Overview of Home Information Packs
 

From 1^st August 2007 owners of residential property that has four or more bedrooms will be required by law to have a Home Information Pack (HIP). Provided the property owner has ordered the HIP they can market their property immediately even if the HIP has not been received.  The Home Information Pack (HIP) is a set of documents comprising legal title, searches, an energy report, a new homes warranty (if applicable) and leasehold / common hold information if applicable.

Much of the information in the Home Information Pack is already used in the conveyancing process but is currently obtained after a sale has been agreed.  Under the new regulations the responsibility to obtain and pay for the home information pack documents passes from the buyer to the seller and the seller must order the HIP before placing the property on the market.

Interim period
 

If a property is on the market before 1^st August 2007 but has not been sold the Seller does not have to provide a Home Information Pack straight away. The Seller may continue to market the property without a HIP until 31^st December 2007. If, after that date, the property has not been sold and the Seller wishes to continue to market the property a HIP must then be provided.

After 31^st December 2007 all residential property with four or more bedrooms must have a HIP.

Home Information Pack Exemptions
 

There are some exemptions to the regulations and sellers should seek advice from a qualified property lawyer prior to marketing to assess whether a Home Information Pack is required. All CMS property lawyers are qualified to give advice on the Home Information Pack regulations. The exemptions are set out briefly below:
 

• Business Use – properties that are classed as a business under the planning regulations and that will remain a business at legal completion.

• Residential property converted to business use – a dwelling that has been converted with the appropriate planning consent to business use and that will still have business use at legal completion.

• Mixed Commercial/Residential Sales – properties that are a mixture of business and residential i.e. a shop with a flat above.

• Dual Use – properties that are used for both business and residential i.e. a Doctor’s surgery with living accommodation.

• Portfolios of Properties – a number of properties that are being sold together as a portfolio

• Unsafe Properties – properties that have been deemed unsafe for habitation by the planning authority and that will remain in that condition on legal completion

• Demolition – property that has a demolition order on it and that will remain in that condition on legal completion

• Properties not being placed on the Open Market – properties that are sold by landlords to existing tenants (i.e. right to buy and housing associations), property sold by a private landlord to an existing tenant, property sold to friends/family etc. that has never been placed on the open market.

• Properties with less than four bedrooms.
   

Note: The Home Information Pack regulations are complex and it is important to take qualified legal advice before marketing your property after 1st August 2007.

HIP UPDATE

Latest Government announcement in relation to Home Information Packs (HIPs)

Many estate agents must be confused and confounded at the sudden announcement by the Government on 22^nd November that the HIP regulations would be extended to include all residential property in England & Wales, regardless of size, from 14^th December 2007.  

From that date home owners who wish to place their property on the market may not do so unless they can prove that they have ordered a Home Information Pack. However, it appears that someone somewhere has been listening to the many agents who are reporting problems and delays with HIPs, because the time limit for first day marketing has been extended from 1^st January 2007 to 1^st June 2008. The reason for this relaxation of the regulations is the delay experienced by HIP providers in obtaining searches and leasehold information. 

The HIP regulations will also be amended to allow leasehold property to be marketed without the ‘required’ leasehold information. The HIP must contain the leasehold document itself but the remainder of the ‘required documents’ including management information, service charge accounts and ground rent receipts need not be included in the HIP for the time being. This relaxation of the regulations is expected to last for a further period of six months during which time the Government will look at ways of speeding up the provision of leasehold information. 

The latest CLG newsletter explains that the Government is turning to that bastion of conveyancing common sense, The Land Registry, for advice on how best to speed up the delivery of conveyancing searches and leasehold information. It has been my long-held view, and that of many others in the legal profession, that the Land Registry should be a one-stop-shop for all legally binding information that affects a property. It is ridiculous in this day and age of information technology that the solicitor is obliged to obtain search information from so many different agencies including the land charges register, local authorities, water authorities, commons registers, mining authorities, local churches etc. With leasehold properties the problem is exacerbated further with solicitors, hard-pressed to meet fast exchange deadlines, sometimes having to wait weeks and pester continually for leasehold management information, service charge accounts and receipts etc. 

The one good thing that the HIP may have achieved so far is to make estate agents understand how frustrating it is to be a conveyancing solicitor, trying to do a good job, whilst waiting for all this information to be assembled. It would be a really worthwhile exercise if the Government were to insist that all legally binding charges, covenants, searches etc. were registered at the Land Registry, failing which they would not be enforceable. If the conveyancing solicitor were able to obtain all this information in one application the time scale between acceptance of offer and exchange of contracts would be dramatically shortened. This action would inevitably lead to reduced search charges for consumers and fewer insurance claims for negligence against solicitors which in turn would lead to reduced conveyancing fees. 

One last thing the Government could do for the beleaguered property industry is to provide us with a finite set of Home Information Regulations. Over the past few weeks we have received numerous calls from estate agents who are deeply confused by the present legislation and all the different dates, extensions and temporary relaxations of the regulations. Naturally, we are happy to help and have posted regular updates and explanations of the regulations on www.howtobooks.co.uk/hip/update.htm.  

Sharon Buthlay

Director of Conveyancing Marketing Services Limited and

Author of The HIP Way to Buy and Sell Your House

ISBN number 978-1-84528-152-6

Published by How To Books

Available from www.howtobooks.co.uk or www.amazon.co.uk and all major bookshops priced just £12.99

Recommended publication - The HIP Way to Buy and Sell Your House by Sharon Buthlay (a consumer guide to the HIP - ISBN 1-84528-152-7 - available from May 2007 from www.howtobooks.co.uk

Click Here to Continue with Home Information Packs

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