On 29 September 2022, Edinburgh City Council adopted a short term lets ('STLs') licensing policy (the 'Policy') which was intended to regulate STL's. The effect of the Policy was that STLs would fall under the scope of licensable activities covered by the Civic Government (Scotland) Act 1982, and that planning permission would be required to offer a flat or a house for a STL that is not the home you live in. The Policy placed a number of other requirements on STL's, including a requirement that bedrooms, living rooms and hallways be covered by suitable floor coverings such as carpet or similar.
The Policy was introduced to tackle several problems which had been identified with the growing number of STLs in Edinburgh. These included issues with anti-social behaviour, littering, lack of maintenance by STL landlords and security issues. Edinburgh City Council carried out a two-stage consultation exercise, which led to the approach taken with the Policy.
The introduction of this Policy led to a crowdfunding campaign which raised more than £300,000 to allow an action to be raised to challenge the legality of the Policy. The action was raised by four petitioners who all owned STLs in Edinburgh. They argued that the Policy was irrational and oppressive at common law. Furthermore, they argued that the Policy amounted to an unlawful and disproportionate interference with the interests of the second to fourth petitioners under Article 1 of the First Protocol of the ECHR (the right to peaceful enjoyment of one's possessions). The petitioners sought reduction of the Policy.
Edinburgh City Council, the respondent to the proceedings, opposed the petition arguing that it was a rational and proportionate response to the issues posed by STLs in Edinburgh.
Decision
In a decision published on 8 June 2023, Lord Braid ruled that the Policy was unlawful at common law.
Three main aspects of the judgment were considered:
- The rebuttable presumption,
- The lack of provision for temporary licences and
- The requirement to supply floor coverings in terms of STL 9.
Lord Braid also found that the policy breached the 2009 regulations in respect of these matters, other than the floor coverings and the omission of the City of Edinburgh Counsels renewal policy. However, Article 1 of the First Protocol to the ECHR claim was found to be premature and speculative, and Lord Braid therefore did not comment further on the legality, proportionality and public interest arguments led.
The rebuttable presumption
The fact that the policy contains references to presumptions is not fatal. However, what is fatal is that it is clear from the evidence that refusal of any rebuttal to the presumptions set out in the Policy will not normally happen. On this point, Lord Braid held that in circumstances where there are so many exceptions to a policy that it ceases to be a policy at all. Therefore, the provisions were "irrational, since they do not support the statutory purpose of the licensing regime. As such, they are unlawful".
The lack of provision for temporary licenses
"It is irrational, where planning permission has already been granted, and where the function of licensing is to address safety and neighbour concerns, to have a general policy that temporary licences will not be granted." The policy was therefore considered unlawful at common law insofar as it does not provide for the grant of temporary licences for secondary letting.
Requirement to supply floor coverings
"The respondent submits that the condition is a reasonable response to residents’ concerns about noise as expressed in complaints and at consultation."
Lord Braid concluded, "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."
Analysis
Although a welcome decision for landlords and letting companies, there will be owners or occupants of neighbouring properties to STLs who are disappointed by the decision, especially as it comes only a few weeks before the start of the Edinburgh Festival, which is expected to see a huge rise in the number of visitors to the city.
Going forward, it will be interesting to see what wording will be considered to be lawful and rational, and what this will mean for landlords and the Council.
For further information please contact our experts.
