Breaking of HIP laws

This week has been eventful for sure in the continued life of Home Information Packs. HIPS are now 1 year old and news headlines continue to be made from the debate on Home Information Packs (HIPS). Recently, significant reports of non-compliance of the legislation have come to light and been acknowledged by leading figures involved within the industry.

Yesterday, it was widely reported by many news agencies including the BBC that some agents, I must stress only ‘some’ agents; are flouting the law and are proceeding to market properties without the legally required Home information Packs.

By law the Home Information Pack must be commisioned prior to the marketing of the property. This should be done by the individual home seller or the estate agent acting on behalf of the home seller. At present the HIP pack needs to have been ordered, with this confirmed  marketing can commence whilst the HIP is compiled. This exception is under review and will probably be removed in December meaning that the Home Information Pack would need to be in place as per the Home Information Pack regulations before marketing would legally be allowed to start. would welcome this exception being removed. This ‘tweaked’ legislation has given room for it to be abused and the benefits of the HIP pack to home sellers and buyers affected. currently complete HIPS, on average within six working days, delivering direct to the client, estate agent or both.

The BBC reports (the following is an excerpt):

However, in the current troubled housing market, it seems some estate agents are not commissioning Hips when the property goes on the market, something which by law they are supposed to do.

According to Paul Marsh, president of the Law Society, the practice is common across England and Wales.

“The evidence we’re receiving from right across the country, be it Cornwall, London or the North East England, is that solicitors are not receiving a Hip when the deal is struck.”

“You would have expected that the Hip would be available immediately the agreement [to accept an offer] is reached.

“We’re not getting a Hip until three to four weeks later, sometimes not until exchange of contracts.”

Action is now being considered by trading standards; it is important to remember that potentially a fine of £200 per day can be applied for marketing of a property without following the Home Information Pack legislation.

It appears that the delay in solicitors receiving the HIP could be a direct result of the agents in question only commisioning the Home Information Pack once the property has received a confirmed offer and then supplying to the clients solicitor once received; which negates the benefit of the HIP speeding up the process.

If the legislation is followed there is no reason why the HIP pack can not be transferred to the solicitor almost immediately; can do this easily and efficiently as we store and deliver the components electronically as standard.

HIPS are far from ‘dead’ as some organisations would like you to believe. The National Association of Estate Agents (NAEA) have consistently been against Home Information Packs since their introduction and would like to see them removed from the process. The Conservatives continue to use HIPS as a ‘political football’ with no viable alternative suggestions in how they would address the issues within the housing market that HIPS, if correctly applied are helping improve.

HIPS are developing, progressing and providing benefits to the house buying and selling process. Just this week it has been announced that a Property Information Questionaire (P.I.Q.) will be included in the future which will add further benefit to the packs current usefulness.

The Home Information Pack continues to have it’s critics and those resistant to allowing the HIP achieving the improvements it was designed to make. There are rogue elements within most industries and these reports do nothing to help improve the reputations of ‘estate agents’ in general. It is hard not to see this as a shame particularly for those that work with, whom take meeting their legal obligations seriously.

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11 Responses to “Breaking of HIP laws”

  1. I think this story was put about by the HIPs industry suspicious of the low number of HIPs in relation to the properties currently for sale. The truth is may of these homes were on the market before HIPs were required and therefore in law still do not require one.
    There has yet to be a clear announcement of the ‘drop dead date’ when all properties will require a HIP irrespective of when the home was originally offered for sale.Until then vendors and estate agents will do all they can to avoid this £300 expense widely predicted to be, and subsequently proven to be, a complete waste of time, money and effort.

  2. There are a number of homes on the market which will not legally require a HIP due to the legislation commencement dates as you state Ron. The ‘drop dead’ date is yet to be annouced.

    Henry Pryor, who set up property website, has calculated that at least one in 10 of sellers do not have a HIP.

    “About 130,000 houses went onto the market in May, but only 89,000 HIPS were commissioned,” he said.

    He said some of this figure could include sellers remarketing their homes, but that “about 15,000 people put their house on the market without first commissioning a HIP”.

    The HIP provides information at the beginning of the house buying process which includes documents previously supplied once a deal was struck. As essential documents are prepared and ready to be used in the conveyancing it can speed the process up and identify any issue that may cause concern at the outset, reducing the numbers of house sales falling through.

  3. Simon Evans Says:

    I think the author needs to recognize that HIPs have achieved little, and cost a lot. The nation is collectively paying far more out for HIPs than any benefit they bring. They are not a solution to any particular problem, and if they did not exist it would not be necessary to invent them. The Tories (who are likely to be in power in 2 years or sooner ) have promised to scrap them. The property industry will heave a sigh of relief when they do, and home sellers will welcome the consequent savings.
    The PIQ seems like a desperate attempt to introduce some value to the pack. It is fraught with legal and practical difficulties and sellers should not complete them without consulting a lawyer (more expense). Give it up. HIPs are doomed!

  4. Paul M Walker Says:

    I am a DEA. Up until mid January, 2008, I provided Energy Performance Certificates for solicitors. Whilst visiting properties I could not defend HIP when confronted by vendors.

    Since then I have been producing HIPs. I can now defend them. Over the months I have been able to resolve many issues that could have delayed the sale of a house had they not come to light at the start of marketing.

    a. Properties not registered with HMLR
    b. HMLR documents with incorrect postcodes
    c. Homes with additional land purchased not registered with HMLR
    d. Incorrect address on HMLR documents
    e. Incorrect land boundries on HMLR documents
    f. IH Tax issues

    I feel that HIP do bring benifits. As for cost, well all the documents in the HIP(apart from the EPC) have always been required. The vendor pays for them instead of the buyer, preventing loss of monies to the buyer when the sale falls through.

