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Home loss payments

This content applies to England & Wales

Home loss payments, including entitlement criteria and how to claim.

Overview

A person may be entitled to home loss payment (subject to limitations on entitlement) where s/he is displaced from a dwelling on any land as a result of the:[1]

  • compulsory purchase of the property
  • making of a housing order in respect of the dwelling (ie prohibition order under Part 1 of the Housing Act 2004 or a demolition order)
  • redevelopment of land or improvement of any dwelling on land previously acquired or appropriated by an authority possessing compulsory purchase powers and currently held by such an authority
  • redevelopment or improvement by a registered social landlord
  • making of an order for possession because the landlord (in the case of a secure tenancy) intends to demolish or redevelop the dwelling or carry out extensive work, or the area is to be sold and redeveloped.[2]

Entitlement

A person will not qualify for a home loss payment unless the following conditions are satisfied:[3]

  • the applicant must have been in occupation of the dwelling as her/his only or main residence throughout a one-year period ending on the date of displacement, and
  • that occupation must be as a result of an interest or right in the property.

Interests that qualify are:

  • any interest in the dwelling
  • a right to occupy the dwellings as statutory tenant or under a restricted contract
  • a right to occupy the dwelling under a contract of employment
  • a right to occupy the dwelling under a licence where either it is a right to occupy as a protected occupier, or the statutory provisions relating to secure tenancies apply to the licence, or the licence is an assured agricultural occupancy, or where the statutory provisions relating to introductory tenancies apply to the licence.

Where a spouse or civil partner has a statutory right of occupation under the Family Law Act 1996, s/he can claim home loss payment where the other spouse is entitled to it but is no longer resident in the home.[4]

A person occupying at the date of displacement, and who has at that time a qualifying interest in the property, is entitled to add to the period of occupation any time when s/he was occupying the dwelling as her/his only or main residence but without a qualifying interest. 

Alternatively, if the applicant has been resident with a legal interest for less than a year, any period preceding this occupation during which some other person occupied the dwelling as her/his only or main residence with a qualifying interest can be added. For example, a spouse or civil partner who has succeeded to the statutory tenancy of a deceased spouse or civil partner, or a child who has succeeded to the tenancy of a parent will be entitled, but a trespasser will not.[5]

In the case of compulsory purchase, if the person leaves the dwelling prior to the date that the authority is authorised to acquire it, then s/he loses the entitlement to home loss payment.[6] In a case where a compulsory purchase order was made against a property, the claimant moved out to act as a live-in carer to her ill mother. Her challenge to the order, and her application for home loss payment was dismissed on appeal because, on the facts, she had not moved out 'in consequence of' the compulsory acquisition of the property.[7]

Compulsory or voluntary displacement

Home loss payment is only payable where a displacement is compulsory. Where tenants were told they would have to move because of improvements and that formal requirement was not withdrawn before displacement, the tenants would be entitled to home loss payment, even if, by the time of displacement, the improvement works were no longer going to proceed. A subsequent change of mind by the authority would not affect entitlement.[8] Thus, in some cases, a voluntary displacement will count as compulsory if a tenant has not actually been forced to move but moved voluntarily because it was believed displacement was inevitable. In one case where a landlord had not yet secured funding for redevelopment following a demolition order and the tenant moved out in the belief that displacement was inevitable, the court found that the tenant's removal was in consequence of the intended development and therefore was not voluntary.[9] It was important to establish a causal link between the displacement and one of the grounds under which home loss payment may be made, and the test was whether the removal is 'in consequence' of redevelopment.

The displacement must be of a permanent nature.[10] However, there may be cases of permanent displacement where a person returns to a dwelling but the works are so extensive that they cause the dwelling to lose its original identity. An example of this was where the property had been reduced from three bedrooms to one, the separate bathroom and lavatory had been merged into one room, the address and entrance had been changed and the total floor area of the flat had been reduced.[11]

Claims by other people

Where a person entitled to a payment dies before making a claim, any person who lived in the dwelling as an only or main residence for at least one year before the date of displacement can make the claim in the deceased person's place.[12]

Claiming home loss payment

Claims must be made within six years of the date of displacement.[13] Claims should submitted to the acquiring authority in writing, but there is no prescribed form.[14] Claims must be accompanied by whatever information is necessarily required by the authority.[15] Payment must be made within three months following the date of the claim, on the date of displacement, or on the date the market value has been agreed or finally determined, whichever is later.[16] If the claimant has an owner's interest, the authority may make the payment in advance.

