Home Loss & Disturbance

Associations are legally required to provide Home Loss and Disturbance payments to claimants. A claimants eligibility will be assessed and the amount of payment analysed.

Home Loss & Disturbance Payments

Introduction

Statutory Home Loss and Disturbance are two separate payments with different entitlement criteria. A displaced person may have entitlement to both Home Loss and Disturbance, although there can be instances where a claimant may have entitlement to only one of the payments.

Legislation

Registered Housing Associations are required to make Home Loss and Disturbance payments under the provisions of Articles 30-32 and 37-38 of the Land Acquisition and Compensation (Northern Ireland) Order 1973, as amended.

Eligibility

Displacement

Entitlement to Home Loss or Disturbance Payments is subject to the occupier being permanently displaced as a consequence of any improvement or redevelopment by a Housing Association which had previously acquired the land and which at the date of displacement was registered.

Explanation of the Displacement Circumstances

• home loss payment – is compensation for the loss of a claimant’s home as a result of certain actions by a Housing Association. The occupier for the purposes of eligibility is the person who has been in lawful occupation of the dwelling, or a substantial part of it, as his/her only or main residence throughout the period of one year ending with the date of displacement. In addition, the spouse of an occupier may have payment rights transferred to him/her when the occupier ceases to occupy the dwelling during the qualifying one-year period
• disturbance payment – is compensation for losses or expenditure arising as a natural and reasonable consequence of being ‘disturbed’. The occupier for the purposes of eligibility is the person who is in lawful possession of the dwelling at the time of displacement and at the time the Association acquired the property. (Commercial interests may also qualify, but not if an option for payment under the Business Tenancy Act (NI) 1964 has already been exercised)
• discretionary payments - Associations have discretion under Article 37(6) of the 1973 Order to make a payment where the statutory condition is not fulfilled
  - in the case of new build schemes any such discretionary payments will not be eligible for inclusion in the ‘Works’ element of eligible capital costs unless the specific prior approval of NIHE (DPG) has been sought and received
  - in the case of rehabilitation schemes such payments whether discretionary or not are to be met from the standard on-cost determined from the scheme and therefore do not need specific DPG approval.
• permanently displaced - means that the occupier of the dwelling or land must be required to vacate by the Housing Association carrying out the improvement or redevelopment. A person cannot be regarded as permanently displaced if there is an intention to return him/her to his/her original home on completion of the works. Similarly, no entitlement would occur when, for reasons of personal preference, a person elects to remain in decanting accommodation rather than return to his/her former dwelling
  
  Where an Association purchases by agreement from an owner-occupier he/she is not entitled to Home Loss or Disturbance payment on vacating the property in Consequence of the purchase. Similarly, there will be no entitlement to payment where an occupier voluntarily vacates following acquisition by an Association or on its behalf by the Department
• a consequence of any improvement or redevelopment – in this phrase the word ‘Improvement’ means work carried out to alter and enlarge, whilst ‘Redevelopment’ means work carried out to alter the use to which the land or dwelling has been put. In both instances, the displacement of the occupier must be in consequence of the works. Home Loss and/ or Disturbance Payments should only be made where an Association requires the occupier to move permanently to facilitate the successful completion of a scheme
• previously acquired - there can be no entitlement to the Home Loss or Disturbance payment where an occupant vacates a property in advance of its acquisition by an Association, whether or not the Association would have wished to displace that person permanently at a later date
• registered - the Association must be registered when displacement occurs. Displacements which take place before registration of the Association with the Department do not create any entitlement to Home Loss and/or Disturbance payments. However, if the land or dwelling was acquired before registration and displacement occurs after registration, an entitlement is created provided that the other conditions are met

Payment of Home Loss and Disturbance

Amount of Home Loss Payment

Negotiations for Home Loss Payments may be conducted by the District Valuer on behalf of Housing Associations. In the case of owner-occupiers, the amount of Home Loss payment shall be 10% of the market value of his/her interest in the dwelling, or as the case may be, the interest in the dwelling vested in trustees, subject to a maximum of £45,000 and a minimum of £4,500. Authority for payment stems from the Home Loss Payments (NI) Order 1992.

In any other case, the amount of Home Loss payment shall be £4,500.

