Agents warned they could face legal action over ‘no benefits tenants’ lettings adverts

Agents and landlords who state in their adverts that they will turn away housing benefits tenants could face legal action from one of the major lobbying groups.

EYE understands that Shelter could be considering a class action on the grounds of discrimination.

A Shelter spokesperson last night confirmed to EYE the organisation’s “intention to take cases to court”.

EYE also understands that both Rightmove and Zoopla have been warned by one agency group, following its advice from Counsel, that they should not be carrying agents’  listings where acceptable tenants do not include those on benefits.

The listed estate and letting agency group told EYE yesterday evening that it had become aware that Shelter had targeted one of its offices, posing as a prospective tenant on benefits.

After being told by Shelter that it was breaking discrimination law, the group had taken legal advice.

Counsel’s opinion was that a breach of discrimination law looks likely.

The agent said it had also been advised by its legal team that landlords might have a defence that is not open to agents – that lenders and insurers do not allow letting to tenants on benefits.

Discrimination laws have been beefed up – but this is many years after lettings were advertised as no blacks, and no Irish.

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37 Comments

  1. Robert May

    Before they do that they should consider why agents don’t take on benefits tenants. I’m happy to sit down with Shelter’s Counsel and explain very, very slowly some basic practical reasons way mixing a  13/52 based system  with a 12/52 system can not be made to work. Even if there is a class action victory and  case law to tells it to work, to comply with the law DWP would need to find a way of pushing  a shoal of eels up a very slippery salt glazed slope

    I try to refrain from insults but there is genuine naivety on this subject that will only be resolved if  someone with some common sense was prepared to listen.

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    1. JMK

      They may listen, they may even understand but they won’t care.  Shelter has links to the deeply socialist Fabian Society.  Their belief is that social housing, maybe even all housing, should be provided by the State.  They are purposely attacking the PRS with any method they can in order to shrink or eliminate it, thus making hundreds of thousands of people homeless and demonstrating to Government that they must take control and provide housing.  Their actions are not about doing the best for the country’s tenants, they have much darker intentions in mind, and it is those people they claim to protect that are being sacrificed in order to achieve their goals.

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    2. DarrelKwong43

      RM, Universal credit pays monthly in arrears not four weekly

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      1. Robert May

        Thank you , I  do know that, I also know that for the whole generation I’ve been a service supplier to the lettings industry benefits tenants have been branded as feckless ne’r-do-wells who can not manage money and who spend all their benefits on booze, ****, scratch cards and drugs because of the way benefits have been paid in the past.

        Shelter are campaigning against a  well established and  ingrained stigma caused by an now ancient accountancy practice that could not cope with there being 4.333333′ weeks in a month.

        Shelter can take their executive salaries and can fund a barrister who’ll happily win-lose  a class action (they’ll get paid anyway)  but they will change attitudes of lenders, landlords and agents  towards benefits tenancies as quickly as Katie Hopkins will be convinced skin colour and religion isn’t a sound basis  for determining if someone is British or not

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        1. Robert May

          **** = four letter f word for cigarettes

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  2. Jrsteeve

    They do realise that a good number of lenders prohibit letting to benefit tenants don’t they? The landlord and agent have no choice in that case.

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    1. singlelayer

      Also agents act on their client’s instructions.

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      1. Retiredandrelaxed

        This is true but if a client instructed you to advertise “No Jews or no Irish”, you would have no option than to decline their instructions. The point being that an agent is not able to rely on “That was what the client instructed us to do/say” as a defence in all cases.

        I agree with the points made re Shelter’s over-political agenda. If the Landlord’s mortgage lender or insurer has specified “No tenants on benefits”, neither the agent nor the Landlord has a choice. If Shelter and/or Govt truly want to change that aspect, going after agents is entirely the wrong target.

        I suppose that a case where an agent or specific office adopts a blanket policy of “No benefits”, without considering the individual circumstances of any specific case could be considered discrimatory as it is excluding a group of people based on a specific characteristic (being in receipt of benefits). If individual cases and circumstances are considered and a tenant is then declined, that seems like a different situation.

        That said, you surely can’t force an individual landlord to take any specfic tenant. The landlord has the right to have the final say on who rents his or her property, and rightly so, surely.

        As is so often the case in the housing industry – let’s blame agents and have a go at them because it’s easy and everybody hates agents (gazumping, gaxundering, fall throughs, etc, etc)

         

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  3. singlelayer

    Complete waste of time. So LLs/agents stop putting ‘No DSS’, but then refuse under some other ground, such as ‘affordability’.

