"No DSS" - Court says policy is unlawful

Shelter successfully assisted a client to challenge a letting agent’s refusal to allow her to view a property because the agent did not accept tenants in receipt of housing benefit. So-called “No DSS” policies have never been successfully challenged in court before as the defendants generally settle, with a number of such settlements receiving media attention earlier this year. This case is very significant, and we’d encourage any person who has been refused services because they claim or intend to claim benefits to contact our helpline for advice.

Case background

The claimant, a 44-year-old single mother with disabilities, began looking for a new home when her private landlord advised that her tenancy agreement would not be renewed when it expired as the property was required for the landlord’s family member. The claimant contacted an agent who was advertising a property to let in an attempt to arrange a viewing of the property. She advised the agent that she had excellent references and payment history, worked part-time and was in receipt of partial housing benefit. The agent responded by stating that they do not accept housing benefit. When the claimant queried this, the agent advised that the company had a policy, held for many years, not to accept housing benefit tenants.  The agent ceased to operate this policy in June 2019.

After exchanging pre-action correspondence, the case proceeded to court.

The claimant alleged that the agent’s refusal to provide her with a service constituted unlawful indirect discrimination.

What is indirect discrimination?

Unlawful discrimination occurs when a person is discriminated against because they have certain protected characteristics. These include gender, race, ethnicity, sexual orientation and having a disability, amongst others. Indirect discrimination occurs where a policy or practice does not directly discriminate against a protected group, but the impact of that policy is likely to be disproportionately felt by people with a protected characteristic. In this case, the claimant argued that women and people with disabilities were more likely to be in receipt of housing benefit, so the policy of not renting to people in receipt of this benefit was likely to have a stronger negative impact on disabled people and women. Indirect discrimination can be lawful if the service provider can prove that the policy or practice is a proportionate way of reaching a legitimate aim. 

The legal framework

This case focused on the Equality Act 2010. This Act does not extend to Northern Ireland. However, Northern Ireland has its own anti-discrimination legislation which makes this kind of indirect discrimination unlawful. There are clear parallels between the Equality Act 2010 and the Sex Discrimination (NI) Order 1976. Although the case is not legally binding, because it was heard by a lower court, the arguments advanced in this case apply equally to landlords and letting agents in Northern Ireland and a court in Northern Ireland is likely to reach a similar decision.

The evidence

The claimant, supported by Shelter, analysed statistics relating to two pools within which to compare men and women, and disabled people and non-disabled people, respectively. The first pool consists of private rented sector tenants. The second pool consists of occupiers of housing more generally. This research provided a sound base for determining the discriminatory impact of the agent’s refusal to rent properties to tenants in receipt of benefits. This evidence is summarised in the redacted court order, available from NearlyLegal, and shows that 53.1% of female single-adult households renting privately claim Housing Benefit compared to 34% of male single adult households. When households with couples are included, 18.8% of women renting privately claim Housing Benefit compared to 12.4% of men. This means that, in the private rented sector, women are more than 1.5 times as likely to rely on Housing Benefit, and thus be excluded by this type of restrictive policy, than men. The court found that It was “…evident that women are substantially more likely than men to claim Housing Benefit and thus more likely to be adversely affected by a No DSS policy”.

The evidence goes on to show that 44.6% of households who claim Disability Living Allowance (DLA) or Severe Disablement Allowance (SDA) claim Housing Benefit compared to 15.1% of households who do not claim DLA or SDA. This means that, in the private rented sector, disabled households are almost three times as likely to rely on Housing Benefit, and thus be excluded by a No DSS policy, than nondisabled households. In respect of occupiers of all types of housing, disabled households are almost five times as likely to rely on Housing Benefit as households without disabilities.

Justification

As with legislation in Northern Ireland, the Equality Act allows for indirect discrimination if such behaviour can be shown to be a proportionate way of achieving a legitimate aim. The burden is on the service provider to justify their policy. The agent in this case did not attempt to justify the policy.

A landlord or agent would likely find it difficult to justify any such blanket policy and should always take a case-by-case approach to lettings. In the past, many mortgage lenders imposed conditions on landlords preventing them from renting out properties to tenants in receipt of benefits.  As a result of media and government attention, some lenders changed their terms and conditions in the last few years to remove this requirement from their buy-to-let mortgage agreements, but it may remain in place with older mortgages. While this lender policy itself is likely open to legal challenge, a landlord with such a condition in their mortgage could potentially use this as a means of justifying such discrimination, although it is unlikely that this defence would be open to letting agents who refuse service to tenants in receipt of benefits.

Application to Northern Ireland

This judgment was issued by a county court in England and, as such, is not binding on other courts. However, the arguments advanced apply equally in Northern Ireland and this landmark case suggests a strong likelihood of success for any similar legal challenges here.

Any person who has been refused services by an agent or landlord simply because they will be receiving social security assistance to pay their rent should contact our helpline for advice.

Landlords and letting agents operating such blanket policies in Northern Ireland should end this practice immediately. Landlord Advice NI can provide free advice to registered landlords operating in Northern Ireland.