a caravan site licence).

Types of short-term let licence

Licensing authorities can grant one of four types of licence for short-term let accommodation.

The licence granted must be for either —

• Secondary letting

• Home letting

• Home sharing

• Home letting and home sharing

Home sharing and home letting cover the use of the host or operator's only or principal home, whereas secondary letting covers separate premises.

Which properties are excluded?

The Scottish Government guidelines list the excluded properties as —

• B&B or guest house with a premises licensed under Licensing (Scotland) Act 2005

• Bothy — a building of no more than two storeys that has no mains electricity, piped fuel supply or piped mains water supply and is at least 100 metres from the nearest public road and from the nearest habitable building

• Holiday caravan or glamping pod in a park with a caravan site licence (Caravan Sites and Control of Development Act 1960)

• Hotels with a premises licence under the Licensing (Scotland) Act 2005

• Self-catering accommodation within the grounds of a licensed premises / hotel (Licensing (Scotland) Act 2005). The accommodation needs to be specifically mentioned as part of the operating plan

• Serviced apartments – where an operator manages five or more in one building

Planning requirements

The legislation also allows local authorities to designate short-term let planning control areas, for example Edinburgh City Council has deemed the whole of the city a control area from 5 September this year.

If your property is in one of these designated areas and you let an entire residential home or flat on a short term basis, you’ll need one of these two things as well as a licence —

• Planning permission for change of use (planning permission must either be in place or an application has been made but not determined)

• Certificate of lawfulness

It is possible that your planning authority could designate a control area affecting your premises after it has granted your licence.

To comply in this case, you should submit a planning application as soon as possible after the council has designated the control area. Your licensing authority will make reasonable allowance for you to do this.

Short-term let operators should consider potential planning requirements.

Outwith a control area, you may still need planning permission if the council considers the change of use of a premises a material change. Your licensing authority can refuse to consider your application if it looks like you need planning permission and you don’t have it.

Licensing standards

It’s important to check whether the property meets required short-term let licensing standards. This can be done by a site visit — you’ll need to pay a fee for this — and you confirming the relevant certification, which I’ll come to in a moment, is in place.

Getting ready to apply

The Scottish Government guidelines provide an extensive description of what the local authority will look for including the identity of the owners, contact details for everyone named in the application and a fire risk assessment.

Other things to consider

• You should check your title deeds to ensure are no restrictive burdens which might prevent you letting out your property

• Ensure you declare any additional income for tax purposes

• If your property is mortgaged, check with your lender for consent to let out your property as a short-term let (and for any planning permission for change of use if required)

• Check your insurance policy to ensure your cover includes the use of the property for short term lets

Mandatory conditions

There are mandatory conditions that every short-term let in Scotland will need to follow.

These focus on property safety.

For example, once an agent responsible for a let’s day-to-day running is identified in the licence, you’ll need local authority approval to make a change. Plus, hosts and operators will state in their application a maximum number of guests they would like to accommodate. However, licensing authorities can also set more conditions to cover local circumstances.

Important information for those considering entering the short-term let market

If you are a new operator, you will need to consider the cost of compliance with the mandatory and additional conditions. Many of the licence conditions relate to existing law or best practice so are unlikely to be an additional cost for existing operators.

Local authorities will charge a fee for each licence application this may vary from council to council and may be different depending on the type of licence you’re applying for.

There will also be a fee for any planning application you need to submit.

Importantly, taking the time to get your application right first time will mean the licensing authority will be able to reach a decision quicker. This is crucial because you can’t operate without a licence and unnecessary delays could have a considerable financial impact on your short-term let business’s viability.

If you’re an existing short-term let landlord, or are thinking of letting out your property, our team can help guide you through the whole process, including licensing and planning.