HIPs Go Critical
7-May-08
When putting their house on the market, the last thing that most people think about is who’s going to provide their Home Information Pack (HIP). But this deserves to be much higher up their list of priorities: the choice of provider can already dictate the quality of the information in the HIP and will soon determine when the house can actually be put on the market.
Launched in August last year, HIPs are designed to make the house buying and selling process quicker and easier by providing a range of information and legal documentation to potential buyers up-front. These include the property’s title document, the results of the normal property searches and an Energy Performance Certificate (EPC), which rates the property’s energy efficiency.
Up to now, houses could be placed on the market as long as all the necessary information and documents had been requested. But from 1st December 2008, the HIP needs to contain at least the EPC and the title document before a house can be marketed. This means that the consequences of choosing the wrong HIP provider are now greater than ever before.
Obtaining a HIP
There are a number of potential routes to obtaining a HIP. Some larger estate agents have their own in-house HIP providers, while others use one of the numerous HIP companies that have sprung up. Many solicitors are also able to supply HIPs.
But the service you receive from these different suppliers can vary greatly. For example, in most instances a HIP should take one or two weeks to put together, but some providers are taking upwards of six weeks. Indeed, SMR Solicitors has already seen house purchases almost fall through over delays in obtaining the HIP.
Certain providers are also putting potentially inaccurate information in their HIPs. In February 2008, the government warned about the practise of including photocopies of title documents, known as Register Views, in HIPs rather than the official water-marked Land Register copies. Some HIP providers are also conducting their own property searches rather than paying to obtain the searches from the district council.
The problem with both these practices is that there is no opportunity for compensation from either the Land Registry or the district council if there are any errors in the Register Views or private searches. Because of this, some mortgage lenders will not accept HIPs that contain private searches.
Choose a Solicitor to Compile Your HIP
The Law Society blames these problems on HIP providers not understanding the legislation. ‘If you are selling up, choose a solicitor to compile your HIP,’ advises Law Society vice-president Paul Marsh. ‘Solicitors understand the regulations and can therefore ensure the HIP meets the required standard.’
Using a solicitor also avoids another potential problem. Many people simply obtain a HIP through their estate agent, often because the HIP is included within the estate agent’s fees. But this obviously causes problems if they want to change estate agent, as the original estate agent is under no obligation to release the HIP.
This means that the homeowner may need to pay a withdrawal fee to obtain the HIP or purchase a completely new HIP, all of which can taken even more time. And in the current housing market, time is something that few sellers can afford.
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More information about HIPs is available at the official Home Information Packs website.
SMR Solicitors has its own in-house energy assessor able to conduct EPCs and is usually able to produce a fully compliant HIP in around two weeks.
Please contact Roger Stone at Chichester or Sarah Evans at Selsey for more information.