    This just serves to raise them dash the hopes of those least desirable. If government want control of tenant allocation, they need to get their own stock.

     

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    1. DarrelKwong43

      Agree, its just lip service to an issue which will still exist.  Instead of a simple NO at the start, the agent will waste theirs and the applicants time by going through an affordability test, just to say NO.  All because Shelter want to justify their existence

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    2. Gromit

      Agree. The Government with Shelter in support are driving rents up and making it unaffordable for people on benefits to rent in the PRS.

      Forcing Landlords/agents to go through the charade of an affordability check that you know the prospective tenant will fail is a complete waste of time & money, and will only serve to push rents up further.

      With 4,000 properties fewer each month in the PRS, Landlords will naturally choose the tenant who is least likely to fall into arrears, trash the property, and/or be anti-social towards their neighbours.

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  4. Marion23

    Or, and here’s a radical thought, the money for the rent is paid directly to the landlord or agent. There I’ve said it. Some people are totally incapable of handling their finances and to leave them to pay all bills and the rent is usually enough to send them scuttling to the nearest pub! We’ve just given notice to a tenant on the new Universal Credit  who is now £2000+ in rent debt and who has trashed the property leaving my landlord further out of pocket.  So, Shelter, here’s a question.  What would you do about that? And if your answer is “nothing” then nothing will change.

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    1. Home Provider

      Shelter will get a legal expert to try to find something wrong with your notice paperwork and procedure, no matter how tiny or irrelevant it is.  They may file no defence but turn up in court at the last minute and surprise you and the judge with it, to ensure that the non-paying tenant can stay in the property and continue not to pay.  See https://www.property118.com/shelter-deter-judge-evicting-anti-social-tenants-using-dubious-technicality/#comments
       

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    2. Gromit

      The Universal Credit system’s “sanctions” regime now makes even direct payment unreliable.

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  5. dannymagix79

    It is up to the landlord who they wish to take and they are allowed to say no benefit on tenants although it could be argued they are being discriminated against because they have no job?!

    I personally was happy to take a benefit tenants (which i did) and she had two kids.  I was paid the money each month on time (I also had a guarantor) and she stayed for 7 years, so if you do find a good tenant in receipt of housing benefit you may find like me (and others that i am aware of) that you have a good, long standing tenant.

    If there is a class action against the agents, maybe start with the lenders first as someone rightly said, some buy to let mortgages stipulate that a tenant in receipt of housing benefit is not acceptable as a tenant!

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    1. DarrelKwong43

      Shelter are relying on the *sex* ground under the Equality Act i.e. a blanket ban is discriminating against women because evidence points that most single parent families claiming benefits are women.   (as per the west midlands case with the ex paralegal applicant)

      Therefore if they win, you cannot have a blanket no benefits position, they will need to phone up, you then need to explain the requirements of affordability, go through their income, explain that it does not fit the financial criteria for referencing, then you are allowed to refuse.  I assume they could offer to pay X amount up front to mitigate any financial risk, but then people need to be asking why someone relying on benefits can afford to pay 6 months up front.

       

       

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  6. LandlordsandLetting

    The CEO of that holier-than-thou organisation, Shelter pulls down over £133K a year – no doubt she could afford a very nice place to live. Even their name is pretentious – sounding like the old Stones record ‘Gimme Shelter’ – gimme shelter man. This is YET ANOTHER factor that will cause even more landlords to desert the private rented sector.

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    1. Tcos

      They want Landlords to leave the PRS so it crashes and they can then attack the government directly to get them to provide housing! If the government think Shelter is on their side or fighting for the good they are sorely mistaken.

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  7. Deltic2130

    Shelter are the most hopeless and hypocritical bunch of twits ever, watching from the sidelines and directing everybody else without actually housing anyone themselves. If they’re that worried about people on benefits, why not spend some of that £61m a year on building ‘Benefit Towers’, blocks of Shelter-branded flats exclusively for DSS tenants? What’s that you say Shelter – not interested??

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    1. JMK

      Surely that’s the job of their corporate sponsor – L&G ???

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      1. PossessionFriendUK39

        Landlords need a campaign group to counter some of Shelter’s comments and actions, particularly, but not exclusively making landlords aware of their main sponsors, finances etc.

        Anyone up for a Campaign group ? contact enquiries@PossessionFriend.uk

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  8. BillyTheFish

    It’s easy, you just say ‘professionals only’

    It’s the Landlord’s property, the Landlord instructs the agent on what type of Tenant they wish to have in their property. The agent follows that instruction.

    There is no active discrimination in saying ‘professionals only’.

