The Long Awaited Arrival of the Prevention of Social Housing Fraud Act 2013

Article

15 October, 2013

The eagerly anticipated Prevention of Social Housing Fraud Act 2013 ("the Act") comes into force today. With it we will have the introduction of new civil remedies and criminal offences to counteract unlawful subletting of social rented housing.

The Housing Department at Forbes has previously delivered briefings which look in detail at the new remedies and offences created by the Act. Future briefings will look at how the provisions are being used in practice and how Registered Providers can make the best use of them. In the meantime the key features of the remedies and offences are set out below…

The Unlawful Profit Order

  • The tenant is ordered to pay the profit made from unlawful subletting to the landlord.
  • Can be used in civil and criminal proceedings.
  • The maximum payable by the tenant is the net profit they have made from their unlawful subletting (i.e. less any rent they have paid to their landlord).

Security of Tenure

  • Assured tenants who unlawfully sub-let will now be in the same position as secure tenants who do the same.
  • The old position:
    • Assured tenants who unlawfully sublet lose their security of tenure because they are not occupying their property as their only or principal home.
      BUT
    • If they move back and live at their property as their only or principal home they regain their security of tenure.
  • The new position:
    • There is no 'BUT'.
    • Assured tenants can no longer regain their security of tenure by moving back to their property.

The Criminal Offences

  • Local Authorities will bring the prosecutions.
  • The Act creates 2 new offences - the difference is the level of seriousness.
  • The less serious offence
    • The tenant ceases to occupy the property as his only or principal home and either sub-lets or parts with possession of it knowing that to be a breach of his tenancy agreement.
    • Defences are available.
    • Sentence: fine not exceeding £5000.
  • The more serious offence
    • The tenant ceases to occupy the property as his only or principal home and either sub-lets or parts with possession of it, not only knowing that to be a breach of his tenancy agreement - but he does so dishonestly.
    • No defences available.
    • Sentence:
      • Summary conviction: up to 6 months in prison and / or a fine not exceeding £5000.
      • On indictment: up to 2 years in prison and / or a fine.

It will be interesting to see over the next few months how the Courts deal with these new remedies and offences and in particular how Local Authorities use their new powers to prosecute. In the New Year Lucie Cocker will be delivering briefings to explore this further.

For details of our future breakfast briefings please request to join our Forbes Solicitors Housing Breakfast Briefings LinkedIn Group or contact Lucie Cocker on 01772 220244 / 07976 268 268 or by email Lucie Cocker

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