JENNIFER M SIMPSON: Legislation aims to make short-term lets safer and more accountable
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The View from the Board by Jennifer M Simpson
Since 2022 all new operators of short-term lets have needed a licence to operate and by October 1 all existing hosts and operators will need to have applied for a licence or they will be committing a criminal offence.
They could be fined up to £2500, though the Scottish Government has indicated that they will look to increase this penalty to £50,000 during the current session of the Scottish parliament.
The legislation was put in place to ensure that short-term lets are safe and address issues faced by neighbours. The legislation aims to balance economic and tourism benefits with the needs and concerns of communities. The cost of the licence will depend on the number of occupants and the type of property.
In Highland Council areas the fee will range from £320 to £610 – the owner might also be charged an additional fee for any enforcement costs. The range of fees charged is a bit of a postcode lottery with the highest fee of £5869 currently being charged for an up to 21-person occupancy property in Edinburgh.
A property is a short-term let if the guest does not use the accommodation as their only home, it is entered into for commercial consideration and the guest is not an immediate family member of the host. There are a range of exceptions such as providing accommodation to students as part of an arrangement made or approved by an educational institution (such as an exchange student) or for individuals who are living in the property to provide services (such as a live-in carer).
The applications process is onerous. Guidance can be found on the Highland Council website, but hosts will need to show they have complied with fire, carbon monoxide, electrical, gas and water regulations as well as arranging for Portable Appliance Testing and ensuring all furniture complies with the fire safety regulations.
The legislation also allows for "control areas" to be created in areas which are adversely affected by the number of short-term lets. In a control area the use of a dwelling house as short-term let will always be material and therefore require planning permission. The only control area currently being proposed in the Highlands is in Badenoch and Strathspey.
Overall, there are concerns that these regulations will cause significant difficulties at times of high demand in an area (such as during the Edinburgh Festival or large sporting events) and while there are provisions in place for up to six-week temporary licences to cover big events, the safety criteria still need to be met.
This new requirement will certainly change the dynamic in the short-term let market and the days of easily listing a property on sites such as Airbnb without needing to jump through compliance hoops may well be behind us. It is difficult to say whether this legislation will strike the correct balance.
These checks and balances imposed by the licence would appear to make Airbnb and other forms of short-term let properties safer and more accountable places to stay, but whether the costs and formalities will put some potential hosts off and ultimately lead to less accommodation being available at times of high demand in an area time will tell.
It is likely welcome news for the operators of hotels and guest houses who already had their own licensing requirements and will now be competing in a more equal playing field.
- Jennifer M Simpson is a director of BBM Solicitors.
