Compensation Policy – Guidance for landlords
Aims and objectives
The policy should be clear that the aim of providing redress is to restore a person to the position they would have been in had the service failure not occurred. It should also emphasise that there are other remedies available to put a situation right but that in some instances, financial compensation may be the only and appropriate form of redress.
It should set out to ensure that compensation payments are fair and proportionate. The document needs to recognise that each case should be considered on its individual merits and that discretion and common sense need to be applied, while promoting consistency. It should also recognise that responsibility will be taken for any detriment or damage caused to an individual or their property and belongings by a third party (contractor) working on the landlord’s behalf.
Circumstances in which compensation will be issued
The document should separate compensation payments into categories and explain in what circumstances payments will be made. It should reflect that there are three types of compensation payment:
- mandatory (such as statutory home loss payments)
- quantifiable loss payments (where people can demonstrate actual loss)
- discretionary payments (for time and trouble/distress and inconvenience)
It should provide examples of mandatory payments which could include home loss, disturbance, improvments and payments under the Right to Repair scheme.
Quantifiable loss payments
It should provide examples of quantifiable loss which could include: increased heating bills due to disrepair, having to pay for alternative accommodation or take away food, paying for cleaning or carrying out repairs where a landlord has failed to meet its obligations. This should come with a caveat that any such costs must have been reasonably incurred and evidence of such loss has been provided.
It should provide examples of where discretionary payments are applicable which could include:
- poor complaint handling
- delays in providing a service eg in undertaking a repair
- failure to provide a service that has been charged for
- temporary loss of amenity
- failure to meet target response times
- loss of use of part of the property
- failure to follow policy and procedure
- unreasonable time taken to resolve a situation
It is important that the document states how other actions may be taken to remedy a complaint either separately from or in conjunction with an offer of compensation. These can include practical actions (such as offering to undertake repairs or redecoration which would otherwise be a customer’s responsibility) and gestures of goodwill (e.g. vouchers, chocolates, flowers). The document should demonstrate a flexible approach to considering different remedy solutions
How will compensation be calculated?
The policy should explain the circumstance in which a set amount of compensation will be offered which could include missed appointments, loss of a room and complete/partial loss of an amenity such as heating, hot water, power and lighting.
It should also set out parameters for discretionary payments of compensation dependent upon the severity of any service failure and associated impact. This could be separated into categories such as ‘minor,’ ‘moderate’ or ‘severe.’
In doing so, it should identify the factors to consider in deciding upon the appropriate award of compensation which could include the duration of the problem and extent or severity of the service failure. It should also account for vulnerabilities and identify that any impact is worsened through disability, old age or the presence of young children.
Situations where compensation will not be considered
The document should explain what payments will not be considered. This could include:
- claims for personal injury
- claims for damage caused by circumstances beyond a landlord’s control (e.g. through storm or flooding)
- problems caused by a third party not working for the landlord
This could also include instances where any damage is covered under contents insurance. The policy should be clear that where damage has been caused directly as a result of the actions or omissions of a landlord or contractor working on its behalf, consideration should be given to reimbursement without the need for the customer to make a claim at further inconvenience and cost to themselves, and in particular, where the facts are not in dispute.