The Housing Minister, Grant Shapps, MP announced earlier this year plans to make sub-letting of social housing a criminal offence.
As we are all too aware, social housing tenants who sub let can earn thousands of pounds a year renting their homes out to private tenants and if discovered, face no greater a penalty than the possibility of the losing their tenancy.
It is the intention of the Government to hit back at this huge problem. It’s estimated that nationally between 50,000 to 160,000 social homes are sub let, which cannot be tackled by social housing providers alone, by reason of their limited resources and has been made more difficult by the evidential and procedural requirements in possession and forfeiture claims before the Courts, particularly in light of the Commonhold and Leasehold Reform Act 2002.
The Government’s current proposals are:
(a). A new criminal offence of tenancy fraud with a maximum sentence of two years’ imprisonment and a fine of up to £50,000;
(b). Payment of the proceeds of the tenancy fraud to the social housing provider, rather than being confiscated by the Government; and
(c). Giving social housing providers greater powers to investigate tenancy fraud with banks and utility companies.
This is obviously great news for social housing providers (although it is unclear as to whether the legislation will have retrospective effect) and cannot come onto the statute books too soon, particularly as social housing providers in the meantime remain under obligation to investigate and seek possession, or forfeiture against those who unlawfully sub let.
This was highlighted as recently as May of this year by the Audit Commission in its criticism of Housing Associations for not making use of the data matching systems under the national fraud initiative.
It is hoped from a Housing Association viewpoint that the Government’s proposals will extend to shared ownership, as well as general needs rent.