Date:  23 August 2007

HIPs - WELL IT FINALLY ARRIVED

After a great deal of controversy and excitement, as from the 1st August 2007, when marketing a residential property with four or more bedrooms for the first time then a Home Information Pack (“HIP”) is intended to be provided. This includes flats with 4 or more bedrooms as well as houses and bungalows.

Further, as from the 10th September the requirement will also apply to 3 bedroom properties as well.

The general idea is that where applicable, the property should be marketed with a valid HIP including the novel Energy Performance Certificate (“EPC”).

However there are one or two circumstances where a HIP is not needed for the time being: 

• Where the property was first marketed before 1st August 2007 and has had to be re-marketed because the transaction has been repudiated or the offer withdrawn. This is subject to the condition that the re-marketing commences within 28 days of the repudiation or withdrawal; 

• It is expected the Government will lay further regulations to specify a drop dead date after which all properties marketed under any circumstance must have a full HIP, presently expected to be around March 2008; 

• In addition, before 1st January 2008 a property can be marketed without a HIP as long as one has been requested. The obligation to actually provide the HIP arises once the person responsible has obtained the EPC, and in any event must be provided to the buyer before contracts are exchanged. Even so,, the surveyors professional body, RICS, advise their members that their effort to obtain an EPC should be ongoing throughout the marketing process. Once the EPC is obtained then the HIP must be provided as soon as possible thereafter.

After the 1st January 2008 a HIP must be provided at the time of marketing, but need not include the EPC so long as one has been requested, and follows on as soon as possible.

The content of the HIP is prescribed by The Home Information Pack (No.2) Regulations which came in to force on 2nd July 2007 and must include as a minimum: 

• an index; 

• the EPC together with the report of recommendations, and in case of uncompleted property, a predicted energy assessment; 

• the sale statement giving certain specified particulars; whether the property is freehold and whether it is offered with vacant possession etc; 

• Land Registry office copies and filed plan; 

• local search; 

• drainage and water search; 

• in the case of leaseholds, a further package of information including a copy of the lease, ground rent, service charge and insurance information.

Please note this list is not exhaustive and reference must be made to the Schedules in the statute to ascertain what relates to the individual property concerned.

There are also further documents that may be included but which are optional at this time, including the originally controversial Home Condition Report, and we may expect additions to the compulsory list as time goes by.

Time will tell whether HIPS will benefit residential conveyancing. Certainly one can accept that the cost of the initial provision of the HIP by the seller will act as a deterrent to any frivolous testing of the market, and likewise the provision of an information pack at the outset of a transaction may reduce the likelihood of the surprises that a buyer may encounter as a transaction progresses. The buyer should be able to move forward with a fair degree of certainty.

However there are still several core documents that are not compulsory as yet and so long as such additional documents remain requisite then I do not see the lead in time to exchange of contracts being materially lessened.

So love them or hate them, HIPs are now with us, and we at Buller Jeffries are geared up to help our clients in their preparation, including arrangements for EPCs.

Please contact Clive Vernon or any other member of the Property Team for further information.