The end at last for ‘no DSS’ discrimination?

Even though the Department of Social Security has not been a government agency since 2001, it has remained common to see adverts for rented accommodation with the phrase “no DSS” included in them. This has raised the question as to whether this amounts to unlawful discrimination contrary to the Equality Act 2010. Direct and indirect discrimination Under the 2010 Act, disability and sex, among others, are considered to be protected characteristics. A person is disabled if they have a physical or mental impairment that has a substantial or long-term adverse effect on their ability to carry out normal day-to-day activities. The Act prohibits direct discrimination, namely that a person who has a protected characteristic cannot be treated less favourably than others because of that characteristic. While adverts by letting agents that DSS recipients are not welcome to apply for accommodation with them are unlikely to amount to such direct discrimination, it has long been argued that they could amount to indirect discrimination. Indirect discrimination is defined as a person (A) who discriminates against another person (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B. What the courts say In recent years, a number of cases have been brought by women challenging the lawfulness of “no DSS” policies, arguing that they amount to sex discrimination because in a high proportion of cases it is women who become single parents after a relationship breakdown and, as such, a high percentage are in receipt of housing benefit. Although such discrimination cases have been settled before they have reached court, most recently a disabled father won his case in Tyler v Paul Carr Estate Agents (County Court at Birmingham, 8 September 2020). While the decision does not set a precedent, as it was not handed down by a higher court such as the Court of Appeal or the Supreme Court, it is the first time that a “no DSS” policy has been declared unlawful by a court. As such, it stands as a warning for landlords and letting agents that they risk legal action being taken against them if they continue to operate blanket “no DSS” bans. Stephen Tyler was married with children, and both he and his wife were in receipt of benefits. Tyler suffered from a number of physical and mental disabilities, including emotionally unstable personality disorder. He required the use of a power chair as he was paralysed. Having been made homeless and in desperate need of accommodation, Tyler approached Paul Carr Estate Agents, having identified three properties on its website which he and his wife could afford. While one property had been advertised as not accepting applicants in receipt of benefits, the other two had no such restriction. However, when Tyler called the agency, he was told that none of the properties would accept him and, indeed, that it was company policy not to accept DSS applicants. Tyler’s evidence was that the call ended abruptly and left him feeling humiliated, as well as of lesser value as a human because he was in receipt of benefits. At trial, the judge found herself satisfied that Tyler had been subjected to unlawful indirect discrimination as a result of the practice of not allowing prospective renters in receipt of housing benefit to apply for the three properties in question and the fact he had been informed that it was company policy not to accept persons in receipt of housing benefit. During the trial, the court heard evidence from housing charity Shelter that its research has shown that 45% of private renters who claim disability benefits (such as disability living allowance or serious disability allowance) also claim housing benefit. As a result of the indirect discrimination, Tyler was awarded £6,000 in damages and a declaration was made that the agency had discriminated against him. This case followed another decision, of the County Court at York on 2 July 2020, in which the parties’ names were redacted. In that case, a single mother of two children had been told by a letting agency that it did not accept housing benefit claimants and that it had had a policy for many years of not accepting such tenants. Some months into the litigation, the agency indicated that it would agree to pay damages of £3,500 and a declaration was made that the agent’s former policy of rejecting tenancy applications because applicants were in receipt of housing benefit was unlawful as it amounted to indirect discrimination on the grounds of sex and disability. Why does this policy persist? There are a number of reasons given by landlords for this discriminatory policy: for example, it is a consequence of restrictions imposed on them by mortgage lenders which prevent them from renting their properties to housing benefit claimants. The most widely reported case is that of NatWest, which came under fire in October 2018 after it refused a landlord a remortgage of his property, and even threatened the landlord with revocation of his existing mortgage, because it was rented to a tenant in receipt of housing benefits. Other reasons given include historical delays in the processing of housing benefit applications, especially where a recipient is in and out of work, requiring their entitlement to benefits to be reviewed on a regular basis. Furthermore, housing benefit is always paid in arrears, which means a tenant could be living in a property for up to five weeks before their landlord receives a single payment. Local housing allowance was introduced in April 2008, and this (except in limited circumstances) is paid to claimants rather than directly to landlords, as is also the case with universal credit. The concern for landlords in this situation is that tenants will not be able to resist the alleged temptation to spend money that is meant for paying their rent on life’s little pleasures. This concern has become reality in some instances. Finally, another concern is that housing benefit will not meet the full market rent, resulting in tenants inevitably accruing rent arrears and being the subject of rent possession proceedings or landlords having to reduce the rent to avoid this possible eventuality. The time has come Signs in windows that say “No Irish, No Blacks, No Dogs” are thankfully banished to the history books, and even the ability for private landlords to impose a blanket ban on tenants having pets was addressed earlier this year with amendments to the model assured shorthold tenancy agreement in January. The number of housing benefit claimants has increased substantially during the Covid-19 pandemic, and it is imperative that the “no DSS” policy is stubbed out once and for all – as previous discriminatory bans have been. Landlords and letting agents should be encouraged to follow the example set by Zoopla in 2019, when it stated that it would not advertise properties that exclude people in receipt of housing benefit from applying. The government too can play a role by reverting to the policy of paying housing benefit (or the rent element of universal credit) direct to landlords. This could be done by way of a simple request by a tenant, similar to a direct debit payment. Dorota Pawlowski is a managing associate and Yetunde Dania is a partner at Trowers & Hamlins Picture © Maureen McLean/Shutterstock