Appendix 2 - Compensation for Improvements

Under the Leasehold Reform, Housing and Urban Development Act 1993 Residents with secure tenancies may be able to claim compensation for certain resident financed improvements, providing they have written permission from us and the work was carried out to an acceptable standard.

The right to compensation for improvements is subject to certain qualifying criteria and regulations contained in the Secure Tenants of Local Authorities (Compensation for Improvements) Regulations 1994 Statutory Instrument 1994 No. 613.

This statutory Instrument identifies the following qualifying improvements and their notional life:

• bath, shower, wash hand basin or toilet - 12

• kitchen sink, or work surfaces for food preparation - 10

• storage cupboards in bathroom or kitchen - 10

• space or water heating - 12

• thermostatic radiator valves - 7

• insulation of pipes, water tank or cylinder - 10

• loft or cavity wall insulation - 20

• draught proofing of external doors or windows - 8

• double glazing or other external window replacement or secondary glazing - 20

• rewiring or the provision of power and lighting or other electrical fittings (including smoke detectors) - 15

• Any other object which improves the security of the dwelling (excluding burglar alarms) - 10

The statutory regulations also set out the formula for calculating compensation:

C x (1 – Y÷N)        

Where C = original cost of improvement, Y = the number of complete years the improvement has been in place (with part of a year being rounded up to a complete year) starting on the date the improvement was completed, N = the notional life of the improvement

NOTE: The minimum amount to be eligible for compensation is £50.00 and the maximum amount payable is £3000.00. 

Residents may only make a claim for compensation for improvement when the tenancy is ending.  Claims for compensation will not be considered before a notice to end the tenancy is received or if we are seeking or been granted a Possession Order or the resident has exercised the right to buy or acquire.

When 28 days’ notice is given in writing for the termination of the tenancy, a claim for compensation for improvement may also be made.  It will only be successful if proof of permission to undertake the improvement is provided.

In instances where a resident is able to remove their improvement (e.g. a bathroom suite) they must reinstate the original or return the area to its original state when they leave the property.

We will aim to deal with all improvement compensation claims to coincide with the tenancy ending (depending upon the claim being submitted at the same time as the tenancy termination notice).  Upon receipt of a claim a visit will be made to the property by one of our employees to inspect the improvement and its condition.

The amount of compensation paid at the end of the tenancy will be set against any sums that may be owing to us by the resident.