What is Tenancy Fraud

The National Fraud Authority have estimated the cost of tenancy fraud to be £900 million.  Aside from the clear financial risks to social landlords, tenancy fraud creates negative social impact and stops communities from thriving.  The lack of a settled home to those truly need it has an adverse effect on the education of children, health and employment prospects and the creation of safe communities.

Also, the costs to local authorities in having to provide housing to homeless families who have been identified as being in need of social housing is astronomical.

The housing crisis in the United Kingdom is substantial, added to by the unaffordability of being able to purchase a home by many people.  

 

It is imperative, therefore, that the allocation and subsequent use of a social home is aligned with the objectives of the social landlord and the idea of social housing as a whole.

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Types of Fraud

New Home Owners

Subletting

Subletting

 

This occurs when a social tenant sublets part or the whole of a property even if that is to a family member without profit.  This is also a criminal offence which attracts a custodial sentence and or a fine under the Prevention of Social Housing Fraud Act 2013 and the Fraud Act 2006.

 

Subletting can occur anywhere including housing which is regarded as ‘hard to let’.  In more recent times, this offence also commonly occurs by subletting a property through Airbnb and other similar online booking sites.

Social landlords can also ask the courts to order the tenant to pay back the unlawful profits they have made from the subletting and many are very successful in doing so receiving sums in the tens of thousands of pounds.

Real Estate Agent

Misrepresentation

Misrepresentation

If a person omits to tell a social landlord a fact or tells a lie in order to be granted a property or to be transferred to a larger property, then they are misrepresenting facts and this is a criminal offence which can lead to a prison sentence and or a fine.

 

The offence is also made out if another person misrepresents facts on behalf of the tenant even if they didn’t ask them to. The offence of misrepresentation is nearly always present in all other types of tenancy fraud.

Real Estate Agent

Joint Tenancy Fraud

Joint Tenancy Fraud

The scenario is usually this: a sole tenant tells their social landlord that their partner has moved in and they would like to be joint tenants with that person.

As soon as the joint tenancy is created, the original tenant moves out which means the remaining tenant (who more often than not wouldn’t be regarded as having a social need) remains in the property alone.

Key Selling

Key Selling

 

If a social tenant is granted a tenancy but never moves in and instead sells the keys to a third party then this constitutes a criminal offence and is tenancy fraud.

Business Meeting

Succession Fraud

Succession Fraud

 

Unfortunately this is a growing phenomenon in the social housing field. 

 

Put simply, it’s when a tenant dies and a person claims the right to succeed by saying they have lived there for the requisite period when they in fact haven’t.

Right to Buy and Right to Acquire Fraud

Right to Buy and Right to Acquire Fraud

 

With the enormous discounts being given to tenants to purchase their social homes, fraud in this area is rife and has a massive detrimental effect on the finances of the landlord as well as the wider community.

Common frauds in this area are claiming the right to purchase when the tenant no longer lives there, providing false financial information and completing documents in the names of aged tenants who might not have capacity to understand the process.

Town Street
Empty Shelves

Abandonment

Abandonment

To move out of a social property and leave it empty without telling the landlord is also tenancy fraud as it’s failing to notify them of a change in circumstances.

 

Even though the tenant has moved out, they retain the benefit of the property and so would also be a criminal offence pursuant to the Fraud Act 2006.

Shared Ownership Fraud

Shared Ownership Fraud

Shared ownership is a brilliant way for people to get onto the property ladder where they are unable to purchase on the open market.

 

There is strict eligibility criteria and often this is misrepresented to enable a shared ownership purchase with the intention of subletting immediately upon completion.