In 2018, £216.1 million was lost due to housing fraud, making it the most expensive area of fraud detected in the public sector.
Veritau are a public sector organisation who investigate fraud on behalf of City of York Council, Richmondshire District Council, Selby District Council, Broadacres Housing Association, Home Group, York Housing Association and Joseph Rowntree Housing Trust.
Properties that are misused and used fraudulently take away from people and families who are in genuine and urgent need of somewhere to live. Tenancy fraud can take place in a number of different ways, and Veritau are campaigning this week to raise awareness and to help you to spot when fraud occurs.
Types of fraud
Subletting a property
If a tenant lets out their property without the consent of the landlord, this is an offence. They may have left a family member there, or may have found a private tenant of their own who may not realise they are living in a social housing property. Additionally the new person at the property may be paying much higher rent than the tenant had to pay, thus allowing the tenant to make an unlawful profit.
Abandoning a property
If a resident has stopped using their property as their main and principal home without informing the landlord, and they have no intention to return, this is classed as abandonment. This selfishly deprives others of using of the property and will only increase the housing waiting list.
False application for housing or Right to Buy
Council tenants and some social housing tenants may qualify to buy their property under the Right to Buy scheme. They will receive a discount on the sale price, depending on how many years they have been a tenant. Yet if they are subletting or abandoning the property at the time, they will not be eligible to buy it. Similarly, providing false information or withholding information on when applying for a home is an offence. By doing so an individual could climb the housing register and falsely acquire a property, and therefore deprive others in more urgent need.
False succession/assignment claim
A property can be succeeded or assigned to an immediate family member in the event of the tenant moving out or passing away. The family member must have been living in the property for 12 months prior to the tenant’s death in order to qualify. Fraudsters may abuse this system by claiming to be in occupation when they were not in order to gain the property for themselves.
This fraud occurs when a property is exchanged for another council or social property without the landlord’s permission. Often exchanges are made for a one off payment, and thus individuals are making a fraudulent financial profit from social housing.
Tenancy fraud is a criminal offence and could result in a prosecution. Anyone convicted of housing fraud may receive substantial fines, a custodial sentence and a criminal record. Fraudsters found to be abusing the housing system can be struck off the housing register, losing their entitlement to social housing in the future. Investigators have powers to obtain information to determine if fraud is taking place and housing providers can seek legal orders to recover profits made by those who sublet.
Cost of tenancy fraud
Of the £216 million lost in tenancy fraud in the UK in 2018, £55 million was lost through the subletting of council and social housing tenancies, and £92 million through fraudulent Right to Buy applications. Click on the following link for further details about the cost of tenancy fraud and recent cases of tenancy fraud.
Do you suspect someone is committing tenancy fraud?
Call us on 0800 9179 247 or send your concerns in an email to email@example.com