Landlords could face Equality Act compensation claims and council fines

Landlords must be careful about how they choose their tenants under new discrimination rules in the Renters’ Rights Act, an expert has warned.

Under the act, it will be illegal for landlords and letting agents to discriminate against prospective tenants who receive benefits or have children.

In a post on her Landlord Law Blog, Tessa Shepperson explains that if it can be proved a landlord has breached discrimination rules, the tenant could claim compensation under the Equality Act or the landlord could face a civil penalty notice from the council.

Courts have been developing rules for ‘indirect discrimination’

Under the Equality Act 2010, landlords and letting agents are prohibited from discriminating against tenants on “protected characteristics” such as age, disability, marriage or civil partnership, race and religion.

However, these protected characteristics do not specifically include tenants who receive benefits or those with children.

Tessa explains that under the Equality Act, the penalty for discrimination is for the person affected to bring a compensation claim, and that courts have increasingly recognised the concept of indirect discrimination.

She said in her blog: “For a long time, it was assumed that because of this, it was acceptable for landlords to refuse tenants on this basis. However, in recent years, courts have been developing rules for ‘indirect discrimination’.

“This is where a policy or practice which appears to avoid the protected characteristics actually puts someone with a protected characteristic at a disadvantage.

“So, having a policy to refuse to accept people on benefits or with children can be discriminatory indirectly, as these people are more likely to be women and sex is a protected characteristic.”

Landlords should keep clear records to avoid breaching discrimination rules

Tessa warns that under the new rules in the Renters’ Rights Act, which provide protection for tenants on benefits and those with children, landlords could potentially face a compensation claim under the Equality Act as well as a civil penalty of up to £7,000 from the council.

She explains that while this does not mean landlords must accept tenants on benefits, it is important for them to keep clear records to avoid breaching discrimination rules.

She said: “Landlords and agents should treat those on benefit or with children in the same way as anyone else.

“Section 41 of the Renters’ Rights Act makes it clear that landlords can take income into account when considering whether an applicant would be able to pay the rent on a tenancy. If the rent is clearly unaffordable for that applicant, the landlord cannot be penalised for rejecting them and choosing someone else.

“If a property is clearly unsuitable for children, then so long as this is clear and set out in your records, a landlord/agent will not be penalised for choosing someone else.”

Tessa also adds that it’s important, when advertising a property, for landlords to be careful with their wording and focus on the property rather than the person who will be living in it.

She explains, rather than using wording such as “unsuitable for disabled people and those with mobility problems”, which could be read as discriminating against disabled people, landlords should instead describe the property’s features, for example “, the flat is on the sixth floor of a block of flats with steep stairs and no lift.”

She recommends landlords keep written notes explaining the reasons for refusing applications and the selection process, warning that poor wording or weak records could lead to compensation claims under the Equality Act and council fines.

You can read Tessa Shepperson’s full blog post by clicking here.