Social Housing Fraud Act 2013 in practice Lucie Cocker Solicitor - - PowerPoint PPT Presentation

The Prevention of Social Housing Fraud Act 2013 in practice

Lucie Cocker Solicitor – Higher Court Advocate Forbes Solicitors

Introduction

The Prevention of Social Housing Fraud Act 2013 (‘the Act’)

• Addresses tenancy fraud arising out of unlawful

subletting

• Does not deal with any other form of tenancy fraud
• What we will cover…

What is the Act trying to achieve?

• Ensure social housing is occupied by those in

greatest need

• Ensure tenants do not profit from their social

housing tenancy

• Introduces changes to both civil and criminal law

Unlawful Profit Orders

• May require a Defendant to pay the landlord the

profit that they have made from unlawful sub- letting

• Different provisions for UPOs within civil and

criminal proceedings

Civil Unlawful Profit Order (1)

• Can apply for a Civil UPO where you have a secure or

assured tenant who:

• in breach of their tenancy agreement,
• ceases to occupy their home,
• sub-lets or parts with possession of it (or part of it),

and

• receives money in return.

Civil Unlawful Profit Order (2)

• Will not apply to assured shared ownership

leases

• Maximum payable = net profit made
• Court has discretion to decide the amount

payable

• A useful tactical device

Criminal Unlawful Profit Order

• Courts are obliged to consider following

conviction

• Can be made in addition or instead of other

sanctions

• Preference given to UPO
• Maximum payable = net profit made

Factors equally applicable to Civil and Criminal UPO’s

• Court must consider Defendant’s means when setting

payments

• Can make a civil and criminal UPO – subject to

maximum

• Landlord needs permission from the court to enforce
• If Defendant fails to pay, the amount payable will attract

interest at the Judgment Act rate

The Act and Security of Tenure

• Significant change to assured tenant’s security of

tenure

• Assured tenants can no longer defeat a NTQ
• Security of tenure once lost will be lost forever
• Ensures assured tenants are in exactly the same

position as secure tenants

Criminal offences created by the Act

• LA’s given power to prosecute tenants who unlawfully

sub-let

• Creates two new criminal offences
• Offences for secure tenants – Section 1 of the Act
• Offences for assured tenants – Section 2 of the Act

The Less Serious Offence (1)

• Committed if the tenant:
• ceases to occupy the property as his only or principal

home,

• either sub-lets or parts with possession of it (or part
• f it without the landlord’s consent) and
• knows this is in breach of his tenancy agreement.

The Less Serious Offence (2)

• 2 Exceptions:
• Violence or threats of violence
• Right to occupy
• Time-limits:
• 6 month limit
• 3 year limit

Maximum Sentence: £5000 fine

The More Serious Offence (1)

• The tenant not only knows he is breaching his

tenancy agreement but he does so dishonestly

• Dishonesty amounts to:

“knowledge that a reasonable and honest person would consider the action in question to be dishonest” R v Ghosh [1982]

• Ultimately a question of fact – will eventually be

clarified by case law

The More Serious Offence (2)

• No exceptions
• On Summary conviction - 6 months in prison, a

fine not exceeding £5000 or both

• On Indictment - up to 2 years in prison, a fine or

both

What to do at the outset…

Using new powers to prosecute

• LA’s can prosecute for main and associated offences –

e.g. aiding, abetting etc

• Can prosecute whether or not landlord and on behalf of
• ther LA’s
• Government to provide an additional £9.5 million to

spend specifically on combating housing fraud

• Anticipated that prosecutions will only be used in the

more serious cases of sub-letting

• Formal agreements between LA’s and HA’s advisable

Regulations and information sharing

• Important to link tenant to another address
• Information sharing with banks, building societies and

utility companies

• Regulations to be introduced, to include:
• Who can use the power
• Which organisations
• Additional safeguards
• Creation of an offence for non-compliance

How are organisations tackling tenancy fraud using the Act?

Southwark Council

• Poster – advising illegal subletting is now a

criminal offence

• Fraud hotline
• Use of website
• Dedicated Anti Fraud Team

Nottingham City Homes & Newham Council

• Implemented a key amnesty – tenants were

given the opportunity to return keys by designated date in order to avoid prosecution

• Tenants warned they would be prosecuted if

keys were not returned in accordance with the amnesty

Gloucester City Homes

• Implemented full tenancy fraud policy
• Want to encourage residents to report

suspicions

• Will take appropriate action against

perpetrators

• Will recover unlawful profit where appropriate
• Will work with other agencies

How do I tackle tenancy fraud?

Use your data Match your data Visit your properties Link with agencies (LA) Publicise your efforts and results Employ dedicated fraud officers Have a policy

Arrange a Key amnesty Take enforcement action

Conclusion

• We await case law to show how the new law will

be implemented in the criminal and civil courts

• In the meantime – need to prepare and adapt

accordingly

• Develop links with LA

If In Doubt...

Call Forbes Solicitors for free initial advice:

• Lucie Cocker

01772 220 244 / 07976 268 268 lucie.cocker@forbessolicitors.co.uk

Your Attention Is Directed To This Note These materials are supplied as general illustrations of legal issues and not as legal advice applicable to any particular person or situation. These materials may not be relied upon as legal advice. Forbes shall not be liable for any loss caused to any person through any action or omission made in reliance on these materials or any connected presentation.  Forbes Solicitors 2014