Response to the Consultation on Licensing Plans for the Regulation of Short-Term Lets

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PLACE is a grassroots network of residents personally affected by the rapid expansion of largely unlawful whole property short-term lets in our communities. The network was set up in April 2019 to share information on how to report short-term lets operating without planning permission or in breach of title conditions; and to lobby the City of Edinburgh Council and the Scottish Government to take action to protect residents’ rights to peaceful, safe and affordable homes.

The network celebrates much of the proposed legislation which empowers responsible home sharing and letting, while clearly setting out the responsibilities and legalities of commercial letting.

However, our network has shown a great strength of feeling about whether the legislation is robust enough to monitor, evidence and enforce against unlawful activity.

We strongly support the many responsible short-term letting providers in Scotland, however our network constantly reports negative experiences with unlawful activity in Edinburgh, and increasingly in other cities.

Examples of the loopholes, reported by our network, and shared in the workshop with the Scottish Government, that we need to see proactively closed are:

Operating without planning permission, particularly in properties where the properties are very unlikely to ever be given planning permission.
Operating ghost hotels – apartments or houses where each room is let independently, but where no one lives on site.
Knowingly subletting a property on a long term contract to short-term letting agencies who carry out the unlawful activity on their behalf.
Hosts renting properties for long term residential use but then using these as unlawful short-term lets without permission from the owner.
Hosts claiming they live in the property, when in fact, they live elsewhere.
Hosts ignoring Planning Contravention Notices (PCNs) which hosts are legally obliged to complete and return to planning authorities when unlawful activity is suspected.
Hosts providing incomplete, misleading information to enforcement authorities e.g. they do not disclose all advertising platforms used, so the number of reviews are under-reported.
Hosts intimidating neighbours so that they do not report issues.
Continuing short-term letting activity after an enforcement notice.^[1]
Continuing short-term letting activity after enforcement and subsequent court action.^[2]^{,^[3]}
Continuing short-term letting activity during the pandemic ban.^[4]^{,^[5]}
Ignoring Covid-19 health and safety regulations.³

We point to the alliance of 22 European cities^[6] who are pushing for tougher rules in fighting the expansion of short-term rentals, and ask that Scotland learns from their experience in designing a transparent and accountable system, with tough, fraud-resistant laws.

We want the design of this legislation to reflect the Scottish Government’s Purpose, Values and Outcomes in the National Performance Framework and recognise the equalities (protected characteristics and socio-economic groups) and human rights impacts, including Fairer Scotland commitments when striking the balance between the needs of commercial stakeholders and the people that live in the communities. We welcome the approach that gives local authorities as many options as possible to enable them to make decisions based on local needs. Ideally, we would like these options to be decided with residents with lived experience of neighbouring short term lets, as per the Community Empowerment Act 2015.

We suggest one final amendment to the design principles: The design must be lawful. It must draw from the extensive case evidence relating to unlawful short-term letting in Scotland^[7], and design legislation to protect the right to housing; that residents are able to enjoy their home, and have a right to private and family life. The extensive list of cases provides clear evidence on the number of days, and the changeover of lets that are consistent with residential living.

PLACE feels a huge relief that action is finally being taken on this issue which will protect communities, visitors and our lawful accommodation providers. We are in agreement with the proposed plans subject to the amendments below. These are described in detail in the full consultation response.

More homes (5.4, 6.6, 6.143) – Effective regulation of short-term lets means more homes and more cohesive communities.
Protect the private rented tenancy (4.8)
No “ghost hotels” and imitation “home” letting (5.4) – a lets-based home letting allowance would make illegal activity almost impossible to carry out undetected.
Empower fair, clear and lawful home sharing and letting (5.4, 6.60) – a lets-based home letting allowance is consistent with the extensive case evidence on unlawful short-term lets, and meets the needs of genuine home letting residents. Clarity is sought where home sharing becomes a commercial guest house or B&B activity.
Recovery after Covid (5.4) – support the responsible tourism industry by stopping unlawful and unsafe short-term lets, once and for all.
A sustainable Festival (5.4) – Effective regulation means: more homes, more home sharing and incentivises longer short-term lets which is ideal for Festival workers, including performers.
Make planning permission for secondary letting a mandatory licence condition with external verification (6.6) – we simply cannot trust all hosts to self declare this truthfully.
The 20m limit for notifying neighbours should be able to be extended depending on the character of the property (6.69).
Evidence should be provided that there is permission from the owner for secondary letting, and of primary residence status for home sharing and letting (6.76).
Proactive monitoring for illegal activity should be mandatory (6.92): Residents should not need to police this.
Clearly define “short-term letting activity” to include advertising a property for short-term letting (6.116)
Give residents the same entitlement to safety as visitors (6.34) – recognise the case law which finds planning permission is essential to protect residential security, particularly in tenements.
Significantly increase the fines for illegal activity, and create the toughest consequences for repeat offenders. (6.115, 6.118, 121 and 6.134)
No temporary licenses for large events – this has the potential to create periods of intensive short-term letting which will seriously undermine residential amenity. (6.135)
Make public the register of hosts and licensed accommodation (6.139, 6.122) – promote lawful and responsible letting to protect visitors and legal accommodation providers.
Separate license numbers for commercial, home letting and home sharing – e.g. COM1234, HOMESHAR1235, and HOMELET1236 allows visitors to clearly see what kind of accommodation they are booking, check the lawfulness of their accommodation against the register and report accommodation they think is being let fraudulently. It also allows authorities to collect the evidence needed to enforce against unlicensed short-term lets, illegal ghost hotels and imitation “home” lets. (6.143)
Minimum grace periods in Edinburgh. (5.17)

