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After all the sound and the fury of recent tabloid headlines, and talk of a U-turn by the
Government, the present position is that HIPs will still be compulsory on the 1st June 2007 (now
less than 9 months away). However, it will not be mandatory, at that time, to include in the HIP
a Home Condition Report (HCR). If no HCR is included then a stand-alone Energy Performance
Certificate (EPC) must be included. Those are the only significant changes that have been
made. However, the government reserves the right to make the HCR a compulsory element if
industry fails to make a success of the roll out of HCRs.
What this means is that, for a registered freehold property the HIP will have to contain (at the
very least):
For unregistered, leasehold or commonhold there will be a large number of additional
documents. The average registered freehold HIP is still likely to be over 80 pages long and will
contain a certain amount of graphics, maps and colour pages, thereby making it difficult for
people who lack the necessary computer facilities to compile it and send it out either
electronically or in personally branded, professional, hard copies.
The only difference for Hipag is that we will now be able to offer two types of HIP, a One Star
HIP, with an EPC in it, and a Two Star HIP, with a full HCR and an EPC in it. We will let the
consumer decide (in most cases having been given advice by an estate agent) which HIP they
want.
So, which HIP will offer the best value for money, the One Star HIP or the Two Star HIP,
bearing in mind that the Two Star HIP will only probably only cost a couple of hundred pounds
more than the One Star HIP. Picture this, two nearly identical houses for sale in the same road
at similar prices. As a buyer, I would certainly be more confident making an offer on a property
that can boast an HCR rather than just an EPC. As a seller, I would be more confident
accepting an offer knowing that my buyer has seen the HCR and is, therefore, less likely to try
to re-negotiate or even withdraw that offer later on during the proceedings.
Curiously enough, the government’s latest announcement on HIPs has thrust solicitors even
more into the limelight than ever. Without the Home Condition Report, HIPs will now comprise
almost entirely legal documents and their compilation and interpretation is going to be a job for
lawyers. The message is simple: don’t ‘wait and see’ - start taking action now and join Hipag!
Rob Hailstone is a residential property conveyancer with 25 years experience. He set up
HIPAG, www.hipag.co.uk, 2 years ago for two main reasons: to ensure that the public would
be able to obtain a high quality Home Information Pack and to help the High Street solicitor
survive the changes that are imminent. Rob is CEO of HIPAG.
Email rob@hipag.co.uk
Back to Contents.
HIPs will be business as usual
No one in the property business can say that we don’t live in interesting times!
By Rob Hailstone
Two-tier HIPs
At Hipag (see www.hipag.co.uk) we will still adopt our strategy of compiling a ‘quick pack’’ (one
with enough documents in it to enable marketing to commence quickly) and our member firms
will, while the property is being marketed, make that pack comprehensive by obtaining any
other documents that may be needed in order to speed up and make the conveyancing process
less stressful. We will endeavour to make sure that the ‘quick pack’ contains replies to the
Home Use Form (or whatever form is eventually prescribed) and replies to a set of Standard
Additional Enquiries. We will still provide our unique Fast Track Hip and Free Hip Appraisal
services. HCR will benefit 70% of buyers
Some HIP pundits are welcoming the absence of the HCR, personally I don't. It has been
proven, by a number of companies over recent years that selling a property with a Pre-Sale
Survey, greatly reduces the likelihood of the sale falling through. Some HIP pundits still insist
on saying that the HCR will not be relied upon by the buyer. In my opinion, it will. Firstly,
because less than 30 per cent of people who buy a property have any type of condition report
carried out at all. On that simple basis, 70 per cent plus, of all buyers will be better off.
Secondly, because the Home Inspector (HI) will be properly trained, well qualified and
insurance backed, their liability will extend to the seller, the buyer and the lender. MOT's for homes
I liken the HCR and the HI to an MOT and a mechanic. When we buy a second hand car it
usually has a current MOT to ensure that it is safe and roadworthy. As buyers of second hand
cars we do not often know how reputable and competent the garage is who carried out and
issued the MOT. Yet we are prepared to rely on the MOT and drive our families at speeds of
up to (and often over!) 70 MPH. Are we saying that our hard earned money and the property
we live in are more important to us than the safety of our families? Of course not, it is just that
we are familiar and comfortable with the MOT, as we will be one day with the HCR -- So long
as we give it a chance. 'In-house' production needs huge resourcing
I know from my talks within the industry that some solicitors’ practices are still adopting a wait
and see attitude to HIPs while vaguely planning to produce them in house. I wonder how many
solicitors who think like this have really considered what will be involved in compiling and
printing HIPs? As previously mentioned, a pack will typically be at least 80 pages long and
some sections must be printed in colours to identify them. There will be extensive graphics and
tables - making files many megabytes long. If there is a lot of interest in a property, then any
number of copies may be required. Producing them is going to take significant computer and
printing facilities to keep up with the demands of regular production. And solicitors who can’t
keep up are unlikely to receive many fresh instructions from estate agents.