The lovely, smiling Grant Shapps, Housing Minister, who clearly in no way whatsoever wants to distract attention from the recent kerfuffle over his alleged misleading of Parliament through dodgy use of statistics (hereafter Shapptistics), has announced the Government’s support for a private member’s Bill.
The purpose of this Bill? Why, it is to criminalise sub-letting of social housing!
Mr Harrington’s Bill would:
create a new criminal offence of subletting; and
allow for proceeds of subletting to be reimbursed to the social landlord in whose stock the fraud was committed
Nobody here would disagree that sub-letting of social housing is a significant problem, and one that needs to be addressed by action by the social landlords. But we can but wonder at the actual point of Mr Harrington’s Bill.
Why? Because unlawful subletting is already a criminal offence under the Fraud Act 2006. Exhibit A – a successful prosecution by Camden LBC in November 2011. Exhibit B – a successful prosecution by City of Westminster in March 2012.
And the Audit Commission notes Councils successfully pursuing the sub-letters for the proceeds of the sub-let as unjust enrichment – case study 1 [link is to PDF]
The DCLG press release frankly seems a bit confused. It starts off by saying:
if caught these cheats face little more than losing their tenancy.
Which is, we must sadly point out, not actually true, but then quotes Grant Shapps as saying:
“I am delighted that Richard Harrington’s Bill will make this fraud a criminal offence so that the perpetrators don’t just lose their tenancy but feel the full force of the law. And by introducing this effective deterrent against subletting, we can free up thousands of homes for those who genuinely need them.
Grant, dear boy, if it is a fraud it is already a criminal offence (which indeed it actually already is) so doesn’t need to be made a criminal offence (again).
Grant Shapps has shown a distinct keenness to make civil offences into criminal ones (trespass to residential buildings) and to make civil proceedings into an arm of retribution for crime (evicting ‘rioters’ wherever the offence happened), but this is a first even for him, to support a bill to make a criminal offence into a criminal offence.
One can only presume he wants unlawful sub-letting to be really, really criminal, twice as criminal as just being criminal. And who amongst us would argue that this is not a sensible use of Ministerial, departmental and legislative time?
Aye, tis true, but the Fraud Act prosecutions are generally a bit of artistry on the part of the prosecuting authorities… They either go under Section 2 or 3 of the Fraud Act.
Section 2 is Fraud by False Representation, and its not always easy to highlight what the ‘false representation’ is in an illegal subletting case. Sometimes, this involves the tenant telling the sub-tenant that they are entitled to sublet the property (a false rep), but what if the tenant claims that they didn’t know that they weren’t allowed to sublet, especially in a case where English isn’t a first language? Very difficult to prove a false representation to the criminal burden and impute the requisite level of dishonesty per Ghosh in such circumstances.
Section 3 is fraud by failing to disclose information. This would be where the tenancy conditions place an obligation on the tenant to tell their Landlord if they are absent from the property for longer than X number days or if someone else moves in with them (i.e. as a lodger.) Not all councils will have such a clause I would wager, and even if they do, how many tenants actually read the tenancy conditions? To be able to prove beyond the criminal burden that someone dishonestly failed to disclose information that they claim that they did know they had to disclose is not easy, especially when the Ghosh dishonesty test is involved again.
A specific offence of illegal subletting would (depending on the drafting of the bill – haven’t seen a draft here yet: http://services.parliament.uk/bills/2012-13/preventionofsocialhousingfraud.html) be a lot more straight forward and easy to prosecute, and there would be a lot less wriggle room for tenants to escape prosecution. 2 cases of successful Fraud Act prosecutions for these offences when there are reportedly 750,000 illegal sublets taking place speaks for itself.
Bill now live: http://www.publications.parliament.uk/pa/bills/cbill/2012-2013/0016/13016.pdf
Creates two new offences for secure tenancies; a summary only offence which only requires knowledge that subletting is a breach of tenancy conditions, and an either way offence which requires dishonest intent. Similar offences are also created for assured tenancies, and interestingly local authorities can prosecute tenants who sublet EITHER and regardless of whether the subletting tenant is in their area.
The summary only offence is something which could not currently be prosecuted under the Fraud Act 2006, and should hopefully encourage local authorities to start tackling this massive problem with more gusto.
It also provides for ‘Loss of Profit Orders’ which appear to operate as mini-POCA orders.
Interesting read!