Housing charity Shelter has won a second case against a letting agent discriminating failing to consider tenants on housing benefits seeking to rent a buy to let home.

The government has already signalled new laws are on the way to ban ‘No DSS’ adverts but some landlords and letting agents are flouting the rules.

So how should landlords market their homes to avoid breaking the law?

No DSS adverts are unlawful

It’s clear from the government and the courts that No DSS adverts are unlawful.

Landlords and letting agents refusing applications from tenants claiming housing benefits risk compensation claims and damage to their reputation.

In the latest case, Judge Mary Stacey at Birmingham County Court was told disabled dad Steven Tyler, 29, was evicted from his rented home in February 2018 after asking the landlord to add some disability improvements to make his life easier.

Tyler was confined to a wheelchair following a road accident in December 2016. He explained to the court that besides his disability, he has mental health issues. The disability means he needs extra personal care provided mainly by his wife, who also cares for their children.

Tyler then approached Birmingham letting agent Paul Carr to find a new home for his family with a request to view three buy to let properties.

Letting agent’s blanket no housing benefit policy

He explained he claimed housing benefit but had always paid his rent on time and had no arrears.

Paul Carr rejected his application stating the company had a policy of refusing to rent homes to anyone on housing benefit.

As a result, Birmingham City Council found him a new property as he and his family were homeless.

The court ruled Paul Carr’s No DSS policy was unlawful and breached the Equality Act.

Explaining the decision, the judge said the discrimination adversely impacted the disabled who are more likely to need state help paying rent.

“There is no doubt that there was a blanket policy that no one in receipt of housing benefit would be considered for the three properties. It put the claimant and other disabled people at a particular disadvantage when compared to others,” said the judge.

“To be told simply, because of his benefit status, that he could not apply for three properties which were perfectly located for his children’s school, his GP and health needs, and extended family support, would be distressing.

“We make a declaration that the defendant has unlawfully indirectly discriminated against the claimant by imposing a PCP [Provision, Criteria or Practice] that those in receipt of housing benefit could not apply to those three properties.”

Damages and apologies

The first No DSS case at York County Court upheld a claim from a single mother with two children that a letting agent’s policy of not renting homes to anyone on housing benefit was also unlawful. The grounds were the policy was discrimination because people were adversely affected by their sex and disability when looking for a home to rent.

Two other single mums have taken on letting agents over their No DSS policies and won out-of-court settlements.

In the first case, the letting agent paid £3,000 compensation, £10,000 legal costs and wrote an open letter of apology.

The second mum also settled out of court, with the letting agent paying £3,500 compensation, £2,500 legal costs and apologising in public.

Online property portals Rightmove and Zoopla also bowed to pressure and banned No DSS listings from their web sites.

Several leading buy to let lenders eased their mortgage conditions to allow landlords to rent homes to tenants on housing benefits. These included NatWest Bank, the Nationwide and The Cooperative Bank.

What’s next for No DSS adverts?

Shelter claims 45% of private renters who claim disability benefits like Disability Living Allowance or Serious Disability Allowance also claim housing benefit.

The latest English Housing Survey gives a clearer picture of how many private renters claim housing benefit.

The data reveals 20% – on in five – of private renters are paid housing benefit. That adds up to around 900,000 tenants.

In March 2019, the government pledged to ban No DSS adverts. Legislation is expected in the long-awaited rent reform bill which has been held up due to Brexit and coronavirus legislation taking up most of the time in Parliament.

Former Minister for Family Support, Housing and Child Maintenance, Justin Tomlinson said: “Everyone should have the same opportunity when looking for a home, regardless of whether they are in receipt of benefits.

“With Universal Credit, payments can be paid directly to the landlord, and we continue to listen to feedback and work with landlords to improve the system.”

He explained government research that suggests half of landlords would refuse to rent to tenants on housing benefit.

The obstacle making landlords reluctant to rent to claimants is the way housing benefit is paid.

Tenants can have their housing benefit paid direct to their landlord, but don’t. Instead, the tenant receives the rent in cash, and many are tempted to spend the money on other bills.

Apply for direct rent payments online