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Social housing fraud prosecution sees council secure £113k unlawful profit order

The London Borough of Southwark has secured a forthwith possession order alongside an unlawful profit order in the sum of £113,000, following a social housing fraud investigation.

Cornerstone Barristers said that Southwark’s investigation found that from around December 2003, the secure tenants had not occupied the property, and since that date, not only had the tenants ceased to reside at the property but they had sublet and parted with possession of the whole.

The investigation into the tenants' use of the house began in early 2018 after a visit to the property following an allegation of noise nuisance.

The investigations continued and a claim for possession and unlawful profits was issued.

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Only one of the tenants defended against the claim, the other had been debarred and had abandoned any defence earlier in the proceedings.

Prior to the pre-trial review, the defending respondent decided she no longer wanted to resist the claim. At the review, the local authority sought to prove its case.

His Honour Judge Luba QC described the act of fraudulently subletting as a "blight on our modern society".

Cornerstone Barristers reported that Judge Luba QC found that:

  1. The property had been sublet and the tenants had parted with possession of the whole so that security of tenure was lost pursuant to section 93, Housing Act 1985.
  2. The notice to quit operated so as to end the contractual tenancy and a possession order should be granted forthwith.
  3. The criteria in section 5, 2013 Act was satisfied: there has been subletting and parting with possession in breach of express and implied terms of the tenancy, the tenants were not occupying the property as their only or principal home and a tenant had received money as a result of that conduct.
  4. As a result of the above, an unlawful profit order for the amount sought and calculated by the local authority - £113,393 - along with interest at 8% for a period of two years judge also accepted that the defendants' conduct had taken the case out of the norm and awarded costs to be assessed on an indemnity basis.

The judge commented that there was "not a starker case" and commended the thorough investigation by the authority.

Sarah Salmon of Cornerstone Barristers represented the London Borough of Southwark and was instructed by its in-house legal team.

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