Tenancy fraud - subverting the subletters
16/04/10
Few of us can have missed the recent headlines about the eye-watering costs and consequences of the unlawful subletting of social housing across England and Wales.
In September 2009, the Audit Commission's paper, Protecting the Public Purse, conservatively estimated that around 50,000 properties are unlawfully sublet. At an average cost of £75,000 per property over a three-year period, the figures begin to resemble a banking bail out.
But there's a real human cost to this problem since unlawful subletting deprives families in genuine need of social housing.
National Crackdown
Given the scale of the problem, the Government launched its National Crackdown on unlawful subletting in November 2009. Under this scheme, individuals are encouraged to tip-off fraudulent subletters with a £500 cash incentive. The scheme also introduced reporting hotlines and awareness raising poster and leaflet campaigns.
New Local Government Network
But according to the New Local Government Network (NLGN), such measures, combined with the existing flimsy sanctions of the civil law, may be insufficient. In a report published in March 2010, NLGN has called for the criminalisation of fraudulent or unlawful subletting.
Current difficulties
Landlords faced with unlawful subletting have a number of difficulties in resolving the problem and recovering the property. A key one is getting evidence of the unlawful subletting.
As unlawful subletting isn't a criminal offence, it's arguable that the Regulation of Investigatory Powers Act 2000 (applicable to public bodies), can't be used to obtain evidence against a subletter using certain surveillance methods.
A further obstacle is caused by the distinction between the disclosure of information under the Data Protection Act 1998 within civil proceedings (section 35) and within criminal proceedings (section 29). As a result of this distinction, together with the discretionary nature of the requirement to comply with any data request under these sections, many requests for information are refused.
Taking action
In November 2009 Communities and Local Government (CLG) published its good practice guidance for social landlords - Tackling unlawful subletting and occupancy. This guidance encourages social landlords to consider effective prevention in the form of measures such as:
- taking full-face photographs of the tenant at sign-up
- using IT to link that photograph to the tenancy agreement
- carrying out thorough, unscheduled settling-in visits.
Given the evidential problems, the guidance also encourages landlords to be more proactive in obtaining reliable information from residents. It highlights raising public awareness and encouraging reporting, using techniques such as newsletters and mailshots, and allowing discrete phone and web-based reporting facilities.
CLG also encourages using tenancy audits to detect and identify unlawful subletting and, where possible, using specialist investigative teams.
Criminalisation
The criminalisation of unlawful subletting proposed by NLGN would go some way to diminishing the current difficulties in tackling unlawful subletting. What's more, it would raise the public awareness of the problem and may act as a deterrent to prospective fraudulent subletters. And it may reduce the number of cases that have to be pursued, often at significant cost and length, through the civil courts.
Tim Crook
Principal Solicitor, housing law services
www.housinglawservices.co.uk