Benefit of the doubt: Could agents be forced to accept benefit tenants?

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The private-rented sector provides the backdrop for many important debates. Occasionally, it might even be described a battleground when matters of social class, inter-generational wealth, mobility, and even race enter the fray.

Rarely does the matter of gender enter the equation, but this may be about to change thanks to the efforts of one particular private tenant.

The tenant in question is a lady living in the West Midlands, presently employed part-time and in receipt of some benefits to help her meet her housing costs. She rents privately and would like to move to another property, apparently more suitable for her family’s circumstances.

Nothing controversial or unusual so far, or frankly anything interesting enough to a great deal of attention.

The story gets more interesting when you realise that, having approached a local letting agency about the desired property, her application was rejected on the basis that she was in receipt of benefits.

This is its self not atypical, only around one in five landlords are prepared to take on the perceived risk of benefit recipients (according to the NLA’s latest research) and for many letting agents, there is little business case for working with this specific market. What is unusual in this case is the lady’s reaction – she plans to take the letting agent to court, on the grounds that their refusal to let the property to her was discriminatory.

But it’s not illegal to refuse to let to tenants receiving LHA. Is it?

No. It is not illegal, income or employment status is not a protected characteristic under the Equalities Act 2010. Nor is being in receipt of state support, this kind of legal protection is reserved for the defined characteristics:

  • age;
  • disability;
  • gender reassignment;
  • marriage and civil partnership;
  • pregnancy and maternity;
  • race;
  • religion or belief;
  • sex;

However, crucially the legislation provides protection against both direct and indirect discrimination. On which the outcome of this particular case may lie.

The lady bringing this case is alleging (so far as I understand it) the agent’s actions indirectly discriminate against women by  virtue of the fact that women are more likely to work part-time and as a consequence also be in receipt of housing support.

It is certainly true that more single women claim benefits to assist with housing costs, it is an unfortunate fact that women are statistically more likely to earn less and therefore find themselves in poverty. Illustrating the point, in response to earlier welfare cuts, the Fawcett Society described benefit cuts are ‘triple jeopardy’ stating:

“Women rely more on benefits and tax credits than men, in particular due to their caring responsibilities and their relative economic inequality and poverty. In fact, on average, one-fifth of women’s income is made up of welfare payments and tax credits compared to one-tenth for men. Put another way, benefits make up twice as much of women’s income than men’s”

Looking at the matter objectively, as gender is a protected characteristic, the case could be arguable.

She who dares wins?

No-one really knows if this argument is winnable until the case is made, but it is probably more likely that the court will find that the agent did not intend to discriminate.

There is some – tangentially – related precedent. Following the election of the Coalition Government in 2010 a judicial review was brought against the Treasury’s emergency Budget on the grounds that the benefit cuts would disproportionately impact on women.

In this case, although a permission hearing took place, permission for a full judicial review was denied. There were a number of reasons for this refusal, including administrative issues concerning when the application was launched, but above all the case was declared ‘unarguable’.

Obviously these cases are not identical, but they both hang on the notion that a wider policy (government or business) may affect people differently by virtue of their gender. While the court did not feel the case was arguable, the Government did concede that more notice should be taken of the variable impact decisions can have on men and women.

What could it mean for letting agents?

That depends on the outcome of the case, if it makes it that far as there is no guarantee at this stage that it will reach the hearing stage.

If (and it is a big if) a judge finds in favour of this tenant it would most likely mean that landlords and agencies would have to rethink ‘blanket’ policies of refusing benefit recipients without due consideration.

That’s not to say that anyone would be compelled to take a particular tenant, but an agent would have to be able to demonstrate that they had considered the application and made a decision based on individual circumstances – with regard to gender.

The case is yet to receive a court date; needless to say UKALA will be monitoring the situation closely.

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