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Tackling housing fraud receives royal nod of approval

The Prevention of Social Housing Fraud Bill yesterday received Royal Assent and is now an Act of Parliament. The Secretary of State is expected to bring its provisions into force shortly. 

The Act creates new offences of the unlawful subletting of social housing.  With limited exceptions, secure and assured tenants, who move out of their homes and, knowingly or dishonestly, sublet the whole or part of them in breach of their tenancy agreements will now commit a criminal offence.  

The Act gives local authorities powers to prosecute these offences, which carry maximum sentences of a fine or 2 years’ imprisonment if the tenant’s actions were dishonest, or a fine if they were not. 

The Act also brings assured tenancies into line with secure, providing that the assured tenants of social landlords will now lose security of tenure permanently if they sublet or part with possession of the whole of their properties. 

It creates a new kind of order – the Unlawful Profit Order or, as it will no doubt become known, the UPO - enabling landlords to recover the profits of unlawful subletting, either following a conviction in the criminal courts or in a separate civil court claim. 

Whether local authorities readily embrace their new powers of prosecution remains to be seen.  Whether the unlawful profit order yields real money as well as paper judgments is also a matter for conjecture.  It is anticipated, however, that many landlords will welcome the new powers at their disposal; and the UPO in particular is expected to become a common feature of county court possession claims.