New Law to criminalise cheats that cost country billions
With just two weeks to go before the start of the Olympics, Housing Minister Grant Shapps has called on social housing landlords in East London to be extra vigilant and take tough action against tenancy cheats trying to make a fast-buck out of sub-letting their homes.
His call came ahead of the Second Reading of a Government-backed Private Members Bill - introduced by Richard Harrington MP - aimed at tackling the multi-billion pound tenancy fraud scam. Measures include making the sub-letting of social homes a criminal offence for the first time, and forcing profits made from unlawful sub-letting to be paid back to the landlord. A summary of responses to the consultation and the proposed next steps are also published today.
In the meantime, the Minister is calling on all social housing landlords to use their existing powers to their full extent including eviction.
Grant Shapps said:
Sub-letting a much needed social home is not a clever piece of private enterprise in action. Instead it’s a multi-billion pound scam that denies families in need a decent home. That’s why I’m giving my full backing to this Bill.
Anyone in London hoping to profiteer by sub-letting their council house in the coming weeks needs to know that they could lose their tenancies by unlawfully renting out their home.
And if these fraudsters think this wheeze is a gateway to earning thousands in the future, then they also need to know that it may soon become a criminal offence.
The Olympics are a great opportunity for London to welcome the world. They are not an excuse for wide boys to rip off the taxpayer. We won’t allow cheating outside the Olympic Park anymore than it will be allowed within it.
Conservative MP Richard Harrington said:
I join Grant’s call for landlords to be extra vigilant over this Olympics summer. By introducing my Private Members Bill I want to see stronger punishments for those who commit tenancy fraud and introduce effective deterrents. This new legislation will go a long way in tackling this problem in the long term
Estimates suggest that between 50,000 and 160,000 social homes are unlawfully occupied across the country. Even at the lowest estimate to replace the social homes that are being unlawfully occupied - to house those who have effectively been displaced by tenancy fraudsters - would cost several billion pounds.
Mr Shapps said social housing landlords and councils could learn from others taking on tenancy cheats including:
Hounslow - used Government funding to enable Homes for Hounslow to hire a tenancy fraud officer and as a result recovered 41 properties between July 2010 and June 2011. Properties recovered included: Clayponds Garden, Ealing - sublet for more than 20 years; and Snowy Fielder Way - the tenant had relocated to USA and the property had been sublet for more than 10 years.
Wolverhampton Homes - used Government funding to employ a dedicated fraud officer, produce publicity material to raise awareness and recruit two tenancy officers to work on high rise blocks conducting tenancy audits and assisting with fraud reports. One recent case involved a tenant who the council believed had not lived at the property for over 20 years, only returning once a week for about 40 minutes. The tenant refused to terminate the tenancy but at the final court hearing the judge ruled in the council’s favour and awarded outright possession plus costs.
Enfield - hired two specialist officers to tackle tenancy fraud with Government funding, resulting in the recovery of around 90 properties to date.
Notes to editors
The summary of responses to the Social Housing Fraud consultation is available at: www.communities.gov.uk/publications/housing/socialhousingfraudresponses.
The text of the Bill can be found on the Parliament website at:
http://services.parliament.uk/bills/2012-13/preventionofsocialhousingfraud.html (external link).
In summary it will, subject to Parliamentary approval, create new criminal offences of unauthorised sub-letting with the prospect of imprisonment on conviction; give local authorities the power to prosecute these new offences both for other local authorities and on behalf of housing associations as well as on their own behalf; provide for unlawful profit orders in both criminal and civil proceedings, which will require the person against whom the order is made to pay to the landlord any profit made from unlawful sub-letting; and, ensure that an assured tenant of a housing association permanently loses their assured status when they sub-let or part with possession of the whole of their property.