New measures in place to combat tenancy fraud
15th October, 2013
The Government has introduced new powers and new penalties to combat the growing problem of tenancy fraud. Social housing landlords need to be aware of the new legislation and how it affects their operations.
What does the new law do?
The Prevention of Social Housing Fraud Act 2013 makes it a criminal office for social housing tenants to sublet their homes in certain circumstances.
It has been introduced to tackle a problem that according to Audit Commission estimates was losing almost 100,000 properties from the Social Housing Sector, and, according to National Fraud Authority estimations, costing local authorities around £900 million per year.
What constitutes an offence under the Act?
Tenants will be committing an offence under the following conditions:
1. The tenant is a secure tenant, or an assured tenant of a Registered Provider of social housing (but not a shared ownership lessee)
2. The whole, or part of the property has been sublet, and
a) The sublet is contrary to tenancy conditions
b) The tenant has moved out.
3. The tenant knows that the sub-let is a tenancy breach, or sublets it dishonestly.
What are the penalties for breaking the new law?
If convicted, penalties for tenants can range from fines to prison sentences of up to two years in the most serious cases.
What defences are there for tenants?
An offence is not committed if the tenant sublets as a result of violence, or threat of violence against him or a resident member of his family by someone living nearby. Also, there is a defence against conviction if the sub lessee would have been entitled to have a court order made to occupy the property, or have the tenancy transferred to them.
Who can prosecute offenders under the new law?
Prosecutions may be brought by local authorities, for any properties, anywhere in England (not just their own geographical area), for any social landlord. However, prosecutions must be brought within six months of evidence becoming available, and no more than three years after the offence was committed.
Will the offender retain the profits of their illegal subletting?
Not necessarily. Following conviction, the court may order the offender to pay profit made from the subletting over to the landlord. In addition, a civil court may make such an order even where no conviction has been secured, if the conditions of the offence are met. Such a claim should be added to any claim made for possession on grounds of non-occupation/unlawful subletting.
Are there any other consequences for tenants?
Yes. Tenants who illegally sublet a social housing property in this way in breach of tenancy terms will lose their Assured tenancy status and cannot regain it by simply moving back in.
How can I find out more about the new legislation?
Tackling tenancy fraud and the legal remedies available will be considered in detail at Ward Hadaway’s Housing Management Law Schools taking place at our offices in Newcastle, Leeds and Manchester at the end of November 2013.
For further information and to secure your place, please get in touch.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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