The New Housing Fraud Legislation ROBERT DARBYSHIRE RICHARD PRICE 9 ST JOHN STREET
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
Examples of Housing Fraud • • • Other examples? Succession rights Non-occupancy Unauthorised exchanges Prevention of Social Housing Fraud Act 2013
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 • S 6 Assured tenancies lose their assured status
Ss 1 -3 is more detail • S 1(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
Ss 1 -3 is more detail • S 1(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
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
Penalties • For 1(1) fine of up to £ 10, 000 • For 1(2) 2 years in Crown Court, 6 months in magistrates
Section 2 • An offence in identical terms for assured tenancies granted by social landlords
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
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
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
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
Detecting Fraud • • Credit checks Land Registry searches Residence checks Use or introduce further checks scheme pretenancy?
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
• 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.
• 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 these can be carried out effectively. • The Government should consider further incentivising local authorities and registered providers to investigate and recover unlawfully sublet properties.
• 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
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?
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
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
DISCUSSION
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