Fraud no more: Ground 5 misrepresentation claims in focus

Recently, there seems to have been a significant rise in social landlords looking to explore Ground 5 misrepresentation claims. This growing appetite to take action on fraudulent misrepresentation in secure tenancy stock, makes it the perfect time to delve into the topic and explore its significance.

This ground is aimed at preventing the abuse of the social housing system - particularly cases where a tenancy has been obtained by fraudulent means - such as lying about housing need, overcrowding or eligibility. A successful Ground 5 possession claims requires the landlord to establish that:

1) Ground 5 of Schedule 2 to the Housing Act 1985 is made out;

2) it is reasonable to grant a possession order; and

3) the Defendant does not have a defence to the possession claim.

Recognising that every case is fact-specific, the following provides a breakdown of the core elements, as touched on above, and aims to provide a general overview to landlords considering possession action relying on Ground 5 - misrepresentation.

Ground 5 of Schedule 2 to the Housing Act 1985 is made out if; 

The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by - (a) the tenant, or
(b) a person acting at the tenant’s instigation

The legislation makes clear that, in brief, the tenant must have given a false statement, which led to the grant of tenancy. Therefore, the landlord carries the burden of proving that, had the false statement not been made, the tenancy may not have been granted.

The false statement must have had a direct bearing on the decision to grant the tenancy. Where the statement was clearly material, an inference will be drawn that the representation influenced the decision to grant the tenancy (Waltham Forest LBC v Roberts [2004] EWCA Civ 940; Windsor and District Housing Association v Hewitt [2011] EWCA Civ 735; Shrewsbury and Atcham BC v Evans (1997) 30 HLR 123, CA). The legislative position is extended further within North Hertfordshire District Council v Carthy [2003] EWCA Civ 20 - whereby the court noted that the failure to disclose new information could amount to a false statement.

Robust evidence is essential in proving both the false statement itself, but also the impact that any false representation had has on the tenancy offer made. This may include application forms for housing/rehousing, witness statements and official documents contradicting the tenant's claim. 

As Ground 5 is a discretionary basis for possession, not only must the claim be made out, but the court must determine that it is reasonable to make a possession order.

In determining reasonableness, the court will consider the specific circumstances of the case. Factors for consideration may include - the seriousness of the fraudulent statement, the length of time of the tenant's occupation, the impact on the current tenant's circumstances, the availability of alternative accommodation and the tenant's vulnerability. As always, the court's objective will be to balance the interests of the parties, and to ensure that any possession order is fair in the circumstances, and therefore it will be for the landlord to demonstrate that is is reasonable for the court to grant a possession order.

In defended matters, the court will of course consider the merits of any defence advanced by the Defendant, and therefore it will be for the landlord to rebut any defence raised. Tenants may raise common defences/counterclaims under the Equality Act 2010, public law arguments or claims of disrepair, and therefore any landlords considering a claim under Ground 5 should proceed with due diligence and consideration to the potential defences that may arise.

In conclusion, Ground 5 offers a valuable tool for landlords to address the ever-increasing issue of fraudulent misrepresentation, which can undermine the integrity of tenancy allocations. While this ground is not as frequently relied upon in comparison to grounds such as tenancy breach or non-payment of rent, understanding the requirements for a successful claim can empower landlords to take action through the less common means available. By becoming well-versed within this area, landlords can tackle those abusing the housing system which is crucial as we continue to see the demand for social housing increase.

If you would like to discuss further please get in touch with our housing management team.