The Prevention of Social Housing Fraud Act 2013 applies in England and Wales and came into force on 15 October 2013. Its purpose it to prevent illegal subletting of social housing by tenants. The act has both a criminal and a civil element.
It is an offence under the Act for a tenant under a secure tenancy or an assured tenancy granted by private registered providers or registered social landlords to sublet a property.
An offence is committed if a tenant ceases to occupy the property as his only or principle home and either sublets or parts with possession of the property or part of it knowing that to be in breach of his tenancy agreement.
A further and more serious criminal offence is committed if the tenant not only knows that he is acting in breach of his tenancy agreement but also acts dishonestly.
To the non lawyer the difference between the two offences is rather subtle but the difference in the potential sentence is significant.
Where a tenant knowingly sublets in breach of his tenancy he faces a fine of up to £5,000. Where a tenant dishonestly sublets then he faces up to six months in prison if sentenced in the Magistrates court and up to two years in prison if sentenced in the Crown court.
The lesser offence can be prosecuted within six months of the date it comes to light and the dishonesty offence can be prosecuted up to three years after the date that it was committed.
The offence can be prosecuted by local authorities whether or not they are the landlord.
The 2013 Act strengths the hand of landlords who wish to see offending tenants leave the property. Tenants who sublet in breach of their tenancy agreements lose security of tenure permanently.
It is possible for a tenant to be made to repay to their social landlord any profit made from unlawful subletting through the making of an “Unlawful Profit Order”. This new order can be made by the civil court during possession proceedings or by the criminal court following conviction for one of the new criminal offences.
The Act also enables Westminster and the Welsh Ministers to make regulations providing local authorities with powers to compel third parties to provide information to assist housing fraud investigations. No such regulations have yet been created but it is likely that they will be introduced in both England and Wales.