Possession and Unlawful Profit Orders

The case of Poplar HARCA v Begum and Rohim, appealed recently to the High Court, concerned repossession of assured tenancies and Unlawful Profit…

The case of Poplar HARCA v (1) Begum and (2) Rohim, appealed recently to the High Court, concerned repossession of assured tenancies and Unlawful Profit Orders.

Facts

The defendants were the assured tenants of a property in London and the claimant, a housing association, their landlord. Weekly rent charges were £146.78 in respect of which the defendants were receiving £138.91 per week housing benefit, leaving a shortfall of £7.87 per week.

The claimant received information that the defendants were no longer living at the property and, instead, were living at the first defendant’s mother’s address. Investigations were undertaken and the claimant, along with the local authority, conducted inspections of the property and the first defendant’s mother’s property.

The defendants and their children were found at the first defendant’s mother’s property and two people were found at the tenanted property (Mr R and Ms A).

The defendants initially admitted that they had been living elsewhere, but later retracted this admission.

Mr R and Mrs A admitted that they had been living at the property and had been paying to the defendants £400 per month to do so. The second bedroom had been padlocked. Mr R and Ms A advised that this room contained a cot and toys, and had been locked in order to maintain its condition, so that if the property was inspected it would appear that the defendants were still living there.

Following the inspections, police raided the property and found drugs and drug-dealing paraphernalia. The second defendant was arrested and pleaded guilty in this respect.

The claimant applied for possession on the basis of rent arrears, parting with possession and criminal activity using grounds 10, 12 and 14 in Schedule 2 to the Housing Act 1988. It also sought an Unlawful Profit Order under Section 5, Prevention of Social Housing Fraud Act 2013.

Court of first instance

The court of first instance made a suspended possession order against the defendants on the basis that they had only parted with possession of part of the property. The Judge did not consider that the defendants had made a profit out of doing so, and did not make an Unlawful Profit Order. He commented that: “it is not a case where tenants were unscrupulously making a profit by subletting: the defendants were collecting £400 a month by subletting but their own rent to Poplar Harca was £146.78 a week which amounts to rather over £600 a month."

The claimant appealed this decision and requested an outright possession order, together with an Unlawful Profit Order.

What happened on appeal?

The High Court allowed the appeal and considered that the previous Judge had delivered a flawed judgment. He had failed to take into account the fact that the defendants had received housing benefit and therefore were “harvesting” the £400 per month they were charging Mr R and Ms A. The defendants were “profiteering fraudsters” who had shown no remorse for their actions and had a long history of criminal behaviour.

The possession order was varied from a suspended order to an outright order and an Unlawful Profit Order was made in the sum of £1,550.

If you wish to discuss any of the issues raised by this article, please contact Jennifer Rogers, Solicitor at jennifer.rogers@weightmans.com or on 0151 242 6953.

 

 

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