Prevention of Social Housing Fraud Bill (HL Bill 55)

1 Unlawful sub-letting: secure tenancies

(1) A tenant of a dwelling-house let under a secure tenancy commits an offence
if—

(a) in breach of an express or implied term of the tenancy, the tenant sub-
5lets or parts with possession of—

(i) the whole of the dwelling-house, or

(ii) part of the dwelling-house without the landlord’s written
consent,

(b) the tenant ceases to occupy the dwelling-house as the tenant’s only or
10principal home, and

(c) the tenant knows that the conduct described in paragraph (a) is a
breach of a term of the tenancy.

(2) A tenant of a dwelling-house let under a secure tenancy commits an offence
if—

(a) 15dishonestly and in breach of an express or implied term of the tenancy,
the tenant sub-lets or parts with possession of—

(i) the whole of the dwelling-house, or

(ii) part of the dwelling-house without the landlord’s written
consent, and

(b) 20the tenant ceases to occupy the dwelling-house as the tenant’s only or
principal home.

(3) The offence under subsection (1) is not committed where the tenant takes the
action described in paragraphs (a) and (b) of that subsection because of
violence or threats of violence by a person residing in, or in the locality of, the
25dwelling-house—

(a) towards the tenant, or

(b) towards a member of the family of the tenant who was residing with
the tenant immediately before the tenant ceased to occupy the
dwelling-house.

(4) 5The offence under subsection (1) is not committed if a person (“P”) who
occupies the dwelling-house as a result of the conduct described in subsection
(1)(a) is—

(a) a person entitled to apply to the court for an order giving P a right to
occupy the dwelling-house or to have the tenancy transferred to P, or

(b) 10a person in respect of whom an application may be made to have the
tenancy transferred to P or to another person to be held for P’s benefit.

(5) A person convicted of an offence under subsection (1) is liable on summary
conviction to a fine not exceeding level 5 on the standard scale.

(6) A person convicted of an offence under subsection (2) is liable—

(a) 15on summary conviction, to imprisonment for a term not exceeding 6
months or a fine not exceeding the statutory maximum (or both);

(b) on conviction on indictment, to imprisonment for a term not exceeding
2 years or a fine (or both).

2 Unlawful sub-letting: assured tenancies

(1) 20A tenant of a dwelling-house let under an assured tenancy to which this section
applies commits an offence if—

(a) in breach of an express or implied term of the tenancy, the tenant sub-
lets or parts with possession of the whole or part of the dwelling-house,

(b) the tenant ceases to occupy the dwelling-house as the tenant’s only or
25principal home, and

(c) the tenant knows that the conduct described in paragraph (a) is a
breach of a term of the tenancy.

(2) A tenant of a dwelling-house let under an assured tenancy to which this section
applies commits an offence if—

(a) 30dishonestly and in breach of an express or implied term of the tenancy,
the tenant sub-lets or parts with possession of the whole or part of the
dwelling-house, and

(b) the tenant ceases to occupy the dwelling-house as the tenant’s only or
principal home.

(3) 35This section applies to an assured tenancy—

(a) under which the landlord is a private registered provider of social
housing or a registered social landlord, and

(b) which is not a shared ownership lease.

(4) The offence under subsection (1) is not committed where the tenant takes the
40action described in paragraphs (a) and (b) of that subsection because of
violence or threats of violence by a person residing in, or in the locality of, the
dwelling-house—

(a) towards the tenant, or

(b) towards a member of the family of the tenant who was residing with
45the tenant immediately before the tenant ceased to occupy the
dwelling-house.

(5) The offence under subsection (1) is not committed if a person (“P”) who
occupies the dwelling-house as a result of the conduct described in subsection
(1)(a) is—

(a) a person entitled to apply to the court for an order giving P a right to
5occupy the dwelling-house or to have the tenancy transferred to P, or

(b) a person in respect of whom an application may be made to have the
tenancy transferred to P or to another person to be held for P’s benefit.

(6) A person convicted of an offence under subsection (1) is liable on summary
conviction to a fine not exceeding level 5 on the standard scale.

(7) 10A person convicted of an offence under subsection (2) is liable—

(a) on summary conviction, to imprisonment for a term not exceeding 6
months or a fine not exceeding the statutory maximum (or both);

(b) on conviction on indictment, to imprisonment for a term not exceeding
2 years or a fine (or both).

3 15Prosecution of offences

(1) Proceedings for an offence under section 1(1) or 2(1) may be brought within the
period of 6 months beginning with the date on which evidence sufficient in the
opinion of the prosecutor to warrant the proceedings came to the prosecutor’s
knowledge.

(2) 20But no such proceedings may be brought more than three years—

(a) after the commission of the offence, or

(b) in the case of continuous contravention, after the last date on which the
offence was committed.

