(And why tenants on benefit may be a better bet anyway).
Tenants have been complaining for years about landlords and letting agents who refuse to even consider them as tenants as soon as they discover they are in receipt of benefits.
In the past few years many, with the assistance of organisations such as Shelter, have been challenging the practice. Now it seems that they have succeeded.
The legal justification
For years it was assumed that ‘No DSS’ policies were allowable as being in receipt of benefit is not a ‘protected characteristic’ under the discrimination legislation. These are set out here and consist of the following:
- being or becoming a transsexual person
- being married or in a civil partnership
- being pregnant or on maternity leave
- race including colour, nationality, ethnic or national origin
- religion, belief or lack of religion/belief
- sexual orientation
Nothing there about being receipt of government benefits. So, the argument went, refusing to consider people as in receipt of benefits must be allowable.
“Not so,” said Shelter and other tenants organisations. A large proportion of benefit tenants are single Mothers and disabled people – who are protected. So discriminating against benefit tenants is disproportionately affecting people with protected characteristics. And so is unlawful.
Then came the cases
The first case which hits the news was in February 2018 when single mother Rosie Keogh, who had a perfect rental payment record, brought a claim against lettings agent Nicholas George, who had a ‘No DSS’ policy and who refused to consider her application.
Her case was settled but it struck a chord and made many landlords and agents change their practices.
Other cases followed but all of them settled – usually in the tenant’s favour.
However, now we have finally two cases where a Judge has, after having heard evidence, decided in the tenant’s favour. These are:
The case of Jane (a pseudonym to preserve her anonymity) was decided in York county court – ‘Jane’ is a single mother who also lives with a disability.
Here the Judge, District Judge Victoria Elizabeth Mark, declared
rejecting tenancy applications because the applicant is in receipt of housing benefit was unlawfully indirectly discriminatory on the grounds of sex and disability, contrary to […] the Equality Act 2010.
The second and more recent case was brought by Stephen Taylor, a disabled man, also with a perfect rent payment record. He was told by letting agent Paul Carr that it was “company policy” to refuse to rent to people who receive housing benefit.
In this case the Judge, Her Honour Judge Mary Stacey ruled that: “
There is no doubt that there was a blanket policy that no one in receipt of housing benefit would be considered for the three properties. It put the claimant and other disabled people at a particular disadvantage when compared to others.
To be told simply, because of his benefit status, that he could not apply for three properties which were perfectly located for his children’s school, his GP and health needs, and extended family support, […] would be distressing.
Going on to say:
we make a declaration that the defendant has unlawfully indirectly discriminated against the claimant by imposing a PCP [Provision, Criteria or Practice] that those in receipt of housing benefit could not apply to those three properties.
So where does this leave landlords and their agents?
The first thing to say is that you must not have blanket ‘No DSS’ policies. They have been found to be illegal and if you say to an applicant ‘we are not considering you because you are on benefits’ they will be able to sue you for compensation. Although maybe only if they themselves fall within the list of protected characteristics.
Even though the cases above were County Court cases and therefore not technically an authority for other courts to follow, it is unlikely that a case going to the Court of Appeal would be decided differently.
However, this does not mean that you HAVE to let to a benefit tenant. It just means that you have to consider their application properly, along with any other applicants.
Who you finally let to will depend on a number of factors – the most important being whether you think they will make a good tenant or not.
Bearing in mind that if you make a mistake you will (under the current Cornaivirus rules) be unable to evict the tenant for up to a year or more, rigorous checking and referencing is really important.
In some cases, you may have no alternative but to avoid benefit tenants – for example, if renting to benefit tenants is prohibited under the terms of your mortgage or insurance policy.
Although the mortgage and insurance companies concerned are probably themselves guilty of unlawful discrimination and fewer now do this.
Some landlords are also unhappy about renting to benefit tenants – not because of anything to do with the tenant, but because the Local Authority has proved so difficult to deal with in the past. This is something that you hear time and time again from landlords and letting agents. For example, we are often told that Local Authorities will
- Encourage landlords to trust them and then let them down.
- Encourage tenants to break the terms of their tenancy agreement
- Tell tenants that they must stay in the property – often without paying rent – when tenants go to them asking for help with rehousing
- Have staff who are rude and aggressive towards landlords and letting agents.
Avoiding benefit tenants because of the behaviour of the Local Authority is very unfair on the tenants but is understandable.
Why tenants on benefit may be a better bet
However, even with a difficult local authority, landlords should consider benefit applications. All of the applicants in the cases above had a perfect rent payment record – which is after all what landlords are looking for.
Responsible single mums like Rosie Keogh and ’Jane’ do not want to be evicted for rent arrears and so make sure that it will never happen. Likewise disabled people like Stephen Tyler. So they are not really a risk. Not more so than anyone else.
There is also the fact that we are facing a recession and unfortunately it looks as if many people are going to lose their jobs. So choosing a tenant with a job today does not mean that they will have a job tomorrow.
There is an advantage therefore in choosing a tenant who has proved that they are able to pay rent while in receipt of benefit. As your tenant who loses his job in a month or so may not.
If you are a tenant on benefit with a perfect rent payment record – you may want to point this out to prospective landlords and letting agents. And explain why they may be better off with you.