Behind the News - Short Lets Licensing

The Scottish Government passed legislation in March this year requiring all local authorities to put in place arrangements for those renting out rooms or properties on a short let basis – for example through Air B&B – to obtain a licence to do so.

The Scottish Government says that the legislation is designed to ensure that rooms or properties meet specific safety standards.

From 1 October 2022 any new operators or hosts must have a licence in place before they can let out the room or property.  Anyone who has been renting out a room or property prior to this has until 1 April 2023 to apply and will be able to continue to operate in the meantime.  All licences must be in place by 1 July 2024.

The Council’s consultation, which will run for a total of six weeks, focuses in on its proposed policy on temporary exemptions and on the fees that will be charged for the licence and closes on 7 August.

The Council is not consulting on the need for a licence  - or the mandatory conditions attached to the licence -  as those are now set in law by the Scottish Government.

The mandatory conditions of the licence include conditions such as only the person named on the licence carrying out the day to day management of the property, adequate fire and carbon monoxide detection systems being in place, and the number of guests residing on the premises not exceeding the number specified in the licence.

Through the legislation the Council could have imposed additional conditions – but has chosen not to do so.

Additional consultees include the members of Destination Orkney, Police Scotland and the Scottish Fire and Rescue Service.

Below you will find some frequently asked questions, and answers:

Why is the Council introducing this scheme?

Because it is a legal requirement. The Council has no discretion to delay or fail to implement a licensing scheme for short-term lets. The rationale for the legislation is to ensure that all premises used for short-term lets are safe, and that the people operating them are suitable.

Why is it being introduced now, when the tourism industry is still in the process or recovering after the Covid-19 pandemic?

The initiative pre-dates the pandemic. The Scottish Government started looking at a number of challenges arising from the short-term lets sector in 2018. Research was carried out in 2019, followed by a public consultation. There were two further public consultations in 2020 and 2021, as the legislation was developed. The Civic Government (Scotland) Act 1982 (Licensing of Short Term Lets) Order 2022 came into force on 1 March 2022. The Council has a duty to establish a scheme for licensing short-term lets by 1 October 2022.

What is the deadline for applying for a licence?

If you already operate a short-term let, then you must apply for a licence before 1 April 2023. You can continue to operate while your application is being processed. If you do not already operate a short-term let when the scheme becomes operational on 1 October 2022, then you cannot start operating until you have a licence.

How long will a licence last?

The Council is proposing that licences will last for 3 years, which is the longest period permitted by the legislation. The Council is currently consulting on the proposed duration of licences, and you can find further information here. It will also be possible to apply for a temporary licence, lasting up to 6 weeks. 

How do I know if I will need a licence?

In simple terms, you are likely to need a licence if you provide residential accommodation as a host to a guest in exchange for payment, and the guest does not use the accommodation as their only or principal home. If you are unsure, you should first check the definition of short-term let in Section 3 of the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022. You may also find it useful to read the Scottish Government’s Guidance for Hosts and Operators.

If you remain unsure, please contact the Licensing Team for advice and guidance at shortletslicensing@orkney.gov.uk.

Are there any types of properties which are excluded from the requirement to obtain a licence?

Yes. These are set out in Schedule 1 of the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022 and include hostels, bothies, student accommodation and hotels which have planning permission granted for use as a hotel.

But I only rent out one bedroom in my house on Air BnB during the summer months. Do I need a licence for that?

Yes. The legislation covers home-sharing (letting out rooms which are part of your own home) as well as secondary letting (letting out separate dwellings, such as a holiday cottage) and home-letting (letting out your entire home). There are no provisions in the legislation which exempt short-term letting carried out for only part of the year, or a specified number of days per year.

What about caravans?

The legislation excludes “accommodation which is capable, without modification, of transporting guests to another location”. This would include motorhomes and conventional caravans designed to be pulled behind a vehicle, but static caravans would not be covered by the exemption.

I have more than one property. Do I need a separate licence for each one?

The legislation states that a licence is required for each “premises”. If you own more than one holiday cottage, or a holiday cottage and a B and B, then you will need separate licences for each premises. However, if you have multiple accommodation on the same premises, for example 3 yurts in a field, then you will need only one licence.

More information:

• Full details on the temporary exemptions consultation are available here.
• Full details on the fees consultation are available here.
• The committee reports which considered the licensing scheme and a full recording of the meeting are available at here.

Further information can also be found on the Scottish Government website: 

Further information can be found on the Scottish Government Website:

• Latest information about the regulation of short-term lets.
• Current Scottish Government guidance for hosts and operators