14th January 2022

Short-Term Lets : Long-Term Solution?

As highlighted in one of our previous blogs https://bit.ly/3rfRyiR, short-term lets have become a topic of controversy in Scotland.   As a consequence, the Scottish Government made a commitment to ensure that legislation is produced to provide Local Authorities with appropriate regulatory powers to address concerns of local communities and balance such concerns with wider economic and tourism interests.

One of the potential regulatory powers that the Scottish Government have considered is the licensing of short-term lets in Scotland.   The principal objective of the licensing legislation is to provide Local Authorities with discretionary powers to ensure that short-term lets are safe, address issues such as noise, disturbance and anti-social behaviour, facilitate Local Authorities in knowing what is happening in their area and allow them to deal with complaints more effectively.

The new legislation is subject to approval by MSPs and, if passed, will come into effect from March 2022.    Under the proposed legislation, all Local Authorities will be required to establish a short-term licensing scheme, capable of receiving applications, no later than October 2022.   The legislation proposes that by 1st April 2023, all existing hosts and operators are to apply for a licence and, in general, all short-term lets are to be licensed by 1st July 2024.

The proposal to license short-term lets is complemented by the separate legislation which allows Local Authorities to designate control areas.  As mentioned in our previous blog, the purpose of a control area is to allow Local Authorities to manage high levels of secondary lettings which affect the availability of private residential housing, the character of the neighbourhood, tackle issues with properties being used for inappropriate purposes and address anti-social behaviour.  

In order to obtain a licence, all hosts will be required to comply with numerous license conditions predominantly addressing the safety aspects of properties.   Such measures will include fire safety, gas and electrical safety certification, repair standards and maximum occupancy.

It is proposed that there will be further mandatory license conditions which will assist with compliance and enforcement and help to protect both guests and neighbours.   These include ensuring that any advert or listing of the property includes a note of the licence number and that it has a valid Energy Performance Certificate, ensuring that the property benefits from adequate building and public liability insurance, ensuring that the holder of the licence does not provide false or misleading information to the Local Authority and ensuring that any necessary fees are paid to the Local Authority for the grant of the licence.

Local Authorities will have the autonomy to set their own fees in order to recover establishment and running costs specific to their area and, as a consequence, it is not clear at this stage what the approximate costs of obtaining a licence would be.   

A recent Business and Regulatory Impact Assessment estimates that the average licence fee would be £214 in the lowest-case scenario with costs being incurred once every 3 years.   This is contrasted with Landlord registration fees which are nationally set at £67 plus £15 for each property making the lowest fee for one property £82 with costs being incurred once every 3 years.

If you require any advice in relation to the proposed changes to license a short-term let, please contact a member of the Blackadders’ Commercial Property team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.

Natalia Bell, Solicitor
Commercial Property
Blackadders LLP

www.blackadders.co.uk

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