    Simple

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  9. DASH94

    On the one hand, I’d quite like to see this tested in court – in a fair and just world, Shelter would lose and then they  might Shut Up on this one point.

     

    On the other hand – I wouldn’t want to be the one fighting the claim.

     

    Also, are they saying that the discrimination is against all folk that are on benefits or is the old claim of discrimination against women?

     

     

     

     

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  10. Home Provider

    This attack should not be news to agents.
    On 22 August Shelter issued its press release about its mystery shopping exercise, which revealed that very few agents they approached had a blanket ban on “DSS” applicants.
    https://www.property118.com/shelter-shocked-result-10-no-make-4-7-maybe-zero/

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    1. Home Provider

      The BBC had a discussion about alleged blanket bans on the Victoria Derbyshire programme on BBC 2 that day.
      https://www.property118.com/will-shelter-sue-birmingham-city-council-letting-agents-landlords/ 
       

      Shelter’s Director of Communications, Policy & Campaigns was there, At one point Beales managed to squeeze in the statistic that 60% of people on housing benefit are women.  He then said “Our intent over the next few months is to bring a series of test cases to ask the courts to look at this closely, ……to ask them to say it’s unlawful.”

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      1. Home Provider

        Unlawful – on what basis?  Well, Shelter claims that a ban on both male and female HB claimants is indirect sex discrimination against women because there are more of them.
        https://www.property118.com/shelters-campaign-rosie-likely-succeed-got-court/ 
         
        Beales is a former Downing Street adviser to Prime Ministers Tony Blair and Gordon Brown, and formerly Director of Strategy and Planning for the Labour Party.

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  11. TeamAdvance

    I work as a letting agent and have rented to many DSS tenants over the past 30 years, some have been good tenants, others not so good, I have also rented to many ‘professional’ tenants, again, some good, some not so good.

    I think Shelter do not understand that firstly it is not up to the letting agent which type of tenant they rent to , it is the decision of the Landlord and we act upon his instructions and very often the landlord is restricted by his lender or insurance company.

    Secondly, and most importantly , the problem we are now faced with is there is a big shortfall between market rents and local housing allowance/universal credit etc therefore it would be foolish (and reckless) to put a DSS tenant into a property that they can’t afford which will create bigger problems.   All of our tenants have to meet the criteria of the referencing company , therefore if we know that the applicant will fail what would be the point of showing them a property and taking their administration fee.

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  12. Estate_Agent_Memes

    OMG again!!??

    I haven’t read all of the comments HOWEVER shelter needs to take this up with lenders, not agents or landlords as landlords would be breaking the terms and conditions of their buy to let mortgages!!

    If they are going to threaten legal action at least sue the right people who insist on not letting tenants on benefits! FFS

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  13. danandsan17

    I will let my properties to the best tenant my agent can find, want to take legal action against me, we will start selling up, this will not help housing in anyway, if landlords keep getting this type of threats, along with the new tax implications, there will be no buy to let landlords, shelter might want to consider that.

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  14. IWONDER36

    Here we go again!

    As an agent, we take both DSS and professional tenant’s as we are guided by our Landlords. We have seen a change in what type of tenants our landlords are prepared to accept, but not based on prejudice. They have changed their minds because of severe delays in HB or UC claims to be in payment, forcing many landlords into 3 month’s mortgage arrears.

    Some did change their minds due to tenant behavior, it rials landlords and agents who work hard to provide quality homes to tenants who don’t work, but have the biggest TV’s, hot tubs, nice cars, who then say they won’t pay their rent if a dripping tap or a creaking hinge isn’t repaired within minutes of being reported.

    It’s amazing how many of these poor single mother’s have size 12 work boots in the front porch when you do an inspection. Get a grip Shelter!

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  15. Thomas Flowers

    Should discrimination include:

    Working people who failed the affordability test for a mortgage?

    Conversely, non-working people who cannot get a mortgage?

    Insurance companies loading premiums for health issues or other?

    People paying higher rate tax?

    Some working people on low incomes receiving less than some people claiming benefits?

    Should Shelter employees sue their boss for discrimination by earning considerably more than their average wage?

    The whole finance industry is based on peoples fiscal situation and the statistical likelihood of repaying a debt regularly and on time.

    So why are Shelter discriminating against the PRS landlord, many of whom, must comply with their mortgage T&C’s and not let to DSS?

    If DSS tenants are statistically no more likely to default on repayments then it is the lenders, not landlords at fault?

    Unfortunately, the World we all live in is not, and never will be, a fair place to live.

