The Demise of Home Information Packs

24 May 2010

Kim Connolly discusses the demise of the HIP and what impact this change could have on the market.

In 2007 the Home Information Pack (HIP) was introduced. This was required to contain certain information concerning a Property that was on the market for sale.  

Briefly, the compulsory legal components were

• an index of documents
• a Property Information Questionnaire
• an Energy Performance Certificate (EPC)
• a sustainability statement for newly built homes
• a sale statement
• evidence of title
• standard searches
• and a copy of the lease where the Property was leasehold.

It was a legal requirement to have a HIP before marketing a Property for sale and it was the seller who was responsible for the cost. From 6 April 2009, legislation tightened and the HIP was required to be available on the very first day that the Property was marketed for sale. Failure to comply with this requirement meant that the seller could be faced with a fixed penalty notice, which was set at £200.

The Conservative Party, in its manifesto, pledged to remove the requirement to provide a HIP and on the 21 May 2010, only 10 days after Gordon Brown resigned and the new coalition Government took over power, the requirement to market a Property with a HIP available was suspended.

For the market to be sure that the HIP is abolished completely there will have to be primary legislation to follow this suspension. However, the Government is stating that it will do this as soon as possible. Anyone wishing to argue that the HIP was worthwhile will have to do so, forcefully, now. The Government appears committed to implementing its policy to carry through the necessary legislation and make the HIP history.

Where are we now?

Sellers should be aware that whilst the obligation to pay for and supply a full HIP is suspended, they are still required to provide an Energy Performance Certificate (EPC) or in the case of a new property sold ‘off-plan’ a Predicted Energy Assessment, which must be replaced by an EPC when the Property is complete.

Estate Agents will still be liable for any breaches that have occurred before the obligation to provide a HIP was suspended. The suspension of the duty to provide a HIP on marketing a Property is not retrospective. However, even if a HIP has already been prepared, following the suspension, an agent is no longer under an obligation to provide a copy of it to potential buyers.

Although, from 21 May, Estate Agents no longer have HIP duties, they do still have duties under the relevant regulations to ensure that the EPC has been commissioned before marketing starts and to include the rating in written particulars when available.

It is required that an EPC is made available by the seller at the earliest opportunity and it must be provided no later than on exchange of contracts.

The suspension of the HIP is news that will be welcomed by the market place. The cost of an EPC is a great deal less than the cost of a HIP and takes a great deal less work to prepare and have available to a potential buyer. More good news for a seller is that following the suspension of the HIP an EPC will be valid for 10 years.

Whilst the HIP is no longer a legal requirement, the concept of preparing paperwork in order to facilitate a speedy sale is still a good one. Solicitors and Estate Agents should work together to encourage sellers to provide relevant documents from the outset.

For more information on this subject or any other legal matter,
please contact us:

Tonbridge: 01732 770660
Sevenoaks: 01732 747900
Email: marketing@warners-solicitors.co.uk