An excellent article on the introduction of the Home Information Pack (HIP) for the sale of property in England & Wales as from 1 July 2007. The article was published on thisismoney.co.uk.
The guts of the HIP that the Vendor must supply is -
The pack will include the following documents, most of which are currently provided later in the sale:
• terms of sale
• evidence of title
• 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
• a home condition report based on a professional survey of the property, including an energy efficiency assessment.
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
• memorandum and articles of the landlord or management company
The article answered many other questions
Will failure to provide a home information pack be a criminal offence?
By how much will the new system speed up transactions?
Will the packs add to the cost of buying and selling, and who will pay?
What about sellers who cannot afford the up-front costs?
What are the benefits of the home information pack?
Won't preparing the pack simply shift delays to the beginning of the process?
Isn't it unfair to put all this extra responsibility on sellers?
Who will actually compile the home information pack?
Will anyone be exempt?
What will the home condition report cover?
Will the home condition report include a valuation?
What will the home condition report cost?
But will buyers trust a report commissioned by the seller?
Will mortgage lenders trust the home condition report?
Won't home condition reports become out of date and have to be repeated?
Will there be enough home inspectors available to do the job?
What about new homes?
The changes will not prevent gazumping, why not just ban it?
Why not adopt the Scottish system, where an offer is binding once accepted?
THe second last point is one of the most interesting ones, tho not directly relating to the HIP, is why didn't the changes end gazumping? I haven't got my head around the gazumping issue in that seems there is no certainty until settlement is concluded.
Vendors will now have to pay a significant upfront cost in preparing the HIP because of the provision of the home condition report.
Another interesting quesiton is who will have to actually compile the report. According to the answer is the person marketing the property will be responsible for ensuring that the pack is available. This would normally be the seller's estate agent but could be a builder, property developer, solicitor, or the sellers if they are not using an estate agent. There is no legal requirement the HIP has to be prepared by a lawyer.
The article included the following paragraph which has relevance to 247legal and NECS
"The Office of The Deputy Prime Minister (ODPM) is responsible for the new regime. It says Hips will ensure important information is provided up front at the very start, and electronic conveyancing will speed up the transaction once a sale has been agreed. 'Taken together, both of these measures will help create a faster and more efficient home buying and selling system.'" That's been my argument for some time. Interesting.
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