Amount of home loss payment

A home loss payment is designed to compensate people for the distress and inconvenience of having to move home at a time not of their choosing.

Owners are entitled to receive 10 per cent of the market value of their home, up to a prescribed maximum amount. Other applicants (including local authority and private tenants) are entitled to a prescribed flat rate payment.The prescribed amounts are revised from time to time and depend on when the person is displaced from her/his home, and whether the displacement occured in England or Wales.[17]

Owners who dispute the valuation and amount of home loss payment can be referred to the Upper Tribunal (Lands Chamber),[18] but any dispute as to entitlement will be resolved by the courts, for example through judicial review. There is no statutory mode of appeal.[19]

Although section 29 of the Land Compensation Act 1973 is silent on the right of a landlord to set-off arrears from a home loss payment, it has been held that if there was a connection between the parties' claims, an equitable set-off could be made and there would be no injustice in allowing a landlord to set-off, for example, rent arrears from the tenant's home loss payment.[20] It is unclear whether the same would apply to a tenant of a registered social landlord, where the registered social landlord is providing the home loss payment.

Discretionary home loss payments

If an occupier has lived in the property for less than one year but has a legal interest and occupies the property as her/his only or main residence at the date of displacement, s/he may be entitled to a discretionary payment, not exceeding the amount of the mandatory payment.[21]

Home loss payments for caravan dwellers

A caravan dweller can also apply for a home loss payment, on similar terms to those above, if s/he is displaced from a site. However, s/he will only be entitled to a payment if there is no suitable alternative site available on which to station the caravan.[22] The High Court held that although a similar requirement did not apply to those displaced from bricks and mortar accommodation the difference in treatment was objectively and reasonably justified and was not incompatible with article 14 of the European Convention on Human Rights.[23]

[1] s.29 Land Compensation Act 1973, as amended by para 3, Sch.15 Housing Act 2004.

[2] grounds 10 and 10A, Sch.2 Housing Act 1985.

[3] s.29(2) Land Compensation Act 1973, as substituted by s.68 Planning and Compensation Act 1991.

[4] s.29A Land Compensation Act 1973.

[5] s.32(3), (4) and (5) Land Compensation Act 1973.

[6] s.29(3) Land Compensation Act 1973.

[7] Joyce v St Albans DC [2007] EWCA 179, LAG, December 2007.

[8] Armstrong v GLC [1980] LAG Bull 269, CC; Caplan v GLC (1980) 5 HLR 104, CA.

[9] Follows v Peabody Trust (1983) 10 HLR 62, CA.

[10] s.29(3A) Land Compensation Act 1973.

[11] R v Islington LBC, ex parte Casale (1986) 18 HLR 146, QBD.

[12] s.32(4) Land Compensation Act 1973.

[13] s.32(1) Land Compensation Act 1973.

[14] s.29(1) Land Compensation Act 1973.

[15] s.32(1) Land Compensation Act 1973.

[16] s.32(2) Land Compensation Act 1973.

[17] In England, see Home Loss Payments (Prescribed Amounts) (England) Regulations 2016 SI 2016/789 with effect from 1 October 2016, or before then Home Loss Payments (Prescribed Amounts) (England) Regulations 2015 SI 2015/1514, Home Loss Payments (Prescribed Amounts) (England) Regulations 2014 SI 2014/1966; Home Loss Payments (Prescribed Amounts) (England) Regulations 2008 SI 2008/1598, Home Loss Payments (Prescribed Amounts) (England) Regulations 2007 SI 2007/1750; Home Loss Payments (Prescribed Amounts) (England) Regulations 2006 SI 2006/1658; Home Loss Payments (Prescribed Amounts) (England) Regulations 2005 SI 2005/1635; Home Loss Payments (Prescribed Amounts) (England) Regulations 2004 SI 2004/1631. In Wales, see Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2016 SI 2016/1072 with effect from 5 December 2016, or before then Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2015 SI 2015/1878; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2008 SI 2008/2845; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2007 SI 2007/2372; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2006 SI 2006/1789; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2005 SI 2005/1808; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2004 SI 2004/1758; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2003 SI 2003/1856.

[18] Tribunal Procedure (Amendment No.3) Rules 2013 SI 2013/1188.

[19] s.31(3) Land Compensation Act 1973.

[20] Khan v Islington LBC (2000) 32 HLR 534.

[21] s.29(2) Land Compensation Act 1973.

[22] s.33 Land Compensation Act 1973.

[23] R (on the application of (1)Mahoney (2)Jones) v Secretary of State for Communities and Local Government [2015] EWHC 589 (Admin).

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