This is a question which has sprung into prominence recently as a result of a case brought by single mother Rosie Keogh against lettings agent Nicholas George, who had a ‘No DSS’ policy.
Ms Keogh was outraged when the agents refused to even consider her application after they learned that she was in receipt of state benefit. She decided to do something about it.
Rosie Keogh’s case
The basis of Ms Keogh’s case was that a blanket discrimination against ‘DSS’ applicants was indirect discrimination against women, particularly single women, as according to official figures, they are proportionately more likely to be claiming housing benefit than single men.
As the case was settled, it cannot be cited as a precedent in the courts. However, the fact that the case WAS settled in her favour and indeed the fact that it was supported not only by Shelter but by a barrister at the Bar Pro Bono unit, will no doubt inspire other people on benefit unable to find rented accommodation to do likewise.
So what can letting agents, landlords and tenants do about it?
The reasons why landlords avoid tenants on benefit
I wrote about this a couple of years ago in a post which attracted a vast number of comments.
When it boils down to it there seem to be about five main reasons:
- Fears that the tenant will not be able to pay
- Fears that the tenant will prove to be a ‘bad tenant’ in some other way
- A desire to avoid having to deal with the local authority
- A prohibition on benefit tenants imposed by their insurer or mortgage company, and
- Concerns about delays in the court eviction process should it be necessary to evict (e.g. due to 1 or 2)
Let’s take a look at these
Fears about rent arrears
This is a very real concern. Particularly with the current move towards Universal Credit and the horrendous problems experienced by tenants in dealing with the payments shortfall as they move from one system to another.
Newspaper reports are rife with stories about Universal credit leading to rent arrears such as this recent report by the BBC.
It is a rare landlord who will be able to cope with this kind of financial loss. Many landlords depend upon their tenants’ rent for their own income – for example, many pensioners. Even if they are not wholly dependent on it, they still have to pay expenses on the property such as the mortgage, insurance, and the cost of keeping it in repair.
A long period of rent arrears can be catastrophic for landlords. It could even put them into bankruptcy.
Still, there are things that landlords can do to protect their position if taking on a tenant on benefit. Such as choosing tenants with a good payment history – Ms Keogh, for example, had an excellent payments history over some 11 years, so probably would not have been much of a risk.
Taking a guarantee from a property-owning relative is something else that can protect landlords. As can asking them to set up a credit union ‘jam jar’ account or an account with the Tasker Payments service.
Fears about bad tenants
There is a view among some people that people on benefit are feckless and irresponsible, ‘spongers’ off the state, and maybe, by extension, more likely to have other undesirable characteristics such as a tendency towards anti-social or criminal behaviour.
It’s a wholly unfair attitude but it does exist and there is probably not a lot that tenants can do about it.
I suppose one way of looking at this (if you are a tenant) is that you probably don’t want someone with these views to be your landlord anyway. Although they may be good prospects for discrimination claims.
Problems with the Councils
I wrote about this recently here. Many, many landlords have told me this, or commented on this blog, saying that the problems with local authorities are such that they are just not prepared to deal with them anymore.
Most of the landlords have also made the point that the problem is not with the benefit applicants themselves, who they agree often make excellent tenants.
I don’t know whether ‘discrimination’ for this reason could be unlawful. I am not a discrimination lawyer. I would welcome comments from anyone who is.
The solution to this issue lies with the Councils. If they could become more supportive of landlords taking benefit tenants, they would find more landlords willing to do so.
Prohibitions imposed by insurers or mortgage lenders
If their mortgage company or insurer imposes prohibitions against benefit tenants, then there is not a lot a landlord can do. Even if he wants to let to a benefit tenant, he can’t.
In the case of insurance, for example, he would risk claims not being paid out and so could suffer major financial losses.
I don’t think a landlord who refuses benefit tenants, for this reason, can be held to be unlawfully discriminating. The challenge should be taken to the insurers and mortgage companies. Maybe the Equalities Commission could bring a test case?
Fears about the eviction process
This is the reason why many landlords are unwilling to ‘take a chance’ on a benefit tenant. The reasons are amply shown by my post on Kate’s story – a real-life case of a landlord who let to a benefit tenant but came to regret it.
There is also the problem of Local Authorities refusing to re-house tenants in priority need until they are on the point of being evicted by the bailiffs. Which can cause landlords huge losses in respect of lost rent and legal costs. Although the Homelessness Reduction Act due to come into force later this year, may change things.
The problems and delays in the eviction process itself though, are unlikely to be resolved anytime soon, unless maybe the Government decides to proceed with a specialist Housing Court.
So what about discrimination then?
As I pointed out in this post, under discrimination law it is unlawful to directly discriminate in respect of the following ‘protected characteristics’:
- 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
As you will see, this list does not include being in receipt of state benefit.
However, there is also indirect discrimination. This is where you are discriminating on a basis (eg type of job) which on the face of it does not relate to protected characteristics but in fact, does – for example, if people with that type of job (or whatever) are invariably women. Or older people. Or people from a certain ethnic minority.
This was that basis of Ms Keogh’s case.
Advice to landlords
No-one can force you to take one tenant over another. However, if it can be proved that you have unlawfully discriminated against one person when making your choice, that person may be able to bring a claim.
The answer to this is to have no blanket prohibitions.
You should consider everyone on their merits and be able to show (if challenged) that the reason you chose A over B was because you thought A would be a better tenant. Not because they were in receipt of benefit. Or due to some other ‘protected characteristic’ related quality.
Advice to tenants
As being in receipt of state benefit is not a protected characteristic, any claim for discrimination will always have to be based on some sort of indirect discrimination.
Single mothers will have a better chance of success therefore than single young men. Provided they would otherwise have been a suitable tenant for the property. Had Ms Keogh had a history of rent arrears and anti-social behaviour, she may not have got very far with her claim.
However, you can’t change what people think and feel. If there is no overt discrimination (such as ‘No DSS’ notices on the agents’ windows) there may not be a lot you can do if you just find it harder to get a home than someone with a high paying job.
This problem is part of the general housing crisis and its solution does not lie in discrimination law, but in ensuring that more housing is available for everyone.