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The City of Edinburgh Council’s licensing scheme for short-term lets operators has been deemed unlawful at the Court of Session.
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 ten years.
The case centred around 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.”
In response to the decision, Council Leader Cammy Day said:
“I’ve received today’s judgement and am pleased that we’ve been successful in defending large parts of our policy.
“While I’m obviously disappointed that the court didn’t find in favour of our policy on secondary lets, I make absolutely no apology for seeking to protect our residents.
“It’s no secret that we face unique housing pressures here in Edinburgh, with a small but densely populated city centre and fast growing population, and it's crucial for us to strike the right balance between promoting our visitor economy while looking after the people that live here all year round.
“Our residents have told us that, in many cases, STLs are hollowing out their communities, reducing housing supply and increasing housing costs. We can’t forget that many have endured years of disturbance and anti-social behaviour and we will continue to work hard to get this right.
“The court acknowledged our intention to find a solution to this and agreed that it was legitimate to use both planning and licensing policy. We welcome the clarity provided and will now consider our next steps in more detail.
“We remain committed to ensuring the whole city benefits from our thriving visitor economy but it has to be managed and it has to be sustainable – and I continue to believe that fair and effective STL controls would be an important step in the right direction.”
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