Ban on ‘No DSS’ after court judgement

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The case against ‘No DSS’ stipulations stepped up a notch when two mothers recently won out of court settlements against two letting agents.

A judge in York County Court ruled on 1st July 2020 that landlords cannot place a blanket ban on the rental of property to people in receipt of housing benefit.  Judge Mark said: “Rejecting tenancy applications because the applicant is in receipt of housing benefit was unlawfully discriminating on the grounds of sex and equality.”

In the months before the ruling, Amanda Staples and Emma Loffler won separate out of court settlements on the grounds of indirect discrimination. Both women cited the case of Rosie Keogh, that made headway in 2018 when Ms Keogh was backed by the homeless charity, Shelter. It was successfully argued that blanket bans were highly discriminatory, as they indirectly targeted women and disabled people who were the most likely groups to be in receipt of benefits.

Ms Staples and Ms Loffler said that various letting agents had point blank refused to show them properties. Shelter agreed to support their legal cases when the agents would not relent.

Ms Staples said: “I’ve always paid my rent, I had a child maintenance order, and I ended up on benefits because of the divorce and because I had three children.”

In her search for a new home, she contacted several local estate agents, but received a flat refusal once they learned she would be in receipt of housing benefit. Despite being aware that some agents operated a ‘No DSS’ policy, she hoped to find a home locally so that her children would not have to move school and so she could keep her part-time job.

Even when she offered to pay rent as much as twelve months in advance, after acquiring a loan from her father, she was told by agents that some landlord insurance would not extend to tenants on benefits.

She found it difficult to keep explaining her personal and private circumstances to complete strangers, who would more than likely turn her down. She said: “After a while, talking to this one particular estate agent, I just said: ‘Nothing I say is going to make any difference is it?’ and he said: ‘No.'”

However, once Shelter agreed to back her case, the letting agent involved agreed to pay £3,000 compensation and £10,000 legal costs and a public letter of apology was also included.

Ms Emma Loffler had a similar result, with the agent involved paying £3,500 in compensation and £2,500 legal costs, also with letter of apology.

Shelter chief executive, Polly Neate said: “The message is clear. Letting agents and landlords must not treat potential tenants as second-class citizens simply because they rely on benefits. If they continue to blindly discriminate against those receiving housing benefit, they risk legal action and a hefty fine.

“Not only is ‘No DSS’ discrimination outdated and grossly unfair, it is unlawful under the Equality Act because it overwhelming impacts women and disabled people, who are more likely to need support paying their rent.”

Shelter looked at approximately 7,100 housing adverts on some of the biggest letting agent websites in the county. On sites such as Rightmove, Zoopla and Countrywide, they found that one in ten adverts contained phrases such as ‘No DSS’ or similar.

It appears there is still a lot of confusion about what property landlords can and cannot stipulate when renting out your property to suitable tenants. Landlords need to ensure they have reliable, rent-paying tenants who will take care of the property. On the other hand, there are many people in urgent need of housing.

Many landlords still think that being in receipt of benefits means people won’t make exemplary tenants. A poll conducted by YouGov in December 2019 and January 2020 asked 1,009 private landlords their opinions. It showed that:

  • 86% thought stating ‘No DSS’ was within the law, but they were uncertain
  • 29% said they did not let their properties to people in receipt of housing benefit and had been advised not to do so by their letting agent.

This clearly shows a lack of clarity and the Residential Landlords Association urged the government to:

  • Put a stop to mortgage conditions that prevent landlords from refusing to let property to benefit claimants.
  • Make sure housing benefit is in line with the current rent levels for each area.
  • Give tenants back the right to choose to have their housing benefit paid straight to their landlord.

This last aspect is the biggest drawback to the private rented sector in being discouraged to rent to the supported DSS tenancy sector. Removing the risk of a landlord not receiving the rent will significant encourage the private rented sector to rent property to DSS supported tenants in need of accommodation.

If you have any queries about your rights as a landlord or tenant, check out the website for government guidelines.

If you’re an aspiring landlord and buying a rental property, a Property Surveying independent Chartered Surveyor can provide you with a building survey. The survey will help the landlord detail any work that is required to be carried out prior to being let to a new tenant.