The Prevention of Social Housing Fraud Act 2013 came into force on 15 October 2013. The government estimates that around 100,000 properties are unlawfully sublet.
The act creates two new criminal offences of unlawful subletting by assured and secure tenants in social housing. Local authorities have been granted the powers to prosecute.
Section 1 of the Act creates two new criminal offences in relation to secure tenants. An offence is committed where a secure tenant knowingly sublets or parts with possession of the whole or part of their dwelling in breach of an express or implied term of their tenancy.
An additional, more serious, criminal offence is committed where a tenant acts dishonestly in the circumstances described above. Whether or not a tenant has acted dishonestly is a question of fact. The explanatory notes to the act state "but is more likely to be found where the tenant has made a profit from the transaction."
Section 2 of the Act applies the same offences to assured tenancies.
The maximum penalty for the lesser offence is a fine of £5,000. The second offence is punishable by a two-year jail sentence and/or a fine of up to £50,000. Additionally the court has power to make "unlawful profit orders" requiring the tenant to pay back any profits the court considers appropriate.
There are various statutory defences a tenant can use in relation to the lesser offence. An offence is not committed where the tenant leaves the dwelling as a result of violence or threats of violence from a person living in the dwelling or in the locality, nor where the person left in occupation may be able to claim a right to the tenancy or a right of occupation. The defences are not be available in the more serious dishonesty cases.
Section 6 amends section 15 of the Housing Act 1988 to provide that assured tenants who unlawfully sublet the whole of their dwelling cannot subsequently regain their security of tenure (as is the case with secure tenancies).
The full text of the Act can be viewed here
(http://www. legislation.gov.uk /ukpga/ 2013/3/contents)