Clarke and Son News

An article in the Law Society Gazette On-Line comments on a report that Home Information Packs (HIPs) have reduced the number of failed transactions.

Conveyancer and HIP provider myhomemove said the packs had caused the number of failed property transactions it was involved in to dip to 9% since the full introduction of HIPs last April. The figure was significantly lower than the 23% average failure rate published by the government in 2007, before the introduction of HIPs.

The data for more than 10,000 sales where myhomemove acted for buyers also showed HIPs had speeded up transactions by about six days, with average time taken to complete now 50 calendar days.

However, Richard Barnett, chairman of the Law Society’s conveyancing and land law committee, commenting on myhomemove’s figures, said HIPs were unlikely to have played a significant part in reducing the failure rate.  Instead, he put the drop down to the unusual market conditions.

Paul Cowdery of Clarke & Son comments:

HIPS with up-to-date searches (i.e. usually no later than 3 months old when we receive instructions) can help to speed up the legal investigation of papers, but I still find in practice that they are of little interest to purchasers who only rarely say that they have viewed the HIP before putting in an offer.  If the market is active then HIPs can help but where it is sluggish there can be duplication of cost where buyers have to renew out of date searches. The jury is still out!

For further information on legal services when buying or selling your home or for the preparation of or consideration of a HIP then contact Paul Cowdery or Jenny Axe on Tel: 01256 320 555.

The following views relating to Home Information Packs (HIPs) post a General Election next Spring have been communicated by Rob Hailstones of the Home Information Pack Action Group (HIPAG).

Grant Shapps has recently reiterated his intention to ’scrap’ HIPs.  What he hasn’t said publicly, is whether he will amend or replace them.  However, the Conservatives have made it clear that they want to improve the home buying and selling process. It is therefore, highly unlikely that Mr Shapps will allow us to go back to the home buying and selling process, as it was, pre-HIPs.

 When the Conservatives held their own home buying and selling review last year it was made clear to them, by Owen Inskip and Kirstie Allsopp, that whatever format the HIP eventually takes, providing ‘information up front’ will be essential.  As an ex-conveyancer I believe we should build on the developments made over the last few years so that creating a property legal pack, that is as ‘exchange ready’ as possible, should become standard practice.

It has to be accepted that the political situation is not as clear as it was a while ago, the Conservatives winning with a safe majority is not a forgone conclusion.  Mr Shapps might not even become Housing Minister and scrapping HIPs will probably be way down the Conservatives ‘to do’ list, after Afghanistan, the economy, health, education etc.  Some pundits now forecast a March election but it would appear that the safe money is still no an election in May.

Whatever the outcome politically, I believe HIPs will either be with us for a while or any worthwhile replacement pack will still require the involvement of a good HIP provider and a local solicitor/conveyancer.

 Paul Cowdery of Clarke & Son LLP adds:

I share the view of HIPAG that a meaningful property legal pack does help in the initial stages of the conveyancing process.  I do not believe it should be a critical feature which will delay marketing and I do not think it should include local or drainage searches as is presently the case.  Results to those searches can be obtained quickly by the purchaser’s solicitor once a buyer is found.

For more information on HIPs, or buying and selling your home, contact Paul Cowdery on Tel: 01256 320 555.

It is becoming clear that after April 6th, one of the key issues determining whether a property may be marketed will be the return of the completed Property Information Questionnaire. These forms must be filled out by the seller and returned to the HIP provider before a property may be marketed. 

Current legal position

It is apparent that some HIP providers are trying to convince sellers to pay for documents to be refreshed in HIPs that are a year old. However, searches and title information only need to be refreshed if a property is taken off the market a year after it was first marketed and then remarketed again.

The Partnership, a supplier of Home Information Packs, has produced a helpful summary sheet which summarises the current legal position and can be downloaded from; http://www.thepartnershiplimited.com

If you would like more information on Home Information Packs and the legal aspects of buying and selling your home, please contact Paul Cowdery on Tel: 01256 320 555.

While the government has underlined its commitment to Home Information Packs (HIP) by extending the documentation that must now be included, it has delayed several key changes that were due to come into force after 31st December 2008.   The date when a HIP must be in place before a property can be marketed has been delayed until 6th April 2009.  This temporary provision, designed to reduce the potential impact of HIPs, was due to expire at the end of this year.  However, this “First Day Marketing” as it has come to be known, had raised concerns with agents worried about delays in bringing a property to the market and properties may continue to be marketed with merely a HIP being commissioned. In summary: 

• Searches remain a compulsory component of HIPs. A working group will be established to consider how they can be made simpler and more easy to use.
• Transitional insurance cover for missing search information will end on 5th April 2009.
• From 6th April 2009 HIPs must include a Property Information Questionnaire (PIQ)
• The present ‘temporary’ leasehold information provision will be made permanent from 1st January 2009. This means that only a copy of the Lease need appear in the HIP although the PIQ will include additional leasehold information from 6th April 2009
• First day marketing will end on 5th April 2009. Estate agents will still have the 28 days provision for certain information (e.g. searches) that takes longer to obtain
• The regulations still do not impose a ‘drop dead’ date after which all properties on the market require a HIP.
• The Minister is setting up a working group to explore options for making sure that consumers have information about the condition of the home. The aim is “to develop market-led models that can be delivered by existing practitioners, including Home Inspectors”.

