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Residential Property Services
HOME INFORMATION PACKS
Frequently asked questions
1 What is a HIP?
A pack containing certain information on your property, which
must be made available to a buyer, before you can put your
property on the market for sale.
Please click here to see a sample
HIP
2 When does the new law start?
1 August 2007 for properties with four or more bedrooms. 10
September 2007 for properties with three bedrooms. 14 December
2007 for all other properties. It only applies to England and
Wales.
3 What happens if I had my property on the
market before HIP law started, and I still havent sold it?
Currently, if your property was already on the market on the
relevant HIP law start date (i.e. 1 August 2007 for sales of homes
with four or more bedrooms; 10 September 2007 for those with three
or more bedrooms and 14 December for all other properties), and
you haven't sold it by that date you will not need to have a HIP.
This is likely to change in 2008 but at this stage no date has
been set.
4 Why are HIPs needed?
Government research has found that a huge amount of money is
being wasted each year by home buyers who make offers to buy a
property, pay for a survey, searches etc, and then discover problems
which mean that they no longer wish to buy the property.
5 What will be in a HIP?
The documents that must be included in a HIP are:
A summary of the contents
of the pack
An energy performance certificate
(EPC)
It can be best described as similar to 'green ratings' that
are applied to such items as fridges. It will tell a potential
buyer about the energy efficiency of your property and offer advice
on practical steps that can be taken to cut carbon emissions.
The EPC will have to be prepared by a qualified energy assessor,
who will visit your property and assess its environmental impact.
Your property will be given a rating from A to G for both energy
efficiency and environmental impact, with A being very efficient
and G very inefficient. The report will also offer a rating if
all the recommendations made by the energy assessor to improve
your home were carried out by you.
The EPC must be the first document in the pack, following the
index;
Sample energy performance certificate
A sale statement summarising the
terms of the sale
Including the address, postcode, whether the property is freehold
or leasehold and whether title to the property is registered at
the Land Registry or not
A copy of your title deeds
Property searches (i.e. local authority
enquiries and a drainage and water search)
If the property is leasehold, initially only a copy of the
lease; however starting on 1 June 2008 other information on the
property from the landlord will also be needed.
Other documents can also be included, such as guarantees, warranties,
and a legal summary, if your chose.
6 Does a survey need to be included in a HIP?
No.
The Government's original wish was to include a home condition
report ('HCR) in the HIP, but this has been abandoned for now.
We expect that a HCR will become a document that must be included
in a HIP within a few years.
A HCR is similar to a survey and provides information on the
condition of the property. It will rate the condition of different
parts of the property on a scale of 1 to 3 - with 1 being the
best - and would need to be undertaken by a qualified 'home inspector'.
A HCR will not purport to be, and should not be regarded as being,
as comprehensive as a full structural survey.
7 Do I need a HIP to sell my property?
Most houses and flats, which are marketed for sale to the public,
will need a HIP. Where you are selling your property privately,
to a friend or relative, a HIP will not be required. A HIP will
not be necessary in a limited number of other cases - for example,
when the property is sold with a tenant in occupation, or it is
a commercial property.
8 Who pays for the HIP?
The seller is responsible for the cost of a HIP.
9 What will a HIP cost?
The cost of each individual HIP will vary - the final price
depending on the documents included in the pack, the cost of local
searches and the EPC, where the property is, and who will be preparing
the HIP.
dgb is working on a number of options as to how you can pay for
the HIP.
When you send a HIP to a potential buyer, you cannot charge for
the HIP itself, but you may make a reasonable charge for copying
and posting it.
10 Who owns the HIP?
Any HIP that is prepared for you by dgb and paid for by you,
will belong to you, and you will be free to take it with you if
you no longer wish to instruct us, or you change estate agents.
We do not know whether other HIP providers will have similar arrangements.
11 Can I see the HIP?
Yes, you will be able to review the HIP. dgb believe it is essential
that you do so, to check that the information contained in it
is correct.
12 Who else can see the HIP?
A potential buyer can request to see a copy of the HIP. You will
have to provide them with a copy; however, you will not have to
supply one, if you or your agent, have reason to believe that
a buyer:
Is unlikely to have sufficient money
to buy your property; or
Is not genuinely interested in buying
a property; or
Is not a person to whom you want to
sell your property.
You will be breaking the law if you refuse to supply a HIP without
explanation. You cannot however, refuse to supply a HIP to someone
because of their race, sex, age, or sexual orientation.
You can make a reasonable charge to a potential buyer who wants
to see a copy of the HIP. The cost can cover copying of the HIP
and postage costs. You cannot charge for sending an electronic
copy of the HIP to a potential buyer.
A potential buyer must be provided with a copy of the HIP within
14 days of a request, or, if later, the day when payment for the
copy is received.
