Short Term Lets: Consultation on draft Licensing Order and Business and Regulatory Impact Assessment (BRIA)

1. 9 Month Time Limit/ Mandatory Conditions to be able to be satisfied during Licence Application Process

We note that it is proposed that 12 months be allowed to local licensing authorities to determine licence applications for short term lets during a transitional period, but that thereafter a determination period of only 9 months will apply.

It is our view that any time limit for determining applications for short term lets should be 12 months, for all applications (not just during a transitional period), rather than 9 months. While we appreciate that it will be left to local authorities how they satisfy themselves as to the suitability of accommodation to be used, other licensing regimes where the suitability of property/ premises require to be assessed allow a 12 month processing period: for example, House in Multiple Occupation (HMO) licensing (under Housing (Scotland) Act 2006) and Skin Piercing and Tattooing licensing (by virtue of an Order made under the Civic Government (Scotland) Act 1982). Indeed, at the present time, all applications under the 1982 Act are, on a temporary basis, subject to a 12 month determination period to allow for the challenges created by the coronavirus pandemic. We are concerned that the proposed 9 month time limit will place considerable strain on local licensing authorities and that a longer period should be permitted, as with the above regimes which equally involve checks on the suitability of property.

Related to the above point, we note the proposed requirement that local authorities must be satisfied that the Mandatory Conditions will be able to be met by the licence holder prior to granting a licence. We are not persuaded that this requirement is necessary and note that this is not a specific requirement in other similar licensing regimes such as HMO licensing (only that a property is suitable as an HMO). Currently, our HMO licensing process in Renfrewshire involves inspection of the properties to be licensed, but thereafter, as with all other local authority licensing regimes, compliance with mandatory and other licensing conditions is a matter for monitoring and enforcement.

We are very concerned that, particularly when taken together with the 9 month determination period referred to above which will apply after the initial transition period, this additional requirement regarding Mandatory Conditions will require considerable resources to be allocated to short term lets licensing. We have experienced considerable difficulties in relation to landlord registration applications since the introduction of the Private Landlord Registration (Information) (Scotland) Regulations 2019, which relate to broadly similar safety issues as a number of the Mandatory Conditions. Due to the extent of these difficulties, a report is being taken to our Regulatory Functions Board (which is in effect our Council’s licensing committee) very shortly. We anticipate that, based on the proposed checks involved, fees for short term lets may require to be comparable to HMO licence fees to ensure that the cost of operating the short term lets licensing regime can be recovered, as with other licensing regimes under the 1982 Act.

2. Policy Statements

We note that the proposed legislation will require local authorities to either introduce policy statements on overprovision of short term lets and on whether they will grant Temporary Exemptions, or decide that they do not wish to do so.

While the accompanying Guidance suggests that a policy on Temporary Exemptions may be able to be expressed in simple terms, there is on the other hand precedent for policies on overprovision in other existing licensing regimes, for example liquor licensing. Should a local authority seek to introduce an overprovision policy, the identification of localities and development of an overprovision policy is likely to take some time. While we note that the intention is to lay the proposed Licensing Order in September 2021, the Order will not be in force until January 2022. We have some concern as to whether the timescale suggested for putting any overprovision policy in place (by 1st October 2022), from the proposed Order coming into force, is realistic.

We also would observe that the development of initial policy statements on overprovision will overlap with the work of Licensing Boards (and Council licensing teams) in developing new Statements of Licensing Policy (including overprovision assessments) which will be required following upon the 2022 local government elections: it may be noted that the Licensing (Scotland) Act 2005 allows a period of 18 months for consultation upon and introduction of those policies.

3. Enforcement Notices

We are not persuaded that there is a requirement for this procedure for short term lets by way of a modification of Schedule 1 to the 1982 Act. The procedure appears to be circular. It allows for this Notice to be served where a condition of licence has been breached or is likely to be breached and for a condition of an enforcement notice to then be treated as a condition of licence. Given that local authorities can already hold a hearing into possible suspension/ revocation of a licence where any condition of a licence is breached, by virtue of Paragraph 11 of Schedule 1 to the 1982 Act, it is not clear what use will be made of this proposed additional provision, as there is no other obvious consequence following upon the serving of an Enforcement Notice.


