Renters’ Rights Bill: What It Means for “No DSS” Clauses in Leases

Renters Rights Bill

For many years, some leases and letting adverts have included blanket restrictions like “No DSS,” “No tenants on benefits,” or “No children.” These phrases were once common in the private rented sector, but they’ve increasingly been seen as discriminatory and unfair.

Now, with the Renters’ Rights Bill moving through Parliament, these kinds of restrictions are set to become history. But what happens if your lease still contains a covenant that prevents sub-letting to tenants who receive benefits?

The Bill at a Glance

The Renters’ Rights Bill is the Government’s flagship legislation to reform the private rented sector. Among other changes, it:

  • Bans blanket exclusions against tenants on benefits or with children
  • Ends fixed-term assured shorthold tenancies – all tenancies will move to periodic agreements
  • Strengthens tenant rights on rent increases, repairs, and redress

This means landlords and letting agents will no longer be able to automatically reject applicants because of their income source.

Clash With Old Lease Covenants

In many blocks, leases signed decades ago include clauses prohibiting sub-lettings to people on housing benefit. Once the Bill is law, these restrictions are very likely to be unenforceable.

Why? Because Parliament’s clear intention is that tenants should be judged on affordability and suitability, not on whether they claim benefits. If there’s a conflict between a lease covenant and statute, the statute wins.

The Risks of Enforcement

If a freeholder or management company tried to enforce one of these old clauses after the Bill comes in:

  • They could face a legal challenge for discrimination or breach of statute
  • They may risk court costs if enforcement fails
  • They could suffer reputational damage for trying to uphold outdated restrictions

What Landlords and RMCs Can Still Do

The Bill doesn’t stop landlords from protecting their investment. They can still:

  • Carry out affordability checks, credit checks, and request guarantors
  • Enforce covenants about using the property as a private dwelling, avoiding nuisance, and paying service charges
  • Expect tenants to meet the same standards of conduct as any other household

What they cannot do is refuse an application just because someone receives Universal Credit or housing benefit.

Preparing for Change

For freeholders, RMC directors, and managing agents, the message is clear:

  • Stop relying on “No DSS” clauses – they won’t stand up in law once the Bill is enacted
  • Update internal policies and communications with leaseholders
  • Take legal advice before pursuing any enforcement action connected to sub-lettings
  • Consider updating lease templates (for new developments or lease extensions) to remove outdated restrictions

FAQs

Can I still run affordability checks on tenants?
Yes. Landlords can continue to assess whether an applicant can afford the rent, check references, run credit checks, or ask for a guarantor if appropriate.

What if my lease says I can’t let to tenants on benefits?
Once the Renters’ Rights Bill becomes law, such clauses are likely to be unenforceable. Statute overrides outdated lease wording.

Am I obliged to accept every applicant on benefits?
No. You are not forced to take on a tenant who fails affordability or reference checks. The Bill simply stops you from refusing someone solely because they receive benefits.

What should RMC directors or freeholders do now?
Start preparing by updating your policies, avoiding reliance on old covenants, and seeking legal advice before any enforcement action.

Find out about PMMS block management services for freeholders and residents management companies.

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