Former Partner at Hodge Jones and Allen Simone McGrath joined Osbornes in January 2007
Home Information Packs
If your property has four bedrooms or more and you are planning to sell it, since 1 August 2007 you will have to obtain a Home Information Pack (HIP). Maria Elliot and Justine Simms of Osbornes examine the requirements.
You will probably have heard of HIPs since there has been a lot in the press about them for much of this year as their introduction has been very controversial. The inclusion of the Home Condition Report (the survey), which was one of the main reasons for HIPs being introduced in the first place, is no longer compulsory, but the production of a HIP still is, if your property has no fewer than four bedrooms. If you market your property for sale after 1 August this year, you will therefore need to be familiar with them and the requirements surrounding them.
The government made the decision to continue with the introduction of HIPs, in a watered down basis, on the premise that it believes that they will address the problems and delays home buyers face when they can’t obtain early and reliable information about properties they hope to buy. It is unclear why they seem to think this is not a requirement for smaller properties!
So what is a HIP and what does it consist of? A HIP is a selection of documents which need to be produced and made available upon a property being marketed for sale. As a concession, provided the HIP has been requested when the agents are instructed to market the property, for now this will be enough to ensure compliance with the legislation. The following will be included in the pack:
- Index of contents
- A sale statement
- Local, drainage and land registry searches
- Leasehold information, where appropriate
- Copies of the title deeds
- The new Energy Performance Certificate.
These documents are among those that a seller’s solicitor would invariably provide to the buyer’s solicitor during the course of a sale, with the addition of the new Energy Performance Certificate, which will contain advice on how to cut carbon emissions and fuel bills. The basic idea is that the documents will be available to the buyer at an earlier stage.
Despite the dropping of the infamous Home Condition Report, to the relief of both buyers and sellers, our experience so far indicates the whilst the cost of the pack varies depending on the precise cost of the relevant searches and information required for each property it will cost in excess of £500 and the seller will have to meet this cost. There will be financial penalties for not complying with the HIP. This is a huge concern for any would be seller, especially as the majority of sellers will be relying on someone else to prepare the HIP for them.
Research earlier this year by the Law Society showed that “trustworthiness was the most important factor when choosing a HIP provider. Almost 60% of Respondents said that they would be more likely to trust the solicitor to prepare the pack and 70% said they would rely on their solicitor to interpret the pack”.
Osbornes is a HIP provider through Searchflow in association with the Law Society. The HIP will contain a large amount of complex legal information and the Law Society endorsed HIP will be guaranteed fully compliant with the government’s requirements.
Even if your home has fewer than four bedrooms you will not be immune from the effect of HIPS as this is just the first stage and they will soon be extended to smaller properties.
Maria Elliot and Justine Simms are Associates in the Property Department. They specialise in all aspects of residential transactions. For more information on this or any other property matter, call Osbornes on 0207 485 8811.
