Home Information Packs
After several years of debate Home Information Packs ( HIPs) are finally due to come in to force on June 1 st 2007. Anyone selling a residential property after that date will be required to provide potential buyers with a pack containing many of the legal documents and a brand new document called an Energy Performance Certificate (EPC). Failure to provide the information will land the seller or their agent with a £200 fine. The full contents of the proposed pack are:
- An index (i.e. a list of the contents of the Pack)
- An Energy Performance Certificate
- A sale statement (summarising terms of sale)
- Evidence of title
- Standard searches (i.e. local authority enquiries and a drainage and water search)
- Where appropriate, commonhold information (including a copy of the commonhold community statement)
- Where appropriate, leasehold information (including a copy of the lease, information on service charges and insurance)
- Where appropriate, a New Homes Warranty
- Where appropriate, a report on a home that is not physically complete
This list may yet change as the final arrangements will not be announced until the end March 2007. It is currently expected that some leeway will be granted in respect of providing the searches as many local authorities are still not able to return them quickly enough.
It had been planned that a Home Condition Report (HCR) would be included but as a result of pressure from the lenders and a lack of Home Inspectors this element was made voluntary. The take up of HCRs in the area trials has been very low and is expected to be even lower once the packs come in to force.
There will be a transition period for properties already on the market on June 1 st 2007. They will not be required to provide a pack for 3 months’ (this may well increase to 10 months’ after consultation).
It is expected that estate agents, in conjunction with specialist pack providers, will organise the pack on behalf of the seller. The cost is likely to be clawed back via increased fees. It is also likely that withdrawal clauses will be added into agency agreements making sellers responsible for the cost of the pack if they change their mind and take their property off the market.
The most interesting part of the pack will be the EPC. Currently this can only be provided by a Home Inspector although there are plans to train armies of Domestic Energy Assessors before the launch date. An assessor will be required to visit the seller’s home and compile a report giving details of how energy efficient the property is and providing recommendations for improvements where appropriate. It is planned that estate agents will be required to include a summary of the report on the particulars of a property.