John Healey offers further boost to councils to tackle the tenancy cheats

Housing Minister John Healey has given councils and housing associations another 27,000 hot leads to potential tenancy cheats who fraudulently sublet the homes they have been allocated.

Mr Healey made clear he wants people to feel the system for housing families is fairer, and outlined his intention to make this fraud a criminal offence - giving an extra deterrent to potential tenancy cheats and strengthening the hand of councils to track and crack down on cheats.

Tenancy cheats live elsewhere and can earn thousands of pounds a year by unlawfully subletting their properties at higher rental rates. If caught, they will usually lose their tenancy and could lose their right to social housing in future.

Those occupying these properties may not know about the fraud - but 80 per cent do not qualify for a council or housing association home, and instead have to find a new home through the private rented sector.

Mr Healey launched the first-ever national crackdown on tenancy cheats in December, including a £500 reward for anyone whose information leads to the recovery of one of the first 1000 homes.

Since then councils and housing associations have recovered around 350 homes, nearly half of which have already been re-allocated to those in real need.

The average cost of recovering a property from a tenancy cheat can be as little as £3,000 - in contrast building 350 new council homes could have cost as much as £35million.

The first £500 reward has also been claimed after a successful tip-off in West London led to the recovery of a home previously unlawfully sublet by a tenancy cheat. Further claims for rewards are in the pipeline.

And to help them build on this encouraging start to the campaign, he has also given councils and housing associations a further 27,000 leads to potential tenancy cheats in their area, uncovered through data sweeps by the Audit Commission matching tenancy records against other data sets, including housing benefit records, as well as the Electoral Roll.

The Minister also outlined his plan to give landlords the option of pursuing each case of subletting as a criminal as well as a civil matter, thereby increasing the penalty that offenders could face, opening up new ways in which landlords can detect and prosecute sub-letters, and raising the possibility of the landlord recovering the unlawfully-made profits. Proving unlawful subletting at present just requires convincing the court on the balance of probability, but a criminal offence would have to be proved beyond reasonable doubt. However, at the same time tenancy fraud investigators could be given powers similar to those available to investigators of housing benefit fraud, so that when they have information suggesting that a property is being fraudulently sublet they can get access to records held by organisations such as utility companies and Social Services, which will provide evidence whether this is the case.

Currently, anyone found committing this fraud faces losing their tenancy - but offering the option to councils to treat this as a criminal offence as well could add both a fine and the possibility of the landlord getting back the fraudulent profits made by the tenant.

Councils and other social landlords have called for this option to be made available, as an extra deterrent to potential tenancy cheats who may be tempted to commit this fraud to try and raise extra cash.

Councils who are working alongside local Housing Associations to tackle tenancy cheats have benefited from a share of £4million to set up their own anti-fraud initiatives. This includes:

• Tower Hamlets council, who are conducting tenancy audits and have recruited three specialist investigators to work in partnership with local housing associations. So far 13 properties have been recovered, with dozens more cases currently under investigation; and
• Blackpool Homes, who have employed a tenancy officer, trained existing housing staff, conducted multi-agency tenancy audits and improved their reporting processes - leading to the recovery of six properties since December

John Healey said:

"Tenancy cheats cannot be allowed to hang onto the council houses they don't need. By unlawfully subletting these properties for a profit they deprive families of the homes they need.

"That's why I launched the first-ever national crackdown on this fraud so people can be more confident the system is fair. Councils have made a good start but I want to see them step up pressure on profiteering from council homes. I have handed them nearly 30,000 new hot leads for suspect tenants, but I am also looking to make this fraud a criminal offence, with tough penalties for the worst offenders to deter those who are thinking of making a fast buck from council housing."

Notes to editors

1. John Healey launched the first-ever national crackdown on tenancy cheats on 30 November, 2009. Details can be found at: http://www.communities.gov.uk/news/corporate/1397396.

2. Councils and housing associations have begun to set up their own anti-fraud initiatives to tackle the tenancy cheats. Examples include:

• The National Fraud Initiative data sweep identified that a woman held a secure tenancy at a three-bedroom house in Harrow and also a four-bedroomed house in Wolverhampton. After investigations were undertaken by both councils' anti-fraud teams, it appeared that the woman obtained the tenancy in Wolverhampton in October 2005 after applying to the council under the guise of overcrowding at a relative's address. Running parallel to that application, she had been registered with Harrow housing dept for many years previous and was awarded a tenancy at Harrow in December 2006, some 14 months after having already obtained the tenancy in the Midlands. When interviewed by investigators from Harrow, she admitted that she obtained the tenancy in Wolverhampton dishonestly and had never lived in the area. On the strength of the findings in the interview, this tenancy was subsequently surrendered to Wolverhampton earlier this month. Harrow has since served the woman with a notice to quit for their property and they intend to pursue her through the courts for obtaining the property by deception.
• Mrs L held a secure tenancy of a three-bedroom house in Leicester for six years. She terminated the tenancy to move to her own accommodation. At the end of the tenancy, keys had not been received, so the tenant was contacted on her mobile. It transpired that she had knowingly left her friend, Ms B, in the property. Ms B had her three-year-old daughter living with her. Ms B was put onto a Mesne Profit account in her own right, whilst possession action was commenced. Ms B was already on the Housing Register, and was further awarded insecure accommodation points. She and her daughter were rehoused to a two-bedroom property before an eviction could take place, although a Court Order had been obtained.
• Reports to a Blackpool Council housing officer from neighbours suggested that the tenant had not been seen at his flat for some time and that another individual was seen frequenting the premises. The property itself was a one bed, first floor flat, in a block of approximately 12 flats. The tenant was on record as living there alone. An investigator made an unannounced visit to the property in order to try to interview the occupant. After being unable to gain access, the investigator left a note setting out the landlord's concerns that the property was being unlawfully sublet, and informed the tenant that they would be returning. A few days later the tenant went into the local Housing Office to terminate his tenancy - thought to be prompted by the council's investigations.

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