The Home Loss Payment scheme provides a useful mechanism for tenants displaced from their affordable homes who may be eligible to claim compensation. Social housing providers may want to consider using this as an incentive when negotiating with tenants if they have to move them out of their affordable accommodation due to planned developments or improvement works.
Under section 29 of the Land Compensation Act 1973, a tenant will be able to claim compensation if they have been displaced from their dwelling due to redevelopment of the dwelling by a registered social housing provider as long as certain conditions are satisfied.
Who is eligible for a home loss payment?
An applicant will be able to claim a Home Loss Payment if:
- They were displaced from a dwelling due to redevelopment/improvement works of the dwelling by a social housing provider
- They were in occupation of the dwelling for over a year as their main residence up until the point of displacement
- They have a ‘qualifying interest’ in the dwelling (this includes a beneficial owner or statutory tenant)
- Displacement must be compulsory and permanent
Amount of compensation payable
The compensation can be substantial. The amount of the home loss payment is 10% of the market value of the applicant’s interest if they hold a beneficial interest in the property or if they are tenants with an unexpired term on their lease of more than 3 years. Currently this is subject to a minimum payment of £7,100 and a max ceiling of £71,000. For shorthold tenants and other applicants, a flat rate is payable which is £7,100.
It can be distressing for tenants when they have to move out or find alternative accommodation due to redevelopment works, even when their landlord will be providing alternative accommodation. The Home Loss Payment scheme aims to provide compensation for tenants for the inconvenience and distress which moving so often entails. It is a useful mechanism for both parties in these situations.
For more information on these payments and the requirements for applicants, please do not hesitate to contact our Social Housing team.