     

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  16. Mandy Thomson Lodgersite

    I believe there IS an issue with tenants on housing benefit, and it’s not usually mentioned.  They GENERALLY don’t make good tenants because they are not HAPPY tenants – they have to take whatever housing they can get, whether it really meets their needs or not, let alone whether they like the property or not.  At least this is the case in under supplied markets such as London.

    As a landlord, I certainly agree there are many barriers to landlords accepting “DSS” tenants – universal credit being the main one, but it would be interesting to see if it became easier for tenants and landlords if the housing benefit restriction was lifted and housing benefit tenants gained more choice (it would certainly be easier for landlords to evict).

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  17. Chris Wood

    What percentage of men work in estate agency and what percentage of women work in estate agency?

    Are Shelter making a biased gender attack on estate agents who are mainly staffed by men/ women*?

     

     

    *delete as appropriate. Also see non-binary etc. etc.

    (tongue partially in cheek)

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  18. Robert May

    A  successful class action by Shelter against the PRS will  drive agents out of business and landlords to invest in other sectors so  rather than helping  assisted tenants Shelter will reduce competition and supply.

    Based on a quote by Leigh Day for some litigation I’m considering funding, let’s assume  Shelter’s legal chums will cost £600,000 and Shelter’s CEO costs  about £135k by the time national insurance is included

    Working within PRS guidelines and  lending criteria £600,000 would provide 20% deposits on 11 average family homes, a modest portfolio that would house 11 families in crisis.

    Based on the average rent, for an average property, paying typical borrowing rates and typical management fees, the portfolio would generate enough operational surplus in a year to provide the deposit on another family home.

    Given  the modest rises in  capital growth  on an 11 property portfolio would add another couple of deposits in just over a year.

    I’m not one to worry who gets paid what but  given Shelter’s determination to score a purely political own goal think its worth mentioning £135,000 pays the rent of 13 family homes for a year, alternatively it’s the ability to add 5 homes to a portfolio  every couple of years.

    Properly run and properly managed, property is a sound investment, not just for private investors but social investors too. I’m not sure how much Shelter has got in its kitty but my thought is it  would definitely be better spent on housing families in crisis than funding a barrister.

     

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  19. TOZ4

    A private landlord’s open policy of a ban on South asian tenants because of curry smells at the end of the tenancy was overturned by the court:  https://www.theguardian.com/money/2017/nov/08/landlord-ban-coloured-tenants-unlawful-court-rules-equality-watchdog

    I always advise my landlord clients against letting to benefit claimants for all of the reasons mentioned in previous comments and more importantly because a possession application through the court will be necessary to evict the tenant who will be told by the council to remain in occupation until they are in reciept of an eviction notice and that compliance with a Section 21 notice of termination will be considered as intentional homelessness and will void any future housing benefit claim. The eviction process takes 6 months, at best, and costs just under £500 in court fees alone. Also, a change in government policy mid term can reduce the amount of benefit paid relying on the tenant to top up the benefit – good luck with that one. Back in the eighties and nineties benefit payments were paid directly to the landlords and far exceeded market rents which was an attractive proposition for many landlords and eased the housing issue. Today, many evicted tenants end up in an hotel at three times the cost of a private rental – WTF!!!!

    Selling off council housing was and still remains a big mistake. In my humble opinion, the government needs to borrow money exclusively to build up a portfolio, buy to let, and the rental income can go towards repayments. New builds, yeah, but purchasing existing stock is a more immediate solution.

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  20. RadPropertyDude

    This happens every day by agents up and down the country. Even if they don’t state it in their adverts, the agent will shelve any benefit  applicants and process others first.  FACT.

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    1. sanctuary45

      I don’t think anyone is disputing that RadPropertyDude but blaming agents is, in the majority of cases, completely wrong. Despite what a lot of people believe, the majority of landlords aren’t multi-millionaires with portfolios of hundreds of properties that they have paid cash for. They are people that have bought a property as an investment to top up their pension or similar and they have had to use a mortgage to buy it. On the vast majority of buy to let mortgages that are available, it is a term/condition of the mortgage that ‘benefit tenants’ cannot be placed in the house. So to allow someone claiming housing benefit to rent the property the landlord would be breaching the terms of their mortgage and risk the property being repossessed by the lender as a result, damaging their credit score and meaning that they not only lose the property but destroy any chance of them borrowing money for anything for quite a few years.

      Why don’t shelter and their ilk actually go after the lenders that impose these terms on their borrowers, rather than go after agents who have no choice but not to allow those types of tenants to rent from them as their first and foremost duty of care is (and always should be) towards their clients, the landlords, and for an agent to allow such a tenant would be placing their client at severe risk of financial penalty?

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