A Home Information Pack (HIP) is a set of documents which contains important information about a property. There are a number of mandatory (‘Required’) documents which every HIP must contain. Further optional (‘Authorised’) documents may be included if the seller wishes.
The Required documents provide information relating to ownership of the property and information relating to essential searches, which are needed as part of the conveyancing process. An energy performance certificate (EPC) and recommendation report are also Required documents.
It will be an offence to market a property either through an estate agent or independently without a Home Information Pack. However, at the present time it is sufficient if you have ordered one!
The Government has brought in the bulk of the HIPs regulations in three stages but is continuing to phase in new requirements. The first stage commenced on 1 August 2007 and applied to properties with four or more bedrooms. On 10 September 2007 homes with three bedrooms were included in the HIPs regulations. Finally, from 14 December 2007, the third stage brought one- and two-bedroomed homes and studio flats into the scheme. Subject to certain specific exceptions, all residential properties now require a HIP.
If your property is being sold through an estate agent or you are arranging a private sale yourself and advertise it ‘for sale’ anywhere, including a private advertisement or on the internet, you will require a HIP.
You are allowed to sell your property privately, for example to a family member or friend, without a HIP as long as it is not marketed anywhere.
If a HIP is required and you market your property for sale without one, you are at risk of receiving a penalty notice from the Department of Trading Standards. The current fixed penalty is £200.00 per notice. Please note that more than one penalty notice can be issued if marketing continues without a HIP.
Your HIP needs to be prepared as soon as possible once you decide you would like to put your property on the market. Although there are other types of HIP provider, there are advantages in using your solicitor to prepare the HIP as they will be handling the conveyancing work for you once the sale is agreed. They will be aware of the legal title to the property and can produce contracts quicker than a solicitor who hasn’t produced your HIP – and of course there would be no additional costs.
With our dedicated team of residential property specialists, Hatchers can offer a range of Home Information Packs from the minimum regulation compliant HIP with just the Required documents, to a fully comprehensive one which could include Authorised documents such as details of guarantees, planning permissions and building regulations approvals. This would be more expensive but could speed up the sale and reduce the likelihood of further enquiries once a sale is agreed. Whilst you are having your property valued and choosing an estate agent we can put together your HIP so that it is available as soon as you instruct an agent and the property can be marketed as soon as possible. Please contact us for further information on hips@hatchers.co.uk
The Government has said thata property may be marketed without a complete HIP, as long as one has been ordered. The Government has also stated that the Energy Performance Certificate may be up to 12 months old when a property goes up for sale. This will only be for a temporary period and you should check with Hatchers to see what the current requirements are.
All properties put on the market now require a HIP. However, because of 'transitional arrangements' you may find that some homes advertised for sale do not have a HIP. It can be confusing, but this is the current situation:
Sellers: If a solicitor prepares the seller’s HIP the information contained will also be used with the conveyancing process. This will mean that when a sale is negotiated it should proceed more quickly as the solicitor will already be aware of the title information documents. If a pack contains ‘Authorised’ documents as well as the ‘Required’ documents (see below for further information) this will also help the transaction along as the buyer will have more information up front rather than receiving this during the transaction process.
Buyers: The HIP will contain important information about the property at an early stage. There will be various types of packs and some may contain more information than others. All packs will contain an EPC and a recommendation report (see below) so the Buyer will be aware of how energy efficient the property is and what can be done to make it more efficient.
The Required (mandatory) and Authorised (optional) information for a freehold property as are follows:
This is a certified assessment of how energy efficient the property is. The assessment must be carried out by a qualified Domestic Energy Assessor (DEA) or Home Inspector (HI). The report will rate for energy efficiency different aspects of the property, such as the walls, insulation, windows, heating and lighting on a scale from A to G, similar to the system used on fridges and electrical appliances. The DEA or HI will then issue the EPC.
The Energy rating is a guide only and not necessarily accurate for the specific property. This is because the assessor has to make certain assumptions when entering data onto the software, eg age of house, year of any extension, whether the windows are of average size for the period of house etc.
The assessment will contain a recommendation report on how to improve the energy efficiency of the property, for example by adding further insulation which will help cut fuel bills etc.
For more information, go to www.homeinformationpack.gov.uk
As soon as the HIP is ordered a qualified Domestic Energy Assessor or Home Inspector will be instructed to prepare the energy assessment. This will involve a visit to the property for the report to be prepared.
While the property is on the market there is no need to update the Home Information Pack (ultimately, the market decides whether the documents remain acceptable and up to date).
If the sale of your property stops then starts again, you would normally be required to assemble a new Pack and update those documents which are now out of date according to the requirements of the Home Information Pack Regulations. However, the seller can carry on using the same Pack without the need to update any of the documents in the following circumstances:
If the searches are more than four months old when contracts are exchanged your buyer may have to obtain new searches at their expense because mortgage lenders will not accept searches that are over six months old. This will not increase costs for you but it may slow the transaction down.
If your estate agent has prepared the HIP it will depend upon the terms you agree with them as to who owns it. If the estate agents own the HIP you may have to pay for it to be released to you.
If Hatchers prepare your HIP then this will belong to you and you will be able to market the property with any estate agent that you choose.
You are free to take the property off the market at any time. You will still be responsible for the cost of the HIP, and if you have signed up for a credit agreement you will need to clear this payment.
This is a report based on a professional survey of the physical condition of the property. Originally this was going to be compulsory and would have been required to be included within the HIP. The Government has now decided that the HCR will only be included if the seller decides to do so.
If a seller decides to commission such a report then they are at an advantage as they will be aware of any problems with the property before it is marketed and can carry out any necessary work. If the work is not done, at least the buyer will be aware of the problems with the property’s condition when they make an offer. This should prevent any negotiating on price for repairs and maintenance at a later date. If no HCR is included in the HIP, a buyer will usually decide to have his own survey carried out to check the condition of the property and may try to renegotiate the purchase price at that stage to cover the cost of any works his survey reveals.
From 31 March 2008 new HIPs regulations require that:
1. In England, where a new home is to be marketed, the HIP must include a sustainability certificate (which is a certified assessment of the home against the standards of the Code of Sustainable Homes). This new requirement will only apply to new homes being designed or constructed or that have been constructed but never occupied - not to existing properties that are being converted. Transitional measures mean that the new rules will only apply to those homes that are at the beginning of the construction process rather than to homes that are already in the process of being built.
2. The current arrangements in England & Wales, under which personal search companies may use insurance to back up their searches where they are unable to access data in local authority records, will be extended until 1 January 2009.
Hatchers can advise developers on the need to include the new certificates in the HIPs and to which properties this requirement will apply.
A basic Hatchers HIP containing Required documents only will cost £325 including VAT. If Authorised documents are required these will be subject to an additional cost. Please note that additional costs can arise in relation to leasehold properties.
Payment can be made by cheque, bank transfer, credit or debit card.
