Narinder Moss tenancy fraud expert did this case
When is letting someone stay in your council flat not subletting? What does it mean to part with possession?
Our client faced a claim for possession of her council flat because of alleged tenancy fraud. She also faced a claim for nearly £20,000 of rent she was meant to have received from subletting.
The above two questions had to be answered in our clients favour if she was to retain possession of her home. They also had to be answered in her favour if she was to avoid penalties for unlawful profit under the Social Housing (Prevention of Fraud) act 2013. The total potential cost of the case if she lost was about £100,000. So, this was a case that could have life changing consequences.
It is complex story that played out at a trial first in the County Court and then the High Court on appeal. It will take some time to tell. Read to the end and you will learn much about defending difficult possession and tenancy fraud claims.
Background
Before she reached 18 our client was given a licence to occupy a studio flat with separate kitchen and bathroom by the London Borough of Southwark. Later, after reaching the age of majority, she was given a full tenancy. She had overcome adverse circumstances in her personal life. So much so, that not only had she obtained a degree and then a professional job but had also been able to take care of a teenage niece whose mother had left the UK. To do this she was officially approved as a carer thereby saving Southwark Council thousands of pounds in foster care costs. She received a small allowance for this social and family service.
Applying for a transfer
It was crowded in the studio flat. It was also a long way from her niece’s school. Therefore, to make life easier and to get a bedroom each she registered for transfer with the London Borough of Southwark. Various delays occurred arising from bureaucratic failures at Southwark. Unfortunately, no progress was made with rehousing. This was despite support from the councils own social services department.
Moving out or staying put?
When an acquaintance of our client offered a private rental nearer to work and with three bedrooms she decided she would move there during the week. She would keep the tenancy of her council flat to use as she saw fit and to entertain family and friends.
Our client placed advertisements online to see if she could get a lodger to help cover her expenses. However, she quickly realised this was wrong and took the adverts down. Eventually she let a family acquaintance stay at the Council flat. This was to help with the bills and food. Our client retained access to her council flat. She always had a key and came and went as she wanted. She always treated it as her main home.
Southwark Council act
In time our client decided that her friend was taking up too much of the very limited space and asked her to go. In good faith our client wrote a letter stating that her friend could no longer stay with her. The friend applied as homeless. Southwark Councils reaction was swift. The council:
- Placed our client under investigation for Tenancy Fraud.
- Told her friend that our client could not ask her to leave without a court order.
- Attended the premises to serve a Notice to Quit?
- Later changed the locks and provided keys to our client’s friend only
- Asked to interview our client under caution on suspicion of criminal offences under the Social Housing (Prevention of Fraud) Act 2013.
Moreover, some time after the council officers left, Police arrived to tell our client that if she did not leave her home then she would be arrested as there was likely to be a breach of the peace.
First steps
Moss & Co aim to provide a service for the whole case. We are experts in both housing and criminal law. For this reason we can give very specific advice about the best strategy to use in a tenancy fraud investigation. Our client had read about similar cases we had done on our website and so contacted us. One of our housing law and crime experts Laura O’Brien attended the interview under caution with her.
We advised on this occasion that it would be in her interests to put forward her account in the interview under caution which she did. The interview lasted, almost two hours. The investigator asked a series of questions including about the internet adverts.
The possession court case early stages
In the meantime, Southwark Council pressed on with their investigation. Our client asked our housing law expert, senior partner Narinder Moss, to advise about the possession case. In December 2015 Southwark Council issue a Possession claim. In March 2016 the council obtained an order freezing our client’s savings. They could do this because they were asking for an unlawful profit order under the Social Housing (Prevention of Fraud) Act 2013. They said our client had made nearly £20,000.
The good news was that Laura’s advice at the interview under caution had paid off. Southwark Council Informed Moss & Co that they would not be issuing criminal proceedings.
The evidence against
The council had a strong case for possession and for the unlawful profits order. They had evidence of:
- Money received — said to be rent
- Two advertisements
- Occupation of our client’s council flat by what appeared to be a named sub tenant
- Documents from the sub tenant confirming occupation
- Credit agency reports linking our client to another address
- Our client’s occupation of other premises
- Council tax in her name out of the borough.
Narinder Moss set about preparing the defence and replying to the many requests for further information that the council served in the court proceedings. She opposed a court application for disclosure of all the meta-data in respect of our clients mobile. It would have given a moment by moment account of our client’s movements. In our view this would be an invasion of her privacy.
Narinder Moss made every effort to settle the case. She pointed out that our client was likely to have the Courts sympathy. The council would not move. They offered mediation but would not agree to all the issues in the case, including possession, being up for discussion. The case was going to trial.
Preparing the defence
It was certainly a difficult but not unwinnable case. Our client was adamant that she had never given up occupation of her council flat. Yes, she had allowed her friend to stay, she had received some help with food and cash as you would expect a long-term guest to do. Crucially she insisted she had never parted with possession of the flat, she always had a key. She had always exercised her right to come and go as she wanted from her property.
Tenacy Fraud and Possession claims — the Law.
To get possession Southwark council had to show that our client had sublet her flat or that she was no longer occupying it as her main and principle home.
Subsection 93(2) of the Housing Act 1985 provides:
If the tenant under a secure tenancy parts with the possession of the dwelling-house or sublets the whole of it (or sublets first part of it and then the remainder), the tenancy ceases to be a secure tenancy and cannot subsequently become a secure tenancy.
Therefore, if our client had sublet the whole flat it was no longer a secure tenancy and the Notice to Quit would have the effect of ending the tenancy. The council would then be entitled to possession.
If she had not sublet the flat the court had to decide whether she was occupying the flat as her main and principle home at the time the Notice to Quit.
The notice they had served was a Notice to Quit. It was not a Notice Seeking Possession for breaches of the tenancy agreement. This we believe was a tactical move by the council. Where a breach of contractual tenancy term is alleged the court usually have to be satisfied that it would be reasonable to grant possession. The court then has a discretion to grant a suspended possession order. Perhaps Southwark Council did not want this because it would have brought into play all the issues around our client’s earlier attempts to get rehoused and her caring for a teenage child. If a court was able to exercise discretion in these circumstances a suspended order would have been the most likely outcome.
The Trial
The tenancy fraud case was heard over two days. The claimants seemed confident of success. The witnesses were called. The council officers and fraud investigators gave their evidence. The council exhibited the documents from the investigation. Our client gave evidence. Her mother gave evidence. Our client’s case was that she had never parted with possession of the whole or of part of her flat. She was cross-examined but stayed firm. The Judge retired to prepare his judgement.
The Judge returned to give a long and reasoned account of his decision. He believed the council officers, he complimented them on the quality of their investigation. There were inconsistencies in our evidence — it did not look good.
But… he found our clients mother a credible witness, he accepted that our client had access to her flat, a right she exercised even whilst her friend was staying. Crucially he found that on the balance of probabilities our client had not parted with the whole. As it was a studio flat it was not possible to part with only part. It was after all a one-room flat. The Judge found that the flat had continued to be our main and principle home even though we had stayed elsewhere. The Judge dismissed the councils claim for possession on the basis of tenancy fraud. He dismissed the claim for an unlawful profit order in respect of rent the council said our client had received. He awarded our client some of her costs.
The appeal
The council appealed. There were six grounds of appeal. More expense for our client, more uncertainty. The council reinvestigated the case, they tried to bring forward further evidence but finally in October 2017, 2 years after the investigation began a High Court Judge ruled against the council’s grounds of appeal. They were not entitled to have a second bite of the cherry, to reinvestigate a case after trial. Our client had won.
The lesson
Never give up. Tenancy fraud cases can be won by the tenant if the client is credible, the cause just and the solicitor determined and persistent in seeing the case through.
If you have problems with tenancy fraud or a possession claim call Narinder Moss on 020 8986 8336 or use the contact form below.
Laura O’Brien criminal law and Social Housing (Prevention of Fraud) Act 2013 expert dealt with the interview under caution