Full Consultation Response

1. Please identify any issues with the proposed definition as set out in chapter 4, and how to resolve them.

Agreement

4.7. We agree with the definition of short-term lets as set out in section 4.7.

4.8 We agree with the principle that a short-term let can exist for a period of more than 28 days (for example where people are working away from home for work), and that regulation should dovetail with regulation of the private rented sector under the 2016 Act. However, it must be clear that a Private Residential Tenancy (PRT) will always exist, regardless of documentation imposed by landlords and letting agents, where that property becomes their only or principal home. The guidance should not provide any loopholes which can be exploited by those wishing to use “sham holiday lets” to avoid the PRT as exposed by Living Rent^[8]. The lets-based home letting allowances proposed by PLACE in 5.4 dovetails neatly with this definition.

4.11. We strongly agree that all short-term lets: home sharing, home letting and commercial letting should require a license, but that the demands for a home sharing and letting, versus a commercial license will be different.

Proposed amendments

4.13 We note that all secondary letting will fall within the scope of control areas, where such areas have been established. We assume this means that commercial short-term lets will not require a secondary letting type license outside of control areas but may still need planning permission. It would be useful to issue guidance for all councils on this matter so that short-term letting hosts are still aware of their other responsibilities.

2. Please identify any issues with the proposed control area regulations as set out in chapter 5, and how to resolve them.

Agreement

5.9. We agree that planning permission should be granted for 10 years only to prevent the ever increasing number of properties used for short-term lets. Perhaps an option for local authorities to lower this number could be incorporated into legislation to enable them to respond to changes in population needs.

5.11. We agree with removing the permitted development right of 28 days and the reasoning described in 5.12.

5.15. We appreciate the acknowledgement of “We suspect that there are a number of instances of secondary letting across Scotland operating without planning permission having been sought (i.e. operating illegally, either wilfully or in ignorance).”

Proposed amendments

5.4. Similar to the Scottish Government, secondary letting is the major concern of PLACE, however, we are regularly presented with cases where unscrupulous hosts are carrying out secondary letting under the facade of home letting or home sharing. Examples include, an owner pretending they usually live in the property while they are actually using it as a full time entire-home holiday let (imitation home letting). Another example is “ghost hotels”^[9] where every room in a flat or house are let individually (imitation home sharing). Ghost hotels and imitation home letting will continue to be a significant risk under the proposed legislation without evidence that the host lives on site, and regulated lawful entire home letting allowances.

We propose in amendment 6.60 that councils can set home letting allowances which are restricted to a fixed number of short-term lets per year with potentially a total number of days per year, with no more than one changeover per month.

This lets based approach, which dovetails with the proposed definition of a short-term let, is also congruous with the extensive existing planning and case law which protects amenity for neighbours. The lets-based allowances can be easily monitored, meets the needs of home letting, disallows high-changeover high-disruption letting, and incentivises longer short-term stays for Festival workers, and others needing a temporary home.

Meeting the needs of home letting – A licensed allowance of, for example, four entire home lets per year allows people to supplement their income very generously, while still protecting residential amenity. Four lets would enable, for example, a three week let over major festival times, a two week let over the summer, a five day let over Easter and a five day let over New Year. The income is the same, but the disruption is far less. It would also allow residents to let out the place they ordinarily live, to another household for a few months on a short-term let basis while they are working away from home.

Supporting students and residential amenity – Such an approach would also allow students to carry out home letting of their university home during the summer break, but in a controlled way which does not reduce the amenity of the area during this period of time.^[10] Amenity is protected even when multiple properties in the same stair are being used in this way.