(3) A certificate signed by the prosecutor and stating the date on which such
25evidence came to the prosecutor’s knowledge is conclusive evidence of that
fact; and a certificate to that effect and purporting to be so signed is to be
treated as being so signed unless the contrary is proved.

(4) Subsections (1) to (3) also apply in relation to an associated offence which is a
summary offence (to the extent that they would not otherwise apply to that
30offence).

(5) A local authority may prosecute an offence under section 1 or 2 in relation to a
dwelling-house—

(a) whether or not the dwelling-house is or was let under a tenancy under
which the local authority is or was the landlord, and

(b) 35whether or not the dwelling-house is located in the local authority’s
area.

(6) Subsection (5) also applies in relation to an associated offence (to the extent that
it would not otherwise apply to that offence).

4 Unlawful profit orders: criminal proceedings

(1) 40This section applies if a person (“the offender”) is convicted of—

(a) an offence under section 1 or 2, or

(b) an associated offence in relation to an offence under section 1 or 2.

(2) The court by or before which the offender is convicted—

(a) must, on application or otherwise, decide whether to make an unlawful
profit order, and

(b) may, if it considers it appropriate to do so, make such an order, instead
of or in addition to dealing with the offender in any other way.

(3) 5An “unlawful profit order” is an order requiring the offender to pay the
landlord an amount representing the profit made by the offender as a result of
the conduct constituting the offence.

(4) If the court decides not to make an unlawful profit order, it must give reasons
for that decision on passing sentence on the offender.

(5) 10The amount payable under an unlawful profit order must be such amount as
the court considers appropriate, having regard to any evidence and to any
representations that are made by or on behalf of the offender or the prosecutor,
but subject to subsections (6) and (7).

(6) The maximum amount payable under an unlawful profit order is calculated as
15follows—

Step 1

Determine the total amount the offender received as a result of the conduct
constituting the offence (or the best estimate of that amount).

Step 2

20Deduct from the amount determined under step 1 the total amount, if any, paid
by the offender as rent to the landlord (including service charges) over the
period during which the offence was committed.

Deduct from the amount determined under step 1 the total amount, if any, paid
by the offender as rent to the landlord (including service charges) over the
25period during which the offence was committed.

(7) Where an unlawful profit order has been made against the offender under
section 5, an order under this section may only provide for the landlord to
recover an amount equal to the aggregate of the following—

(a) any amount by which the amount of the offender’s profit found under
30this section exceeds the amount payable under the order made under
section 5, and

(b) a sum equal to any portion of the amount payable under the order
made under section 5 that the landlord fails to recover,

and the landlord may not enforce the order under this section, so far as it
35relates to a sum mentioned in paragraph (b), without the leave of the court.

(8) Subsection (9) applies where the court considers—

(a) that, as well as being appropriate to make an unlawful profit order, it
would be appropriate to impose a fine, and

(b) that the offender has insufficient means to pay both—

(i) 40an appropriate sum under an unlawful profit order, and

(ii) an appropriate sum under a fine.

(9) The court must give preference to making an unlawful profit order (though it
may impose a fine as well).

(10) If the amount required to be paid by a person under an unlawful profit order
45is not paid when it is required to be paid, that person must pay interest on the
amount for the period for which it remains unpaid.

(11) The rate of interest is the same rate as that for the time being specified in section
17 of the Judgments Act 1838 (interest on civil judgment debts).

(12) Sections 131 to 133 of the Powers of Criminal Courts (Sentencing) Act 2000
(supplementary provisions about compensation orders) apply to unlawful
profit orders as if—

(a) references to a compensation order were to an unlawful profit order
5(subject to paragraph (d)),

(b) references to the compensation to be paid under a compensation order
were to the amount to be paid under an unlawful profit order,

(c) section 133(3)(a) and (b) were omitted, and

(d) the reference in section 133(3)(c) to a confiscation order under Part 6 of
10the Criminal Justice Act 1988 or Part 2 of the Proceeds of Crime Act 2002
or an unlawful profit order (or both) were to such a confiscation order
or a compensation order under section 130 of the Powers of Criminal
Courts (Sentencing) Act 2000 (or both).

(13) In this section “the landlord” means the landlord under the tenancy in respect
15of which the offence was committed.

5 Unlawful profit orders: civil proceedings

(1) The court may, on the application of the landlord of a dwelling-house let under
a secure or an assured tenancy, make an unlawful profit order if—

(a) in the case of a secure tenancy, the conditions in subsection (3) are met,
20and

(b) in the case of an assured tenancy, the conditions in subsection (4) are
met.

(2) An “unlawful profit order” is an order requiring the tenant against whom it is
made to pay the landlord an amount representing the profit made by the
25tenant from the conduct described in subsection (3)(a) or (4)(c).

