How to combat housing fraud

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The provisions of the Prevention of Social Housing Fraud Act 2013 provide a useful tool in order to make sure that those living in your accommodation are entitled to do so.

The provisions of the Act can be applied to establish if an offence has been committed. One of two new criminal offences may have been committed based on the evidence of:

  • Subletting without permission
  • The tenant living elsewhere as his/her only or principle home
  • The tenant's knowledge that his/her conduct is in breach of the tenancy agreement
  • Whether or not dishonesty can also be proven (this will be a question of fact together with using the "reasonable and honest person" test and establishing if any profit is being made). This carries a greater sentence of imprisonment of between six months and two years
  • Whether there has there been any violence or threats of violence made to the tenant which could provide them with a defence.

If the evidence points to an offence having been committed, an application should be made for an Unlawful Profit Order. The court can order the tenant to repay the landlord any profit over and above the rent. If dishonesty cannot be proven, there is a six month time limit within which to take legal action, taking effect from the date of having sufficient knowledge to prosecute. The police or the local authority can prosecute so landlords must work closely with them.

If unlawful subletting is proven, the tenant will lose security of tenure which cannot be regained even if they return to the property.

In any event, if the tenant is not living at the property as his/her only or principle home the landlord must serve Notice to Quit (NTQ) on the tenant. Service of the NTQ must comply with the terms of the tenancy agreement regarding service.

Landlords must have strategies in place to tackle housing fraud. This will include improving methods of detecting fraud by engaging in Data Sharing Agreements and Data Sharing Protocols and joining an alliance or data sharing group. Privacy notices in tenancy agreements should be amended to reflect that you will share data to prevent and detect tenancy fraud.

Data matching processes should be reviewed by liaising with local authorities and credit reference agencies. Take the opportunity to review your routine data collection methods by, for example, holding targeted campaigns, ensuring tenants understand the new offences and promote staff training on the new law (including with gas contractors and other routine visitors to your properties).