Compensation for people displaced from their home
A person may be entitled to a home loss payment or disturbance payment if they are permanently displaced from their home.
- Home loss compensation payments
- Entitlement to home loss payments
- Home loss payment for compulsory displacement
- Home loss payment claims by other people
- Claiming home loss payment
- Amount of home loss payment
- Discretionary home loss payments
- Home loss payments for caravan dwellers
- Disturbance payments
- Eligibility for disturbance payments
- Amount of disturbance payment
- Disputes over disturbance payments
- Local authority duty to rehouse displaced occupiers
Home loss compensation payments
A person may be entitled to home loss payment if they are displaced from a dwelling on any land as a result of the:
compulsory purchase of the property
making of a housing order in respect of the dwelling (that is 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
Entitlement to home loss payments
A person does not qualify for a home loss payment unless they were in occupation of the dwelling as their 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, they can claim home loss payment where the other spouse is entitled to it but is no longer resident in the home.
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 they were occupying the dwelling as their 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 their 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 is entitled, but a trespasser is not.
In the case of compulsory purchase, if the person leaves the dwelling prior to the date that the authority is authorised to acquire it, they lose the entitlement to home loss payment.
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.
Home loss payment for compulsory 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.
A voluntary displacement counts 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. 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. 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.
Home loss payment 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.
Claiming home loss payment
Claims must be made within six years of the date of displacement.
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. 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 their home, and whether the displacement occurred in England or Wales.
Owners who dispute the valuation and amount of home loss payment can be referred to the Upper Tribunal (Lands Chamber), but any dispute as to entitlement will be resolved by the courts, for example through judicial review. There is no statutory mode of appeal.
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. 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 their only or main residence at the date of displacement, they may be entitled to a discretionary payment, not exceeding the amount of the mandatory payment.
Home loss payments for caravan dwellers
A caravan dweller can also apply for a home loss payment, on similar terms to those above, if they are displaced from a site.
They are only entitled to a payment if there is no suitable alternative site available on which to station the caravan.
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.
Disturbance payments are made to compensate a residential occupier for reasonable expenses in moving from the house or land. People who do not qualify for a home loss payment, for example because they do not satisfy the residence requirement, may be entitled to a disturbance payment.
The situations in which a disturbance payment can be made are broadly the same as those for home loss payments. The main difference is that any acquisition of land by an authority with compulsory purchase powers is sufficient; the acquisition itself need not be compulsory. Qualification is cumulative and occupiers may be entitled to both home loss payments and disturbance payments.
Provisions on the permanence of the displacement are the same as for home loss payments. Any acquisition by an authority possessing compulsory purchase powers suffices for entitlement; the acquisition itself does not need to be compulsory. The provisions use the term 'house or building' not dwelling, which is the term for home loss payments.
Eligibility for disturbance payments
Disturbance payments can be paid to someone who is in lawful possession of the land. Lawful possession does not include lodgers or those with merely a licence to occupy.
Eligibility for disturbance payments is also affected by the reason for the displacement. Where the displacement is due to acquisition by a local authority possessing compulsory purchase powers, disturbance payments are only payable where the applicant is not entitled to compensation through any other Act. This does not include home loss payments, which are payable at the same time.
Where displacement is due to a housing order, resolution or undertaking, no disturbance payment can be made if compensation is payable under section 584A of the Housing Act 1985. This compensation is available to owners of property subject to a Closing or Demolition Order so this exception will only apply to owner-occupiers.
Even if there is no entitlement, local authorities have discretion to make a payment by way of compensation for disturbance.
Amount of disturbance payment
Disturbance payments cover reasonable expenses incurred by the entitled person during moving. People who are displaced from properties that have been adapted for disabled people are entitled to the comparable cost of those modifications.
The meaning of reasonable expenses has been examined in the courts. It has been held that they refer to expenses that relate strictly to the move, and expenses reasonably incurred as a direct and natural consequence of the displacement. Redecoration expenses, re-connection charges and redirection of mail are likely to be allowed. Claiming for carpeting because carpets from a former dwelling do not fit may also be allowed (although not in Nolan, where rose bushes lost during the removal were allowed).
Some local authorities only allow payments for soft furnishings such as carpets, but exclude 'hard' items such as fixed beds or fitted wardrobes that cannot be moved to the new home. This is possibly because in Nolan new kitchen cupboards that had to be bought because those in the former dwelling could not be removed were not allowed. Each case must be treated on its own merits.
Disputes over disturbance payments
In a case where an applicant failed to mitigate losses by refusing to accept a ground-floor local authority flat and moved into temporary accommodation when the authority had made a Closing Order on the landlord, there was no entitlement to compensation for losses while they were in the temporary accommodation.
