The amount landlords will have to pay occupants entitled to home loss payments is increasing from 1 October 2019.
What is the legal position?
The Land Compensation Act 1973 sets out circumstances in which a landlord is obliged to make a home loss payment to an occupant who is permanently displaced from their home. These circumstances include:
- Compulsory purchase of a dwelling;
- Making of a housing order in respect of the dwelling;
- Where a registered provider of social housing (in England) or a registered social landlord (in Wales) is carrying out an improvement to the dwelling or redevelopment of the land; and
- A possession order in respect of a secure tenancy based on Ground 10 or 10A.
The occupant must meet certain eligibility criteria to qualify for the payment. The amount of home loss payment is set by the Government in regulations.
What is changing?
Under the new Home Loss Payments (Prescribed Amounts) (England) Regulations 2019, any occupants who are displaced on or after 1 October 2019 will be entitled to:
- For tenants, £6,400 (instead of £6,300); and
- For leaseholders, who are entitled to 10% of the property value, a minimum payment of £6,400 (instead of £6,300) and a maximum payment of £64,000 (instead of £63,000).
The 2018 Regulations will be repealed.
LAs need to ensure the increased amounts are paid to eligible occupants and that relevant policies and procedures are updated accordingly.
LAs may also want to consider paying the higher amounts sooner if an occupant tries to delay displacement to meet the October eligibility date: this may be a more cost-effective approach.
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