Home Information Packs
With minor exceptions, all houses being put up for sale in England and Wales have needed a Home Information Pack (HIP) since 14 December last year. If you are selling a property privately, or selling a property subject to an existing tenancy agreement, a HIP is not required.
Originally HIPs were to be introduced on 1 June last year but, after a legal challenge by the Royal Institution of Chartered Surveyors, they have been introduced on a phased basis.
The intention behind HIPs is the early provision of relevant information about the property being sold, to prospective buyers of that property.
HIPs consist of a number of documents relating to the property being sold which are compulsory and must be included, and further documents that can be included voluntarily if the seller so wishes.
Documents that are compulsory are a copy of the legal title of the property being sold, local authority, drainage and water searches and an Energy Performance Certificate. The latter is a detailed examination of your home’s energy efficiency and environmental impact, very similar to consumer friendly fridge ratings, and will be carried out by an accredited Domestic Energy Assessor.
For reasons of cost most HIPs consist of the compulsory documents only. This does mean that not all relevant information that would be of interest to a prospective buyer is included. For example there is no obligation on the seller to include an environmental search within the HIP. This is highly relevant information from a prospective buyer’s perspective. This will still have to be submitted by the buyer’s solicitors once a sale has been agreed.
The government’s original proposal was that a property could not be marketed for sale to the general public until the HIP was complete. They have since made a concession that currently allows a property to be marketed as soon as instructions to produce a HIP have been given. This concessionary period has recently been extended to 1 June 2008.
From a practical point of view anybody wishing to sell their property should give instructions for a HIP to be prepared as soon as they have made their decision to sell.
A benefit of HIPs has been the increased co-operation between solicitors and estate agents at the very outset of the transaction, in gathering the information needed to prepare the HIP and progressing the sale, with obvious benefits for the person selling.
Most leasehold properties will require a HIP for the first time. The original regulations required the HIP to include information that could only be derived from managing agents, such as information about rent, service charges and property insurance. The government quickly accepted that this information was not being supplied quickly enough. As a further concession they have announced, for the time being at least, that the only further compulsory document that must be included in a HIP of a leasehold property, is a copy of the Lease itself.
First time buyers benefit from the introduction of HIPs as they will no longer have to pay for the local, drainage and water searches which they would have had to have done previously.
Although the need for a HIP means that a seller incurs the cost of preparing it which they have not previously had to do, the initial expense is partly offset, for those buying another property at least, by the fact that the seller no longer has to pay for the local, drainage and water searches in connection with the new property.
Solicitors have always obtained copies of the legal title and submitted conveyancing searches and are well placed to prepare HIPs for your property.
At Spratt Endicott we produce HIPs ourselves. They fully meet the seller’s legal obligations. Whilst the speed at which at which a HIP is compiled is very much dependent on how quickly the local, drainage and water searches are received, we can typically produce HIPs within 5 or 6 working days of being instructed.
We can produce them at a cost of approximately £375.00 inc VAT for a freehold property and £395.00 inc VAT for a leasehold property.
We have arrangements with a number of Domestic Energy Assessors who are usually able to produce an Energy Performance Certificate within 48 hours. Typically their costs range between £85.00 and £130.00 plus VAT depending on the number of bedrooms at the property being assessed. Their costs are included in the figures set out above.
For those sellers who do not want to pay for a HIP outright we offer the option of deferring such costs to the date of legal completion of the sale.
David Inch
Partner
Spratt Endicott Solicitors
January 2008
