JUDGMENT SUMMARIES

Background

Following recent changes in legislation, short-term letting is now an activity which must be licensed by local authorities, in terms of the Civic Government (Scotland) Act 1982.  Edinburgh has also been designated as a short term let control area under section 26B of the Town and Country Planning (Scotland) Act 1997, meaning that the use of tenement accommodation in Edinburgh for secondary[1] short-term letting is deemed to involve a material change of use for which planning permission is required.

The policy, adopted in September 2022, contains a rebuttable presumption against the grant of an STL licence for secondary letting in a tenement or with a shared main door.  Where such a licence is granted, the duration is restricted to one year (in contrast to the three year period for other types of STL licence).  There is no provision for the grant of temporary licences for tenement accommodation, again in contrast to other types of STL.  Finally, the policy is that a standard condition for all secondary lets whether in a tenement or not that the rooms have carpets or other suitable floor covering.

The arguments

The petitioners (who own or manage tenement properties which are used for secondary STL) argued that these aspects of the policy were irrational and oppressive at common law.  The purpose of the licensing regime was to ensure the safety of the property for visitors.  It was also irrational not to allow for temporary licences for tenemental property, and to restrict the duration to one year.

The Council argued that its policy was a rational and proportionate response to the problems posed by short-term letting in Edinburgh, such as noise and other forms of anti-social behaviour.  Well-run businesses could still expect to receive a licence. 

Decision

Lord Braid has ruled that the policy is irrational insofar as it contains a rebuttable presumption against granting a licence for property within a tenement (or shared main door) and does not provide for temporary licences.  The purpose of a policy was to inform the public of the approach which would be taken, and to achieve consistency.  While there could always be exceptions from a policy, it was clear that the Council would in fact grant licences for secondary STLs in tenement accommodation more than exceptionally, and so the rebuttable presumption would not in fact achieve consistency nor assist applicants in knowing whether an application was likely to be granted.  More fundamentally, it was not the function of the licensing authority to decide that a licence should not be granted simply because a property was of a particular type or in a particular area.  The regulatory regime that was set up made clear that the planning and licensing regimes were intended to complement each other, and those were decisions for planning.  The Council remained entitled to refuse a particular application on amenity grounds, but not to have a general policy of refusing a licence simply because the property was in a tenement. 

The lack of a regime for temporary licences has also been held to be irrational. The reasons given by the authority for its policy of not issuing temporary licences for properties in a tenement applied equally to other forms of STL, for which temporary licences were available.

As regards floor coverings, Lord Braid has ruled that to the extent the policy required carpets for all secondary lets, including ground floor flats and detached houses, it was irrational and, to the extent that it could expose a licence holder to significant expense for no good reason, it was oppressive.

However, as regards the restriction of licences for tenement properties to a period of one year, Lord Braid has rejected the petitioners’ challenge, holding that this aspect of the policy was rational, proportionate and justified by the need for greater inspections.

The petitioners separately argued that the above aspects of the policy (other than the provision relating to carpets) contravened the Provision of Services Regulations 2009, in that the policy was not clear, unnecessarily duplicated planning law and was likely to dissuade applicants from applying.  Lord Braid also upheld this argument in relation to the rebuttable presumption and the restriction on temporary licences.  In relation to the one year restriction, this did not in itself contravene the regulations.  However the policy ought to have contained a statement of the Council’s position regarding renewals, which is that a renewal of an STL for secondary letting in a tenement is likely to be granted if there has been no change of circumstances since the licence was granted.  The omission of such a statement was a contravention of the Regulations since the Council’s approach was not clearly set out in the policy.

A separate human rights challenge was dismissed as premature.

A hearing will be convened to discuss the precise terms of the order to be made in light of Lord Braid’s decision.

The opinion published on the  Scottish Courts and Tribunals website is the only authoritative document.