HIPs required from 1st June 2007

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HIPs required from 1st June 2007

Postby gardenlaw » Tue May 08, 2007 8:44 am

Welcome to the new Home Information Pack (HIP)

The 1st June 2007 introduces the most controversial piece of legislation ever to hit the property selling process. This will be a confusing time for all concerned. To help out we have put together some pointers which we hope will clear up a few of the rumours surrounding the HIPs

Facts:

If you chose to have a HIP produced privately the property in question must be available for sale on the open market within 3 months of the pack being produced. Otherwise the pack will be considered to contain outdated information and an updated pack will need to be produced. However, once the Property has been marketed, the Pack information will remain valid until the property is sold. It is at the buyers discretion to renew any of the HIP documents once the property has been marketed.


What is a HIP?

A HIP is an information pack which contains a number of legal documents such as property title deeds, Local Authority searches, an Energy Performance Certificate, and the voluntary option of the Home Conditions Report. Marketing of a property can not commerce without a HIP which will be paid for by the Seller.

How much will a HIP cost?
The price of the HIP will depend upon the size, value and location of the property. They are likely to be between £375 and £500.

When will HIPS be introduced?
The government plan to make HIPs compulsory from the 1st June 2007. The Home Conditions Report is no longer a compulsory element. HIP are currently being offered on a voluntary basis by HIP Providers throughout Britain.

What would happen if I market my property without a HIP?
A fine of £200 may be issued to the seller if a property is marketed without a HIP. However it is not a criminal offence.

Will the Packs become out of date?
No, once the pack is prepared, it is valid for however long it takes the property to be sold. The HIP can be renewed if requested, but this is not a requirement.

Can I keep my existing conveyancing process?
Yes. A HIP is not a conveyance, but a collection of legal documents. Buyers and sellers will still require conveyancing services.

What should I do if the buyer asks questions regarding legal documents contained within the HIP?
You must advise buyers that you are in no position to answer any legal questions and advise them that independent legal advice should be obtained.

The Home Conditions Report (HCR) has become a voluntary option, but the Government hope to introduce it as a compulsory element once enough Home Inspector have qualified and the HCR has had an opportunity to prove itself to the critics.

HIPs will not be required for the following:-


Properties in Scotland and Northern Ireland
Non-residential properties or where homes are in mixed use with commercial property
Private sales where the property is not offered on the open market (e.g. to a family member, neighbour, or friend)
Properties sold with sitting tenants and not available for owner occupation
‘Right to Buy’ sales by Local Authorities or other social landlords
Homes held on a lease of less than 21 years


The initial advantage of buying a HIP privately is that once your pack has been received you can market your property immediately, with or without an Estate Agent.

What must legally be in a Home Information Pack?

terms of sale;
an Energy Performance Certificate
evidence of title eg an office copy of the HM Land Register for the house;
replies to standard preliminary enquiries made on behalf of buyers;
copies of any planning, listed building and building regulations consents and approvals;
for new properties, copies of warranties and guarantees;
any guarantees for work carried out on the property
replies to local searches; and

Also, for leasehold properties:
a copy of the lease;
most recent service charge accounts and receipts;
building insurance policy details and payment receipts;
regulations made by the landlord or management company; and
memorandum and articles of the landlord or management company
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