YHN's Tenancy Fraud Policy 2022
1. Introduction
1.1 Background
Your Homes Newcastle (YHN) is responsible for managing the housing
stock and allocations for Newcastle City Council (NCC). We are committed
to ensuring the fair allocation of properties and making the best use of the
housing stock we manage. This means we are required to investigate and
deal with any potential instances of tenancy fraud.
In recent years, many social landlords have stepped up their efforts to
tackle fraud in their stock. The government has drawn attention to the
issue and has expressed concern that tenancy fraud costs the country an
estimated £900m per year.
1.2 Legal Framework
YHN’s Tenancy Fraud policy complies with the following legislation:
• Prevention of Social Housing Fraud Act 2013
• Housing Act 1985
• Housing Act 1988
• Housing Act 1996
• Theft Act 1968
• Proceeds of Crime Act 2002
• Data Protection Act 2018
• The UK GDPR (General Data Protection Regulation)
• Fraud Act 2006
• Bribery Act 2010
• Criminal Procedures and Investigation Act 1996
• Public Interest Disclosure Act 1998 (PIDA)
• Police and Criminal Evidence Act 1984(PACE)
• Forgery and Counterfeiting Act 1981
• Regulation of Investigatory Powers Act 2000 (RIPA)
• Human Rights Act 1998
1.2.1 Key Legislation
The Fraud Act 2006 states that a person is guilty of fraud if he is in breach
of the following:
• Fraud by false representation
• Fraud by failing to disclose information
• Fraud by abuse of position
A person who is found guilty of fraud is liable, on conviction to a maximum
sentence of 10 years imprisonment and/or a fine
The Prevention of Social Housing Fraud Act 2013 creates specific
criminal offences of unlawful subletting by secure and assured tenants in
social housing. This occurs where:
• the tenant sub-lets or parts with possession of part or all of the property
• the tenant ceases to occupy the property as their only or principal home
• the tenant knows this conduct is a breach of a term of the tenancy
The Act gives local authorities (Newcastle City Council) powers to prosecute in cases of unlawful subletting and enables the court to order the recovery of any profit made though unlawful subletting, by awarding Unlawful Profit Orders (UPOs). Any assured tenant convicted of unlawfully subletting their tenancy will lose their security of tenure and the new criminal offence of subletting carries a maximum sentence of two years imprisonment or a fine (or both).
Housing Act 1996 – It is an offence under section 171 of the Act to make a false statement or withhold information in relation to allocations. It is an offence under section 214 to make a false statement, withhold information or fail to declare a change of circumstances in relation to homelessness.
Theft Act 1968 – A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it.
1.3 Scope of the policy
This policy provides a framework for YHN, acting on behalf of NCC, to identify and tackle tenancy fraud prior to and during a tenancy and applies to all existing and potential customers. YHN will work with all stakeholders, including local communities and local and national partners to prevent and stop tenancy fraud. These include Northumbria Police, Newcastle City Council, and other local authorities and registered social landlords with whom we will share information in order to detect and prevent criminal behaviour.
The policy outlines YHN’s commitment to dealing with tenancy fraud. In developing the policy, YHN recognises that:
• YHN must ensure the fair use of the housing stock we manage on behalf of the City Council and Leazes Homes.
• tenancy fraud can deprive those in most need from accessing social housing by limiting the number of properties available.
The following policies and procedures should be considered alongside this Tenancy Fraud Policy to ensure appropriate action is taken to prevent and address fraud:
• Abandonment Procedure
• Tenancy Fraud Ways of Working Procedure
• Whistleblowing Policy
• Whistleblowing Procedure
• Group Anti-Bribery Policy
• Lettings Policy
• NCC’s Anti-Money Laundering Policy
2. Policy statement and definitions
2.1 Policy Statement
YHN aim to ensure that those in greatest need have fair access to social housing by tackling fraudulent occupation and misuse of our stock.
We aim to achieve this by preventing and detecting fraud and taking effective action. When tenancy fraud is identified, YHN will take action to end the fraudulent activity and recover the property, where appropriate, and share information regarding fraudulent activity with other organisations. We will do so in line with our legal obligations in respect of the Data Protection Act 2018 (DPA 2018), the UK General Data Protection Regulation (UK GDPR) and YHN’s Privacy Notice and Fair Processing Notice(s). This policy is applicable equally to all regardless of:
• age,
• disability,
• gender reassignment,
• marriage or civil partnership,
• pregnancy and maternity,
• race,
• religion or belief,
• sex,
• sexual orientation,
2.2 What is tenancy fraud?
Tenancy Fraud (also known as social housing fraud) occurs when a council house is occupied by someone who is either not legally entitled to be there whilst the tenant(s) live elsewhere, a tenancy has been obtained fraudulently, or a property is left empty whilst the tenant(s) lives elsewhere.
The following list is not exhaustive but contains examples of tenancy fraud:
• Unlawful Subletting: A tenant rents out all or part of their property to someone else without the permission or knowledge of YHN, this could either be on a long-term or short-term basis. This includes using it as an Air BnB.
• Application fraud: A prospective tenant knowingly provides false information on their housing application in order to gain a council house or in order to move up the housing waiting list. Failing to declare information requested within the application form such as criminal convictions, is also application fraud.
• Right to buy fraud: A tenant knowingly provides false information when applying to buy a council house. This could include false information about who has been living in the property prior to purchase or about how the purchase is to be funded. It can also include failure to disclose information such as details of previous right to buy discounts. YHN are committed to the prevention of money-laundering, and it is essential that any monies paid to the authority are confirmed as being from a legitimate source.
