Outer House finds Edinburgh’s short-term let licensing policy unlawful

A group of four accommodation providers lodged a judicial review against the policy last month after a crowdfunding campaign raised more than £300,000.

Rolled out in response to concerns about the impact of a rise in properties being used as short-term lets (STLs), particularly in the city centre, the scheme requires hosts to apply for a licence by October. Those who list entire properties on Airbnb and similar sites also need to seek planning permission from the council, or just a ‘certificate of lawfulness’ if used as an STL for more than 10 years.

The case centred around the petitioners’ opposition to a presumption against allowing entire flats within the city’s tenements to be used as holiday lets.

The policy states that “secondary letting in tenement or shared main door accommodation is considered as unsuitable” and the burden would be on the applicant to demonstrate why they should be exempt from the rule.

The challenge was successful with Lord Braid finding that the council’s policy is unlawful at common law, in respect of the rebuttable presumption, the lack of provision for temporary licences and the requirement to supply floor coverings. The court also found that the policy breaches The Provision of Services Regulations 2009 regulations.

Rosie Walker, partner and head of litigation at Gilson Gray, who represented the short-term let operators who brought the action, said: “The court found that the City of Edinburgh Council’s short-term let licensing policy was unlawful at common law and in breach of The Provision of Services Regulations 2009 for a number of different reasons. Most strikingly they found that it was not for the council, as licencing authority, to decide that a licence should not be granted just because a property is in a tenement.

“Our clients took the brave decision to bring this action against the local authority to protect their businesses and, more widely, to protect an industry that is very important to the Edinburgh economy.

“Short-term accommodation providers create a significant number of jobs in the city and deliver flexible accommodation that hotels and other operators simply cannot – particularly during important events like the Edinburgh Festival. The campaign was the largest crowdfunded legal case in Scottish history, underlining the strength of support for our clients. It comes on the back of years of engagement by the Industry with the Scottish Government and the local authority to try to put in place a workable regulatory framework.”