Month: November 2024

Almost the end of the week, and I am in court on a sub-letting possession matter. I have been very impressed by so many organisations’ approach to the International Fraud Awareness Week, and if I can be especially biased I have loved the Tenancy Fraud Forum’s top tips series.

But fraud is an issue throughout the year and not just for a week, and I hope in my field of housing fraud it continues to be dealt with enthusiastically and persistently. Attending events such as the Oxford Annual Fraud Conference demonstrates what talent there is, especially on the investigation side.

I am going to leave this blog with reference to a recent successful prosecution carried out by the London Borough of Islington. A former tenant was ordered to back £242,705 plus £18,000 in costs at Snaresbrook Crown Court on Wednesday 11 September 2024. Why?

• He became a tenant of the Council in 2011.
• He failed to advise however that his circumstances had changed since applying for social housing.
• He had bought a 3-bedroom home in Haringey.
• Rather than live in that property with his family, he sub-let it.
• Not only was he receiving up to £2000 in rent but he was also claiming full housing benefit on his Council property.
• His fraud was discovered when he applied for the right to buy.
• He pleaded guilty to 4 counts of fraud in December 2022.
• He received a suspended sentence of two years, plus 30 Rehabilitative Activity Days days and 250 hours of unpaid work.
• The Council pursued Proceeds of Crime Act proceedings.

Islington have been especially proactive and successful in detecting housing fraud and between April and September 2024 recovered 41 properties.

#fraudweek

For day 5 of the International Fraud Awareness Week I thought I would highlight 5 suggestions for improving the prospects of a successful fraud possession action. There will be many others of course but this is a start!

• Use court processes effectively – for example, the Part 18 Request for Further Information. Defences are frequently (and perhaps understandably) brief and leaving many important questions unanswered. Raise these unanswered questions in a Part 18 letter – if still not answered or answered sufficiently an unless order can be applied potentially leading to a strike out of the defence/debarring of the defendant from defending the claim. I wrote about this in March 2022.
• Prepare a detailed pre-action protocol letter – remember, this is not only a procedural requirement but also gives the landlord a final chance to properly understand the prospective defendant’s response to the allegations made against them. If it is not responded to, or done so only in a very cursory manner, then there is plenty of opportunity to raise a poor and insufficient response in submissions and by way of cross examination.
• Understand and ‘use’ hearsay – there is at times very little direct evidence available to the claimant and even where there potentially is, such as where a client officer visits a property and finds sub-tenants there, those sub-tenants frequently decline to attend court such that their statement or evidence of their presence and status is entirely hearsay. Direct evidence is inherently best but litigants should not be put off by its absence, remembering in particular the question of weight addressed in section 4 of the Civil Evidence Act 1995 and the inherent hearsay nature of much crucial evidence such as credit reference records and bank statements.
• Identify inconsistencies in the defendant’s case – not every case has a ‘knock-out blow’ and some require a proper weighing up of the evidence. To that end it is often helpful, if only to seek to undermine the defendant’s overall credibility, to identify the number of inconsistencies in their account. It may be in respect of comparatively insignificant or non-determinative matters but it can assist to demonstrate the likely greater force of the claimant’s case. I recall a succession case where the Council’s position was that the tenant had moved back (as opposed to merely visited) to his country of birth before he died such that he was no longer a secure tenant and there was no longer any statutory succession right. His death was only in fact reported many years after it happened and there was limited evidence of his activities in his country of birth. There were though 13 instances where the would-be successor’s evidence was inconsistent either with their own testimony or previous position, or with that of their family witness. The court allowed the possession order and determined that there was no succession right extant at the time of the tenant’s death.
• Understand the judicial approach to the determination of facts – in 2021 I wrote about this following the judgment of Warby J in R (Dutta) v General Medical Council [2020] EWHC 1974 (Admin), especially at paragraph 39. The case is worth a read.

What are your top tips?

#fraudweek

In April 2023 Lost homes, lost hope: social housing fraud in England – recovering social homes for those in need – a research report produced by the Tenancy Fraud Forum and Fraud Advisory Panel – was produced.

It proceeded on the basis that the average cost of tenancy fraud in England was £42,000 per property and found:

• 148,000 social homes were subject to some sort of tenancy fraud.
• That’s 1 in 20 of all social homes in London, and 1 in 30 elsewhere in England.
• Tenancy fraud detections fell 55% between 2013/14 and 2019/20.
• 76% of frauds go undetected over the same period, at a cost to the public purse of £500 million.

In this International Fraud Awareness Week this is a report worth a re-read!

The increasing popularity of short-term lets has added a new dimension to sub-letting problems faced by social housing landlords. I have written previously on this subject 3 times: August 2019, August 2022 and December 2023.

Over 4 years ago I ran my first webinar on this issue and last month ran my latest event along with Stephanie Toghill:

By way of practical application, in August of this year Birmingham City Council reported on a successful prosecution of a tenant that had unlawfully sublet their local authority flat after advertising the property for rent via Airbnb. They rented out the property for a total of 158 nights, pleaded guilty to 3 offences in the magistrates’ court and signed a notice to quit to terminate their tenancy.

The value to local housing authorities of such work was seen by a press release from Brighton & Hove Council in June 2024 reporting that investigators had “saved more than half a million pounds in Brighton and Hove City Council’s housing department alone last year”. One of its councillors said:

“I’m doing a lot of door knocking at the moment and we often find the person who is supposed to be in a house isn’t in the house.”

“I think that Airbnb is quite interesting, particularly in my ward (West Hill and North Laine), which is a city centre ward. Tenants will say to me ‘that’s an Airbnb’. Someone said that to me in a council block the other day.”

“If it’s a leasehold property, there’s nothing we can do about that but obviously if it’s one of our properties then that would be very concerning.”

Follow the Tenancy Fraud Forum, who for this week are providing on LinkedIn ‘top tips’ to assist social landlords in their fight against social housing fraud.

#fraudweek