Home information packs
The Government is introducing Home Information Packs to improve the process of buying and selling a home.
From 1 August 2007 all home owners with a 4 or more bedroom property in England and Wales will need to arrange for a Home Information Pack to be prepared before putting their homes up for sale. 3 Bedroom properties will need a Hip from 10th September
Under the new Housing Act, from 2007 home-owners or their selling agents will be required to have a home information pack when marketing homes for sale, and to make a copy of the pack available to prospective buyers on request.
Under the present home buying process, a lot of the information needed about a property by buyers and sellers only becomes available after an offer has been made and accepted. This may mean problems with the property only come to light several weeks later, by which time the buyer and seller may have incurred significant costs in legal fees, searches, surveys, etc. This can cause the terms to be renegotiated, delay exchange of contracts and even result in transactions failing altogether.
Extensive research has shown that the current system is extremely inefficient and wasteful and does not look after the best interests of buyers or sellers. Delays in the present system can encourage gazumping and other problems. Providing key information up front in the home information pack will make the process more efficient, clearer and easier for consumers. This means less risk of transactions collapsing, less wasted expenditure and greater certainty for everyone earlier in the process.
Codys have arranged agreements with local Solicitors and Domestic Energy Assessorsto allow us to get the HIP created in the shortest possible time.
Frequently asked questions
When will Home Information Packs become compulsory?
Home Information Packs will be compulsory from 1 August 2007
Have options to include a phased approach been considered e.g. implement a Home Condition Report at a later date to the energy rating?
A statement made by the Department for Communities and Local Government on 18 July 2006 announced that rather than having a “big bang” implementation, with all the risks that would have entailed for home buyers and sellers, we have concluded that the mandatory elements from next June will be the Energy Performance Certificates, searches and other legal documents. The Home Condition Reports will remain part of the Pack, but as an authorised document rather than mandatory item.
What will be included in the Home Information Pack?
The Home Information Pack Regulations 2006 were laid before Parliament on 14 June 2006.
The Regulations set out provisions on the “required” and “authorised” content of the Pack. Required documents must be included in the pack where appropriate and authorised documents may be included at the seller’s discretion.
The required documents are:
An index (i.e. a list of the contents of the pack)
The authorised documents include:
- A sale statement (summarising terms of sale)
- Evidence of title
- Standard searches (i.e. local authority enquiries and a drainage and water search)
- An Energy Performance Certificate
- Where appropriate, commonhold information (including a copy of the commonhold community statement)
- Where appropriate, leasehold information (including a copy of the lease, information on service charges and insurance)
- Where appropriate, a New Homes Warranty
- Where appropriate, a report on a home that is not physically complete
- A Home Condition Report*
- Guarantees and warranties
- Other searches.
* The regulations will be amended so that from 1 August 2007 the Home Condition Report will be an authorised part of the Pack.
Sellers can top up their Packs voluntarily to include full Home Condition Reports; these reports are based on a professional survey of the property and will be authorised documents. Sellers offering full Home Condition Reports will be more likely to benefit from swifter sales and suffer fewer transaction failures, as accepted offers are much less likely to be re-opened as a result of new information coming to light. The Government is working with stakeholders to facilitate the take-up of the full Home Condition Report.
Do you have to wait for all Home Information Pack components to be assembled before the property is marketed?
A home must be marketed with a Pack at the time the property is put up for sale. Providing reasonable attempts have been taken, in certain circumstances the property can be marketed with an incomplete Pack – this is defined in regulations. As part of the Dry-run, however, we will be testing various options, including allowing marketing to begin if sellers have already commissioned their Pack, rather than having to wait up to 14 days.
How long will the complete Pack be valid for?
The Home Information Pack is valid whilst the home is continuously marketed for sale, and the Regulations allow for a period where the property might be taken off the market whilst, for example it is under offer or to allow a seller to change agents.
The main time-sensitive items in the Home Information Pack are the local searches. These are generally acknowledged to be valid for six months.
The majority of sales complete within six months under the current process and we expect the Home Information Pack to shorten the time between offer acceptance and exchange of contracts.
Are Home Information Packs needed at auctions?
Yes. People buying at auction need reliable information just as much as anyone else.
If you require any more information please visit http://www.homeinformationpacks.gov.uk/faqs_contactus.aspx