Subletting and unlawful profit orders


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In the recent case of Poplar Housing and Regeneration Community Association v (1) Begum (2) Rohim [2017] the High Court overturned a Suspended Possession Order and gave guidance on the making of unlawful profit orders.

Ms Begum and Mr Rohim were the assured tenants of a two-bed flat which they occupied with their children.  Having received a tip off that they were sub-letting, Poplar Housing and Regeneration Community Association Limited ("the Landlord") decided to visit the flat. They found that the Defendants were living at Ms Begum's mother's house with their children, which they admitted but later denied.

They also admitted they had allowed a couple to occupy the flat who informed investigating officers that they paid the Defendants £400 rent per month. They had access to the entire flat apart from one bedroom which contained the Defendants' belongings. These items were kept there in order to give the impression that the Defendants were living at the flat.

Shortly after this, the Second Defendant went to his flat, unlawfully evicted his sub-tenants, threatened to burn their clothes and demanded his keys back.

Upon being arrested, the First Defendant stated that she had only stayed with her mother the night before in order to look after her ill brother. The Second Defendant gave a "no comment" interview but said to officers afterwards "we'll see who laughs last when the case goes to court".

The Defendants moved back to the flat and the Landlord commenced possession proceedings upon Grounds 10, 12 and 14, as well as having served a notice to quit. Before the matter came to trial, the police raided the flat and found the Second Defendant in possession of cannabis and drug dealing paraphernalia.

At the trial, the Recorder found that the Defendants had not parted with possession of the whole flat as they had retained one bedroom. However, he found that they had sublet part of the flat and made a suspended possession order but he refused to make an unlawful profit order. The reasoning was that the Defendants had moved in with the First Defendant's mother to care for her brother and as the Defendants were paying more for the flat than they were receiving from their sub-tenants, they had not made a profit.

The Landlord appealed and argued that the Recorder's discretion had been seriously flawed. His decision to suspend the possession order was contrary to the public interest and was wrong. His decision not to make an unlawful profit order was flawed because the Defendants had in fact made a profit.

On appeal, the High Court Judge was satisfied that the Recorder's decision had been fatally flawed and held that it was not acceptable to allow "profiteering fraudsters" to occupy premises thus excluding "deserving families". He therefore substituted an outright possession order for the suspended one and made an unlawful profit order, finding that as the Defendants were in receipt of housing benefit they were not paying anything for their property.

This is a rare case where an Appeal Judge has interfered with the discretion of a Trial Judge but in circumstances where the Recorder had, in the Appeal Judge's findings, fallen for the lies of the Defendants.

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