(3) The conditions in the case of a secure tenancy are that a tenant under the
tenancy—

(a) in breach of an express or implied term of the tenancy, has sub-let or
parted with possession of—

(i) 30the whole of the dwelling-house, or

(ii) part of the dwelling-house without the landlord’s written
consent,

(b) has ceased to occupy the dwelling-house as the tenant’s only or
principal home, and

(c) 35has received money as a result of the conduct described in paragraph
(a).

(4) The conditions in the case of an assured tenancy are that—

(a) the landlord is a private registered provider of social housing or a
registered social landlord,

(b) 40the tenancy is not a shared ownership lease,

(c) in breach of an express or implied term of the tenancy, a tenant under
the tenancy has sub-let or parted with possession of the whole or part
of the dwelling-house,

(d) the tenant has ceased to occupy the dwelling-house as the tenant’s only
45or principal home, and

(e) the tenant has received money as a result of the conduct described in
paragraph (c).

(5) The amount payable under an unlawful profit order must be such amount as
the court considers appropriate, having regard to any evidence and to any
representations that are made by or on behalf of the landlord or the tenant, but
subject to subsections (6) and (7).

(6) 5The maximum amount payable under an unlawful profit order is calculated as
follows—

Step 1

Determine the total amount the tenant received as a result of the conduct
described in subsection (3)(a) or (4)(c) (or the best estimate of that amount).

10Step 2

Deduct from the amount determined under step 1 the total amount, if any, paid
by the tenant as rent to the landlord (including service charges) over the period
during which the conduct described in subsection (3)(a) or (4)(c) took place.

Deduct from the amount determined under step 1 the total amount, if any, paid
15by the tenant as rent to the landlord (including service charges) over the period
during which the conduct described in subsection (3)(a) or (4)(c) took place.

(7) Where an unlawful profit order has been made against the tenant under
section 4, an order under this section may only provide for the landlord to
recover an amount equal to the aggregate of the following—

(a) 20any amount by which the amount of the tenant’s profit found under
this section exceeds the amount payable under the order made under
section 4, and

(b) a sum equal to any portion of the amount payable under the order
made under section 4 that the landlord fails to recover,

25and the landlord may not enforce the order under this section, so far as it
relates to a sum mentioned in paragraph (b), without the leave of the court.

(8) For the purposes of this section “the court” means the High Court or the county
court.

(9) Section 110(3) of the Housing Act 1985 (by which the claimant in proceedings
30relating to a secure tenancy may not recover the claimant’s costs if the
proceedings are taken in the High Court) does not apply to proceedings under
this section.

6 Loss of assured tenancy status

After section 15 of the Housing Act 1988 insert—

“15A 35Loss of assured tenancy

(1) Subsection (2) applies if, in breach of an express or implied term of the
tenancy, a tenant of a dwelling-house let under an assured tenancy to
which this section applies—

(a) parts with possession of the dwelling-house, or

(b) 40sub-lets the whole of the dwelling-house (or sub-lets first part of
it and then the remainder).

(2) The tenancy ceases to be an assured tenancy and cannot subsequently
become an assured tenancy.

(3) This section applies to an assured tenancy—

(a) 45under which the landlord is a private registered provider of
social housing or a registered social landlord, and

(b) which is not a shared ownership lease.

(4) In this section “registered social landlord” has the same meaning as in
Part 1 of the Housing Act 1996.

(5) In this section “shared ownership lease” means a lease of a dwelling-
house—

(a) 5granted on payment of a premium calculated by reference to a
percentage of the value of the dwelling-house or of the cost of
providing it, or

(b) under which the lessee (or the lessee’s personal representatives)
will or may be entitled to a sum calculated by reference, directly
10or indirectly, to the value of the dwelling-house.”

7 Regulations about powers to require information

(1) The appropriate authority may by regulations provide for the exercise, for
prescribed housing fraud investigation purposes, of powers to require the
provision of information.

(2) 15The appropriate authority may by regulations—

(a) make provision about the persons by whom powers conferred by
regulations under this section may be exercised;

(b) in particular, make provision for the authorisation by local authorities
of persons to exercise those powers.

(3) 20The provision that may be made by regulations under this section includes, in
particular, provision equivalent to—

(a) provision made by a relevant enactment, or

(b) provision that is capable of being made under a relevant enactment,

with such modifications as the appropriate authority thinks fit.

(4) 25For the purposes of subsection (3), each of the following enactments is a
“relevant enactment”—

(a) section 109B of the Social Security Administration Act 1992 (powers to
require information);

(b) section 110A of that Act (authorisations by local authorities to exercise
30powers of investigation);

(c) section 121DA(2) and (3) of that Act (interpretation of Part 6 of that
Act).

(5) After the repeal of section 110A of the Social Security Administration Act 1992
by Part 1 of Schedule 14 to the Welfare Reform Act 2012, the reference to that
35section in subsection (4) is to that section as it had effect immediately before it
was repealed.

