Landlords in the private rented sector (PRS) may have many concerns when renting out their property. Will the tenant have pets? Are they financially secure? Do they have children?
However, recent developments mean that landlords and agents must tread carefully when advertising a property for rent and assessing tenancy applications from families.
There is a strong need to navigate potential discrimination implications backed by legislation and a recent ruling from the Property Ombudsman. Otherwise, landlords could find themselves having to go to court or pay compensation to the tenants with children whose applications they reject.
In this article, we will explore the issue of renting to families balanced with fair housing practices. We will take a look at what these challenges mean for landlords when letting a property in practical terms as well as provide guidance on how to comply with best practices.
What the law says about renting to families
The majority of landlords want to rent their property fairly and not discriminate against potential renters in any way. After all, tenants with dependent children are usually reliable when paying their rent, constituting 1.7 million of the 4.7 million homes within the rental sector in 2019. This represents a sizeable pool of potential tenants.
But the need to avoid direct or indirect discrimination is not only a question of fairness. It is enshrined in law through The Equality Act 2010. This wide-reaching legislation is clear on the situation of renting a property to families in England. It includes a section which specifies that a landlord or agent must not unlawfully discriminate against a person on the basis of a protected characteristic.
Protected characteristics include the tenant’s sex, race and religion as well as any disability. Therefore, landlords need to show that they have not advised the agent to apply blanket bans (in writing or verbally) which means it’s harder for families to be successful in their application. Landlords should not include rules such as “no children” or any terms that would exclude children and their families from renting such properties.
That is not to suggest that families must be considered before other groups. Ultimately the decision of whether to let a property to a specific applicant(s) that happen to have a family, remains with the landlord. However, they must not make it more difficult for tenants with children to be successful.
With the Renters’ Reform Bill expected to pass into law, landlords will no longer be able to refuse tenants with children.
Different types of discrimination
As well as harassment and victimisation, the Equality Act 2010 bans two forms of discrimination that landlords, and the agents acting on their behalf, need to be aware of when advertising and assessing the applicant’s suitability for viewings/renting.
First of all, ‘direct discrimination’ is seen to have taken place when a landlord has intentionally treated a category of applicant (here a family) less favourably than others because of a protected characteristic. Secondly, inadvertently putting a family at a disadvantage when applying for a home via a policy that excludes them, would qualify as ‘indirect discrimination’ however unintended this might be.
Rarely is direct discrimination found to be acceptable under English law. However, the indirect form might be permitted if it is reasonable, proportionate and serves a permitted purpose. An example of this purpose would be where a property does not have enough bedrooms. Landlords have a responsibility to not let out an unsuitable or crowded property and so refusing a family would be justified here on safety grounds.
A relevant case
Crucially, whilst families do not have protected status under the Equality Act 2010, landlords need to tread carefully and fairly consider each application submitted by those with children. A recent ruling by The Property Ombudsman in March 2023 found that several letting agents’ blanket bans on renting to a family not only went against its code of practice but discriminated against women.
A mother of four and her husband were looking for a new rental property after finding themselves homeless. This occurred after a Section 21 ‘no-fault’ eviction notice had been issued to them in their previous property. Whilst they could prove that they were able to afford the rent, they were still unable to secure a rental home after multiple landlords/agents had rejected their applications.
The Property Ombudsman declared that these “no children” bans contradicted its code of practice as such cases disproportionately affected more women than men. Generally speaking, more women will have children living with them. This makes the process tougher for families, as it could be viewed as indirect discrimination towards the applicant’s gender.
If seen to have discriminated either directly or indirectly, landlords in the private rented sector could face financial implications. Compensation may be payable to applicants if landlords and agents are seen to have broken the Equality Act 2010.
What are the renters’ rights?
As 19% of parents have been unable to rent somewhere they wanted in the last five years because they have children, this issue is gaining prominence. More and more emphasis is being placed on preventing discrimination in housing.
The Equality Act 2010 can be applied to blanket bans on renting to families. This means that landlords in the private sector have to be open-minded and fairly consider applicants with families. Making the process tougher for families could be viewed as indirect discrimination towards the applicant.
Renters with children should have their tenancy applications shown the same consideration as other tenants would be given. Therefore, landlords and the agents they instruct, need to show an objective approach and decide on other factors such as credit checks and referencing from previous landlords.
Preventing discrimination
Landlords should consider each enquiry and applicant, including those with children, fairly to stay within the law. Assessing each family’s application objectively on an individual basis using the same criteria for all potential tenants, could help to avoid legal action.
Adequate records of how they assessed each applicant should always be kept for protection against legal action further down the line. This process helps to form fairer housing practices and helps landlords to comply with best housing practices.
Landlords should never instruct their agents in any way to dismiss those with children from viewing the property. This applies when first enquiring on the phone and after submitting a tenancy application.
Furthermore, if you are dealing with prospective tenants as a private landlord independent from agents, applicants will not always be able to challenge your decision and claim discrimination. The reason for this is that PRS landlords are not compelled to follow regulations in the same manner.
Promoting a greater awareness of housing law among landlords is vital to the operation and reputation of the sector. It also ensures that all parties, landlords and future tenants work within the parameters of the law. This article goes some way to highlighting the major points that PRS landlords have to consider when selecting tenants for their properties.
Conclusion
Recent events relating to the Equality Act 2010, The Property Ombudsman ruling and the Renters’ Reform Bill, mean that issuing blanket bans on families with children could have severe financial and reputational implications for landlords.
However, potential fines and legal action can be averted by looking at tenants’ merits on a case-by-case basis (including those with children), diligently keeping records and ensuring that, as a landlord, you are fully versed in regulation and best housing practices.
This approach will provide access to safe housing for tenants and their families, ultimately leading to better retention rates for landlords, while at the same time building trust in the Private Rented Sector.
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