Where is the nuance in Holyrood’s reform to short-term lets licensing? - Stephen McGowan

In an attempt to assuage concerns from local authorities and their communities about the proliferation of short-term lets – largely driven by global tourism and technological change – the Scottish Government is proceeding with its new short-term lets licensing regime. The draft order, set for implementation from April 2023, falls into existing licensing law but has been met with criticism.

There is concern about the proliferation of short-term lets such as AirBnB proprties

Industry bodies have raised concerns about the legislation, perhaps with reason. Not only will processing thousands of licensing applications and inspections place a significant burden on strained local authority resources, but the regime will also increase compliance costs for landlords. In a context where councils are focusing resources on Covid-19 and where tourism is in the doldrums, the timing of this new law could also be questioned.

Even putting current circumstances aside, there remain issues with practical implementation, notably on points of public consultation, single licences for multiple accommodations, and overprovision.

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Public confusion or consultation?

The new regime will see councils combine site notices for public consultation where there are both planning and licence applications. This may be a good idea in theory but is likely to cause confusion as the planning and licensing systems are entirely distinct, with unrelated application and assessment processes. This will undoubtedly lead to misunderstandings and result in objectors raising planning issues of no relevance before licensing committees assessing applications. Such a situation would be regrettable and could easily be avoided.

In addition, the order proposes that neighbours within 20m of application premises be notified by councils to raise views. In densely populated areas, this 20m radius could comprise large numbers of households, putting a significant workload on council staff. Added to this is the fact that the order makes local authorities responsible for displaying site notices, inverting the position for all other license types (where applicants display notices). Is it sensible to ask councils to carry out such additional work given the constraints they already face?

Multiple accommodations: collective responsibility

The order proposes that for buildings with multiple accommodations and shared facilities, such as apartment blocks, there be a single building licence. This has benefits, notably in cutting cost and administration, however it does mean that the misuse or lack of upkeep of just one flat could lead to licensing breaches for the entire building. Surely withdrawing the licence for an entire building worth of properties amounts to an unfair degree of collective responsibility that would potentially see landlords in perfect compliance with the regime punished?

Arbitrary ‘overprovision’

The new legislation provides grounds for refusal for reason of ‘overprovision’ of short-term lets where there are too many such properties in an area. However, there is no requirement for councils to assess, consult or define overprovision (or the mischief it causes). This could give rise to arbitrary decisions, which seems entirely avoidable given the approaches to overprovision already provided by the Licensing (Scotland) Act 2005. This lack of clarity means we cannot determine whether overprovision might apply to defined localities, and for transition, is it first come first served?

There are also questions over how the measures on overprovision will complement or compete with plans to create ‘control areas’ using the planning system. Will the creation of two competing concepts of ‘overprovision’ and ‘control areas’ lead to confusion?

The Government policy intent is clear, but upon close inspection the proposals raise numerous practical concerns. If we must have a licensing regime for short-term lets, let us have one that works and is based on probative evidence.

Stephen McGowan, partner and head of Licensing (Scotland) at UK law firm TLT​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

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