(NB. The above rates are correct at the time of publication. It is the responsibility of the Association to ensure that the correct rate is applied).
The market value of an interest in a dwelling:

• in a case where the interest is compulsorily acquired, is the amount assessed for the purposes of the acquisition as the value of the interest and
• in any other case, is the amount which, if the interest were being compulsorily acquired under a vesting order becoming operative on the date of displacement, would be assessed for the purposes of the acquisition as the value of the interest; any dispute as to the amount involved shall be determined by the Lands Tribunal
• a dwelling shall be taken to include any garden, yard, outhouses and appurtenances belonging to or usually enjoyed with that dwelling

Amount of Disturbance Payment

The amount of the Disturbance Payment shall be an amount equal to the reasonable expenses of the person in removing from the land, and, if carrying on a trade or business, the loss sustained because of disturbance to that trade or business. ‘Reasonable expenses’ will include such costs as removals, disconnection and reconnection of cookers, water heaters, telephones and TV aerials and the fitting and adaptation of carpets and curtains.

• prior to making payments to Owner-Occupiers, Associations should consult the Department in order to establish that compensation has not already been paid as part of a Home Loss Payment Package
• current standard disturbance payment offers (unchanged since 2004/05) are:
  - claimants in unfurnished rented property moving to unfurnished property - £1,210
  - claimants displaced from a furnished tenancy - £277
  - owner occupiers moving to rented property - £800
  - owner occupier moving to owner occupied property - £1,650.
• A Disturbance Payment shall carry interest, the rate to be decided from time to time by the Department of Finance and Personnel, from the date of displacement or the giving up of occupation until payment is made

For further information please see the Office of Public Sector Information website OPSI.

(NB. The above rates are correct at the time of publication. It is the responsibility of the Association to ensure that the correct rate is applied).

Where the applicant will not accept the minimum payment as set out above, or the capital valuation of a dwelling exceeds £60,000, or in any other unusual circumstances, Associations are advised to obtain a fully itemised claim with supporting vouchers of replacement costs and send this to the District Valuer, Land & Property Services (LPS) for advice and direct negotiation with the claimant if necessary. Claims referred to LPS must include:

• confirmation of tenure. For owner occupiers this includes proof of ownership of both the previous and current property. Proof of tenure can include a rent book, title deeds or a letter from a solicitor
• receipts for all items claimed
• where estimates are supplied the claimant must be advised that estimates are not acceptable and that receipts for the claimed items should be produced

Claims for Payment

Claims for payment must be made in writing to Housing Associations. Copies of the appropriate forms can be downloaded from the Forms within the Sheme Approval Guide:

• HLD1 – Claim to Housing Association for Home Loss Payment
• HLD2 – Claim to Housing Association for Disturbance Payment
• HLD3 – Receipt for Home Loss or Disturbance Payments

Timeliness of Payment

Claims

Home Loss Payment - claims for Home Loss Payment must be made by the claimant before the expiration of the period of 6 months beginning with the date of displacement.

Disturbance Payment - no such restriction applies to claims for Disturbance Payment but obviously it is administratively desirable to encourage claimants to submit their claims as soon as possible after the date of displacement.

Payments

Home Loss Payment – payment must be made by Housing Associations on or before the latest of the following dates:

• the date of displacement
• the last day of the period of 3 months beginning with the date of the claim and
• Where the amount of the payment is to be determined in accordance with Amount of Home Loss Payment (see above), the day on which the market value of the interest in question is agreed or finally determined. Where a payment is to be determined under Amount of Home Loss Payment (see above), a payment in advance must be made where a determination has not been made by the later of the dates at (a) and (b) above, with the shortfall (or excess) being paid (or repaid) when the market value has been finally determined.

Housing Association Costs

New Build schemes

The actual costs incurred or to be incurred on Home Loss and Disturbance Payments in relation to new build schemes should be included under the “works” element of eligible capital costs. This will then be included as part of the normal payment of grant tranches. The original or certified copy of the receipt for such payments must be included in the grant claim at practical completion stage. The Association must also retain a full set of records relating to their payments which may be inspected by the Department’s Inspection Team.

Rehabilitation schemes

Costs incurred on Home Loss and Disturbance Payments in respect of rehabilitation schemes are covered by the standard on-cost. No specific approvals need be sought from the NIHE Development Programme Group (DPG) for payments in relation to such schemes nor are individual grant claims required since the latter will form part of the normal grant tranches.