Amount of compensation
5.—(1) Subject to paragraphs (2) to (4), the amount of compensation payable for qualifying improvement work shall be calculated in accordance with the formula–
which is the prescribed method of calculation for the purpose of section 30(5)(a)(ii) of the Act where–
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the cost of the improvement work from which shall be deducted the amount of any grant made–
under Part XIII of the 1987 Act; and
under the Home Energy Efficiency Scheme Regulations 1997(1);
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the notional life of the improvement effected by the work; and
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the number of years starting on the date on which the improvement was completed and ending on the date on which the tenancy ends and for the purposes of this paragraph part of a year shall be counted as a year.
(2) Where–
(a)the cost of the improvement work was excessive;
(b)the improvement effected by the work has deteriorated at a rate greater than that provided for in the notional life for that improvement; or
(c)the improvement effected by the work is of a higher quality than it would have been had the landlord effected it,
the landlord may deduct from the amount of compensation calculated in accordance with paragraph (1) such sum as is reasonable in order to take into account that sub-paragraph (a), (b) or (c) applies.
(3) Where the improvement effected by the work has deteriorated at a rate lower than that provided for in the notional life for that improvement the landlord may add to the amount of compensation calculated in accordance with paragraph (1) such sum as is reasonable in order to take into account that the improvement has so deteriorated notwithstanding that otherwise the amount of compensation calculated in accordance with paragraph (1) would be nil.
(4) Compensation shall not be payable to the extent that the amount of compensation would exceed £4,000 per improvement.
S.I. 1997/790, as amended by S.S.I. 2001/267.