Tackling sub-letting in social housing

Article

07 June, 2010

The issue of the sub-letting of social housing stock is arguably one of the chief problems facing the sector at the present time. With a shortage of such accommodation in the United Kingdom, efforts are being made to prevent these properties from being sub-let to third parties, without a landlord's consent.

It is a particular problem because it means that the considerable waiting list for social housing cannot be reduced and also because the 'original' tenant can make a substantial profit on the sub-letting: it has been reported that in London, a property was rented from a Registered Social Landlord for around £100 per week and was then sub-let to a third party for £1,000 per week.

With the Audit Commission announcing in a September 2009 document that around 50,000 social homes were unlawfully sub-let, the extent of the problem can be appreciated.

How is it being tackled?

In November 2009, the then Government announced a national crackdown on the issue of sub-letting. This included a reward for anyone whose information led to the recovery of the first 1,000 homes. Plans were also outlined to give social landlords the option of pursuing each case of subletting as a criminal matter in addition to a civil case.

Councils and housing associations were also to be provided with around 27,000 leads which had been uncovered through 'sweeps' by the Audit Commission by matching tenancy records against other data sets (such as housing benefit records and the Electoral Roll).

What steps can be taken by social landlords?

For social landlords, there are legal avenues which can be made use of to tackle sub-letting.

In relation to secure tenancies, section 93(2) of the Housing Act 1985 states that if a secure tenant parts with possession of the property in question, or sub-lets it to another party without consent, then the tenancy is no longer deemed to be secure in nature and cannot revert back to being secure later. In such a situation, a landlord may then serve a Notice to Quit in order to terminate the tenancy. It should be noted however, that section 93(1) of the 1985 Act states that it shall be a term of every secure tenancy that the tenant may allow people to live at the property as lodgers. Section 94 of the 1985 Act also states that a landlord must not unreasonably withhold consent to the sub-letting of part of the property and if it does so, then consent is then deemed to have been given.

For assured tenancies, the Housing Act 1988 does not provide the same level of assistance. Instead, such landlords may have to rely upon Ground 12 of Schedule 2 of the Act as a basis for any legal action (this Ground concerns a breach of the tenancy agreement other than one related to the payment of rent), if the provisions of the agreement expressly state that sub-letting is not permitted. It may also be the case that the tenant will have also forfeited their right to be an assured tenant, as they would not be occupying the property as their only or principal home.

In either situation, it is open for a landlord to recover damages and/or unlawful profit from the tenant whilst seeking possession of the property. Although doing so may not be appropriate in every situation, a landlord could recover amounts where the tenant has sufficient assets or where the sub-letting was conducted as a commercial enterprise.

Practical Hints & Tips

Guidance provided by the Department for Communities and Local Government offers a number of suggestions on how social landlords can look to identify and deal with sub-letting at as early a stage as possible.

One suggestion is for photographs to be taken when the tenancy commences so that all members of staff who deal with the property are aware of what the tenant looks like. Copies of the photographs should be kept 'on file' and with the tenancy agreement. Doing so provides a quick and easy way of validating the identity of the person residing in the property. Holding copies of other forms of personal identification may also prove to be beneficial.

The guidance also recommends checking for suspicious activity and validating the tenant's identity during 'settling-in' visits in the first few weeks of the tenancy. Evidence should be obtained detailed who is residing at the property and whether this corresponds with the contents of the tenancy agreement.

Another tip offered by the guidance is for the issue to have greater public awareness and for reports of sub-letting to be encouraged. The 'profile' of sub-letting could be increased by a landlord highlighting it in tenant newsletters and handbooks and also on their own website. Reports can also be encouraged through making it as easy as possible for individuals to submit their concerns. Examples can include via email, in person or through a dedicated telephone 'hotline'.

Tenancy audits and property inspections are also recommended as useful ways for landlords to carry out checks on who is living at a particular property. Carrying out such visits is said to be an ideal method of ensuring that all aspects of the tenancy agreement are being complied with.

Summary

Sub-letting is an issue which can be tackled by social landlords. Through rigorous checks being made at the beginning and during the tenancy, suspicious behaviour or activities can be identified and dealt with. Given the number of properties said to be unlawfully sub-let and the number of people seeking social housing, it may be advisable for social landlords to consider how to deal wit this issue.

For more information and assistance on these issues, please contact the Housing Department at Forbes Solicitors on 01772 220200 or contact Stuart Penswick by email.

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