Tenant discriminated against for receiving benefits.

[Melboy]

Something more to consider now when placing adverts and viewings.

A letting agent and landlord have been ordered to pay damages of £4,500 and legal fees for unlawfully refusing to show a potential tenant a rental property based on the fact she receives benefits.

All agents should understand the implications of this case and realise it is unlawful to reject anyone who is in receipt of Universal Credit.  

Full story here:

       https://www.arla.co.uk/news/may-2021/tenant-discriminated-against-for-receiving-benefits/

 

[Richlist]

I don't understand the problem.

My letting agents & I have a policy of only accepting applications from tenants who meet the criteria for rent guarantee insurance. Applicants in receipt of housing benefits/UC get help by virtue of not having sufficient income to pay their rent so they don't qualify for the insurance. 

Am I missing something ?

Am I over simplifying a problem that I don't think really affects landlords ?

Then there is the restriction on some mortgage t&c's which don't allow letting to people in receipt of benefits.

 

 

 

 

[Melboy]

The case was taken on by Shelter Lawyers.

My guess is that they refused to show this person the rental property on the grounds that she was in receipt of state benefits so I am guessing this case is based on discrimination. Perhaps you have to let the process of tenant selection run it's course through to the end and then inform the person they have not been successful?  perhaps Grampa as a letting agent could shed some light on this matter?  

Either way it does appear that all LA's and landlord's need to be very careful when advertising their rental property now and not to say in the advert "No DSS" or risk a possible fine of £20,000 for doing so as revealed in the above article.

 

[Richlist]

What a dog's diner ?

I still don't understand.

* When I had BTL  mortgages they all specified no benefits tenants in the t&c's......so advertising for no applicants on benefits means I complied with my mortgage lender requirements. Even if that has now changed for NEW loans, there will be existing loans where those t&c's apply.

* I guess it would be acceptable to include in the advertising......'applicant must qualify for rent guarantee insurance'.......that would then automatically exclude those on benefits for most insurers.

There are obviously going to be loopholes......they would find it very difficult to close them all off.

 

[Carryon Regardless]

My simplistic thoughts, cynical of course.

When I was rejected for the self employed covid grant HMRC stated I wasn't classed as self employed, and yet I have completed a self assessment and paid tax due to that for many years.

So I'm not self employed, I don't pay PAYE so who do I work for. Well it's the Gov't of course. 

Our decisions and choices of how we run the business that we are allowed to be responsible for have been diminished to such a degree that we must accept that it isn't our business any longer. We are merely the one's responsible to provide accommodation to the satisfaction of onerous legislation, to be overseen by Shelter.

I haven't read the link but am I right in assuming the LL paid the expenses of Shelter?

 

[Grampa]

Well the Agent should have been a bit more careful regarding the way the property was marketed and the manner in which the tenant was refused its not hard. An agent who out rightly tells an applicant they wont be considered due to being in receipt of benefits then gets fined has no one to blame but themselves. Its no different to a wheelchair user who insists to view an unsuitable property even after being given the reasons why its unsuitable, you would be just inviting an discrimination claim whether it has merit or not.

Sometimes in business you have to give lip service to head off a problem before you get to the pass. 

[Grampa]

14 hours ago, Richlist said:

I don't understand the problem.

My letting agents & I have a policy of only accepting applications from tenants who meet the criteria for rent guarantee insurance. Applicants in receipt of housing benefits/UC get help by virtue of not having sufficient income to pay their rent so they don't qualify for the insurance. 

Am I missing something ?

Am I over simplifying a problem that I don't think really affects landlords ?

Then there is the restriction on some mortgage t&c's which don't allow letting to people in receipt of benefits.

I dont as a rule use rent guarantee insurance but the one time I did which was which was with Rent4Sure they made a big thing of accepting benefit tenants. So your agent may need to come up with another reason in case they come across a sharp tenant. There is bound to be other RG products with other underwriters as well who accept HB tenants.

Now if the rent is sustainably higher than the UC/HB rates for that size property that will wittle down any possible benefit tenants. Or as a final resort they get told their application has been put forward to the landlord with the other interested parties who will decide on their preferred choice from the applicants.  

[Melboy]

9 hours ago, Grampa said:

Well the Agent should have been a bit more careful regarding the way the property was marketed and the manner in which the tenant was refused its not hard. An agent who out rightly tells an applicant they wont be considered due to being in receipt of benefits then gets fined has no one to blame but themselves. Its no different to a wheelchair user who insists to view an unsuitable property even after being given the reasons why its unsuitable, you would be just inviting an discrimination claim whether it has merit or not.

Sometimes in business you have to give lip service to head off a problem before you get to the pass. 

 

Yes, I agree with Grampa.    I would be absolutely non committal in my reply to any prospective tenant and certainly would never reveal my thoughts on whether they would be suitable and it is almost certain I would imagine that the LA and Landlord refused this prospective tenant either verbally to their face or in writing due to the fact they were HB claimant's.  Not a wise thing to do these days in my opinion.

