What is a Short-term Let Licence?

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Back in October 2022, Scotland introduced short-term let licensing. Now, if you want to rent out your place for short stays, you need to get a licence from your local council. There are some exceptions, but generally, if you're offering accommodation for short-term lets, a licence is a must.

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Types of Short-term Let Licences

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There are four types of licences:

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Home Sharing

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This is when you rent out all or part of your home while still living there.

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Home Letting

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This means renting out all or part of your own home while you’re not there, like when you’re on holiday. This also includes 'home swapping', where you let someone use your home in exchange for using theirs or other accommodation. If you swap homes as part of a business, you’ll need a short-term let licence.

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Secondary Letting

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This involves renting out a property where you don’t usually live, such as a second home or a holiday let.

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Home Letting and Home Sharing

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This is when you let out all or part of your own home while living there and when you’re not.

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Types of Accommodation that Need a Licence

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The licensing scheme for short-term lets applies to both residential and commercial accommodations in Scotland.

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• B&Bs and guesthouses
• Chalets
• Cottages
• Lodges
• Holiday lets and self-catering places
• Shepherds' huts
• Tents, tipis, and wigwams
• Treehouses
• Yurts

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Excluded Accommodation

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You don't need a licence for:

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• Aparthotels: Must be entirely owned by one person, have at least five serviced apartments run as one business, share a common entrance, and not mix entrances with other residential units.
• Bothies: Small buildings (max two storeys) with no mains electricity, fuel, or water supply, and at least 100 metres from the nearest public road or habitable building.
• Holiday Caravans or Glamping Pods: Must be in a park with a caravan site licence (Caravan Sites and Control of Development Act 1960).
• Hotels, B&Bs, or Guest Houses: Must have a premises licence under the Licensing (Scotland) Act 2005.
• Self-Catering Accommodation: Must be within the grounds of a licensed premises or hotel and mentioned in the operating plan (Licensing (Scotland) Act 2005).

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No licence is needed for private residential and social housing tenancies.

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You'll need both a short-term let licence and an HMO licence for short-term lets within a house of multiple occupation (HMO).

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How to Apply for a Short-term Let Licence

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To apply for a short-term let licence, visit your local council's website. You can also determine the specific licence type required before applying.

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Check requirements and apply. Contact them for assistance if information about short-term let licences isn't available on your council's website.

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Application Deadlines

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The deadline for applying for a short-term licence varies based on whether you're an existing host or a new one.

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Existing Hosts

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If you already offered short-term lets before 1 October 2022, you have until 1 October 2023 to apply for a licence.

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When applying, the council may request evidence that you were providing short-term lets before the specified date in 2022.

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During the council's review of your application, you can continue to leave your accommodation.

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New Hosts

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Before you begin offering short-term lets, you must apply for and obtain a licence.

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It's illegal to take bookings or accommodate guests without a licence.

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Failure to apply for a licence could result in a fine of up to £2,500 and a one-year ban from applying for a licence.

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Transitional Period

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If you already provided short-term lets before 1 October 2022 and applied for a short-term let licence before 1 October 2023, you can continue offering short-term lets while your application is being processed.

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Local Council Processing Times

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• Transitional Period for Existing Hosts: If you applied before 1 October 2023, councils have up to 12 months to process your application.
• New Hosts: Councils have up to 9 months to process your application.

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If a local council doesn't decide within these timescales, you'll automatically receive a licence valid for up to one year. This is unless the courts grant the council an extension for processing.

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Duration of the Licence

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Local councils determine the duration of your licence. Your initial licence can be valid for up to 3 years from the date of issuance.

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Mandatory Conditions Short Term Let Licensing in Scotland

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To obtain a licence, a short-term let property in Scotland must meet specific criteria, including:

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Compliance with Repairing Standard

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The property must meet the Repairing Standard for houses and flats, including the Tolerable Standard.

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Valid Energy Performance Certificate (EPC)

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A valid EPC, obtained within the last 10 years, must be held and displayed in any advertising for whole homes being rented out.

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Electrical Safety 

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An electrical safety check must be conducted every five years.

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Fire Safety

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The property must meet fire safety criteria, including the installation of heat and smoke alarms, and compliance with the Furniture and Furnishings (Fire Safety) Regulations 1988.

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Risk Assessments

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Fire and legionella risk assessments must be carried out.

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Gas Safety and Portable Appliance Testing

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An up-to-date Gas Safety Certificate and a Portable Appliance Testing (PAT) Report are required.

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Insurance

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Buildings and public liability insurance must be in place.

Hosts must also display some of these certifications and ensure that the number of guests welcomed matches the maximum allowed in the licence. Also, they must adhere to any additional conditions the local authority sets.

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Conclusion 

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In Scotland, hosts offering short-term accommodations must obtain a license from their local council. Different licenses, application deadlines, and processing times apply. Complying with these regulations is essential to avoid fines and legal consequences. If you've offered short-term lets before the specified date, apply for a license within the transitional periods. Non-compliance can lead to penalties and letting restrictions. Stay informed about your area's requirements and promptly apply for the necessary license.