Why? The license to use the allotment doesn't include living permanently on it. It's not a land you own.

I was confused, the language "your allotment" implies property rights.

Maybe "you'll lose access to the allotment" would be more clear.

The key word is IMO "allotment". While it can mean "parcelled and given out" (and that's the origin of it), the dominant meaning in English is "piece of land you can rent (for growing vegetables)"