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Have HIPs had their day? - Helen Woodend, Chebsey & Co

Have HIPs had their day?

The days of the HIP are numbered. Of course, their official title is the Home Information Pack although it is questionable how much information these controversial packs contained.

HIPs first raised their ugly heads in the Queen’s Speech in 2003. The idea behind the HIP was that it would contain enough information to allow buyers to make an informed decision about the property they wanted to purchase. It was felt that this would allow any potential problems to be highlighted earlier on in the transaction and then dealt with accordingly. After many delays they came into being in 2007. They were phased in gradually from 1 August 2007. From the end of 2007 every house that was marketed required a HIP and they have since become a part of every house sale in the country.

HIPs contain a number of compulsory documents:

- Index – providing a checklist for the pack, when a document that should be in the pack is unavailable the index must say so, give the reason that it is missing and indicate the steps being taken to obtain it.

- Sale statement – provides some basic information about the property including the address, whether the property is freehold or leasehold, whether the property is registered or unregistered and whether or not the property is being sold with vacant possession.

- Standard searches – these are a search against the local land charges register, a search against other records held by the local authority (including such things as planning history and proposals for local roads) and a search about the provision of drainage and water services to the property.

- Evidence of title – these documents prove that the seller has the right to sell the property and confirms the extent of the land being sold.

- Energy Performance Certificate – this tells you how energy efficient the property is that is being sold on a scale of A – G, with a being the most efficient and therefore should have the lowest fuel bills.

HIPs have always been controversial. From whether they should have been introduced at all, to the lack of consultation process, to whether they actually assisted the home buying process. I have many clients who buy houses without ever opening the HIP for the property. It is also arguable that they hindered the property market. It is the seller’s responsibility to provide the pack and therefore pay for it. This may have put many sellers off speculatively placing their houses on the market as it would cost them money to do so.

However, things are going to change. Under the Coalition Agreement reached by the new Government HIPs will be no longer. The Agreement, published on 12 May 2010, states in Section 11 under the heading “Environment” that whilst the Energy Performance Certificate is to be retained the HIP itself is to be scrapped. Will something else be introduced to replace the HIP, I doubt this and hope that save for the Energy Performance Certificates there will be no requirements for sellers to produce further documents prior to marketing their homes. The big question is when this change will occur and for the moment we will just have to wait and see.

One final question that occurs to me is why the decision about scrapping of the HIP is contained in the “Environment” section of the Coalition Agreement? Perhaps it is because they were such a waste of paper that we can help save some trees in the future!

Helen Woodend

Helen Woodend is a Solicitor at Chebsey & Co www.chebsey.com

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