Tenant's right to compensation for improvements

The question of how much tenants can make improvements to a rented house can be quite contentious. Particularly for those in social and council housing, this is a big question. You must be wondering whose responsibility is it to fix up your house, and who pays?

Well, that’s the exact question we’ll be answering in this blog, so you’re in the right place.

What are a tenant’s rights to compensation for improvements?

Tenants living in social and council housing have a right to compensation for improvements, and there are actual laws in place to help you get compensation. If you’re in private housing, you don’t have the same kind of guarantee, but we’ll get to that shortly.

When we talk about a tenant’s rights for compensation for improvements, we’re talking about times when you as a tenant needed to have work done on your house to improve your living standards. For example, if you needed to renovate the bathroom because it actually needed to be fixed. If you paid for the renovation, you should be able to claim compensation back from your landlord (aka the council or housing association) for a portion of the cost, if you leave the property before you made full use of the improvement. We’ll explain what this means a bit further down.

If you’re living in a privately rented property, you won’t get to officially claim compensation for improvements. Landlords are supposed to keep your house livable, and you can talk to them about making improvements to your house, but they don’t really have a legal obligation to compensate you if you pay for any work done. It’s a good idea to talk to your landlord before you have any work done, as you don’t have as much protection as people living in council houses.

If you’re wondering about extra fees your private landlord might be charging you, you can check out our blog ‘What is the Tenant Fees Act 2019?’

What improvements can tenants make?

Tenants in social or council housing can make improvements to their houses that improve their living conditions and help to make the house livable. You should be able to  claim compensation on any improvements that cost between £100 and £3,000 and involved any of these things:

• Bath or shower
• Toilet
• Kitchen or bathroom sinks
• Storage cupboards in bathroom or kitchen
• Work surfaces for food preparation
• The heating system
• Radiators
• Insulation of cavities, pipes, or lofts
• Draught-proofing external doors or windows
• Double-glazing or other external window replacement
• Rewiring lighting or other electrical fittings (including smoke detectors)
• Anything that improved the security of the house but excluding burglar alarms

The council probably won’t compensate you for cosmetic changes, so if you redecorate the walls or get a new bath because you didn’t like the colour of the last one, you’re unlikely to be able to get any compensation.

It’s good to remember to get written permission from your landlord to do the improvements before you start any work. They shouldn’t really be able to refuse the work, as long as it is necessary, but they might ask for certain conditions. For example, they may have rules about materials you plan to use or the contractors you want to hire. It’s good to remember that they probably won’t want you to do any of the work yourself, as they need to guarantee that any improvements are to a high standard.

If your landlord thinks that the work will cause future problems with renting the property, disrupt the neighbourhood, or create health and safety problems, then they can potentially reject your proposal. But, if you’re just hiring someone to fix your bathroom or repair your insulation, you can be fairly confident that they will accept your proposal.

If you’re wondering about more of the rules for living in a council house, you can check out our blog ‘Can the council force you to downsize?’

How much can tenants be compensated?

When it comes to actually claiming compensation for the improvements completed, how much you can be compensated is based on a couple of key things. These are the cost of the improvement, and how much of the improvement’s ‘notional life’ is left.

Notional life is essentially how many years a particular improvement is expected to benefit you as a tenant. For example, a toilet generally has a notional life of 25 years. This can vary a little from authority to authority, so it’s best to check with your local council when you make your improvement.

If you leave your tenancy before the end of the notional life of the improvement you paid for, you can claim compensation. This is because you haven’t got the full use of what you paid for. The compensation payment is therefore a pretty straightforward calculation, as you get money back for all of the time you haven’t used:

Compensation amount = Cost of improvement x Percentage of notional life remaining

Let’s imagine it cost you £1,000 to have your toilet replaced, and you left your house 5 years later, the toilet would have 20 years of notional life left that you didn’t get to use.

This would give you 1,000 x (20/25) = 1,000 x 80%

So, your compensation would be £800.

It might sound a bit complicated, but there are all sorts of calculators out there to help you get the right amount. You can claim compensation for each separate improvement you paid for, with a maximum pay-out of £3,000 per claim.

How can tenants claim compensation for improvements?

Claiming compensation for improvements should be as simple as writing a letter to your landlord to ask for compensation.

There are just a couple of key things to remember when you’re claiming compensation for improvements to your house:

• When to make your claim - You should be able to make your claim any time from 28 days before the end of your tenancy to 14 days afterwards. It might be a good idea to get started early though, just in case you have any delays in getting together your evidence.
• Collect evidence - As part of your claim you’ll need to provide full evidence of the permission you got from your landlord for the work to happen, as well as all of the invoices and receipts for the work being done.
  

There are also a couple of potential exceptions that might affect how much compensation you get:

• If the work was much more expensive than expected, or the improvements caused a load of extra inspection and administration costs, your landlord might lower  the amount of compensation you would expect to get.
• If the improvements have lasted much better than expected, or fallen apart really fast, your landlord may also have a reason to adjust the amount of compensation.
• If you owe any money to your landlord, for example rent or unpaid heating bills, they can take what you owe out of the compensation money.
• If you’re buying the house from the council or you’re being evicted you can’t claim compensation at all.
  

If you’re wondering how evictions work, you can check out our blog ‘How long do bailiffs take to evict a tenant?’

It might be a good idea to get your landlord’s approval at every step of the process so you can prove they were ok with the work happening. It also might be worth contacting your landlord before you leave your tenancy to discuss things well ahead of time, as it can help things move faster when you make your claim.

Otherwise, applying for compensation for improvements should be as simple as sending a letter to your landlord. It’s worth making it very clear that you are applying for compensation for improvements to your house, and including your address, the type of work that happened, and the amount of compensation you would expect.

A few final tips…

Here are a couple of last things to know when you apply for compensation for improvements to your house:

• Tenants living in social and council housing are the only people in the UK who have the legal right to be compensated for improvements made to their house.
• Anyone living in the house when the application is made should get the compensation. If you have multiple tenants, the money will probably be split evenly unless you specify otherwise.
• Landlords are not supposed to raise rent in the property during your tenancy on the basis of improvements you made, but once you leave and have been compensated they can raise rent for the next tenant.

Urban Jungle is not a financial advisor and information in this article should not be taken as advice or recommendation.