Kirsty Gallacher

In Scotland, a licence is required for what are known as home sharing, home letting and secondary letting. The Civic Government (Scotland) Act 1982 (Licensing and Short-term Lets) (Amendment) Order 2024 will make a number of updates to the existing licensing scheme if passed. The amendments address some restrictive aspects of the previous legislation, aiming to provide a more balanced approach.

Short-term let owners and the tourism sector more widely have been hoping for some more radical amendments to the restrictive legislation currently in force. It seems that the proposed amendments may not significantly reverse the reduction in the number of properties to let. However, the proposed legislation will be welcome news for some in the industry, for example those specialising in lets for the Edinburgh Festival and other ad hoc events, or those looking to sell a relevant property or business.

One significant amendment is the introduction of licensing exceptions for up to six weeks a year. The 2024 Order will place a cap on the temporary exemptions that can be sought from the requirement to obtain a short-term let licence. Hosts may only apply for three periods of exemption per calendar year, with the total exemption period not exceeding six weeks. A temporary licence will permit hosts and other businesses to take bookings and accept guests for a restricted period of time of up to six weeks without having a licence in place. This may be particularly beneficial in regard to special events such as festivals and major sporting events.

Currently, if a property is sold, the purchaser would be required to apply for a new licence. However, amendments would allow licences to be transferred to a new host. Short-term let licence holders would be able to transfer their licence to third parties via an application to the licencing authority. The idea is to support hosts and operators if they wish to sell by allowing them to market their accommodation as a short-term let with onward bookings in place, or if there are other reasons why a licence needs to be transferred - such as that the licence holder has died, and an executor is acting on their behalf.

Prospective short-term let operators would be able to apply for provisional short-term let licences at the construction stage or before accommodation is built. Once the building is completed, the provisional licence would go through a confirmation process. This would be introduced to help ensure greater regulatory planning where the purpose of the new build is identified in advance, while aiming to help new entrants seeking to join the sector from being prevented due to uncertainty over whether a licence will be granted or refused after construction.

The transfer proposal makes sense, but the proposals are limited in scope. Similarly, the provisional premises licence proposal refers to “new builds” but does not deal with conversions of older properties.

Kirsty Gallacher is a regulatory law expert at Pinsent Masons