Councils and Housing Associations increase Investigations
We have seen a marked rise in Housing Fraud Investigations over the last six months. The social landlords have become more effective in managing their housing. In the past the landlords would rely on “feet on the ground” – the presence of housing officers who worked in offices on or near the council estates and so knew everyone on their patch. Subletting then was difficult.
The causes of subletting
There has been a move to centralising administration, and so many estate housing offices were closed. Further housing officers started working from home during the Covid 19 lockdowns, a practice which has become common across the public sector and continued after the pandemic was over. As a result the councils hands on control of their property has been reduced. Some tenants could then sublet their properties to family or for profit without any substantial risk of being detected. Chanell 4 has claimed that up to 100,000 properties are unlawfully sublet.
Soaring house prices have made it more difficult for young people to buy their first home which has led to a buoyant rental market especially in London. It is therefore not surprising that a tenant with a council or housing association tenancy comes to see it as a valuable asset which they can dispose of as they wish. This mindset is further reinforced by a tenants right to buy their property; if the property will one day be theirs by right why not dispose of it as they wish now! However for the reasons given below councils are detecting many more unlawful sublets and taking action to repossess, prosecute and claim compensation or the loss they have suffered as well as in some cases orders requiring repayment of all unlawful profit.
Detection rates for unlawful subletting
Detection rates are on the up. Councils now make a point of publicising their successes. For example Hackney, Camden and Westminster regularly report their successful prosecutions and most boroughs now have a facility for anonymous online reporting of suspected unlawful subletting.
The councils have woken up to the scale of the unlawful subletting and have put resources into detecting and prosecuting it. This can take many different forms depending on the council but all involve dedicated fraud teams who now have extensive experience in collecting the evidence needed. Council’s have different policies depending on their objective. Some simply want the property back and with skilful negotiation can be persuaded to take no further action on the keys being returned. Others want both the property back and compensation for the loss. Yet others take a very aggressive approach and want their property back, a criminal conviction and compensation whether by way of a compensation or unlawful profit order. At Moss & Co we have dealt with most London Councils, and so have a very good sense of which policy they adopt.
Fraud Investigations linked to Right to Buy applications
One trend we have noticed recently is that whenever a tenant makes a Right to Buy application it is immediately referred to the councils in house fraud team. The application is then rigorously checked and all the information in it cross referenced to national data bases. This is not surprising as every Right to Buy application represents the potential loss of a unit of social housing.
What to do if you are being investigated.
Take legal advice as soon as you can. We will definitely be able to help you navigate a subletting investigation – whatever you do and whoever you consult, do not try to do it alone!
Narinder Moss is an expert in subletting fraud.