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What is a HIP?

Background -  Why were HIPs introduced?

Government research revealed the sale and completion process in Britain is amongst the slowest in Europe. Lack of information, delays and problems achieving completion of key milestones in the conveyancing process added to problems for those moving house. Once an offer is accepted, it is hoped that the availability of a significant number of documents relating to the property “up front” will enable the actual conveyancing process to be concluded more speedily. The Government is confident that HIPs will “improve the house buying process”.

What is a HIP?

A Home Information Pack or ‘HIP’ is a pack available to potential buyers which contains important information that interested buyers of a property should be aware of prior to placing an offer a property. The HIP contains various documents which are known as “Required Documents” which must be included in the pack to conform with Government guidelines. For more information on “Required Documents” see HIP Contents

What type of properties require a HIP?

After the 14th December 2007 all residential properties1 being sold with vacant possession, being marketed for sale require an HIP.

Properties which are currently outside the scope of the HIP regulations and therefore do not require a HIP are:-

  • Business premises
  • Buy to let properties – i.e. sold with an existing tenant in possession thereby not providing vacant possession on completion
  • Dual-use properties i.e. partly residential and partly business premises
  • Portfolios of properties
  • Unsafe properties
  • Properties being sold for demolition
  • Right to Buy properties i.e. purchase from Council or Housing Association

Whose responsibility is it to commission a HIP?

The responsibility of commissioning of a HIP is placed on the seller. If a seller instructs an Estate Agent to market the property then he Estate Agent must ensure that a HIP has been commissioned and ensure that it is passed to any Buyer before completion or to any interested buyer if the property has not been sold before the HIP is completed.

Fines

If a property is marketed without commissioning a HIP (and evidence of this will be required) a penalty charge of up to £200.00 could be imposed on the seller or the estate agent.

Is a HIP required on a right to buy from the council or housing association?

Right to buy properties are excluded from the legislation due to the fact that the property is not being openly marketed. Shared Ownership properties being sold on the open market will require a Home Information Pack.

Will Home Information Packs be required for Auction Properties?

Yes

How long will the pack be valid for?

If the sale of your property stops and then starts again, you would normally be required to assemble a new Pack and to update those documents which are now out of date according to the requirements of the HIP Regulations. The seller can however carry on using the same Pack without the need to update any of the documents in the following situations

  • If a sale has fallen through and the marketing has stopped, provided that remarketing starts within one year of the date when marketing first began or, if later, within 28 days of the sale falling through.
  • Where marketing has stopped for any other reason, the seller may remarket the property with the same Pack provided that remarketing starts within one year of the date when marketing first began.

The only time sensitive aspect of the pack is the local search, which only have a shelf life of 6 months. The Regulations make no provisions for the local search to be renewed.

What is an Energy Performance Certificate?

This is an energy rating carried out on the property by a qualified Energy Assessor. An Energy Performance Certificate and a report on any recommended works will be included. The Certificate will give the property an A-G green rating. This has the intention that it will cut fuel bills and carbon emissions from the property. On the 22nd November 2007 the Government announced that properties which have an energy rating of F-G which be offered a discount or free help with energy efficient measures by an organisation which is being set up to try and help with the cost of fuel bills and will be undertaken by Green Homes Services.

By acting upon the recommendations, it is anticipated that the average homeowner will save £300 every year on fuel bills.

Who is authorised to carry out the Energy Performance Inspection (EPC)?

These must be carried out by an accredited Energy Assessor

Is it necessary to have a complete pack at the time the property is marketed?

No, the seller must commission a HIP at the time the property is marketed. The HIP must be supplied to the purchaser before exchange of contracts, which makes the transaction legally binding, takes place.

1The Government announced on 22nd November 2007 its’ intention that in June 2008 a HIP will be required for newly built homes and also commercial property for sale or rent. It is also intended that by October 2008 all public buildings will have to display and EPC (Energy Performance Certificate).