Agent rejecting potential tenant on benefits pays out after admitting discrimination

A tenant turned away by a letting agent after she said that that part of her rent would be paid out by benefits looks to have won the first round in an important legal battle.

The case has been settled out of court and despite setting no official legal precedent could have major consequences for agents and landlords when it comes to accepting – or rejecting –  tenants on benefits.

The claim that has been settled on the basis of discrimination against women – not against alleged discrimination against benefits tenants as such, but because women are more likely to be on benefits, and therefore more likely to be discriminated against.

The letting agent involved has paid £2,000 in compensation after admitting indirect discrimination.

Estate and letting agent Nicholas George in Birmingham told single mother Rosie Keogh that it would not proceed with her application for a property in the Kings Heath area of the city after it found out she would pay some of the rent via housing benefit, according to the BBC.

Keogh said that Nicholas George informed her of the decision relating to her application, made in May 2016, before it had looked into her individual circumstances or assessed how reliable a tenant she would be.

She had been living in the same property for 11 years and had always paid the rent in full.

Having had a letter of complaint dismissed by the agent, the mother of one issued a claim for discrimination in the county court.

Her case was supported by housing organisation Shelter.

The claim was made on the basis that blanket bans on benefit claimants indirectly discriminate against women, and especially single women, because they are proportionately more likely to be claiming housing benefit than single men, according to official figures.

Eighteen months after she began her dispute, Nicholas George brought it to a close with its settlement out of court.

The BBC suggested that the thousands of letting agents and landlords around the country who reject housing benefit claimants “could be flouting equality laws”.

But solicitor Giles Peaker, who writes the Nearly Legal blog, said that since the case was settled out of court it settles no principle in law.

He told EYE that it didn’t necessarily mean that there were legal implications for agents who stipulate ‘no DSS’ when they advertise properties for rent.

But he added: “Of course, it doesn’t mean that the same argument won’t be run by others.”

Polly Neate, chief executive of Shelter, said: “Many private landlords and letting agents openly shun those on housing benefit.

“But private renting is so expensive that many people can’t get by without it — even if they are working — leaving thousands of hard-pressed renters caught in a vicious circle.

“What’s worse, the ‘no DSS’ policy of blindly rejecting housing benefit tenants indirectly discriminates against women as a group.

“We know that more women, especially single mothers, rely on housing-benefit to top-up their income meaning they inevitably suffer the most.

“Our advisers repeatedly hear from desperate mothers battling to find someone willing to let to them, in spite of being able to pay the rent.

“We believe such blanket bans could be unlawful and result in court action under the Equality Act.

“That’s why we are urging all landlords and letting agents to get rid of ‘no DSS’ policies, and treat people fairly on a case by case basis.”

A Shelter survey of 1,137 private landlords last year found that 43% had an outright ban on letting to such claimants. A further 18% preferred not to let to them

Chris Norris, head of policy at the National Landlords Association said: “Cases like this highlight the very worst of what a minority of renters have to put up with when looking to secure a home in the private rented sector.”

EYE has contacted Nicholas George for comment.

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16 Comments

  1. NWood95

    What about mortgage companies that put this as a stipulation?

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    1. Bless You

      ‘Many agents shun dss’. That’s because shelter think it’s fine to squat if they don’t feel like paying the rent and then pay their court bills. 

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  2. loubieloo

    This is absolute madness what about the landlords who’s mortgage company stipulate no housing benefits are shelter going to take them to court??  More reasons for landlords to leave the Lettings market and then what?  The council will house all these tenants in their council houses

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  3. jeremy1960

    Are these “clients” not the vulnerable that gov and shelter are trying to protect?  Seems to me that by publicising articles like this and supporting them they are simply driving more landlords away and backing agents whos job it is to act for the landlords into a very dark corner.

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  4. cyberduck46

    Can’t see a case like this ever being won in court.

     

    You could equally say the same for any exclusion if there are more women being excluded. Or if there are more men then isn’t that sexual discrimination against men?

     

    Complete nonsense in my opinion.

     

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    1. Bless You

      Good point.  Lettings is for big companies now. You would be mad to try and take on the gov’t.   and the media with this witch hunt mentality.

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  5. Aurora12

    The DSS (Department of Social Security) no longer exists – it ceased in that name in 2001! [Since superseded by the BA & JCP] and now the DWP [Department for Work and Pensions] – yet Letting Agents STILL use the term.

    I’m afraid I’m guilty of ‘indirectly discriminating’ by including it when I advertise through an online agency – NOT because I think tenants can’t afford it – but because of the potential “extra administration time” perceived due to delays in their payments, often outside of their control, chasing them up, etc. Aside from the Mortgagor’s stance, which Landlords would willingly opt for potential extra work, late payments, possible ill will with your tenant? Landlords still have to ensure they have the funds available to pay their bills on time.

