The Prevention of Social Housing Act 2013 came into force in October 2013, and its purpose is to prevent the abuse of allocated social housing (secure or assured tenancies), e.g. unlawful subletting for profit by the tenants.
The Act provides the landlord with two potential types of proceedings to pursue against the offending tenant: civil procedings and criminal proceedings (by virtue of sections 1 and 2 of the Act).
These criminal offences differ largely in one important aspect: dishonesty. Section 1 is a summary only offence, and a conviction raises the prospect of a maximum fine (level 5). Section 2, which can be tried in the Crown Court, occurs when the tenant acts dishonestly in the subletting and can lead to a maximum sentence of six months’ imprisonment (summary jurisdiction) and/or fine as above. If tried on indictment in the Crown Court, the Judge could order a prison sentence with a maximum of two years and/or a fine.
There are a number of very limited, situation-specific defences.
An important aspect of these offences is the power of the Court to make an Unlawful Profit Order, meaning that on top of any fine the Court may make, it can also order that the defendant repay to the Local Authority or Housing Association the profit made from any unlawful subletting. The Court must consider whether to make such an order and may make such an order if it feels it is appropriate.
We recently represented an individual who faced both offences in the alternative, because he had sublet his flat for profit through letting agents.
The excellent Martin Lewis of Counsel (Castle Chambers) persuaded the London Borough of Camden’s prosecutors that a section 2 offence was not appropriate in our client’s case, because there was no suggestion of dishonesty. He also had a wealth of mitigation material to put before the Court. The Court did make an Unlawful Profit Order, but our client had kept a detailed record of payments received, and the true profit figure (deducting the rent and service charge paid to the Local Authority landlord throughout the period) was easily identifiable.
The client had made full admissions when interviewed by Local Authority investigators, and explained the difficult personal situation that had led him to sublet in the first place. He voluntarily returned the key and gave up vacant possession to the landlord during that interview. As a result, he was given a low fine and was very relieved not to have received a sentence of imprisonment.
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