It is common practice for landlord and letting agents to have a strict “No DSS” policy when vetting applications from tenants. Sometimes this policy has come about as a result of a bad experience with a tenant in receipt of housing benefit and the difficulties in having the benefit paid directly to the Landlord.
A recent case before the Courts could see a change in the law coming which outlaws this practice on the basis that it breaches the Equality Act.
The Equality Act 2010 makes it an offence to discriminate against someone either directly or indirectly on the grounds of one of a number of protected characteristics such as age, sex, disability etc.
So what does this have to do with tenancies and landlords choosing who they will allow into their property?
A single mother took a letting agency to court over a blanket ban which they imposed in which they refused to consider her application on the basis that she was in receipt of housing benefit without considering any other aspect of her application or prior references she had from other landlords showing that she was a responsible tenant who always paid her rent on time. She had in fact lived at the same property for 11 years and the rent was always paid.
The Claimant argued, and had official figure to back this up, that more women than men claim housing benefit because as single mothers they are limited in their ability to work full time due to childcare issues and therefore are more likely to be eligible to claim housing benefit. The letting agent conceded the claim and settled it out of Court. Whilst the Court did not make an official ruling about the claim it is likely to open the floodgates to these types of claims due to the publicity which the case has received in the press. The charity Shelter supported the claim and is reporting it to raise awareness about the issue.
The BBC have reported a survey which Shelter conducted in 2017. Of 1,137 Landlords surveyed 43% had an outright ban in place against accepting tenants in receipt of housing benefit. This shows the widespread problem and could lead to the Government introducing legislation to prevent this type of attitude towards renters. According to figures reported by the BBC, a fifth of all private renters claim housing benefit demonstrating how large a proportion of the private rented market this issue affects.
If you are a landlord or a letting agent should you review your policies? In order not to breach the Equality Act 2010 you should review your policies and if you have an outright ban in place this should be changed. Having tenants who pay prompted is a key factor but just because a tenant is in receipt of housing benefit does not mean to say that they are not going to pay their rent on time. Prudent checks should always be carried out including a credit check which will reveal any bad debts and Judgments and you should take a full history from the tenant and consider asking for a reference from their previous landlord. If these checks suggest the tenant might not be good for the rent, then the application can be rejected on that basis. If there are concerns about the rent being paid a guarantor might be a solution so that someone else will pay the rent if the tenants fall to do so. Obviously, checks on the guarantor would also need to be undertaken.
For further information about the issues raised in this article please contact Susan Lewis free on 03303 001103.