    I currently state “Benefits Claimants” – but the online agency still quote DSS on the Ad.

    It has now made me think twice though, partly because I’m a female. If Agents/Landlords are discriminating, surely they should go firstly to the Mortgage Cos. though, who dictate “discrimatory” practice in the first place re: BTL loan conditions?

     

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  6. WizKid

    As letting agents our process should be to review each applicants suitability amongst many criteria before progressing an application and landlords should be given the choice to choose the most ‘suitable’ tenant. Its not just about whether they are in receipt of benefits! Are they a good fit for the property and a viable prospect regarding paying the rent compared to the other tenants applying i.e. their track record of paying the rent with their previous landlord.

    As in this case the lady had been with her landlord for 11 years and always paid the rent, if that’s true that’s a massive box ticked! In our experience the market is hyper competitive and so there are always more than 1 tenant applying for a property and a number of criteria used in selecting the right tenant from those that apply.

    In this day and age surely we shouldn’t be disregarding someone just because they are receiving benefits and equally we shouldn’t prefer tenants that aren’t. Some of our best tenants are on low incomes and in receipt of benefits and some of our worst are on very good incomes but have a chip of entitlement on their shoulders.

     

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  7. Property Peep

    Shelter, “providing no shelter since XXXX”

    Shelter “slowly trying to put estate agents out of business since XXXX”

    Shelter “Donate to keep our chief exec in the Shelter / mansion he is accustomed too”

    Shelter “Undercover political lobbying, funded by innocent donations since XXXX”

    When is someone going to report them to the ASA for calling themselves Shelter !

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  8. IWONDER36

    Many landlords who did accept benefit funded tenants have now stopped.

    The main reasons being, delays in HB of up to 12 weeks for the tenant to be in payment, or the roll out of UC which hands the housing element directly to the tenant. A small minority of which do not regard paying for a roof over their head as the priority bill.

    As agents, we work for the landlord and we act on their instruction, unless that instruction is clearly discriminatory. I fail to see how a landlord or agent is discriminating against gender simply for wanting a tenant who can pay the rent immediately so that the mortgage can be paid on time.

    We take our commission from rent in payment, we cannot run on false promises, we have staff who need to pay their rent or mortgage, if they’re lucky.

    You can’t keep moving the goal posts and expect the players to stay on the field! Or is that the idea?

    If any other industry were under attack in the way ours is, the unions would be at the coalface putting a stop to it.

    It would also be nice to see SHELTER use some of its wealth to actually provide shelter instead of blowing it all on trying to be the Greenpeace of the property sector!

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  9. GuyCharrison

    What is frustrating here is that yet again agents are being lead down a path of not being able to correctly advise their clients in fear of a fine.  There are areas of the country where Council’s work well in paying housing benefits and others where they don’t; surely an agent has an obligation to their landlord client to advise of their experience as they would with information they knew about a private tenant.  I think the agent in this case backed down to quickly, that said i appreciate it was a commercial decision to just have the issue go away. Perhaps something ARLA should take up and at least get a barristers opinion for its members?

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    1. Beano200062

      Who..la?

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  10. bridget

    The problem is not necessarily that they are claiming benefits but that the referencing process don’t accept benefits as part of income hence they would usually fail referencing. This is the same as zero hours contracts where people consistently earn far in excess of the amount required, and this can be evidenced in payslips,  but not as far as their contract is concerned. It then means a landlord has to take a judgement whether to accept them or not when referencing rejects them.

    This is OK if the landlord doesn’t require rent protection insurance, but if they do they need the tenant to fully ‘pass’ all their checks or it won’t be accepted.

    The only other way is by having a guarantor, but often (not always) people claiming benefits don’t have a guarantor that would also pass referencing.

    If there are a lot of people going for a property it just ends up easier for the landlord to accept the least complicated cases.

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  11. NickTurner

    I wonder how long it will be before adverts stating  ‘no benefits, no pets, no smoking’ will be outlawed? I am sure it will not be long. Let us not forget that pensioners in receipt of a state pension are on benefits irrespective of their personal financial means. People in receipt of child benefit are also in receipt of benefits ( with certain restrictions I know)

    Years and years ago it was not unusual to see a colour ban on prospective tenants, thankfully and rightfully no longer.

    If the rental support part of the benefit was paid direct to the agent/landlord it would encourage more landlords to consider letting to those on benefits as then that amount guaranteed?

     

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    1. LongInTheTooth75

      Direct payments are fine until the tenants circumstances change, such as a working partner moves in, making the tenant no longer eligible for benefits which doesn’t come to light for 3 months and the benefit people come looking for repayment of the benefits, on direct payment, they knock on the landlords door!!

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  12. HITMAN32

    I wonder when mortgage lenders will lend to benefit recipients, is that discrimination, what about mortgage related fees should they be banned like tenant fees. It’s a joke! We may as well just give Properties away free of charge and free rent.

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