Helping Innovate Property (HIP) – Blog, Housing Market News and Articles

This week has seen news released about developments of Home Information Packs and has given rise to speculation about Home Condition Reports (HCR) making a suprise return. The main topics and news within Magaret Beckett’s statement; industry professionals and associated organisation had some expectation of though we were all unsure of the exact timing until recently.

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Home Information Packs (HIP) are becoming more widely accepted since the first date of implementation. However, with the Home Information Pack’s existence also comes some fallacies and myths which have been attached to them. Due to this we have decided to look at a selection of some commonly held misconceptions and some of the more unusual ones we have come across.

1. HIP stands for and is an abbreviation for Home Improvement Pack.

This a common mistake many make and one can certainly be forgiven for holding this belief. This error was recently made by the Communities and Local Government (CLG) when publishing a guidance document on Home Information Packs within their website. It has since been rectified.

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The final part of our Property Purchase Completion Guide we take a looka what happens when things dont go as planned.

Completions that don’t happen on the day

There are occasions when, for a number of reasons, completion does not happen on the day. Obviously this can cause serious difficulties however there are a few things that you can do to help mitigate these difficulties and any financial losses:

• Make sure you are available to speak to your lawyer and to the selling agents at all times. Find out what time your lawyer will be finishing for the day and see if there will be anyone staying later who could deal with any last minute issues

• If you are also selling a property do not hand the keys to your purchaser or allow them to move their belongings in unless your lawyer has advised you to do so

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The property completion proceedings are further discussed in Part 2 of of our guide; including some of the obstacles that you may encounter when buying your next home.

Events on the day of completion

In the normal course the completion monies will be sent by your lawyer early on the day of completion to the account of the seller’s lawyer. If you are also selling a property then your lawyer will need to receive the funds from your purchaser’s lawyer first which obviously means the monies would be transferred to your seller’s lawyer later in the day.

Your property purchase is considered completed when the seller’s lawyer receives the completion monies and when the seller vacates the property. As the lawyers cannot control what time the funds will reach their destinations there is no guarantee as to what time completion will take place. However, generally  it will be around lunchtime.

The contract will incorporate a latest time for completion. This will either be as per the standard conditions of sale, in which it will be 2pm, or it may be varied. It is very rare that it will be later than 2pm but it is quite common for it to be earlier, perhaps 1pm or even as early as 12. If the matter has not completed by this latest time then the party who has caused the delay in breach of the contract (see below).

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Property completion is the day that you get the keys to your new property and that the money is paid over to the seller’s lawyer. The date will have been agreed between you and the home seller prior to exchange of contracts and will be a fixed date on which both you and the property seller are contractually bound to complete. Over the next week we will be publishing our 3 part guide to Property Completion.

Agreeing a completion date

Before your lawyer exchanges the contract you will be asked for a completion date. There will usually be at least one week between exchange and completion to allow time for the mortgage funds to be ordered from your lender and final searches to be completed (though this can often be done quicker if required) and it must be a weekday but other than that you and your seller are free to agree a date that suits you both.

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The Home Information Pack legislation is generally understood; that ‘all’ domestic properties being placed on the market require a HIP, except in a few exceptions. The important date of the 1st October 2008 looms in regard to the Energy Performance Cerification of properties; did you realise that if your house was on the market before the relevant Home Information Pack legislation was enacted that you will require an Energy Performance Certificate (EPC)?

You may have had you home on the market by now a ‘considerable’ length of time and whilst these properties continue to be exempt from the HIP legislation are not exempt from Energy Performance Building Directive (E.P.B.D.)

So what does this mean for pre-HIPs home sellers from the 1st October 2008?

One must have an Energy Performance Certificate (EPC) commisioned and it must be made available to prospective buyers in its full form at the earliest opportunity when:

• when the building is viewed
• If any written information about the building is provided as a result of a request by a prospective buyer – this includes email and electronic communication
• When contracts are exchanged

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After our recent article,  should i train as a domestic energy assessor? which has received a massive number of comments and strength of feeling within the responses; we have decided to follow this up with the latest announcement by the Government.

The Government periodically announces combined numbers of Domestic Energy Assessors and Home Inspectors and breaks the figures down into the stage they have achieved at the time of reporting. The numbers continue to rise from the last published figures on the 6th March 2008. As of 23rd May 2008 the official numbers are:

Accredited (DEA & HI) – 7,930 (increase of 829 from 6/3/08)
Qualified (DEA & HI) – 1,464 (passed exams and qualified, but not yet become accredited)
Passed exams (DEA & HI) – 4,816
Total (DEA & HI) in system who have passed exams or progressed further – 14,210 (increase of 2,784 from 6/3/08)

It is worth remembering that these figures do not show those that are currently practicing. It is anticipated that both Domestic Energy Assessors and Home Inspectors (whom many have never carried out enough Home Condition Reports even to regain a fraction of the training costs) have left the industry. It is sad that these people have been unable to survive within the industry; often citing a lack of instructions and income as the main defining reason for leaving to find alternative employment.

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It is fair to say that the Royal Institution of Chartered Surveyors (RICS) and the National Association of Estate Agents (NAEA) have never been the greatest admirers of Home Information Pack legislation. It is envisaged that this week they will combine efforts when putting their views forward to the Government to attack HIPS once again.

The latest stance is one of focussed criticism towards the searches within the Home Information Pack whilst seemingly and suprisingly asking for some aspects to remain and apparently agreeing that the planned Property Information Questionnaire (P.I.Q.) would be useful.

RICS’ director of external affairs, Gillian Charlesworth, said: “These legal documents (searches) must be taken out of the packs and left to buyers and their advisers to obtain at the appropriate time during the transaction.” RICS wants HIPs to be replaced with a voluntary report as per the Carsberg report.
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The Property Information Questionnaire (PIQ) has been announced as one of the next steps in progressing the Home Information Pack which will add further information and benefits to the existing HIP.

The Communities and Local Government has issued a consultation document as part of the new planned ‘mandatory’ documents. The consultation contains the following parts:

• the leasehold requirements in the Home Information Pack (HIP) (Part 1) – we will discuss in a later post which will follow
• the inclusion of the Property Information Questionnaire (PIQ) in the HIP (Part 2).

We will be considering and formulating our views on the questions within the paper over the coming weeks. HIP-Consultant.co.uk are interested in your views and welcome comments based on this consultation.

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This week has been eventful for sure in the continued life of Home Information Packs. HIPS are now 1 year old and news headlines continue to be made from the debate on Home Information Packs (HIPS). Recently, significant reports of non-compliance of the legislation have come to light and been acknowledged by leading figures involved within the industry.

Yesterday, it was widely reported by many news agencies including the BBC that some agents, I must stress only ‘some’ agents; are flouting the law and are proceeding to market properties without the legally required Home information Packs.

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Home Information Packs (HIPS) are now a year old this week. The past year certainly has been controversial at times for HIP packs as the legislation has been rolled out; which lets be honest was to be expected. Home information packs have been reported upon as often is the case in the UK press with a negative slant. The legislation has unfortunately become a ‘political football’ with the debate showing little signs in slowing.

Home information Packs were designed to provide information to the home buyer, speed up transaction times and reduce the number of failed completions. Home information Packs or as they will be known Home Reports are due to be implemented in Scotland from December this year.

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