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17 September 2020
Gurdip Chana, Advisor at specialist lettings helpline, HF Assist, explains why you must not advertise "No DSS" and how you can encourage landlords to consider tenants on benefits.
We are receiving enquiries from many agents requesting information on how to deal with “DSS tenants”, following recent discrimination claims leading to £1000s in settlement costs being paid by the agent or landlord.
Importantly, on 2nd July 2020, a County Court had awarded a tenant damages against an agent who would not consider the tenant due to the fact they were claiming housing benefits.
More recently, on 8th September 2020, a second County Court had awarded a tenant damages due to a “no DSS” policy. Click here for a link to an article on this case.
Due to the Court ruling, preventing a tenant from applying for a tenancy on the grounds they will apply or are entitled to benefits will amount to discrimination and be considered unlawful under the Equalities Act 2010.
Therefore, under no circumstances must you place in adverts stating “No DSS” or refuse outright to consider such a tenant for a tenancy.
Shelter include the following statement on their website advising tenants on benefits looking for housing: “No DSS policies are blanket bans on renting to tenants claiming universal credit or housing benefit. You can complain if you see adverts like these or if an agent refuses to deal with you because you're on benefits. No DSS policies and adverts are unlawful discrimination but you can still be asked to pass an affordability check.”
In short, you must treat all applicants ‘equally’. This means that you must explain to all tenants, from the outset, the ‘affordability criteria’ which they must meet. For example, you could require tenants to have a minimum income, have sufficient savings, have no CCJs, etc.
Some agents/landlords might consider using ‘rent guarantee’ insurance. The insurance provider will have clear criteria to be followed for a tenancy to be eligible for cover. The insurer’s criteria can also be used as a means of setting your affordability criteria.
What all this means in practice is that your only means of rejecting a prospective tenant is on the basis of whether they can afford to rent as opposed to whether they are claiming benefits.
Not all tenants claiming benefits are ‘bad’ tenants – most will pay all rent due or make ‘top-up’ payments to cover any shortfall in benefit entitlement. Encourage your landlords to be open minded and to consider some of the below if facing this situation.
You should consider the following:
The days of placing “No DSS” in adverts has come to an end. The penalties (and losses) for discriminating against tenants claiming benefits are significant. Therefore, in summary:
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