Tenancy Fraud – Housing Law or Criminal Law?

Tenancy Fraud

There has been a recent drive to tackle tenancy fraud and to recover secure tenancies and assured tenancies (those social tenancies managed by Housing Associations). We have seen an increasing number of interviews under caution (formal interviews as part of a criminal investigation) being carried out in relation to alleged tenancy fraud. Understanding tenancy fraud requires an understanding of housing law as well as criminal law. At Moss and Co we specialise in both.

The Prevention of Social Housing Fraud Act 2013 created a specific offence of illegal subletting and gave the Criminal and Civil Courts the power to make Unlawful Profit Orders (an order for payment of the amount representing the profit from unlawful subletting). The offence arises where a tenant with a secure tenancy or an assured tenancy sublets all or part of their property, in breach of their tenancy agreement, without the authorisation of their landlord and the property sublet is no longer their only or principle home.

The question of whether an address is a tenant’s principle home is not straightforward. Whether an address is a tenant’s principle home is a matter of fact and degree; the Court must look at all the evidence before deciding on this question. Personal absence from the address does not necessarily mean that the address is no longer the tenant’s principle home. The fact that a tenant continues to keep belongings at the address may be of relevance. Evidence of the tenant’s intention to return to the address may also be of relevance. Successfully arguing that the tenancy in question continues to be the tenant’s principle home (even though they may have been absent from the address) could mean that the tenant does not lose the property and would mean that the tenant could not be convicted of an offence under the Prevention of Social Housing Fraud Act 2013. It is possible for tenancy fraud prosecutions to be brought under the Fraud Act 2006. Even under the Fraud Act the concept of principle home may be still be central to the charge.

Tenancy Fraud and Benefit Fraud

Tenancy fraud and benefit fraud investigations often go hand in hand. If your landlord or the local authority believe you have been illegally subletting and you are in receipt of welfare benefits then you are likely to be accused of committing fraud in relation to your benefits. If you have been claiming Housing Benefit but have not been resident at your address then the local authority who your Housing Benefit will argue that you should not have been receiving the benefit as you should not be treated as liable to pay the rent. Likewise, if it is believed that you have been receiving income from subletting which you have not declared in relation to your claim for benefits then this could impact on your claim for benefits and could result in an overpayment.

Tenancy fraud and benefit fraud both involve a cross-over between civil law and criminal law. At Moss and Co we are specialists in criminal law, housing law and welfare benefits law so we are well placed to advise in relation to all matters relating to tenancy fraud and benefit fraud.

Confiscation proceedings in Tenancy Fraud and Benefit Fraud prosecutions

With the rise of prosecutions for offences of benefit fraud and tenancy fraud we are also seeing a rise defendants being committed to the Crown Court because a confiscation order is being considered. Under the Proceeds of Crime Act 2002 the Court can (subject to a number of conditions) make an order that a defendant who has been found guilty or has pleaded guilty pay an amount representing their benefit from criminal conduct. Failure to pay the amount ordered may mean that the defendant serves a period of imprisonment. Even where the Magistrates Court feels that the case is not so serious that the defendant should be sentenced in the Crown Court, if the prosecution ask that the case be sent to the Crown Court because a confiscation order is being considered the Magistrates Court must send the case to the Crown Court. In many cases our clients are sentenced to community orders or suspended sentences (meaning that they are not sent prison) and the Crown Court has made a confiscation order which could result in them being sent to prison if they do not pay. If you are sent to prison for failure to pay, the amount will still be outstanding on your release. The length of the period in prison is dependent of the amount of the order made.

Confiscation proceedings are complex and can be very lengthy. In relation to all confiscation proceedings it is very important that the amount of benefit from the criminal conduct is calculated correctly. In cases where the benefit is undisputed then confiscation proceedings can be avoided altogether if early payment is made. This may mean quick repayment of any overpaid benefits. Legal advice is essential in navigating the law surrounding confiscation proceedings and where possible avoiding them all together.

Estate Agents beware

It is not only tenants who are finding themselves subject to tenancy fraud investigations. Under the Accommodation Agencies Act 1953 it is a criminal offence to advertise a property for rent without the express authorisation of the landlord. If an Estate Agent or anyone else involved in letting properties is found to have advertised a social tenancy without the express authorisation of the landlord they will be committing a criminal offence.

It is also possible for Estate Agents and other parties involved in illegal subletting to be prosecuted under the Prevention of Social Housing Fraud Act 2013 on a joint enterprise basis. The criminal law allows prosecution of parties who assist, encourage or procure the commission of a criminal offence.

Laura O'Brien Solicitor

Laura O’Brien our Tenancy and Benefit Fraud expert.

If you find yourself under investigation or subject to prosecution as someone who has assisted in subletting you will often be seen as less to blame than the tenant. It may be possible for prosecution to be avoided altogether through careful negotiations.

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