Some aspects of the City of Edinburgh Council’s short-term let licensing policy are “unlawful”, a judge has ruled.
Landlords and a property marketing company (the petitioners) took legal action against the council over its short-term let (SLT) licensing policy and welcomed the ruling as a “victory for law and common sense”.
The policy, due to come into force in October, comes amid concern about the high number of short-term lets such as Airbnb-type properties in the Scottish capital.
The four petitioners challenged what is described as a “rebuttable presumption” against granting licences for secondary letting in tenements.
They also challenged the absence of any regime for temporary licences for secondary letting, and a requirement in respect of all secondary lets that bedrooms, living rooms and hallways must be covered by a suitable floor covering such as a carpet.
Following a judicial review, Lord Braid found the rules around the rebuttable presumption are “irrational, since they do not support the statutory purpose of the licensing regime. As such, they are unlawful”.
In relation to temporary licences, he found the policy is “unlawful” at common law insofar as it does not provide for the grant of temporary licences for secondary letting.
He also found the rules on floor coverings unlawful, stating: “To the extent that the policy requires carpets for all secondary lets, including ground floor flats and detached houses, I consider that it is irrational and, to the extent that it could expose a licence holder to significant expense for no good reason, it is oppressive and does go beyond what is necessary to control noise.”
Those opposing the scheme donated more than £300,000 through crowdfunding to help fund the judicial review at the Court of Session in Edinburgh.
In a statement afterwards, the petitioners said: “As the largest crowdfunded case in the history of the UK, the petitioner team are deeply grateful to the many small, local businesses that supported the campaign financially in such uncertain times.
“We have yet to fully digest the detail of the decision but we hope that this will give common cause to both the Scottish Government and City of Edinburgh Council to seek a fresh approach that aims to collaborate and work with local operators of self-catering accommodation, recognising the many good things it brings to the economy and people of Scotland.”
Its chief executive Fiona Campbell said: “The fact this was the biggest Crowdfunder in Scottish legal history demonstrates the strength of feeling that the council’s licensing plans were an existential threat to the livelihoods of operators.
“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.”
City of Edinburgh Council leader Cammy Day said: “I’ve received today’s judgment 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 he’s 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.”
A Scottish Government spokesman said: “The challenge was specific to the City of Edinburgh Council’s implementation of the short-term let licensing scheme, it was not a challenge to the licensing scheme itself.
“The short-term lets licensing scheme has been in force for the whole of Scotland since October 2022. It allows local authorities and communities to take action to manage issues more effectively in response to local circumstances.
“The core component of our licensing scheme is a mandatory set of safety standards that apply to all short-term lets which are vital to ensure the safety of guests and neighbours.”