Consistent with planning and civil law – Residential amenity is protected by law. The existing case law informs how the home letting allowance should be set without impacting neighbouring amenity. There are several cases which are helpful here: Ratcliffe Terrace in Edinburgh found 30 days of lets over 14 lets unlawful^[11]; Nemcova v Fairfield in London found seven lets over one year unlawful^[12], and Succoth Terrace found entire home letting for the duration of the summer period unlawful^[13]. A smart allowance of four licensed lets is a lawful compromise.

Easy to monitor unlawful activity – A lets-based home letting allowance can be clearly monitored even without host or platform cooperation. More than four reviews in one year without a commercial license would clearly indicate illegal activity. Only a few cities have attempted to use a limit based on a number of days. The experience has been challenging. London limits have been described as “ineffective”. The deputy mayor for housing in Paris states “Airbnb does not respect the law”. Amsterdam has reduced their sharing allowance to 30 days after 60 days was found to be ineffective. Recently ten European cities wrote to the European Union for help to fight the AirBnB expansion. Edinburgh could be a world leader in using smart and robust legislation to enable home letting whilst making unlawful activity almost impossible to carry out undetected.

Support a sustainable Festival – Another benefit is for the Edinburgh Festival. A lets-based home letting allowance incentivises those who wish to maximise their home letting income to seek individuals and groups who are looking to stay longer. During the Festival this will hugely incentivise artists, performers and Festival support staff. Student flats available over the summer will also be incentivised to seek longer short-term stays which will provide more fairly priced accommodation for Festival workers. Those who wish to stay in Edinburgh only a few days will be supported by the many excellent lawful short-term accommodation providers who have the resources and setting to address the impacts and needs of a high changeover of very short staying visitors.

Support recovery after Covid – Unless regulation is effective, business will continue to be lost by responsible accommodation providers to unlawful short-term lets. Visitors will lose confidence in the Scottish tourism industry as they experience unsafe, unprofessional and unlawful businesses. These businesses often operate in unsuitable properties bringing them into conflict with neighbouring families and communities, further damaging the tourism industry.

5.17. The power to set grace periods is appropriate but we would strongly oppose anything but the minimum grace period in Edinburgh where the requirement for planning permission has been known and ignored for some time to the significant detriment to communities. The strength of feeling in the Edinburgh City Plan for an Edinburgh-wide short-term lets control area demonstrates the large proportion of people who want to see urgent action on this issue. The 2024 date is completely unacceptable. For lawful and responsible existing short term let operators, the process of applying should be quick, and does not need a long grace period.

5.3 The PLACE network strongly supports informal home sharing and letting but some residents have shared guidance from Visit Scotland’s Quality Standards^[14] and the City of Edinburgh Council (page 6)^[15] on the regulations for commercial guest houses and bed and breakfasts, and asked for guidance on how these should be applied to protect the residents ability to lawfully share their homes, balanced against residential amenity, and the obligations of more commercial operations. Unlawful guest houses in tenement stairs have already been subject to enforcement action due to the impact on residents on the shared stair. The guidance on what defines commercial B&Bs and Guesthouses, versus what can be considered home sharing needs to be lawful and clear.

3. Please identify any issues with the proposed licensing order as set out in chapter 6, and how to resolve them.

Agreement

6.9 – 6.57. The standards, safety checks, limits on occupancy, waste, noise, curfews and data provision all appear appropriate, except for the exceptions detailed below. Meeting and greeting guests is essential to ensure that neighbours are not bothered by guests, and for ensuring that guests understand the health and safety of the property.

6.58. We agree the prohibition of local authorities from setting a nights per year limit on secondary letting as a routine licence condition is appropriate. We agree that such a limit for home sharing or home letting may be appropriate.

6.61. We agree that local authorities should be able to charge fees to cover the establishment, and running costs including such matters as processing applications and renewals, undertaking site visits, handling complaints and other monitoring and enforcement costs. This will ensure that the system is sufficiently funded to take swift and robust action, when needed.

6.103. We agree that local authorities should be able to charge a fee for a visit required in response to one or more complaints, where it is found that there are compliance issues.

6.122. It is very important that the basic details about hosts are transparent, as with HMO Landlords Register.

Proposed amendments

6.6. We note the proposed mandatory conditions for licensing. We note that while items like gas safety, electrical safety and EPC ratings would require external verification, planning permission would only be self-declaratory. We believe this single proposal has the potential to undermine the whole system. Our recommendation, in the strongest terms, that an amendment is made that states that for secondary letting in short-term let control areas; and in properties with shared spaces, the application form must make planning permission a mandatory licence condition which requires external verification. To not include this will undermine trust in the entire system. The extensive case evidence from DPEA planning appeals shows the unacceptability of commercial short-term lets operating in properties with shared stairs^[16] and this must be reflected in the legislation. We simply cannot trust all hosts to self declare this truthfully.

