19 Mar 2014

Unlawful profit orders on illegal sub-letting

The Prevention of Social Housing Fraud Act has been in force for two months, but difficulties in bringing a prosecution are already emerging, suggests James Menzies. Illegal sublets tend not have written contracts, of course, and by the time the authorities catch up, the illegal tenant has probably vanished.

He therefore suggests the impact of the act may be confined to obtaining unlawful profit orders in possession claims in the civil courts. This was the route taken in a recent case. (The potential loss of security of tenure by assured tenants may prove to be the other most significant change.)

There's recently been a pretty clear cut case - where a housing association tenant was living abroad and sub-letting their property! The housing association won a judgement of £31,000 plus costs against the tenant.

An investigation by one of the Viridian’s fraud officers revealed that the fraud had taken place over two years and seven months. Katrina Robinson, head of legal services at Viridian said:
A decision was made to enforce the Unlawful Profit Order as we do not tolerate fraud. This is a clear message to those sub-letting that social housing is for those in need and anyone found to be profiting from this will be pursued to the full extent of the law.
The Prevention of Social Housing Fraud Act 2013 was brought into effect in November 2013 and section 5 of the act, Unlawful Profit Orders, allows social landlords to seek a money judgement in respect of any unlawful profit made as a result of sub-letting their social housing tenancy.

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