4. Miscellaneous

(a) In the draft Licensing Order, Schedule 1, Paragraph 3(2), there appears to be a typographical error. Reference is made to the word “licence” at “Paragraph 1(m)” to avoid HMOs being excluded from the proposed regime (when not the guest’s only or principal home). The word “licence” does not however appear, at all, in Paragraph 1(m) of Schedule 1: it therefore appears that the reference should be to Paragraph 1(k) of Schedule 1.

(b) We note the proposed modification to the 1982 Act to introduce neighbour notification provisions for short term lets licensing. We note it is proposed that neighbours within 20 metres be notified and that the responsibility for neighbour notification would fall to the local authority, either by displaying a site notice or by notifying neighbours.

We think this is potentially onerous on local authorities. Under the existing provisions of the 1982 Act for premises based activities (and indeed under the HMO legislation), site notices are displayed by the applicant for the licence. For these regimes, we obtain sight of a certificate confirming display of the notice and may ask for some form of evidence as to display, as required (there is also provision for further display in the 1982 Act, where the notice has not been correctly displayed).

While we have found that these arrangements generally work well, should a revised neighbour notification procedure be introduced we would suggest that the options open to the local authority be either display of a notice by the applicant or that the local authority notifies neighbours within a 4 metre locality, which is the distance provided for in relation to liquor premises under the terms of the Licensing (Scotland) Act 2005. The proposed 20 metre locality in the draft Order could prove onerous in built up areas. Regarding the proposed display by the Council of a site notice, this will not mitigate against the risk of a notice being removed during the period of its display, by one means or another, so the benefits of that approach may be considered questionable.

(c) The drafting of the modified Paragraph 5(3A) of Schedule 1 to the 1982 Act appears inconsistent with the existing Paragraph 5(3): Existing Paragraph 5(3) sets out grounds for refusal and, if these are not made out, directs the local authority to grant an application. However, the proposed Paragraph 5(3A) then separately gives a discretion to refuse based on overprovision. Perhaps the drafting of these modified provisions can be revisited to ensure their consistency.

(d) We note it is intended to introduce guidance as to what constitutes a fit and proper person to hold a short term lets licence. We are not convinced that this would be of assistance. There is developed case law in relation to this test, which is regularly used by local authorities. There is a risk that any guidance, to which local authorities would be expected to have regard, could be inconsistent with the developed case law, which could in turn result in licensing decisions being challenged.

(e) We wonder whether there is a typographical error in relation to the proposed new Paragraph 5(2B) of Schedule 1 to the 1982 Act (as set out at Paragraph 7 of Schedule 2 to the Order. This states that the Council “must impose any limit on the number of nights for which premises may be used for secondary letting”. Is the word “not” missing from this subparagraph? Otherwise, this provision appears to be in direct conflict with the proposed modified section 3B of the 1982 Act (at Paragraph 1 of Schedule 2 to the proposed Licensing Order) which states that such a limit must not be imposed.

(f) With regard to the Policy Note accompanying the Licensing Order, it is not clear that the position where a licence is suspended or revoked has been properly understood in the development of the new legislation. Where a person no longer has a licence, or their licence is suspended (and hence is no longer in effect), the person is unable to operate under their licence by the automatic operation of law. Either the decision comes into effect immediately (if imposed by the local authority under Paragraph 11(10) of Schedule 1 to the 1982 Act), or it comes into effect at the end of the period for appeal. While decisions require to be confirmed by a Council in writing, there is no legal basis for some other date being specified for the decision taking effect. Where a licence is no longer in force (or effect), the matter of whether to charge an unlicensed host with an offence would be for the police.

We have little further to add in relation to Paper 3 given the detailed response in relation to Paper 2.

We note however that the Order is expected to come into force in January 2022. Given this, we have concerns regarding some of the timescales set out in the Order. For example, any policy statement on overprovision of short term lets would be taken forward once the Order is in force. This is not anticipated to happen until January 2022. The BRIA suggests that it is “allowing one year” to local authorities to introduce the provisions, on the basis that the Order is expected to be laid in September 2021, but it is not expected to be in force at that time.