(6) A person exercising powers conferred by regulations under this section must
have regard to guidance issued or approved by the appropriate authority.

(7) In this section “housing fraud investigation purposes” means purposes
40relating to the prevention, detection or securing of evidence for a
conviction of—

(a) an offence under this Act;

(b) an offence under the Fraud Act 2006 relating to the unlawful sub-letting
or parting with possession of the whole or part of a dwelling-house let
45by a local authority, a private registered provider of social housing or a
registered social landlord,

(c) an offence under the Fraud Act 2006 relating to an application for an
allocation of housing accommodation under Part 6 of the Housing Act
1996,

(d) an offence under the Fraud Act 2006 relating to an application for
5accommodation, or for assistance in obtaining accommodation, under
Part 7 of the Housing Act 1996,

(e) an offence under the Fraud Act 2006 relating to—

(i) a claim to exercise the right to buy under Part 5 of the Housing
Act 1985,

(ii) 10a claim to exercise the right to acquire under section 16 of the
Housing Act 1996, or

(iii) a claim to exercise the right to acquire under section 180 of the
Housing and Regeneration Act 2008, or

(f) an associated offence in relation to an offence mentioned in any of
15paragraphs (a) to (e).

(8) In this section “prescribed” means prescribed by regulations under this section.

8 Regulations about related offence

(1) The appropriate authority may by regulations provide for the creation of an
offence that may be committed by a person by refusing or failing to provide
20any information or document when required to do so by or under regulations
under section 7.

(2) Regulations under this section—

(a) must provide for an offence under the regulations to be triable only
summarily;

(b) 25may not provide for such an offence to be punishable with a fine
exceeding level 3 on the standard scale.

(3) Regulations under this section—

(a) may provide, in a case where a person is convicted of an offence under
the regulations and the act or omission constituting the offence
30continues after the conviction, for the person to be guilty of a further
offence and liable on summary conviction to a daily fine;

(b) may not provide for the daily fine to exceed £40.

(4) The appropriate authority may by regulations make provision—

(a) about defences to an offence under regulations under this section;

(b) 35about the commission by a body corporate of such an offence;

(c) about the conduct of proceedings for such an offence;

(d) about the time limits for bringing such proceedings;

(e) about the determination of issues arising in such proceedings;

(f) about other matters of procedure and evidence in relation to such an
40offence.

9 Regulations: supplementary

(1) In sections 7 and 8 “the appropriate authority” means—

(a) the Secretary of State, in relation to England, and

(b) the Welsh Ministers, in relation to Wales.

(2) Regulations under section 7 or 8—

(a) are to be made by statutory instrument,

(b) may make different provision for different cases or circumstances, and

(c) may contain incidental, supplementary, consequential, transitional,
5transitory or saving provision.

(3) A statutory instrument containing regulations made by the Secretary of State
under section 7 or 8 may not be made unless a draft of the instrument has been
laid before and approved by a resolution of each House of Parliament.

(4) A statutory instrument containing regulations made by the Welsh Ministers
10under section 7 or 8 may not be made unless a draft of the instrument has been
laid before and approved by a resolution of the National Assembly for Wales.

10 Consequential amendments

The Schedule (consequential amendments) has effect.

11 Interpretation

(1) 15In this Act—

(a) “secure tenancy” has the meaning given by section 79 of the Housing
Act 1985, and

(b) “assured tenancy” has the same meaning as in Part 1 of the Housing Act
1988.

(2) 20In the application of this Act in relation to a secure tenancy, the following
expressions have the same meaning as in the Housing Act 1985—

• “dwelling-house” (see section 112 of that Act);

• “landlord” (see section 621 of that Act);

• “tenancy” (see section 621 of that Act);

• 25“tenant” (see section 621 of that Act).

(3) In the application of this Act in relation to an assured tenancy, the following
expressions have the same meaning as in the Housing Act 1988—

• “dwelling-house” (see section 45(1) of that Act);

• “landlord” (see section 45(1) and (3) of that Act);

• 30“tenancy” (see section 45(1) of that Act);

• “tenant” (see section 45(1) and (3) of that Act).

(4) References in this Act to a member of the tenant’s family (in relation to a secure
or an assured tenancy) are to be construed in accordance with section 113 of the
Housing Act 1985.

(5) 35In this Act “shared ownership lease” means a lease of a dwelling-house—

(a) granted on payment of a premium calculated by reference to a
percentage of the value of the dwelling-house or of the cost of
providing it, or

(b) under which the lessee (or the lessee’s personal representatives) will or
40may be entitled to a sum calculated by reference, directly or indirectly,
to the value of the dwelling-house.

(6) References in this Act to the landlord under a secure or an assured tenancy
include—