home information packs

overview

After a number of false starts, home information packs (HIPs) finally became reality on 1st August 2007. Solicitors, estate agents and others in the property industry are having to grapple with a third set of regulations (the first two sets of regulations having been abandoned before they came into force) in this so far ill-fated government project to speed up the home-buying process. From 14th December 2007 the HIPs requirements will extend to all properties, whatever their size.

The new regulations are complex and the Department of Communities and Local Government have recently published a guide to the regulations. The guide runs to more pages than the regulations themselves. In this overview we try to highlight some of the key provisions in the new regulations.

1. From 14th December 2007, HIPs will be required for all properties whatever their size. However, the size of a property (measured in terms of the number of its bedrooms) will still be relevant for some time to come. That is because the HIPs regime has been introduced in stages and the size of the property will determine the date from which a HIP must be produced for marketing of that property.

2. The basic rule (subject to the transitional provisions outlined below) is that a property cannot be put on the market unless the estate agent (or the seller himself in a private sale) is in possession of a HIP. Once in possession of the HIP, the estate agent must make a copy available to any potential buyer requesting one.

3. Properties which are already on the market before the HIPs regulations apply to them will not require a HIP. This means that HIPs will not be needed for four bedroom properties already on the market before 1st August 2007, three bedroom properties on the market before 10th September 2007 and all other properties on the market before 14th December 2007.

4. The minimum requirements for a HIP are that it must contain an index, a sale statement, an energy performance certificate, title details, local search and a drainage search. In recognition of the potential delays in obtaining searches and the energy performance certificate (and in the case of unregistered land, details of the title) there are special provisions allowing the property to marketed with an incomplete HIP so long as those items have been requested.

5. There is also a much wider exception to the requirement for a HIP which will apply to properties being put on the market before 31st May 2008. During that time it will be permissible for a property to be marketed without a HIP provided all the compulsory HIP documents have been officially requested. The event which triggers the requirement for a HIP is the receipt of the energy performance certificate.

6. Once all the compulsory components of the HIP have been assembled there is no further obligation to update the contents of the HIP. This means that, for a property which remains on the market for a considerable period of time without selling, potential buyers may well be receiving out-of-date searches which need to be renewed by their own solicitors. Even at the initial point of marketing, the only requirement as to the age of documents is that the searches must be dated within the previous three months and the energy performance certificate must be dated within the last 12 months.

7. If a property is taken off the market, it is permissible to put it back on the market without a new HIP if the re-marketing occurs within 12 months of the date when the property was first put on the market.

The summary above is not intended as an exhaustive guide to the HIPs regulations. On the contrary, there are many provisions and further exceptions which have not been covered in the summary. If you have any further queries about the regulations you should take legal advice. Any member of our residential property team will be happy to provide further guidance. The remaining sections of our website coverage of HIPs explain how Field Seymour Parkes can provide a HIP for your property.