Lees Solicitors - Possible reforms to the Home Information Pack rules? Mark Broughton

Residential Conveyancing News

Possible reforms to the Home Information Pack rules? Mark Broughton


Possible reforms to the Home Information Pack rules? Mark Broughton

On 5th January 2010, the HIP Reform Group released a "white paper" putting forward proposals to amend the controversial Home Information Pack scheme (commonly referred to as HIPs).

The group itself was formed in November 2009 and is comprised of a number of property professionals. It states that the packs themselves should be retained rather than scrapped, as the Conservatives have pledged to do, should they prevail in the forthcoming General Election.
The paper suggests that with a little effort, a future government (regardless of political inclination) could reform the HIP scheme with minimal resistance from the industry.

The key to this would be to allow marketing of the property to commence when a HIP is commissioned rather than completed, as the current rules dictate.

In addition, the contents of the pack would be left largely at the discretion of the pack provider (be they solicitor, estate agent or private company). One of the criticisms of the present scheme is that Environmental Reports, Chancel Check Reports and important searches based on the geographical location of the property (for example Coal Mining, Cheshire Brine or Tin Mining) are not considered "mandatory". Therefore they are simply omitted despite being regarded as essential documents for Buyers, solicitors and mortgage lenders alike. Their inclusion (where appropriate) would ensure that the pack provides further and better information to potential Buyers and their legal advisors either immediately prior to, or just after an offer has been made. Should such documentation reveal information unpalatable to Buyers or their solicitors, then the Buyer can withdraw without huge time or cost implications.

The pack information would then have to be delivered together with a "consumer friendly" summary. This would include details of any adverse aspects relating to the property title, environment, and / or planning as well as possible solutions the seller has implemented or that could be implemented in the future. In relation to this particular proposal, it could be argued that it directly conflicts with the legal principals of caveat emptor - let the buyer beware. It is suspected that solicitors would certainly be wary of preparing such a commentary on the property for interested parties due to potential conflicts of interest and liability issues, if selected to compile a HIP for a client.

The pack with its selective content would then have to be delivered within 28 working days of the first day of marketing or, if sooner, 14 working days from the date of offer. However, the current requirement for Energy Performance Certificates (EPCs) to be in place prior to the marketing of the property would need to remain so as to comply with European regulation.

David Pett, solicitor, pack provider and member of the HIP Reform Group responsible for writing the paper has been quoted in the Law Society online Gazette as saying "the HIP has received a lot of criticism for stalling the property market, adding extra cost to a transaction and placing an unnecessary burden on Sellers and Buyers." The proposals are therefore designed to bring "practical and cost benefits to the consumer as well as property professionals and could be introduced with very light touch regulation."

If met with support and the successful implementation of the proposals, Mr Pett believes that may mean "the quickening of transaction time, the reduction in abortive sales and greater transparency" in the home buying process.

Here at Lees Solicitors LLP we offer a complete Home Information Pack service through our external component providers. Should you wish to benefit from this service or simply need to discuss your current property requirements, please do not hesitate to contact a member of our Residential Conveyancing Team.

Mark Broughton

 

This article provides a summary of a recent case/change in law/news item. It is intended for general information purposes only and is not to be relied upon. It does not constitute legal advice and should not be treated under any circumstances as a substitute for legal advice. Lees Solicitors LLP does not accept any responsibility for any loss that may arise from reliance upon the information contained within this article. The copyright in this article is owned by Lees Solicitors LLP and permission must be sought before reproduction or publishing.


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