In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
New Regulations, the Home Loss Payments (Prescribed Amounts) (England) Regulations 2015, have been passed so that for displacements occurring on or after 1 October 2015 the home loss payment due:
- to a person with an owner’s interest (so a long leaseholder or freeholder) will be calculated as 10% of the value of the property subject to:
- a minimum of £5,300 (up from £4,900); and
- a maximum of £53,000 (up from £49,000).
- to a person in any other circumstance (so in reality a tenant) £5,300 (up from £4,900).
Registered Providers will need to ensure that budget forecasts for redevelopment are adjusted to take account of the change, policy documents are updated and accurate offers made to occupiers who are due to be displaced on or after 1 October 2015. There is also a practical question of whether landlords offer voluntary increases in payments now to incentivise people to move out now rather than waiting to October to receive the higher payments.
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