It would also be useful for the host to list those websites, including short term management agency websites, on which they will be advertising their properties for monitoring purposes. To make this more stringent, a list of short-term letting platforms could be provided and hosts asked to specifically select those ones that they are using to advertise their short-term let.

6.8. We are unclear why compliance with license conditions is the host’s responsibility (even where they are not the owner of the accommodation). We are aware of cases where unlawful short-term letting activity has been carried out by tenants. A mandatory license condition should include permission from the property owner. This would also prevent some of the sub-letting that is currently in existence where less scrupulous owners are knowingly subletting a property on a long term contract to short-term letting agencies who carry out the unlawful activity, on their behalf.

6.19b Will an automatic date be set if the electrical safety inspection is not in place to start with?

6.30. Must also include any paying tenants / lodgers, as well as family members and friends.

6.34. It is incorrect to say that condition f) on Planning Permission does not relate directly to safety and this should be corrected. The DPEA appeal decisions regularly quote the reduction on security for neighbours when introducing a regular changeover of non-permanent residents into the secure communal areas of the property.^[17]^{,^[18],^[19],^[20]} Residents deserve the same protections to their safety as visitors. It is their home, and their safety and security is a fundamental part of that.

6.60. We largely agree with the statement that local authorities should be permitted to issue licences with specified shorter periods of letting for home sharing and home letting. However, PLACE strongly recommends that legislation should be permitted to issue home letting licences with a specified number of entire home lets for the reasons described in 5.4.

6.69 We propose that notifying neighbours within a 20m radius is a minimum, but that local authorities can increase this distance if it fits with the local character of housing e.g. a property in a build up area may be across a courtyard from another property where sound will travel and bounce off of buildings, carrying the sound further. Furthermore, the 20m radius must include the boundary of any wall for the property e.g. a garden which connects with the back garden of another garden, as happens in tenements, will affect all the properties of the residents who use the neighbouring garden.

6.74 An objection to the application can be made of the character of the applicant, or if the applicant will allow pets, due to potential noise impacts.

6.76. The applicant will need to show that if they are not the owner (and spouse or civil partner’s name if married to avoid owners changing the named person if they have acted inappropriately in the past), that the owner gives consent.

For secondary letting, they must declare that the title deeds do not have restrictions that would prevent it being used for short-term letting.

For home sharing, they need to evidence it is their main residence.

Will the host be expected to identify if the property is accessible e.g. steps in to the property?

Will the application state whether they are allowing guests with pets (exceptions for assistance pets) due to the potential for noise impacts.

6.82. There should be an expectation that a local authority employee will visit a property at least once before an application is granted to ensure basic standards. This could be delegated outwith the licensing department.

6.92. Proactive monitoring is highly desirable. Residents do not feel comfortable or safe reporting and policing unlawful activity which is happening so close to,or sharing spaces with, their home. There should be a maximum time limit when complaints must be responded to and actioned.

6.115. The fines on the standard scale are insignificant compared to the significant profit that can be made from unlawful short-term letting and need to be revised to be significantly higher.

6.116. Needs clarification as to what constitutes “carrying on an activity”. This should be amended so that it includes the advertisement of a property for short-term letting. Glasgow City Council already include this in their enforcement notices but it would be useful to make this explicit in law. Glasgow also requires the removal of items such as key safes associated with the short-term letting of the property.^[21] Legislation must also hold agencies and platforms to account and require them to only advertise properties with valid licences and to remove those which are unlawful. This is called “platform accountability” and it has been found to be the vital component of any effective licensing scheme.

6.118. We believe the most common type of unlawful activity will be commercial hosts carrying out commercial level activity with a fraudulent home sharing / home letting license. We believe that unscrupulous hosts will pretend that they, or a close acquaintance, live in a property to acquire a home sharing and home letting license. They will then will carry out unrestricted rooms or entire property letting. It is unclear from the document proposed legislation what fine this would attract but it appears this may be covered under “failing to comply with a license condition”. This would only attract a maximum fine of £10,000 which is insufficient to deter this type of activity. This should also be revised to at least £50,000.