Having said that I did think the fine was excessive for their so called "crime" of discrimination.

[Carryon Regardless]

The rejection of HB applicants on that ground doesn't apply to me, because I need T's and it wouldn't be realistic in some / most of my areas to expect better.

I guess I need be cautious on my wording when advertising though as I 'did' state no unemployed. I also state sickness and elderly claimants welcome and while that often amounts to benefit claimants it is a restriction to some. Shelter's barrister, well any really, are there to find the best cause to hang the defendant, us in these scenarios.

Insurance companies are allowed to assess risk and charge the premium accordingly. I would wager that if we were to increase our rent for benefit claimants the prosecuting Barrister would find it easy to have us hung. To defend would cost upwards of £10K (an added cost to the LL mentioned in the original post)

As with my earlier grumble,

We must now go to court to request approval of having 'our' property returned to us. When told "not this time", we shall suffer the backlash and have to return at our expense to try again.

We, or our Agents, are not allowed to charge the prospective or in place T's for any admin or even inconvenience they cause.

Increasingly it is being taken out of our hands who we should actually take as a T. It is desired that we should be forced to accept children and animals, as a human right.

These things creep up on us, but here it isn't that subtle. Any forecast on what onerous changes we should expect next month / year?

How close are we to being social LL's? And our threatened penalties are greater than the local councils.

Do the RLA still exist?

[Grampa]

Just a little footnote to the court case mentioned to put some context to the story. The case was brought by Hayley Pearce and I believe  this was the third case in 2 years which she has taken on letting agents who rejected her due to being on benefits though the 2 earlier case did not reach court and were settled for a estimated 15k in damages.

You wont be surprised to know she was backed by the housing charity Shelter

Just remember the law doesn't force landlords and agents to house tenant's in receipt of benefits but to only consider their application along side any other application. Which is a bit of a nonsense really.

 

 

[Richlist]

1 hour ago, Grampa said:

 

 

Quote

Just remember the law doesn't force landlords and agents to house tenant's in receipt of benefits but to only consider their application along side any other application. Which is a bit of a nonsense really.

 

 

But surely it has to be more than that in the eyes of the law. There has to be a more detailed description/definition of the term 'consideration' in the context of this issue......don't you think ?

I could receive an expression of interest/ application from anyone in receipt of benefits, think about it for 10 seconds and tell them I won't be letting to them because they are in receipt of benefits. I can honestly say I've thought about (i.e. considered) their application and decided they are not suitable.  I don't have to tell them they don't meet the criteria for rent guarantee or my mortgage lender's rules or that a far better quality tenant will be along shortly. 

[bil8999]

Think we are making a bigger issue out of this than needs to be, consider there application the same as the others and reply say they have been unsuccessful.

[Grampa]

On 5/7/2021 at 8:57 PM, Richlist said:

 

But surely it has to be more than that in the eyes of the law. There has to be a more detailed description/definition of the term 'consideration' in the context of this issue......don't you think ?

I could receive an expression of interest/ application from anyone in receipt of benefits, think about it for 10 seconds and tell them I won't be letting to them because they are in receipt of benefits. I can honestly say I've thought about (i.e. considered) their application and decided they are not suitable.  I don't have to tell them they don't meet the criteria for rent guarantee or my mortgage lender's rules or that a far better quality tenant will be along shortly. 

I do agree, but a landlord would be foolish to do so.  

The law used is section 19 & 20 of the Equality Act 2010 and the court ruling confirmed that anyone who seeks to exclude renters receiving housing benefits is acting unlawfully. So I guess if the reason given to exclude someone is a reason other than that and the same criteria is used equally with all applicants you should be ok.

I would also guess other reason(s) to rule out an application could be a number of things such as:

1. Income
2. Provable income (getting a official letter (not a print out from a on-line calculator) stating what benefits they would receive if they moved into your property can be quite difficult. Just because they receive £xxx at their current property doesn't  mean they will receive the same benefits at another property that may have more or less rooms, be in a different area with different rates, maybe different number of people/occupier's and  also a different rent amount)
3. Not providing an official letter stating there isn't an existing benefit debt they need pay back (due to an earlier over payment)  and therefore a claw back on future benefits . This claw back isn't uncommon and would reduce the amount of benefit the tenant would receive  therefore reducing income. If there was a debt it wouldn't appear on normal ref checks.
4. Number of occupants 
5. Number of Children.
6. Suitability of occupants for the type of property ie: pets children
7. Pets. (take no notice of the fallacy that pets cant be refused. This stems from the recent clause added in the free government AST that allows pets. Though I have heard even this isn't enforceable)
8. Mortgage  restriction 
9. Building Insurance restriction
10. Head lease restriction
11. Criteria for Rent Guarantee insurance
12. Having a Guarantor

 

 

 

[Grampa]

12 hours ago, bil8999 said:

Think we are making a bigger issue out of this than needs to be, consider there application the same as the others and reply say they have been unsuccessful.

I agree. Just be aware of the ruling and what is told to unsuccessful applicants.