Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) (Amendment) Order 2024: business and regulatory impact assessment

The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Amendment Order 2024

1.1 Purpose and Intended Effect

• This Business Regulatory Impact Assessment (BRIA) relates only to provisions contained in the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Amendment Order 2024. This document and the relevant amendments made by this statutory provision will be referred to as the 2024 BRIA and 2024 Amendment Order respectively.
• The 2024 Amendment Order amends the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 ("The 2022 Licensing Order”).

1.2 Background

• This BRIA is supplemental to the BRIA published in November 2021, alongside the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022. We shall refer to these as the 2021 BRIA and the 2022 Licensing Order.
• The 2021 BRIA contained a range of data on trends in the short-term let sector, tourism, Covid-19 and other factors. This 2024 BRIA does not revisit our assessment of the original scheme, and only assesses the specific provisions in the 2024 Amendment and any potential business regulatory impact of the changes the amendment delivers.
• The 2022 Licensing Order was approved by Parliament in January 2022. Local licensing schemes commenced in Scotland on 1 October 2022, and have since been operational with short-term let (STL) operators applying for and receiving decisions in relation to their applications.
• Throughout implementation, Ministers have committed to being responsive in their delivery of the scheme. The 2024 SSI Amendment is part of our approach to deliver evidence based technical updates within the principles of licensing, as outlined below.

In summary, the 2024 Amendment Order includes provisions which have the following practical effect:

• Commercial consideration definition - The wording ‘a provision of service’ has been deleted from the definition of “Commercial consideration” to recognise that this could be confusing when read in conjunction with Article 3 (d) of the 2022 Licensing Order which excludes accommodation if it is provided for the principal purpose of facilitating the provision of work or services by the guest to the host or to another member of the host’s household.
• Foster care arrangements - The Amendment Order also clarifies that foster care arrangements will not require a short-term let licence.
• Single licence for multiple accommodation – the 2024 Amendment Order clarifies that licensing authorities do not need to refuse an entire short-term let licence application where there are multiple accommodations on a single premises. The licensing authority may grant a licence in respect of all or some of that accommodation.
• Licence transfers – this is a new process whereby a short-term let licence may be transferred to someone else on application by the licence holder. A short-term let licence holder can apply to the licensing authority to transfer the licence into the name of a third party, subject to there being no objections from the Chief Constable. This will support hosts/operators if they wish to sell by allowing them to market their accommodation as a short-term let (with onward bookings) or if there are other reasons why a licence needs to be transferred such as the licence holder has died and an executor acts on their behalf. The licensing authority will consult the Chief Constable as part of the transfer application and prospective hosts/operators will not have to apply for a new full licence.
• Temporary exemptions – local authorities already have the power to authorise temporary exemptions from the requirement to have a short-term let licence for a period of up to 6 weeks. The 2024 Amendment Order clarifies that there may be up to three periods of temporary exemption in each calendar year which must not exceed a combined total of six weeks.
• Provisional licences for new build short-term lets– The 2024 Amendment Order includes provision so that a new host who is building accommodation intended for use as a short-term let can apply for a provisional licence at the construction stage. The provisional short-term let licence can then be confirmed once the accommodation is complete and the host can secure compliance with the licence conditions
• Information to be displayed at Short-term let premises -The 2024 Amendment Order inserts a requirement for two new pieces of information to be displayed at a short-term let premises as part of compliance with the mandatory conditions for such licences. The new provisions require licence holders to make the following information accessible to guests within the short-term let accommodation: 1) instructions as to what guests should do in the event that the carbon monoxide alarms sounds and, where relevant, 2) if there is a mobile gas cabinet heater in the premises, safety instructions as to the operation and movement of the mobile heater.
• Exclusion for guest rooms in specific types of residential accommodation – The 2024 Amendment Order clarifies that guest rooms provided in residential accommodation where personal care is provided, guest rooms in hospitals, guest rooms in nursing homes and guest rooms in sheltered housing are all classed as excluded accommodation for the purposes of the short-term let licensing regime, if the guest is visiting residents.

1.3 Rationale for Government intervention

On 27 October 2023 Mr McLennan, the Minister for Housing, wrote to the Local Government, Housing and Planning Committee to reaffirm commitment to an ongoing iterative process to monitor delivery of short-term let licensing in Scotland. The Minister advised the purpose of the implementation work is to identify solutions to any operational challenges, as well as what emerging good practice looks like. The scope of this work will not, however, alter the delegation of powers to licensing authorities to administer local schemes, nor amend the types of licences or the core principles.

Further information about the wider rationale for short-term let licensing is set out in the 2021 BRIA.

1.4 Objectives

• The Scottish Government’s purpose in relation to the amendments made in the 2024 Amendment Order is to make technical updates to the STL licensing scheme, whilst preserving the principles of licensing.
• This 2024 BRIA focuses purely on the changes set out in the 2024 Amendment Order. It is informed by engagement with stakeholders, undertaken since October 2022 and responses to the three formal consultations undertaken in 2019, 2020 and 2021.

These changes have been identified through monitoring of licensing implementation to improve operational processes and form part of an update to Parliament, and to retain the core principles of licensing.