HIPs have been introduced to implement ‘better buying and simpler selling’. A large number of consumers are dissatisfied with the conveyancing process and complain that it is costly, slow and uncertain. The new law was originally intended to ensure that all the necessary legal documents would be made available at the start of the process when a property is marketed. The aim was to ensure transparency in the system and hopefully reduce the number of abortive transactions. In turn this should reduce the costs of buying or selling your home. On the basis that it is the Seller’s responsibility to provide the HIP, this should enable more first time buyers to get onto the property ladder too.
However, estate agents, lenders and lawyers all expressed reservations about the effect of the HIP on the housing market. In response, the Government has considerably reduced the scope of it but doubts remain as to how helpful it will be.
The HIP will now contain:
- An Energy Performance Certificate (EPC)
- An index
- A sale statement
- Evidence of title
- Standard searches i.e. local authority /water and drainage
- Where appropriate, commonhold and leasehold information
- ”What to look for in a HIP” leaflet
- Unexpired warranties
A number of documents can be included, so long as they are ‘authorised’ and these include documents such as property information forms.
The most controversial original proposal to be included within the HIP was the Home Condition Report or HCR - a report on the physical condition of the property. This is now not a compulsory part of the HIP but can be included on a voluntary basis.
The inclusion of the EPC is to ensure that consumers have information available to them regarding energy efficiency. It will also contain information and practical steps to reduce carbon emissions and save energy bills. The rationale behind this is to make the conveyancing process more ‘green’ but whether consumers will be concerned remains to be seen.
If your property is on the market before 1st June 2007 then you have until 31 December 2007 to provide one.
The introduction of HIPs will dramatically change the way that houses are bought or sold and buyers and sellers should make sure they carefully select a solicitor who is fully conversant with HIPs to do their conveyancing.