• Succession fraud: A person moves into a property without the right to do so when the legal tenant dies or misrepresents the amount of time they had been living there in the period prior to the tenant’s death.
• Assignment Fraud: Applying to assign a tenancy using false information, or assigning a tenancy without YHN permission.
• Mutual exchange fraud: When tenants swap properties without YHN permission. Tenants are only allowed to assign their tenancies by way of exchange if they have received (or are deemed to have received) permission from their landlord(s). Key-selling: A tenant or an employee of a local authority or housing association receives a one-off payment to give the keys of a property to someone who is not entitled to live there. This could also qualify as an offence as part of the Bribery Act 2010.
• Abandonment/non-occupation: A tenant moves out of their property without informing YHN or does not move in at all and fails to inform YHN.
2.3 What is not tenancy fraud?
With the prior consent of YHN, tenants are able within the terms of their tenancy agreement to take in a lodger or to rent out a spare room or part of the property, whilst the tenant still lives in the property as their only or principal home.
2.4 Subtenants
A subtenant is a person who is renting part or all of a property from a YHN tenant.
If a subtenant is discovered during a tenancy fraud investigation, the council will provide support by offering advice and assistance which may be in the form of completing a homeless application if applicable and applying to join the Housing Waiting List. They will be advised of the legal process the council will take in gaining possession of the property so that they are aware of the time scale involved for them to vacate the property.
3. Our approach
YHN aims to reduce tenancy fraud by working proactively to prevent, detect and investigate tenancy fraud.
3.1 Prevention and detection
Some of the ways YHN prevent and detect tenancy fraud include:
• Employing a robust verification process and eligibility checks, when reviewing applications for housing.
• Requesting that declarations are signed to confirm true and accurate information has been provided and where applicable, that YHN will be kept up to date by applicant(s) regarding changes of circumstances.
• Verifying identity evidence supplied by applicants.
• Confirming the identity of anyone claiming to be a tenant prior to disclosing information that could be misused for the purposes of fraud if disclosed to someone other than the tenant.
• Undertaking tenancy audits to ensure that the property is being used and maintained within the terms of the tenancy agreement.
• Carrying out checks to verify information provided by housing applicants, tenants, and Right to Buy applicants.
• Offering a variety of channels through which to report tenancy fraud.
• Pro-actively investigating reports of tenancy fraud.
• Undertaking publicity campaigns to highlight the impact of tenancy fraud, signs to look out for and to provide details of how tenancy fraud can be reported.
• Sharing information with a number of organisations in accordance with relevant privacy policies and data protection legislation.
• Participating in the Cabinet Office’s National Fraud Initiative (NFI); a national data matching exercise in which data from public and private sector bodies is processed to prevent and detect fraud. More information is available within YHN’s NFI Fair Processing Notice.
• Performing data-matching exercises. More information is available within the Anti-Fraud Data Matching Privacy Notice.
3.2 Remedies and sanctions
The remedies and powers available to YHN include:
• Refusal of an allocation or withdrawal of an offer of accommodation
within the terms of the allocations policy.
• Issue a written warning.
• Refusal of a request for assignment or succession.
• Refusing or terminating a Right to Buy application.
• Reducing the amount of Right to Buy discount a tenant can receive when purchasing their property through the Right to Buy scheme.
• Issuing possession, injunction or other tenancy enforcement proceedings.
• Demoting a tenancy.
• Issuing proceedings using the powers available to Newcastle City Council through the Prevention of Housing Fraud Act 2013 including criminal prosecution.
• Applying for Unlawful Profit Orders to recover any financial gain resulting from tenancy fraud such as unlawful subletting.
• YHN can together with NCC, and Northumbria Police pursue a criminal prosecution. If convicted a tenant may face a fine or imprisonment.
• Undertaking of disciplinary action.
• Reporting the incident to Action Fraud.
Decisions around how YHN will address and sanction tenancy fraud, are made by YHN’s Senior Leadership Team alongside NCC’s Legal Services. Where evidence of fraud, bribery, misappropriation or theft is discovered, the Managing Director will decide whether to refer the matter to the Police.
3.3 Reporting Tenancy Fraud
Tenancy fraud can be reported to YHN / NCC in the following ways:
• By e-mailing fraud@newcastle.gov.uk
• Via the online fraud reporting web form
• By calling the Fraud Hotline on 0191 277 1166
Your Homes Newcastle (YHN) tenants can also report tenancy fraud in person by visiting a Housing Service Hub.
Where reports of tenancy fraud relate to suspected misconduct of an employee, these should be reported in line with the Whistleblowing Policy and Procedure.
4. Roles and responsibilities
YHN does not tolerate fraud. Tenancy Fraud can occur before a tenancy is granted or during the course of tenancy and the vigilance of frontline staff including those in Housing Services is vital in YHN’s efforts to identify and address tenancy fraud. All staff should be alert to fraudulent activity and report any suspicion of fraud or irregularity.
The Financial Regulations provide the framework for financial control. Under Financial Regulations, the Managing Director and Directors are, for the areas under their control, responsible for ensuring that the arrangements, guidelines, and procedures for the proper administration of financial affairs are operated in accordance with Financial Regulations. The Council’s Fraud Officer alongside YHN are responsible for investigating Tenancy Fraud.
5. Equality and diversity
This policy complies with YHN’s Equality, Diversity and inclusion Policy.
6. Responsibility and monitoring of the policy
Responsibility for the monitoring of this policy lies with the Fairer Housing Unit in the city council’s Place Directorate.
7. Review
This policy will be reviewed in line with any legislative changes.