How do you assess compensation in a civil housing disrepair claim?

July 2018

There are two principles that could be used to assess compensation for tenants suffering from housing disrepair.

Firstly the court could try to work out the level of distress, inconvenience and suffering caused by the disrepair and then try to assess a figure to compensate the tenant for that. An alternative approach would be to start from the position that a disrepair claim is a contractual dispute and that therefore compensation must relate to the contract. This approach would lead to a situation where compensation is assessed by reference to the rent. The court's role in assessing compensation would be to work out to what extent the value of the rented property had been diminished and then set that as the compensation.

The approach taken will lead to different outcomes for different tenants. If the compensation is assessed by reference to actual harm suffered this may give rise to awards in excess of the rent charged. This could be to the benefit of tenants of social landlords. If the rent diminution approach is used this will limit the amount of compensation that a tenant paying a social rent may achieve but might increase the amount a tenant paying market rent might achieve.

Both the approaches, and a combination of them both have been applied over the years. The current - and it seems settled - position is that compensation will be assessed as a notional reduction in the rent.

The way this works in practice is something like this; The property is divided up as follows. How many rooms are there that are bedroom or living rooms? Allocate them the lion's share of the rent, say 80%. Allow say 20% for the kitchen (unless this is where much of the life of the house takes place in which case it will be treated as if it was a living room), hallways , WC & bathroom. Then try to assess a diminution in value for each room.

For example In a 3 bedroom flat with a small kitchen where the landlord has had notice of disrepair for 2 years and 1 bedroom and the living room are affected by dampness the following process could be applied:

There are 4 living rooms. They account for 80% of the rent. 2 of them are affected. If the damp is quite bad then their usefulness may be reduced by about 50%. 50% of 80% is 40%. Therefore the starting point for calculating damages is 40% of the rent for 2 years. If the rent were £140 per week this would lead to a starting point of £56 per week. Over 2 years this would amount to £5,824.

This is a very simplified and crude example designed to demonstrate the principles involved only. If the tenant were forced to spend more time inside due to age or infirmity compensation might be higher. It is also worth remembering that as most disrepair actions are contract disputes there will be no aggravated or exemplary damages.

There would also be specific financial losses to add to the compensation (eg damaged clothes, ruined wallpaper, increased heating costs etc).

If the claim against the landlord is based in tort (eg negligence) then it is arguable that the alternative approach to assessing compensation should be adopted.

Compensation for personal injury is outside the scope of this post.