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Changes to HIP Regulations

Thursday, 2nd April 2009

Categories: Sales

Author: Peter Barry

The latest chapter in the Home Information Pack (HIP) regulations commenced on 6th April. It is now illegal to market a property until the majority of the documents that make up the pack are available.

Up until now it was enough to show that the pack had been applied for, a simple matter of placing an order online, but that is no longer the case. Any agent found flouting the regulations will face a fine of £200 for each an every breach – enough to eat away any potential commission before a property is even sold.

What percentage of buyers do you think request a copy of the HIP before making an offer on a property? Fifty percent? Maybe twenty five percent? Speaking from personal experience I can tell you that of all the properties that we have marketed since the HIP regulations came in to force in 2007 a grand total of 1 person has asked for a copy of the HIP – and I think they were expecting to find a Home Condition Report in it (we’re still waiting to catch sight of one of those).

In addition to the ban on first day marketing a couple of other changes have been introduced which may just speed up the sales process further down the line. Firstly, sellers are now be required to provide a completed Property Information Questionnaire (PIQ) in their packs. The purpose of the PIQ is to provide the buyer with a helpful checklist of information as they walk around the property. It is not intended as a replacement for enquiries made during the conveyancing process but should help reduce the opportunity for surprises, such as an extension built without planning consent, coming to light further down the line as part of the sale process.

The second change relates to the searches contained within the pack - the standard searches, and a copy if the lease where appropriate, must now be ordered immediately by the HIP provider and added to the pack as soon as they are available. Up until now providers could rely upon insurance to cover any missing or incomplete data. In addition there will be a cut off point 28 days after marketing after which a property must be withdrawn from sale if the documents have not been obtained.

We will continue to provide Free HIPs to all vendors that sell their property through us on a sole agency basis. Our HIP provider tells us that they will have a marketing compliant pack dropping in to our inbox within 72 hours of confirmation of instruction (subject to the Vendor doing their part).

We’re also thinking hard about how best we can use the 3 day delay to drum up interest in new properties – more to come on that later.

For full details of the changes to Home Information Packs see the Direct Gov website.