The legislation should anticipate and be ready to effectively take action to sanction and take control of properties for those who ignore enforcement notices, and or ignore court decisions. To illustrate why this is necessary we point to the hundreds of short-term letting businesses in Edinburgh who continued to operate throughout the pandemic (and who were not providing essential accommodation to key workers^[22]^{,^[23]}); to the operators who continue letting despite receiving enforcement notices; and to at least one operator who has been reported to have continued operating parties, in contravention of coronavirus regulations, despite an enforcement notice, upheld on appeal to the Scottish Government, and upheld by the highest civil court in Scotland^[24]^{,^[25],^[26],^[27]}.

6.121. The fine for making a false statement in an application should be increased significantly beyond £2,500. It is the experience of many in the PLACE network that unscrupulous hosts often present the details of their business in a misleading way to try to evade enforcement action or obtain a facade of lawfulness. A higher fine is needed to deter this, given the significant income that unlawful letting can bring.

6.134. Where a license is revoked the host cannot apply for another short term let license for another property for a year. All other licenses held by the host must also be reviewed.

6.135. Temporary licenses. We do not see the benefit of temporary licenses. Any additional temporary license, particularly a regular one for an event such as the Edinburgh Festival has the potential to create a period of intensive, poorly monitored short-term letting that has the potential to seriously deteriorate residential amenity and motivate property investment activity. It also de-incentives hosts to carry out health and safety checks, or follow the good practice laid out in the proposed legislation to keep residents and visitors safe. There is also a liability issue if all the paperwork is self-certified and no site visit happens. Would neighbours even have an opportunity to object? Temporary licenses are incompatible with planning appeal decisions by the DPEA. Ratcliffe Terrace highlighted how important holiday periods and weekends are to residents, “who will be most likely to spend time at home with a reasonable expectation that they will be able to enjoy the amenity of their flats with a minimum of disturbance”.^[28]. Haymarket Terrace also states “There is no acceptable period for the continuation of a loss of amenity arising from excess disturbance to existing residents.”^[29]^{,^[30]} Residential amenity must be protected at all times.

6.139. The register of hosts and licensed accommodation should also be made available to visitors so that they can check the lawfulness of their accommodation before booking. This would match the landlord registry for private rentals.

6.143. We recommend that properties wishing to home share / home let are given two licence numbers: one for entire home letting, and one for home sharing (room only). These would be displayed with their advertisements and will allow authorities to monitor properties who are suspected of carrying out commercial activity without the appropriate license. In these cases, it will be vital to distinguish between whole property and home sharing activity e.g. COM1234, HOMESHAR1235, and HOMELET1236 allows visitors to clearly see what kind of accommodation they are booking, check the lawfulness of their accommodation against the public register and report accommodation they think is being let fraudulently.

Other matters

Will license applications go to the licensing boards so Community Councils can comment on them?

Will a caravan, shed or tent in a property’s garden need to be included?

Can local authorities be given powers to fine guests who ignore the rules, e.g bring in additional guests, hold parties, carry out a business, or bring undeclared pets?

Powers for local authorities to suspend licenses in the event of an emergency e.g. Covid-19, which may be localised

Short Term Lets Consultation on a licensing scheme and planning control areas in Scotland – https://www.gov.scot/binaries/content/documents/govscot/publications/consultation-paper/2020/09/short-term-lets-consultation-licensing-scheme-planning-control-areas-scotland/documents/short-term-lets-consultation-licensing-scheme-planning-control-areas-scotland/short-term-lets-consultation-licensing-scheme-planning-control-areas-scotland/govscot%3Adocument/short-term-lets-consultation-licensing-scheme-planning-control-areas-scotland.pdf

Response to the Scottish Government Short-term Lets Consultation (July 2019) – https://placeedinburgh.org/response-to-the-scottish-government-short-term-lets-consultation

^[1] https://citydev-portal.edinburgh.gov.uk/idoxpa-web/enforcementDetails.do?activeTab=documents&keyVal=PJZTOUEW0S000

^[2] https://www.thenational.scot/news/18205731.highest-scots-civil-court-backs-party-mansion-appeal/

^[3] https://www.thesouthernreporter.co.uk/health/nicola-sturgeon-adds-voice-concerns-over-west-linton-party-house-2940674#gsc.tab=0

^[4] https://www.edinburghlive.co.uk/news/edinburgh-news/anger-edinburgh-airbnb-flats-shared-18539098

^[5] https://theferret.scot/airbnbs-edinburgh-glasgow-coronavirus-lockdown/

^[6] https://www.france24.com/en/20200922-european-court-of-justice-backs-french-law-regulating-airbnb

^[7] https://placeedinburgh.org/planning-appeal-decisions/

^[8] www.livingrent.org/shamholidaylets

^[9] www.edinburghnews.scotsman.com/news/people/edinburgh-ghost-hotel-told-stop-operating-airbnb-crackdown-continues-1373117