Where the compensation payable (whether the amount thereof has been settled by agreement or determined by the Lands Tribunal) to any person does not exceed the sum of £100, and the claimant makes a statutory declaration in the prescribed form stating whether he claims as absolute or as limited owner, and gives prima facie evidence which satisfies the council that for not less than six years immediately preceding he, or his immediate predecessor in title, has been personally or by an agent in receipt of the rents or profits, or in actual occupation, of the land in respect of which compensation is payable, the council may pay to the person claiming as absolute owner the compensation payable for the estate in respect of which he claims, and, where a person claims as limited owner of any estate, the council may pay the compensation payable for that estate to the trustees of the settlement under which the limited owner claims.

Where any compensation not exceeding the sum of £100 is payable in respect of an estate which is subject to any mortgage or charge (not being a charge consisting of an annuity under the Land Purchase Acts or a charge in respect of any sums repayable in respect of a loan made by any government department), the compensation may be paid to the person entitled to the mortgage or charge, or, if there is more than one such mortgage or charge, then the person entitled to the mortgage or charge which is first in priority, and the amount so paid shall be received in reduction of the principal sum for the time being owing in respect of the mortgage or charge, notwithstanding any direction, proviso or covenant to the contrary contained in any instrument; and where the compensation is paid to a mortgagee or chargeant, the receipt given by the mortgagee or chargeant shall release the compensation fund from all claims by him and any subsequent mortgagee or chargeant, and also from all claims by the person creating the mortgage or charge and all persons claiming through or under that person.

A memorandum of the amount paid under sub-paragraph (2) shall, when practicable, be endorsed on the instrument creating the mortgage or charge, and shall be signed by the person receiving the compensation, and a copy of the memorandum shall be furnished by the council at its expense to all persons appearing to the council to be entitled to any estate in the land subject to the mortgage or charge.