A judge at the Court of Session has ruled that the City of Edinburgh Council’s licensing scheme for short-term lets is unlawful.
Lord Braid’s decision in a Judicial Review of the Short Term Lets Licensing Policy comes as the result of a challenge by a group of accommodation providers which raised more than £300,000.
The proceedings were brought by Ralph Averbuch, Glenn Ford, Louise Brook and Craig Douglas - with Iain Muirhead and Anna Morris providing support - in what was the largest crowdfunder in Scottish legal history.
The new scheme requires hosts to apply for a licence by this October, with those who list entire properties on sites like Airbnb also needing to seek planning permission from the council, or a Certificate of Lawfulness if the property has been used for short-term lets for more than a decade.
The petitioners’ opposed a presumption against allowing entire flats within the city’s tenements to be used as holiday lets.
The policy stated 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.
Following a two-day hearing last month, Lord Braid found that the council’s policy did not stand up in 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 Provision of Services Regulations from 2009.
The Association of Scotland’s Self-Caterers stated that it believes the decision has wider implications for the Scottish Government’s short-term let licensing regulations.
Fiona Campbell, the association's chief executive, commented: “The impact of this will not be confined to the capital as the decision has ramifications for licensing schemes across Scotland.
“The Scottish Government need to go back to the drawing board on short-term let regulation and engage constructively with industry to provide a regulatory framework that works for all stakeholders.“
Rosie Walker, partner and head of litigation at Gilson Gray said: “Most strikingly, the court 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.”
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