The OFT have announced that they will be conducting a comprehensive study of home buying and selling. This will concentrate on:  

• Competition on price and quality between service providers
• The prospects for new entry by, in particular, internet property retailers
• The extent to which consumer interests are protected by the existing regulatory framework

The study may also cover the relationships between estate agents, and mortgage brokers, surveyors, solicitors and other professional advisors.

If you would like advice on HIPs or any aspect of buying or selling your home, please contact  Paul Cowdery or Tel: 01256 320 555

The revised HIP Regulations, covering amongst other things First Day Marketing provisions, the new Property Information Questionnaire and the continued use of Personal Searches in HIPs are due to be announced within the next week. We will provide a full breakdown as to how the Regulations will affect buyers and sellers as soon as we can after their publication.

If you would like advice on HIPs or any aspect of buying or selling your home, please contact  Paul Cowdery or Tel: 01256 320 555

Certain regulations permitted the marketing of properties without a Home Information Pack (HIP).  Those regulations also had the effect of exempting properties from the requirement to provide an Energy Performance Certificate (EPC).

This typically included homes which were marketed prior to the various applicable commencement dates (which in turn limited the need for a HIP to particular sized properties before removing the property size criteria altogether) and where those properties have been continuously marketed ever since.

However, the exemption provisions cease on 1st October 2008.

The effect of this is that for all properties for sale as at 1st October 2008, where contracts have not been exchanged, the seller must provide the buyer with an EPC prior to exchange. This relates to all properties being sold regardless of when listed and whether or not they have been openly marketed.

For clarity the seller is responsible for procuring the EPC, having a copy available for prospective purchasers to view and providing a hard copy to the purchaser prior to exchange.

There appears to be a lack of knowledge about this requirement across the market place. If your property has been on the market without a HIP then please let us know or at least ensure that your Estate Agent is made aware of the need for obtaining the EPC.

Moving home? For further information on HIPs or conveyancing, either e-mail Paul Cowdery, Conveyancing Partner direct or telephone Clarke & Son on 01256 320 555.

The Department for Communities and Local Government is consulting on two proposed changes to the information that must be supplied in a Home Information Pack (HIP).

The proposals are that each HIP should include a Property Information Questionnaire and, for leasehold properties, a summary of key information relating to the lease.

For further information, either e-mail Paul Cowdery direct or telephone Clarke & Son on 01256 320 555.

“There are particular requirements which now apply to Home Information Packs (HIPs) when you’re purchasing a new (new build) property” says Paul Cowdery, Residential Conveyancing Partner at Clarke and Son, Basingstoke.

He adds, “Newly built homes are affected by HIPs but there are differences in the way the scheme operates for these types of properties, particularly in the way that energy performance information is presented.”

Since 6th April 2008, all new build properties marketed ‘off-plan’ or ‘complete’ require a HIP. Any off-plan property physically completed after the 6th April requires an ‘As Built EPC’ (‘Energy Performance Certificate’) regardless of whether there was a HIP produced at the point of marketing. This is needed for Building Control to issue final certification and a copy with the recommendation report presented to the buyer on completion.

New homes marketed “off-plan” before they are physically complete will not have a full Energy Performance Certificate (EPC) as these can only produced following a physical inspection of a completed building.

New build HIPs therefore differ from traditional HIPs with respect to the EPC which is replaced by a Predicted Energy Assessment (PEA) for plot sales marketed off-plan, or an ‘As Built EPC’ for completed properties. ‘As Built EPCs’ cannot be produced by Domestic Energy Assessors (DEAs) and can only be produced by qualified ‘On Construction Energy Assessors’.

Paul provides expert guidance on all legislation regarding Home Information Packs and how it affects home owners either as potential purchasers or as vendors.

If you’re looking for some help or advice on any aspect of Home Information Packs, either e-mail Paul Cowdery direct or telephone Clarke & Son on 01256 320 555.

The final report of the Carsberg Review has now been published and there are two main findings:

1. Improvements need to be made to the residential property transaction process because problems have not been adequately addressed by the introduction of Home Information Packs (HIPs)
2. The current system of voluntary regulation and redress does not provide adequate protection or information for the consumer.

A long list of recommendations are included that focus largely on the need for formal regulation which would cover estate agents and letting agents, managing agents and landlords who do not use an agent.

The recommendations are also aimed at improving the provision of information for consumers and making property transactions quicker and less expensive. One finding is that HIPs have not helped and legislation should be amended to make HIPs voluntary.

Paul Cowdery, Conveyancing Partner with Clarke & Son, Basingstoke comments, “HIPs have assisted in practice to ensure that search information is available at an earlier stage but the more wide ranging problems in the present property market, such as difficulties in obtaining mortgage finance, have acted to negate any benefit.”

He adds, “The government has been committed to HIPs and the requirement for an Energy Performance Certificate will remain whatever the destiny of the HIP generally.”

If you wish to get in touch with Paul on any aspect of conveyancing, either contact him by e-mail or telephone Clarke & Son on 01256 320 555.

The government has announced that it is extending the transitional arrangements introduced last year which enabled properties to be marketed once the Home Information Pack (HIP) had been commissioned.

The announcement means that the current arrangements will remain in force until 31st December 2008, and also requires that only the lease will be needed for leasehold properties.