Introduction
Home Information Packs (HIPs) are as new concept as of 2007. They aim to bring together all the information needed during the sale / purchase of a home (i.e. property for residential purposes) so as to minimise cost and time of all parties involved.
Of course the new rules will take some getting used to and might not reduce costs or time in the first instance. This Net Lawman article explains what exactly must be included in a pack. We have many more articles on Home information packs. You can also buy and download a pack for use today.
The relevant Acts of Parliament and regulations associated with HIPs are:
- Housing Act 2004; and
- the Home Information Pack Regulations 2007
The Home Information Pack will change the way you do business. Make sure you're prepared.
The basics
Packs should contain:
Compulsory items ('Required') - for example, the evidence of title that proves it's yours to sell.
Optional items ('Authorised') – for example, the Home Condition Report which gives buyers a clear idea of what work, if any, needs to be done to the property. Optional / authorised items really are optional. You cannot add in anything you like. The document must be an ‘authorised’ document. Of course the more ‘authorised’ documents you add, the happier the buyer will be.
Compulsory items:
Here is a list of Compulsory items:
- Energy Performance Certificate
- Sale statement
- Searches
- Evidence of title
- Leasehold and commonhold documents
- Home Information Pack Index
An energy performance certificate
Energy performance certificates tell you how energy efficient a home is on a scale of A-G. The most efficient homes have the lowest fuel bills and are in band A. The Certificate also tells you, on a scale of A-G, about the impact the home has on the environment. Better-rated homes should have less impact through carbon dioxide (CO2) emissions.
The average property in the UK is in bands D-E for both ratings. The Certificate includes recommendations on ways to improve the home's energy efficiency to save you money and help the environment.
Sellers of newly built homes will have to provide a predicted assessment of the energy efficiency of the property, but a full Energy Performance Certificate should be provided to the buyer when the home is completed.
The certificate should look something like this chart above.
Sale statement
The sale statement should provide some basic information about the site, including:
- the name of the seller and the address of the property being sold
- whether the property is freehold, leasehold or common hold
- whether the property is registered or unregistered
- whether or not the property is being sold with vacant possession
Searches
The Home Information Pack must include:
- the local land charges register specific to the property being sold. You can use either an official search certificate (if the search is carried out by the local authority), or a different version (if a personal search company is used).
- other records such as planning decisions and road building proposals. These are referred to as ‘local enquiries’ in the Home Information Pack regulations..
- the provision of drainage and water services to the property.
Evidence of title
These prove that the seller owns the property and therefore has the right to sell it. Where the property being sold is registered, certain documents that are available on request from the Land Registry must be included in the Pack. These provide an up-to-date official record of who owns the land, and consist of:
- official copies of the individual register (made up of a property register, proprietorship register and, typically, a charges register)
- an official copy of the title plan
In the case of the sale of a commonhold interest, official copies of the register and title plan should be produced for both the unit and common parts.
For sales of unregistered land, the Pack must include copies of a certificate of an official search of the index map (obtained from the Land Registry), and those documents that the seller intends to rely on to provide evidence of title to the property, and thus the right to sell it.
Leasehold and commonhold documents
Most of the documents that must be included in the Home Information Pack are applicable to all transactions, but some are needed only for leasehold and commonhold sales.
The required leasehold documents are:
- A copy of the lease
- Any regulations or rules that apply to the property that aren't mentioned in the lease and any proposed amendments to same
- Statements or summaries of service charges covering the previous 36 months
- Where appropriate, the most recent requests for payment of service charges, ground rent, insurance against damage for the building in which the property is situated, and insurance in respect of personal injury caused by or within the building during the 12-month period before marketing began
- The name and address of the current or proposed lessor, and details of any managing agent that has been appointed or proposed by the lessor to manage the property
- A summary of any works being undertaken or proposed that will affect the property or the building in which it's situated.
The required commonhold documents are:
- An official copy of the individual register and title plan for the common parts. This is in addition to official copies for the unit
- An official copy of the commonhold community statement.
Where they are reasonably obtainable, or sellers can reasonably be expected to be aware of them, the following documents and information are also required:
- Copies of any regulations or rules not described in the commonhold community statement and any amendments proposed to those regulations or to the commonhold community statement
- Copies of any requests for payments made in the previous 12 months in respect of commonhold assessment, reserve fund levy and insurance (if not covered by a request for commonhold assessment)
- The name and address of any managing agent or other person appointed or proposed to be appointed by the commonhold association to manage the commonhold
- A summary of current or proposed works affecting the commonhold.
Home Information Pack index
This is a regular index containing a list of everything in the pack. The index acts as a checklist for all parties. Where a document that must be included in the Pack is unavailable, the index must say so, give the reason it is missing, and indicate what steps are being taken to obtain it. If documents are added to or removed from the Pack at a later stage, the index should be revised accordingly.
Optional documents
These include the following:
- home Condition Reports;
- legal summary;
- home use/contents forms;
- other documents
Only required and authorised documents may be included in the Pack.
Home condition reports
A home condition report contains information about the physical condition of a property, which sellers, buyers and lenders will be able to rely on legally as an accurate report.
Sellers who provide a report will have an early opportunity to carry out repair work on the property or obtain quotes prior to marketing.
Buyers can use it at the beginning of the home-buying process to minimise the possibility of being faced with unexpected repair bills and other surprises.
Lenders can benefit by using the Reports to inform their valuations, reducing the need to repeat a detailed on-site inspection at the buyer's expense.
Home Inspectors responsible for preparing Home Condition Reports must hold a qualification at NVQ Level 4 (equivalent to degree level), and will require in-depth knowledge and practical understanding of residential building construction and defects across a range of properties as set out in the approved National Occupational Standards for Home Inspectors.
Legal summary
Home Information Packs will contain some complex documents that can be difficult to understand. The optional summary of the legal content of the pack could therefore be very helpful to buyers, although it will not remove the need for buyers to take their own legal advice as well.
Home use / contents form
This allows sellers to give buyers information on a range of matters such as boundaries, notices, services, sharing with neighbours, planning permissions and other matters of interest to potential buyers.
It is usual for sellers to declare which fixtures and fittings and other contents of the property are included in the sale, are excluded from the sale, or are subject to negotiation.
Other documents
Sellers could speed up the sale if they include non-standard searches in the Home Information Pack where appropriate.
For example, it's standard practice to obtain a mining search in areas where coal mining has taken place. Sellers in these areas will save time if they provide this search in the Pack.
Other searches cover rights of way, ground stability and actual or potential environmental hazards such as flooding and contaminated land.
Sellers will also want to include guarantees and warranties for work already carried out on their homes.
Relevant Net Lawman document templates:
PR500 Home condition report in due course)oomseting a four or more bedroom home.
Home condition report
PR499
Home Information packs
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