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Legislation sets out the grounds on which an application must be refused, and these are summarised below.

Civic Government (Scotland) Act 1982:

• If it considers the applicant or anyone else on the application not to be a fit and proper person to hold a licence.
• If it considers that the activity would actually be carried out by a person who is not the applicant, and if that person had applied he would have been refused.

Where the application relates to premises, a vehicle or a vessel that are not suitable for the activity, because of:

• The location, character or condition of the premises or the character and condition of the vehicle or vessel.
• The nature and extent of the proposed activity.
• The kind of persons likely to be in the premises, vehicle or vessel.
• The possibility of undue public nuisance, public order or public safety.
• Where there is other good reason – usually meaning that it is at odds with a licensing policy agreed by the council. 

Housing (Scotland) Act 2006:

• If it considers that the applicant or anyone else on the application is not a fit and proper person to operate a House in Multiple Occupation.
• If the applicant or agent is disqualified from holding a licence or acting as agent for a licence holder.
• If it considers that the property is unsuitable for use as a House in Multiple Occupation or could not be made suitable by including conditions in the licence.