We had a very interesting webinar the other day on the Tyler v. Carr case with Tessa Buchanan, the barrister for the claimant Mr Tyler.
Big thanks to her for giving up her time to explain it all to us.
However, it was clear from the comments and chat that many of those watching were landlords and agents and most of them were concerned about how they should deal with the process of choosing their tenants in this light of this case.
Let’s take a look at some of the points raised:
Prohibitions in mortgages and insurance policies
For example, what should landlords do if their mortgage and/or insurance policy prohibited ‘benefit tenants’? Could they still be sued for compensation for unlawful indirect discrimination? This was obviously a big concern.
Tessa Buchanan was of the view such clauses do not justify refusing to consider benefit tenants, as the clauses in the mortgage or insurance policies would themselves be discriminatory and unenforceable.
However, from the landlord’s point of view, they may not feel able to risk their mortgage company calling in the loan for breach of mortgage condition or their insurer refusing to pay out on a claim.
One of the delegates said
I have approached my Insurance Broker and they reckon it’s legitimate to not have HB.
So presumably were she to take on a benefit tenant, any claims she made would be rejected.
It is fair to expect her, or other landlords in a similar position, to risk this or to engage in no doubt expensive litigation with the insurance company (who will have considerably deeper pockets than the landlord) to challenge their prohibition?
We also had several landlords on the webinar who said their mortgage company had ‘no DSS’ clauses – so notwithstanding the Shelter research cited by Tessa Buchanan, obviously some landlords do still have this problem.
It would in fairness be relatively easy for a landlord to switch to an insurer who does not prohibit benefit tenants as many policies do not include these clauses (including Alan Boswell Group who helped me develop our Insurance Mini-Course here).
It would, though, be considerably more difficult for a landlord to change his mortgage company.
My feeling on this point is that the real culprits here are the mortgage and insurance companies and that tenants organisations should target them rather than the hapless landlords – who find themselves between a rock and a hard place.
Or as one of the attendees said:
Perhaps Shelter should challenge the Council of mortgage lenders directly rather than bashing landlords?
However, I understand from Shelter who have since been in touch with me, that they would be willing to help landlords challenge these clauses. They tell me that in their experience mortgage companies tend to back down when challenged. For example, there was the case of Nat West last year.
Any landlords wanting to take advantage of this – let me know and I will put you in touch with them.
What about leases?
In response to the attendee who asked
What about a provision in the lease that restricts renting to DSS tenants? Is this the same as the mortgage question?
The answer is ‘probably yes’. But again, landlords won’t want to get into difficulties with their freeholder landlord.
Although forfeiture proceedings on this ground are most unlikely, and even if the freeholder did go to court about it, the Court would probably find the offending lease clause unfair and unenforceable.
But is it fair to expect landlords to risk this?
Other types of discrimination
There were quite a few questions about other discrimination – for example:
Shared accommodation (HMO) tenants will frequently want same-gender houses ie fellow housemates all-female etc. Is a landord/agent able to advertise with these requirements?
If you say “All tenancies are subject to referencing and payment of a deposit” does that count as indirect discrimination?
If we have an affordability criteria it would mean that fewer single woman can afford it, therefore, arw we are discriminating against women? Our rent guarantee insurance requires income of a certain amount.
Is not allowing kids also a breach of the Equality Act?
My query is regarding giving letting agents references. In my case, tenants are on UC HB and therefore in arrears. We do not take deposits and rent in advance. Would this be direct or indirect discrimination?
By what criteria then are landlords/ agents to select a tenant without facing a challenge of either form of discrimination?
What are landlords supposed to do?
I am not a discrimination lawyer so I am not the best person to answer the questions above.
For example, I would be surprised if landlords could be accused of discrimination for trying to keep an HMO female only on the request of the other tenants, but I can’t guarantee this. Do any readers have any views on this?
So far as children are concerned, I suppose it will depend on whether a property is suitable for children or not.
The main point that emerges from all this though is that landlords need to be fair.
The Tyler v. Carr case is not saying that landlords HAVE to grant tenancies to all benefit tenants who apply to them. It is just saying that landlords need to be fair and to treat all applicants equally.
So if you are a landlord and you do this and are able to show that you have done this, then you should not experience any Shelter supported challenges and claims for compensation.
It is all down to proper record keeping so you are in a position to prove what you have done – I discussed record keeping here.
You can watch the webinar below: