Defending Social Housing Fraud cases
The Social Housing Fraud Act became law in 2013. We were expecting a wave of possession claims, prosecutions and applications for confiscation of profits. What was expected to be a flood turned out to be a trickle – until now. In the last few weeks we have noticed a sharp increase in the number of clients calling us for advice and representation in proceedings brought under the Prevention of Social Housing Fraud provisions.
The recent cases range from possession claims in the County Court to criminal investigations. The criminal investigations are clearly new territory for the Landlord Local Authorities and Housing Associations who are not used to criminal procedure. The issues that need to be resolved in these cases include Housing Law, Criminal Law and the Welfare Benefits regulations. All three elements can often be found in single case. The criminal offence may not be limited to the subletting but also to a failure to disclose income where the client is in receipt of means tested benefits. Also for the first time the issue of whether a client has acted dishonestly will be an important factor in a prosecution for unlawful subletting under the act.
It is therefore crucial that legal advice is taken at an early stage and certainly before attending any interview. Any interview appointment given should be postponed until proper advice has been taken. Where criminal proceedings are contemplated interviews have to be conducted under the provisions of the Police and Criminal Evidence Act 1984 and anyone under investigation is entitled to a solicitor as of right. It may be the case that the defendant will not wish to answer questions and will deal with the investigation by providing a statement prepared with the help of a solicitor. Your solicitor will also be able to find out from the investigator the extent of the evidence. It is unwise to attend an interview without knowing the information in the investigating officers possession. This information can include a complete record of the suspects bank transactions obtained under the provisions of the act. The bank statements may disclose not only the payments out for rent but also payments in from the subtenant. This evidence would be the basis for any application to confiscate profits from the subletting.
We have represented and advised many clients who have received letters informing them of an investigation and requesting that they attend for interview. In every case so fare we have managed to avoid prosecution and where the evidence allows our clients have also retained their property.. We have not yet had a case where the landlord has succeeded in either obtaining a conviction of possession through the Courts.
In some cases it is worth negotiating with the local authority or housing association to try and come to an agreement regarding possession and thereby avoiding prosecution or confiscation court proceedings and the costs associated. In other cases it is possible to persuade the investigators that they do not have a case and that proceedings should be dropped.