Presentation on theme: "Handling HIPs with confidence. Agenda Why HIPs? When will HIPs be required? Which properties require a HIP? Required contents of a HIP Enforcement/penalties."— Presentation transcript:
Agenda Why HIPs? When will HIPs be required? Which properties require a HIP? Required contents of a HIP Enforcement/penalties How this effects your business Keeping it simple! Using the HIP Storing the HIP
Objectives Ensure you understand what a HIP is! Give you confidence to answer questions about HIPs Help you understand the contents Understanding the legislation Help you start thinking of ways to make HIPs work within your office
The Government introduced HIPs because: Millions of £s are lost through aborted sales each year There has been an increase in the number of vendors “testing” the market at an agent’s expense Because of global warming sellers must have their homes energy rated (EPC element of pack) The pack will increase transparency in the market The Home Condition Report (HCR) will allow buyers to see the general condition of a property before making an offer.
From 1 st August 2007 every residential property brought to market will require a HIP, subject to the phasing below: –4 bedrooms or more: 1 st August –3 bedrooms:10 th September –2 bedrooms:tbc –1 bedroom:tbc There are a number of exemptions (described later) Properties listed prior to this date will require a HIP from 1 st January 2008 if still on the market
All residential properties designed for domestic use, including new build homes, require a HIP. The exemptions are: –Properties to be demolished –Unsafe properties –Commercial properties –Mixed residential/commercial properties –Seasonal/holiday accommodation –Right to buy and similar sales –Sales of property portfolios –Properties being sold without vacant possession (i.e. with a tenant in place)
“Required” contents are compulsory. They are: Index (list of documents in pack) EPC (or predicted Energy Assessment for incomplete properties) –EPC can now be up to 12 months old Sale Statement Land Registry official entry and title plan* Leasehold/Commonhold information (if applicable) Local Authority search Water & Drainage search Marketing may commence once HIP has been commissioned and paid for. * Copies of the title deeds if unregistered and a certificate of search result of the index map
The contents of a HIP “Authorised” contents are optional. They include: Home Condition Report (HCR) Environmental searches Mining, Radon searches etc Documents relating to repairs/improvements etc Warranties/guarantees Translations
Energy Performance Certificate (EPC) The EPC was introduced by European legislation The EPC grades property energy efficiency Checks include heat retention, loft insulation, boiler efficiency, lighting, cavity wall insulation Inspection takes 35-45 mins EPCs have to be registered by Landmark Solutions before they are put in the pack Agents sales particulars must contain/attach: –A copy of the EPC or a copy of the 2 EPC graphs Our free EPC Graph Generator software can be downloaded from www.lms.com to make thiswww.lms.com quick and easy for you
Enforcement/ Penalties Enforcement will be through the local Trading Standards Office Any agent who markets a property without a HIP post implementation date will face a fine of £200 per incident The fine can be cumulative (i.e. if you don’t get a HIP on a property you can be fined again) Repeated offences may render the agent liable to a prohibition/suspension under the Estate Agents Act Agents are responsible for any part of the HIP that would contravene the PMA
Glossary of Terms HIP – Home Information Pack EPC – Energy Performance Certificate HCR – Home Condition Report CLG – Communities and Local Government DEA – Domestic Energy Assessor HI – Home Inspector
Booking an Appraisal A seller should be made aware if they will require a HIP at booking stage Ideally the valuer should cover off costs and available options at the appointment Be prepared to answer questions Not everyone knows about HIPs!
Carrying out the Appraisal HIPs should not change the way you value a property Be prepared for some negativity surrounding the subject Remember it is legislation so take a neutral stance if possible Offer your HIPs solution confidently - remember “solution” is a positive word! Other useful words to use: flexible, funded, your pack! Look to identify who the seller will use for conveyancing at the earliest opportunity
The Order Process Instruct LMS LMS commence HIP compilation When all documents are complete we send you access to the electronic copy of the HIP The conveyancer will have access to an electronic copy
Things to consider! How do you manage the vendor’s expectations at booking stage? Giving property access to DEAs may be a challenge Who will be responsible for managing HIPs within the office? Where will you store the HIP?
The documents within a HIP (apart from the EPC) are used in all your transactions today It is still the responsibility of the conveyancer to discuss the legal documents contained in the pack with the buyer….not yours Because the HCR is not mandatory most buyers will not scrutinise the HIP too much Remember you are still selling the property on its features and benefits not the pack A good EPC is a good selling point
Use the fact your new listings have a HIP as a positive message When you have an interested buyer offer the HIP as a matter of course to aid the decision process If you are uncertain about anything or have a question you cannot answer contact your LMS account manager If you are selling a 200 year old property you should not expect a high energy rating. Should the buyer?? Manage expectations realistically.
Storing the HIP HIPs come in many different formats: –Paper (bound book) –CD –Online –USB Stick As a standard LMS HIPs will be provided online. Different formats can be ordered at £10 + VAT each.