| Changes to Home Buying and Selling April 2009 |
The Department for Communities and Local Government have announced important changes to Home Information Packs which will take effect from 6 April 2009.
Home Information Packs Overview
Who needs a Pack?
New additions to the Pack
When does the Pack need to be available?
Energy ratings and particulars
Compiling the Pack
How up to date do the documents need to be?
Who can see the Pack?
Sellers changing Estate Agents
Redress
Home Information Packs Overview
HIPs were introduced to provide information about a property prior to cost being incurred by the buyer. This helps prevent delays and wasted time for sellers and is intended to speed up the buying/selling process. From 6 April 2009 this information must be available from the first day the property is marketed. Buyers will benefit from seeing the pack and should be offered one when an interest in the property is registered and should not have to be requested.
Who needs a Pack?
HIPs are now required for most homes put on the market with vacant possession on or after 14 December 2007. The execeptions being:
- Mixed use properties (e.g a flat and shop being sold together)
- Portfolio sales
- Leases of less than 21 years
The seller marketing the property is responsible for a valid Pack being available. This will either be the seller or their estate agent.
New additions to the Pack
From 6 April 2009 the Pack will include the Property Information Questionnaire (PIQ) as a mandatory document. This form should be completed by the seller and will provide concise, useful information about a property and is intended to inform the propective buyer to make decisions regarding whether to view or make an offer. Sellers can still choose to include additional permitted information - additional leasehold information / Home Condition Report / guarantees or additional searches if they feel this adds further improvement to the Pack.
From 6 April 2009 the following changes are to be made to the home buying and selling process:
- Introduction of the new Property Information Questionnaire (PIQ)
- Removal of the temporary first day marketing exemption
- All searches, produced by a local authority or a search company, must be complete with no gaps in data covered by insurance.
From 1 January 2009 a copy of the lease is the only additional required document in a HIP for the sale of a leasehold property.
Further information is obtainable from the Businesslink website.
When does the Pack need to be available?
From the 6 April 2009 a property can only be put on the market with a HIP containing the following documents as a minimum:
- An Index listing the contents of the HIP and noting any required documents that are missing
- A Property Information Questionnaire (PIQ)
- An Energy Performance Certificate (EPC) or Predicted Energy Assessment (PEA) for new homes marketed before completion
- For new homes only, a Sustainable Certificate, Interim Sustainability Certificate or nil-rated certificate as required under the Code for Sustainable Homes
- A Sale Statement summarising the terms of sale
Evidence of a title
The following documents, if unavailable when marketing begins, must be included in the HIP within 28 days from the first point marketing date:
- Standard Searches
- A copy of the Lease (where applicable)
- Documents showing proof of title (unregistered properties only)
Energy ratings and particulars
The EPC provides an energy efficiency rating for a home. The ratings range from A to G where A is very efficient and G is least efficient. The rating is based on factors such as age, property layout, construction and heating, lighting and insulation. The ratings are standard so consumers can easily compare the energy efficiency of one home with another.
The energy rating graphs from the EPC should be included in the written particulars or attached to them as a separate document. Written particulars may be electronic or paper and contain at least two of the following:
- A photograph of the property or a room in the property
- A plan of the property
- A description of the room sizes
Compiling the Pack
The Index and the Sale Statement must contain the documents in the relevant order. The rules require that the Index must appear first, followed by the PIQ. The EPC or PEA should come next followed by sustainability information where appropriate; the remaining documents can be in any order. The HIP must comply with the regulations and it is the responsibility of whoever provides a particular document to ensure the information is accurate.
How up to date do the documents need to be?
The age limits on documents only apply when the property is first put on the market. Copies of Land Registry documents and the required searches should be no more than three months old at this point and the EPC no more than three years old.
Where a seller decides to take their property off the market, when they return to the market the same HIP can be used so long as marketing restarts within 12 months of the first point of marketing.
Who can see the Pack?
Potential buyers are entitled to receive a copy fo the Pack, or any part of it on request and this should be provided to them within 14 days. There should be no charge for this, however, you can request a reasonable charge to cover copying and postage for sending paper copies. The HIP rules make no provision for charging for an electronic copy of a HIP.
Sellers changing Estate Agents
Where a seller already has a Pack and decides to change their agents, there is no requirement for the seller to replace the Pack or update the documents contained in it.
Redress
Anyone acting as an estate agent is required to belong to an approved redress scheme. This covers all estate agency activities, including the duties to provide a valid Home Information Pack.
All of the duties described above are enforced by the Local Authority Trading Standards Officers, who can provide help and assistance should this be requested. Penalties for non-compliance of the new regulations can also be issued by these officers. The current penalty is £200.
The Office of Fair Trading can ban agents who consistently breach the HIP duties.
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