Local authority duty to rehouse displaced occupiers
Occupiers may be entitled to rehousing by a local authority if they are displaced from residential accommodation as a result of:
a demolition order
a prohibition order under s.20 or s. 21 of the Housing Act 2004
the local authority acquiring the land under compulsory purchase
the local authority carrying out redevelopments or improvements where the land has previously been acquired through compulsory purchase
Emergency prohibition orders under s.45 of the Housing Act 2004 are not included in the list of housing orders that would trigger a rehousing duty.
The local authority only has a rehousing duty if 'suitable alternative residential accommodation' on reasonable terms is not available to the displaced person.
The duty only applies to people living in the property at the time of the making of the order or the decision to acquire the land or redevelop.
The duty on the local authority to rehouse the displaced person is separate from an authority's homelessness duties under the Housing Act 1996. There is no requirement that the person be in priority need.
Provision of accommodation
Local authorities are entitled to put the applicant into temporary accommodation pending rehousing. A displaced person does not have any priority over those on the waiting list or those being housed as homeless. In one case where the local authority had made a compulsory purchase and the applicant had refused two offers of permanent accommodation, the local authority had fulfilled its duty by providing bed and breakfast accommodation until more suitable accommodation was available.
Exceptions to the duty
The local authority will not have a duty to rehouse a displaced person if they were:
a 'short-life user' permitted to use the land pending demolition or improvement
The duty does not apply where displacement is a result of compulsory purchase in response to a blight notice under the Town and Country Planning Act 1990.
Last updated: 29 October 2021
s.29 Land Compensation Act 1973, as amended by para 3, Sch.15 Housing Act 2004.
grounds 10 and 10A, Sch.2 Housing Act 1985.
s.29(2) Land Compensation Act 1973, as substituted by s.68 Planning and Compensation Act 1991.
s.29A Land Compensation Act 1973.
s.32(3), (4) and (5) Land Compensation Act 1973.
s.29(3) Land Compensation Act 1973.
Joyce v St Albans DC  EWCA 179, LAG, December 2007.
Armstrong v GLC  LAG Bull 269, CC; Caplan v GLC (1980) 5 HLR 104, CA.
Follows v Peabody Trust (1983) 10 HLR 62, CA.
s.29(3A) Land Compensation Act 1973.
R v Islington LBC, ex parte Casale (1986) 18 HLR 146, QBD.
s.32(4) Land Compensation Act 1973.
s.32(1) Land Compensation Act 1973.
s.29(1) Land Compensation Act 1973.
s.32(1) Land Compensation Act 1973.
s.32(2) Land Compensation Act 1973.
(in England) see: Home Loss Payments (Prescribed Amounts) (England) Regulations 2021 SI 2021/841 (with effect from 1 October 2021), and before that: Home Loss Payments (Prescribed Amounts) (England) Regulations 2019 SI 2019/1117 Home Loss Payments (Prescribed Amounts) (England) Regulations 2018 SI 2018/915; Home Loss Payments (Prescribed Amounts) (England) Regulations 2017 SI 2017/769; Home Loss Payments (Prescribed Amounts) (England) Regulations 2016 SI 2016/789; 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. (In Wales) see Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2018 SI 2018/1113 with effect from 3 December 2018, and before that: Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2017 SI 2017/996; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2016 SI 2016/1072; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2015 SI 2015/1878; Home Loss Payments (Prescribed Amounts) (Wales) Regulations 2008 SI 2008/2845.
Tribunal Procedure (Amendment No.3) Rules 2013 SI 2013/1188.
s.31(3) Land Compensation Act 1973.
Khan v Islington LBC (2000) 32 HLR 534.
s.29(2) Land Compensation Act 1973.
s.33 Land Compensation Act 1973.
R (on the application of (1)Mahoney (2)Jones) v Secretary of State for Communities and Local Government  EWHC 589 (Admin).
s.37(1)(a) Land Compensation Act 1973.
s.37(5) Land Compensation Act 1973.
s.38(1)(a) Land Compensation Act 1973.
s.38(3) Land Compensation Act 1973.
Glasgow Corporation v Anderson 1970 SLT 225 Court of Session.
Nolan v Sheffield MDC  38 P&CR 741, LT.
Nolan v Sheffield MDC  38 P&CR 741, LT.
Glasgow Corporation v Anderson  SLT 225.
Tribunal Procedure (Amendment No.3) Rules 2013 SI 2013/1188.
s.38(4) Land Compensation Act 1973.
Adam v Woking BC  RVR 329, LT.
s.39 (1) Land Compensation Act 1973.
R v Bristol Corporation ex p Hendy  1 WLR 498.
R v East Hertfordshire District Council ex p Smith (1990) 23 HLR 26.
s.39(3) Land Compensation Act 1973.
s.39(2) Land Compensation Act 1973.