How to Prevent Right to Buy and Right to Acquire fraud 1. Right to - - PowerPoint PPT Presentation

How to ……

Prevent Right to Buy and Right to Acquire fraud

HOUSING LAW UPDATE 2014

• 1. Right to buy/Right to Acquire: In context
• Since the Housing Act 1980, 2 million households have

purchased their council home.

• 160,000 sales a year in early 1980s;
• > 4,000 in 2011.
• 620,000 Housing Association tenants have preserved

Right to Buy.

• HA tenants may have Right to Acquire for properties

built/transferred by Local Authority to HA post 1.4.97.

• 2. The Discount/Incentive
• Discount after 5 years occupation
• Houses: 35% of value + 1%/per additional year

to maximum 60%

• Flats: 50% + 2%/year per additional year to

maximum 60%

• 2. The Discount/Incentive (Continued)
• Recent substantial increases in levels of discount
• 1 April 2012: £75,000
• 25 March 2013 £100,000 in London
• Proposals to
• Increase discount to 70%
• Possibly reduce qualifying period to 3 years

• 3. The Problem

People without the RTB, exercising the RTB.

• Not in occupation; or not in lawful occupation.
• False information in support of application.
• 2011/12

» 38 cases » Value £1.2m » 52% increase since 2008

• Protecting the Public Purse 2012 (Audit Commission)

• 4. Prevention
• Understand the Fraud
• Misrepresenting tenancy length/history
• Not using as principal home
• Misrepresenting household composition: adding

non entitled joint tenant

• Tenancy Fraud Policy: include RTB risk
• Dedicated team

» 85% of organisations with a team could detect/act on fraud; cf » 19% of those without

• 4. Prevention (Continued)
• Awareness
• Briefings to relevant groups

» Housing Officers » Janitors, Caretakers, Cleaners » Repair managers » Tenants

• Education
• Signs of fraud
• Tenancy/application fraud training
• Id verification – signs of forgery, how to identify

false documents

• 4. Prevention (Continued)
• Publicise
• Policy on Tenancy/Right to buy or acquire

fraud

• Potential penalties
• Enforcement Action taken

• 5. ID Verification

Know your tenant at every stage:

• Application for social housing
• Sign-up to a new tenancy
• Tenancy audits
• Application for assignment or mutual

exchange

• Application for succession
• Changes to the tenancy, including adding

another tenant or change of household composition/circumstances

• 5. ID Verification (Continued)

Carry out enhanced checks of:

• ID documents
• Proof of residency
• Proof of tenancy history

Use credit reference agency or other sources to verify application information

• 6. ID Checks: Photos
• Full UK or EU driving licence with photo
• 10 year UK or EU passport
• EU identity cards
• Biometric residence permits –

(non EEA foreign nationals)

• 6. ID Checks: documents
• UK certificate of naturalisation
• BR2102, BR2103 or BR5899 letter

confirming eligibility for state pension

• Current child benefit/job seeker’s allowance

book or card

• Birth/marriage/adoption certificate
• Medical card with National Insurance

number

• Certificate of HM Forces employment
• P45, P60 or payslip

• 7. Residency Checks:
• Copies of current
• P45, P60, payslip
• Benefit/Pension correspondence
• Utility/Council Tax/Mobile phone bill
• Bank/Credit Card statements

• 8. Verifying claims

Developing anti-fraud culture – verify information and evidence

• Check
• Photographs match
• Date of birth matches records and is

appropriate

• Signatures match
• Documents are genuine with no signs of

tampering

• 8. Verifying Claims (Continued)

Check ID provided against:

• Internal data (rents/housing

management/repairs database)

• Housing Benefit data
• Electoral Roll
• Social media (Facebook etc)
• Internet searches
• Land Registry
• Address services 192.com
• Data sharing organisations eg. Callcredit

• 8. Verifying Claims (Continued)

Check eligibility

• Tenant resident for qualifying period
• Additional applicants resident for 12 months
• Historical details: any transfers during

tenancy? Preserved RTB from previous LL?

• Notice to Quit served by tenant/joint tenant?
• Possession order, suspended possession
• rder?

• 9. Suspicious Circumstances

Interview:

• Applicants whose circumstances require

verification/clarification

• Invite them to sign statement about

circumstances

• Warn them about fraud procedures and

related offences

• Offer opportunity to amend their statement

before signing it

• 10. Vulnerable Tenants
• Be aware of pressure on vulnerable/older tenants

by unscrupulous finance companies/family members

• Ensure they are aware of responsibilities
• Payment of any loan
• Long term security: shorthold tenancy may

render them homeless

• Repairing obligations
• Government has updated guidance leaflets

• 11. Enforcement
• Misrepresentation Act 1967
• Fraud Act 2006
• Proceeds of Crime Act 2002

• 12. Case Report
• Haringey LBC –v- Hines (2011)
• Dec 2001: H applied for RTB from LB

Haringey

• Oct 2002: lease granted
• Haringey discovered following HB conviction

in 2008 that H had moved out of property early in 2002; so had not been a secure tenant

• 12. Case Report (Continued)
• Fraudulent misrepresentation but no “rescission” of

contract due to earlier case law; damages awarded for misrepresentation

• Court of Appeal dismissed claim, and overturned

damages award because the serious allegations had not ben put to T in cross examination

• Had this case been conducted in a different way,

Haringey may have been able to set aside contract, and claim damages

• 13. Case Studies:
• CIH Briefing Note: Prevent RTB Fraud
• Bristol CC
• Bolton at home
• Barking and Dagenham

• 13. Case Studies (Continued)
• Sandwell MBC:
• Specialist Investigation Team : HB staff and co-
• pted housing manager.
• Reviewed Documentation so fit for purpose
• Improved Key Fob security systems
• Arranged local press coverage
• Results:
• Prevented 3 fraudulent RTB applications.
• Recovered:

» 5 properties obtained by false declaration » 36 abandoned properties

• 13. Case Studies (Continued)
• Top tips
• Ensure investigators are focused on fraud,

not ASB etc.

• Support from Cabinet Members/Senior

management

• Data matching/National Fraud initiative
• Keep abreast of news: RTB incentives =

increase in applications and fraudulent ones

• Pursue offenders through courts where

possible