    So now searches are cheaper than ever. An EPC costs between £80 to £120.

    HIPs are a good thing.

  5. Ian Macpherson DipDEA, LRPS Says:

    HIPS should indeed remain and be developed. The NAEA are beefing about them because their members are not getting any financial reward any more from external sources. Given that sellers pay out massive fees to greedy estate agents for some advertising space and a notice board, maybe the EA’s should consider how expensive they are to the seller. And all this rubbish about them not being of benefit to homebuyers is just tripe!

    The searches have to be done anyway, regardless. The only difference previously was that a solicitor or conveyancer, took your eyes out and came back for the sockets with the fees that you were charged.

    And to say they are expensive to home sellers is claptrap as well! The price has reached a level which is far more cost effective than has been suggested. But more importantly, nearly everybody who is selling their house is going on to buy another one so it’s even stevens! The house they go to buy has to have a HIP too so they, as potential buyers, don’t have to pay out fortunes for searches cos they’ve already been done. Thus, they have saved probably more by the HIP process rather than the old way.

    Despite all the political rubbish being spouted by the opportunist Tories, it is my belief that HIPS are here to stay, in one form or another. The Tories don’t have a viable alternative and probably won’t have because it’s not an issue which has any political capital at a general election. People have far more important priorities like the cost of gas and electricity, for which they are being held to ransom by energy suppliers, owned by foreign companies, which were able to do so cos Margaret Bloody Thatcher sold them all off to give tax cuts.

  6. Let us be honest about HIP’s;
    If the Tories had brought them in, then Labour would have been against them. The principle behind HIP’s is perfectly sound but the way in which they were introduced was shambolic.

    The main protagonists in the anti HIP lobby have vested interests (real or perceived) in maintaining the status quo, their opposition to HIPs is not altruistic – it’s greed.
    An example of this greed can be seen in the ‘mark-up’ that some Estate Agents apply to the HIP before ‘selling it on’. HIP prices have fallen due to competition (and the fact that searches have become cheaper due to HIP’s!) but I regularly encounter house sellers who have paid up to £50 more for their pack because the Estate Agent has added ‘administration costs’ to it!

    The Government have been sadly negligent in thier attitude towards publicity for HIP’s, has anyone seen anything meaningfull aimed at anyone other than Property ‘Professionals’? If you leave the publicity in the hands of the anti HIP lobby you get the situation that we are have now.
    The general public know little, if anything, about HIPs other than the negative press releases and Estate Agents are not exactly forthcoming when asked about them.

    As a DEA & HIP provider I know that many HIP’s are not being progressed until a firm offer has been made on a property. I also know that the threat of being fined £200 (per day) for not having the HIP / EPC data in place is laughed at, after all who is going to enforce it – certainly not the local Trading Standards people.

    HIPs were, and still are, a very good idea. It’s a pity that the government do not seem able to recognise this and support them with the strength that they deserve.

  7. ANDREW COOK Says:

    The very fact that properties are being sold without HIPs seems to beg the question whether HIPS are needed at all.

    Andrew Cook

  8. The issues within the housing market that HIPs have been implemented to address are largely recognised and acknowledged within the industry as problematic.

    The examples Mr P. Walker has given above can potentially cause delays in transaction times. By commissioning a Home Information Pack at the start of the process these examples can be identified and resolved prior to an offer being submitted, therefore removing the probability of a ‘last minute’ hold up.

  9. Interesting how those backing the HIP are making a business from them and those against are not!
    As an estate agent; I believe changes to the way we buy and sell property are necessary.
    However, I do not believe that the HIP in its current form helps the process; especially in a difficult market such as the one we currently face where a home can be for sale for many, many months making the searches etc. useless.
    None of my buyers nor my vendors can see any benefit in the HIP, no-one has yet asked to look at the HIP when buying a home and the vendors don’t seem that interested in it either.
    I believe we should scrap the HIP, keep the EPC (and wait to be taxed on the energy efficiency of our homes!!) and re-think the best way forward.
    What do we want to achieve from a change in the house buying process? Transparency? Speed of transaction? a reduction in sale fall through’s? or a stealth tax?
    What do the public want, were the public unhappy before HIP?
    As for the comment about greedy estate agents, that old adage is becoming boring….I can wax lyrical all day about that subject.

  10. Hi Mark,

    It is true that we provide Home Information Packs and do have a vested interest though also a belief in the increasing benefit HIPS are providing.

    It is not just HIP providers who are gaining an income from this market. Am sure you will be aware that many estate agents and solicitors also have a provision of some description where they benefit financially.

    The awareness of HIPs does need increasing to vendors in my opinion. Estate agents can play a role in this goal by taking a pro-active approach in showing potential vendors the HIP.

    Some of the information may not be of interest to vendors though that does not make it useless. Infact some of the information that is contained within the Home Information Pack has always been essential in the house buying process; it is now presented in a different form at the start of the house selling process.

  11. I think they should do away with with HIPs.Many people like myself have to put there house on the market because they can not afford to stay in them, but to be able to sell now they have to find money to do so.
    Yes there r company’s out there that will defur payments for up to 9 months but if the property is not sold by that time then where’s that payment going to come from?
    The goverment dont think of this.

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