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Restrictions on Scottish Short-Term & Holiday Lets

Posted by Matthew Gunn on July 21, 2022
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What is changing?

The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 was passed by the Scottish Parliament on 19 January 2022 and came into force on 1 March 2022.

This means that all operators of short-term or holiday lets will now be required to hold a license, much like being a registered landlord if you let out long-term, private rental properties.

Owners of short-term let properties, including home sharing, home letting, and secondary letting, will need to obtain a license for each premises they operate. These regulations will go into effect 1 October 2022. Existing hosts/operators will have until 1 April 2023 to complete their application for a license, whereas new hosts will need a license prior to operating after 1 October.

What’s the purpose?

The Scottish government is implementing these measures for a few reasons. One being to give neighbours a chance to raise any objections to the property being a short-term let, as it will also affect them. Reasonable grounds for objection include:

  • the application is not consistent with the licensing authority’s policy on overprovision;
  • concerns that the application is inaccurate or misleading;
  • concerns about the safety of guests, neighbours or others;
  • concerns about noise or nuisance; and
  • concerns that the application runs contrary to other legal or contractual requirements.

The intention is also to regulate the short-term lets industry and prevent overprovision. The Local Authority can reject an application if they deem there is already too many short-term let properties in the area.  The application will determine if the owners and operators are deemed “fit and proper” to offer a property in the area. They will consider criminal convictions, any previous loss of licenses and if any false or misleading information was provided on the application.

These regulations will also help to enforce maximum capacity for let properties and hold the owners to the Repairing Standard, as well as Fire Safety and other compliance certificates such as Gas Safety, Electrical Installation Condition Reports, Portable Appliance Testing, and a Legionnaire’s Risk Assessment. Short-term let operators also must have valid buildings insurance and valid public liability insurance (covering no less than £5 million) in place throughout the entirety of the license.

How do I apply?

You as the host can make your own application with the relevant Local Authority or appoint a solicitor or Letting Agent/Property Manager to make the application on your behalf. If you do not own the property, you must have permission from all owners in order to make the application.

On the application, the host(s), all owners (if not the hosts), and any companies/persons involved in day-to-day management must be listed. This does not include those that oversee operations such as cleaning or garden maintenance. If utilising a Letting Agency, the Company and it’s Directors or Partners must also be listed – employees are not included in this.

When will I receive a decision?

Any existing hosts can make an application before 1 April 2023 and can continue operating until they receive a decision. The Authority will make a decision within 12 months of application for these hosts.

Any new hosts from 1 October 2022 will be required to obtain a license prior to operating. The Authority has 3 months to consider an application and a further 6 months to determine the application.

What are the costs?

Each Local Authority will be determining their own cost for application. Other sources have noted that Glasgow City Council is aiming to have the application fee be between £150 and £400 per accommodation – a staggering difference between Landlord Registration for long-term lets which is £68 for the initial application and a further £16 per property.

Can I switch to long-term lets to avoid the fees?

The short answer is, yes. You would still need to meet Safety Compliance Regulations and adhere to the Repairing Standard, but switching from short-term to long-term lets is quite simple. You also will not face the risk your application being rejected due to overprovision like you could with short-term licensing.

We wrote an entire blog article about becoming a Private Residential Landlord – you can read the post here. We’ve also written an article about how to choose a letting agent, should you decide to make the switch.

How can Gallus help?

If the impending regulations and stress of operating a short-term let are making you re-think your rental property, we can provide a free rental valuation to help you determine what rental income you could receive with a long-term let. Our management style also helps landlords save money in the long run, providing them with the best yields possible.

If you’d like to read more on what services we provide, these can be found on the Landlords page.

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