Poplar HARCA v (1) Begum (2) Rohim – Neutral Citation Number: [2017] EWHC 2040 (QB)
The respondents were granted an assured tenancy of a two-bedroom flat in Poplar ; the rent was met in full by payments of Housing Benefit. During the course of the tenancy, they moved out of the property and sub-let it. They retained the ‘use’ of a single room, padlocked shut, in which they kept children’s belongings in an attempt to avoid detection in case of an inspection by the landlord. Following their sublet, they gained a rental income of £400 a month.
At the original trial, the landlord claimed that the Respondents had parted with possession of the entire property, thereby losing security of tenure (s.15A of the Housing Act 1988). (It also claimed the right to possession under grounds 10, 12, 14 of the HA.) The Respondents denied moving out of the flat, saying that they had left only to care for a sick relative and that they had received no money from the ‘relatives’ who were staying at the address. The Recorder found that the respondents had not parted with possession but made a suspended possession order on the other grounds. He refused to make a UPO, finding that the Respondents had not made enough from any sub-letting to meet the rental payments.
In addition to overturning the suspended possession order and granting possession to the landlord, His Honour Judge Turner, sitting in the High Court, gave the first guidance during an appeal decision in relation to the granting and calculation of an Unlawful Profit Order.
Section 5 of the Prevention of Social Housing Fraud Act (PoSHFA) says that (in simple terms) the amount of any order should be the income generated unlawfully less any rent actually paid. The first step is to determine the total amount the tenant received as a result of [the sublet] (or the best estimate of that amount). Next you must deduct from that amount the total amount, if any, paid by the tenant as rent to the landlord (including service charges) in relation to [the period during which the property was sublet]. In making his calculations, the landlord argued, the Recorder had accounted for the Housing Benefit as rent paid but not as income received ; this, they said, could not be correct.
The Judge agreed, holding that, the word, ‘total’ means that any income that arises from the ‘the dishonest relinquishment of possession’ should be considered as income received – to do otherwise would defeat the “obvious intention of Parliament to provide a mechanism with which to strip him of his spoils.”
Note to investigators : The judge’s words mean that any income derived from the property should be included in the calculation, so do look for benefits, grants, alterations etc., in compiling your figures.
View the full case on www.bailii.org/ew/cases/EWHC/QB/2017/2040.html