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Licensing expert warns of ‘flood’ of short-term let licences

An expert commentator on civic licensing has warned of a “flood” of licence applications for short-term lets in Scotland that could reach tens of thousands.

Stephen McGowan, partner and head of licensing in Scotland at UK law firm TLT, was commenting in response to the Scottish governmentannouncement of new powers for councils to introduce safety and control measures, including a licensing scheme for short-term lets by spring 2021.

McGowan said: “The new regulations enable councils to balance the needs and concerns of their communities but will have a profound impact on landlords, in terms of their licence to continue to operate and their ongoing costs and liabilities.

“According to the government’s own research, there are 32,000 properties registered with Airbnb alone in Scotland. Assuming local councils enact a new licensing scheme to regulate short-term lets, which seems likely, each of these properties, should the landlord wish to continue to operate it as a short-term let, would require a licence and operating without one would become a criminal offence.

“It is also not yet clear how far the scheme will go in terms of capturing what might be called non-typical residential style lets, such as holiday lets, self-catering facilities and more traditional B&B style accommodation, which could push the numbers up higher.

“The government has made it clear that safety will be a mandatory consideration, which I take to mean that the properties will have to undergo a HMO style inspection. This means costs for landlords in ensuring their properties meet these regulations as well as the costs associated with compliance.

“Beyond that, there are no “grandfather rights” proposed and each new application will go through the same process as other civic licences. This means possible objections, hearings for all applications, and the ability to refuse applications not just on the fitness of the property but also the person who wishes to hold the licence, such as having regard to convictions.”

Mr McGowan, who is also chairman of the Institute of Licensing Scottish region, and accredited by the Law Society of Scotland as a specialist in licensing law, explained that the regulation will also have a significant impact on local authorities and other local services.

He said: “Provision will need to be made to deal with the impact of such a magnitude of applications on local authority resources.

“A massive rush of applications of this order could bring licensing administration to a halt, and have a knock-on effect on reporting obligations with Police Scotland and other authorities such as Fire and Building Standards, who will likely have to comment on each application. This could impact on processing times for other types of civic licence.”

Mr McGowan is the author of Local Government Licensing Law in Scotland (2012), the only legal textbook on the Civic Government (Scotland) Act 1982 – under which the new licensing schemes will be adopted.

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