1. The New Housing Fraud Legislation
ROBERT DARBYSHIRE
RICHARD PRICE
9 ST JOHN STREET

2. Examples of Housing Fraud
Not telling the truth when applying for a property e.g. Claiming to have children when you don’t
Sub-letting your property without permission
Living in a property after someone has died without the right to do so
Source: “Council House Fraud” from GOV.UK

3. Examples of Housing Fraud
Other examples?
Succession rights
Non-occupancy
Unauthorised exchanges
Prevention of Social Housing Fraud Act 2013

4. Prevention of Social Housing Fraud Act 2013
Ss 1-3 : Unlawful sub-letting is a crime, prosecutable by the local authority, in secure and assured tenancies
Ss 4-5 “Unlawful profits” can be ordered to be repaid to the landlord in civil or criminal proceedings
S6 Assured tenancies lose their assured status

5. Ss 1-3 is more detail S1(1) – creates a crime re secure tenancies
Where T sublets or parts with possession of part or whole without consent in writing
And T ceases to occupy as only or principal
And T is aware this is a breach of tenancy

6. Ss 1-3 is more detail S1(2) – creates a crime
Where T dishonestly sublets or parts with possession of part or whole without consent in writing
And T ceases to occupy as only or principal
And T is aware this is a breach of tenancy

7. Defences 1(3) &1(4)
No crime if T so acts because of violence or a threat of violence against him or a member of his family
No crime if occupant is entitled to apply for a right to occupy or to have tenancy transferred

8. Penalties For 1(1) fine of up to £10,000
For 1(2) 2 years in Crown Court, 6 months in magistrates

9. Section 2
An offence in identical terms for assured tenancies granted by social landlords

10. Section 3: Limitation
Prosecution must be brought within 6 months of knowledge of the offence coming to the prosecutor
And in any event, within 3 years of commission of the offence

11. Section 4: Unlawful profit orders - Crime
Must be considered upon conviction
Requires profits to be paid to L
If not made, reasons must be given
Can be ordered in addition to a fine

12. Section 5: Unlawful profit orders - Civil
Requires sub-letting or parting with possession in breach of tenancy agreement
And that T no longer occupies as only or principal
Can be recovered “on application”
Applies to assured and secure tenancies

13. Section 6: Loss of assured status
Applies where T parts with possession or sublets entirety of premises…
in breach of tenancy agreement
Automatically, assured status is removed

14. Detecting Fraud Credit checks Land Registry searches Residence checks
Use or introduce further checks scheme pre-tenancy?

15. Recommended Steps
All landlords should ascertain the level of unlawful occupation in their stock.
More local authorities should provide a fraud investigatory service to housing associations in return for nomination rights to homes recovered

16. Registered providers of social housing should have robust internal audit processes in place to detect possible fraudulent or corrupt actions by staff.
Local authorities should consider photographing tenants at allocation and existing tenants at tenancy audits.

17. Local authorities should consider the balance of the resources they allocate to housing benefit and housing tenancy fraud.
A consistent best practice tenancy audit checklist and training needs to be devised to show how these can be carried out effectively.
The Government should consider further incentivising local authorities and registered providers to investigate and recover unlawfully sublet properties.

18. Registered providers and councils should commit to joint working and there should be political and managerial commitment to the recovery of unlawfully sub-let properties.
Housing tenancy fraud is not restricted to London and work needs to be done to promote investigations outside London
Source: House of Commons Library Ref: SN/SP/6378

19. Is it necessary to rely on fraud?
What are you trying to achieve?
What are the consequences of alleging fraud?
For the Claimant
For the Defendant
Burden of proof generally
What is the Court’s approach to fraud claims?
Do judges like them?

20. Information must be “relevant” to a fraud investigation
The Prevention of Social Housing Fraud (Power to Require Information) (England) Regulations 2014
Now in force
Allow approved officers of a local authority power to require information from…
banks; credit businesses; water and sewage undertakers; gas electricity and telecommunications suppliers
Information must be “relevant” to a fraud investigation

21. Bring a claim Under the Housing Act
Do you need to rely on fraud at all?
Under the Prevention of Social Housing Fraud Act
No dishonesty offences
Dishonesty offences
Civil unlawful profit orders

22. DISCUSSION