Many of you will have read a recent news release from the London Borough of Barnet in which it was reported that they had secured estimated savings of £1.3 million by recovering 41 properties “being used illegally”, and retained an asset value of £1,534,800 by identifying 12 fraudulent right to buy applications.
Earlier this year, the London Borough of Enfield reported that it had saved over £300,000 in each of the previous two financial years by recovering (20) properties found to have been unlawfully sub-let by the tenant.
These of course are headline figures with little to no appreciation of the human cost of abuse of the social housing sector, the hard work of a variety of individuals to uncover and demonstrate the unlawful activity, or the stories given by the tenant either to cover-up the reality and/or explain away seemingly compelling evidence raised against them.
Local authorities can in particular therefore see real savings given the likely impact on and relationship with temporary accommodation costs. A pro-active anti-fraud strategy is essential in any event, even though from a court perspective the litigation process can be drawn out and expensive, even if ultimately successful. To give 2 examples from cases I have acted in in the last couple of years:
Case 1 – allocation fraud
A local authority nominated the tenant to a housing association in 2007, the tenancy commencing the same year. Before the actual grant of tenancy, she was required to complete a housing application form, one of the questions on which was “Do you own any other home or property?”. To this she answered “No” but she did in fact own a house. The court heard from internal and local authority fraud investigators, and determined that grounds 12 (living at property as only or principal home, and notify landlord of lengthy absences) and 17 were made out. The trial judge concluded “the counterveiling weight of public policy considerations lead me to conclude with no doubt that there should be an outright possession order”.
Landlord Costs: £27, 105.34. Notice to Judgment: 2 years 1 month.
Case 2 – subletting of housing association property
The tenancy commenced in 1999. Fraud investigation showed connections in Wales, and in another city in England for extended periods. The tenant claimed her brother was the instigator of what she said were false complaints of her subletting, which included copies of rent book payments. During the trial she claimed to have merely been visiting friends elsewhere (despite being registered for council tax at those addresses), to have forgotten her first husband’s name when asked about persons recorded in a credit reference report, and to have no real answer to companies’ links showing both her involvement as an officer and address elsewhere. A possession order was made on an outright basis along with a £136,080 unlawful profit order.
Landlord Costs: £17,309. Notice to Judgment: 2 1/2 years.
Of course in some cases the tenant concedes early on in the process, without the court process being instituted or having to come to any contested conclusion.
What is apparent is that effective systems in place can greatly enhance prospects of success, ultimately reduce costs and preserve the integrity of the landlord’s allocation and housing management system:
- Clear application forms.
- Systems accessed by and reviewable across internal departments.
- Appropriate data sharing agreements.
- Proper application of the pre-action practice direction & protocol process.
- Use of credit reference checks and intelligence services such as NAFN.
- Effective and consistent record-keeping.
I am starting the process of writing the 3rd Edition of Cornerstone on Social Housing Fraud, and this will continue the approach of setting out the legal process and jurisprudence in the housing fraud arena alongside the investigative options available with full acknowledgment of any statutory or other restrictions.
Finally, to highlight 3 excellent fraud conferences coming up:
(1) 17 October, 2024
Housing Sector Fraud Risk Conference in Birmingham
(2) 14 November, 2024
Oxford Investigation Services, Annual Fraud Conference 2024 in Oxford
(3) 13 March, 2025 (details to be announced)
Tenancy Fraud Forum Annual Conference 2025 in London