13 What formats will a HIP be produced
in?
You will be able to choose the number of copies of the particular
HIP you need, and in which formats, to suit your marketing requirements
(e.g. hard copies, on CD, and online). A minimum of one hard
copy of the HIP will need to be purchased to comply with the
law.
14 How long will it take to produce a HIP?
On average, dgb believe most HIPs will be prepared within
five working days of one being requested on your property, provided
you supply all the information and pay the fees required.
15 What if I try to sell my property without
a HIP?
You will be breaking the law, and may:
Receive a £200 penalty notice;
A fine not exceeding £5000;
Have to pay a potential buyer the reasonable
cost of the preparation of a HIP
16 How long does a HIP last?
Until the property is sold. If the property is taken off the
market for less than a year and then re-marketed, the same HIP
can be used.
17 How long are documents in a HIP valid
for?
Until an unknown date (the government haven't confirmed the
date yet) you will be allowed, to have in the HIP, an EPC that
is up to 12 months old when the property is put up for sale.
We expect the 12 month period for an EPC to be reduced to three
months in early 2008.
18 What if I can't get some of the information
for some reason? Does it mean I can't sell my property?
No. Until 1 June 2008, you will be allowed to market your property
as soon as you have requested a HIP. You will not have to delay
marketing until the HIP has been prepared.
19 Who is responsible if the HIP is defective?
You, and your agent, are responsible for making sure the property
is marketed with a valid HIP. The law sets out the required
content or minimum terms for some of the documents which must
be contained in the HIP. If any HIP document is misleading or
inaccurate, you, and your agent, will be expected to make sure
that the right documents are included.
The law recognises that you, and your agent, should not be
held responsible for the accuracy of the information contained
in documents provided by others. So long as you, or your agent,
have reasonable cause to believe that the documents do comply
with the law, you will not be breaking the law.
20 What if I am selling a newly built property?
Sales of new homes built to the most recent building regulations
(Regulation 17C, Part L, 2006) are currently exempt from the
need to have a HIP. The current intention is to bring these
properties within the scope of HIP law on 6 April 2008.
Homes built under earlier building regulations are not excluded
and these homes will therefore need a HIP.
New homes marketed 'off-plan' will need to contain a predicted
energy assessment (PEA) instead of an EPC in their HIP. EPCs
require a physical inspection.
Where new homes are marketed 'off-plan' there are likely to
be some differences between HIPs for these sales and those provided
for properties that are already built. For example, the searches
for the property and title information may cover a wider area
if the property has not yet been allocated an address and individual
titles have not yet been created.
Buildings that have been materially altered or changed would
not be classified as a new build as they are not covered by
regulation 17C of the building regulations. This means that
conversions are not excluded from HIP law
21 Will there be any further changes to
HIPs law?
Towards the end of 2007. the government will assess the implementation
of HIPs, and will consider what further steps (if any) might
be needed to reform the property buying and selling process.
This assessment will be informed by:
The operation of the market from 1 August
2007;
The results of area trials where HIPs
have already been in operation; and
The further consultation on HIPs which
will start this summer.
22 How do I get a HIP?
Contact dgb once you have decided to sell your property and
before you have started marketing it. dgb will be able to advise
you on:
Decision making and timetable;
Gathering together the information that
has to be and can be included in the HIP;
Obtaining pre-marketing advice and valuation;
Obtaining a pre-HCR inspection and considering
whether this document should or should not be included in the
HIP;
Obtaining the EPC;
Considering the terms of contract with
an estate agent;
Who to instruct to prepare a HIP and
the cost;
Who owns the HIP;
Set terms for profiling buyers and distribution
of HIPs;
When you can market the property;
The methods of how to pay the HIP (including
credit arrangements subject to status);
The legal steps in selling the property
once you have secured a buyer.
23 Can dgb provide me with a HIP?
Yes. HIPs contain a large amount of legal information and
dgb are best placed to prepare, interpret and advise you on
these packs. dgb intend to offer the Law Society Home Information
Pack. dgb are confident that the Law Society HIP is the right
solution for your next sale. It is:
Guaranteed to comply with HIP law;
Prepared online so you can market your
property as quickly as possible;
Flexible, allowing you to include additional
items about the property, if you chose;
Produced with Law Society branding,
offering a buyer reassurance about its quality;
Designed to link seamlessly into the
property selling process and our IT system;
Competitively priced.
24 Where can I get more information on
HIPs?
Please call one of dgb's residential property team or you might
like to look at www.homeinformationpacks.gov.uk
Mark Smith
01634 304000
Email: mark.smith@dgblaw.co.uk
This represents dgb's understanding of the law on 1 December
2007. It is a general guide for information only. You should
obtain legal advice on your specific circumstances.
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