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Tenant discriminated against for receiving benefits

Tuesday 04 May 2021

A letting agent and landlord have been ordered to pay damages of £4,500 and legal fees for unlawfully refusing to show a potential tenant a rental property based on the fact she receives benefits.

All agents should understand the implications of this case and realise it is unlawful to reject anyone who is in receipt of Universal Credit.  

The case

Shelter, which took up the case on the tenant’s behalf, said that an employee of the agency, Michael Jones & Company told Hayley Pearce, the potential tenant via telephone “people in receipt of benefits would not be acceptable to the landlord, without checking whether she could afford the rent”.

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Hayley’s case against Michael Jones & Company is one of three she has taken on in the last two years, and the only one to reach a final hearing at court.

The other two admitted their mistakes, settling before trial, and collectively paying damages and legal costs of almost £15,000.

In one of these two cases, the landlord of the property Hayley wanted to view said she had no idea that her agents were refusing to help people receiving benefits. She herself was once a single mum who needed housing support in the past. The landlord was shocked and ashamed that her letting agent behaved in this way.

Shelter

Last year, a mother of two also won her case when she was refused rented accommodation because she received housing benefit and ended up homeless.

What ARLA Propertymark is doing

ARLA Propertymark has consistently highlighted the issues faced by both tenants and landlords with Universal Credit being paid in arrears. The design of the system with payments made in arrears makes paying rent on time impossible for many tenants and this presents issues for landlords who are relying on the rent to make mortgage payments.

The UK Government must ensure Universal Credit is adequate and more effective. There are three things they must do. Firstly, tenants should have a choice over whether the housing element of their Universal Credit is paid directly to their landlord. Secondly, all claimants should be able to choose whether to have Universal Credit paid monthly or twice monthly to assist with budgeting. Under the current arrangements, paying awards monthly does not reflect the lived experiences of many claimants. Thirdly, to tackle rent arrears the Universal Credit advance should be turned into a non-repayable grant from the first day of the claim removing the five-week waiting period.

In our 2021 Budget Representation we called for the UK Government to raise and restore the Local Housing Allowance to the fiftieth percentile to cover the average cost of rents in a local area. The housing element of Universal Credit currently only covers the lowest third of market rents in an area, meaning those paying average rents will face a large shortfall. By lifting the Local Housing Allowance rates further this will make more homes affordable to renters and ensure landlords and letting agents have more confidence to let to renters claiming Universal Credit.

ARLA Propertymark is a member of the DWP Universal Credit Private Rented Sector Strategic Landlord Group and has worked hard to lobby for change to improve how Universal Credit works in the private rented sector.

In June 2019, Propertymark attended the No.10 Roundtable on ‘No DSS’ and has been working with the UK Government on producing a ‘myth busting’ Fact Sheet relating to ‘No DSS’ and Universal Credit.

Propertymark resources

Members can log in to their Member area to access our Universal Credit and Private Rented Housing Fact Sheet where there are specific versions for England and Wales and another for Scotland.