HIP'S

What is a Home Information Pack, or HIP?

A HIP is a report intended to provide key information for the use of buyers and sellers at the start of the home-buying process to make the sales transaction quicker, smoother, more efficient and less likely to fail before exchange of contracts. HIP documents attempt to deliver to consumers a clearer picture of what they are buying and selling, early in the sale offering.

Home Information Packs (HIPs) are relatively new to the housing market and have been required since 1st August 2007. We have put together some background information on HIPs to help you understand them before you place your order.

HIPs have been introduced to help the buying and selling process for houses in Britain. It is anticipated that by having a pack produced on properties that are going to be sold, then the buyer will get a full report on the property they are considering.

The Home Information Pack includes the following:

• Index
• Property Information Questionnaire
• Energy Performance Certificate
• Sale Statement
• Title documents
• Local Authority Searches and Drainage report

From 6th April 2009, you need a Home Information pack in place before you or your agent can start to market your property. That is the law and it is an offence incurring a fine if a HIP is not available and for sale signs go up, etc.

What are the benefits of HIPs?

Before HIPs, about a quarter of all sales transactions failed resulting in lost time and money for both buyers and sellers. With HIPs, potential buyers can make more informed decisions which should reduce the likelihood of unfavourable surprises later on which could cause the sale to be delayed – or the buyer to pull out altogether. The buyer also benefits by having important information about properties they may want to purchase, paid for by the sellers.

Following recent changes to government regulations in April 2009, a property can only be marketed when all the required HIP documents have been commissioned and paid for (or a commitment to pay has been made).

Potential buyers are entitled to view HIPs free of charge, or, receive a copy of the HIP, or any part of it from the agent or responsible person upon request, within 14 days. There should be no charge for this, but buyers can be charged a nominal fee to cover copying and postage for sending a paper copy. The HIP Regulations make no provision for charging for an electronic copy of a HIP, however.

The Property Information Questionnaire, PIQ, should be completed by the seller, who should also examine the completed HIP and determine whether all the documents are accurate.

Sellers will typically be given an electronic copy of the pack at no charge by their estate agent or HIP provider; however they can and may be asked to pay a reasonable charge to cover copying and postage for sending a paper copy.

Updating a HIP

While the property is continuously marketed, the seller is under no legal requirement to purchase a new HIP or update any of the content, except in instances of a new-build to replace the PEA with an EPC when this becomes available (where appropriate). A seller is permitted to consider offers, change estate agents or start using an agent where they weren't previously, provided there is no break in marketing, and there is still no requirement for them to get a new HIP or refresh the documents in it.

Even after one year, if a seller takes their property off the market after a sale has fallen through, they can go back to the market with the original HIP as long as remarketing starts within 28 days of the sale falling through. Where the Pack is out of date it may be possible to reuse the EPC as long as it is not more than three years old.

Mandatory items in a HIP

The following mandatory, or compulsory documents must be included in your HIP:

• Index
• Property Information Questionnaire (PIQ)
• Energy Performance Certificate (EPC) or Predicted Energy Assessment (PEA) for new builds
• Sustainability Certificate (New Homes Only)
• Sale statement
• Evidence of title (including where applicable additional information for leasehold and commonhold properties)
• Standard searches (local authority search and drainage and water report)

Other documents can be included within a HIP, for example the seller may choose to include a mining search in a mining area, or provide information on the condition of the property with a Home Condition Report. Note that advertisements for improvements or other products or services are not permitted in a HIP.

Buyers and Sellers

All a buyer needs to do is ask whoever is advertising or marketing the property to view the HIP or request a copy. If it is through an estate agent, they must provide this free of charge – although they may make a charge for copying and posting, if they wish.

Sellers can use a variety of methods when arranging your HIP. Estate agents, solicitors, specialist pack providers, other businesses who offer the service or indeed you can compile one yourself. The searches in particular can be very technical are best prepared by experts familiar with the local council involved. PSG is the recognised expert in searches and HIPs in England and Wales.

You do not need a pack if:

- You don’t advertise it on the open market (selling to a neighbour, family member or friend etc, this is also called a "direct sale")
- You are selling holiday or seasonal accommodation, including holiday caravans
- You have non residential property – or indeed if you have a mixed property like a shop with a flat
- You are selling a property that has been declared unsafe, or one that is going to be demolished

If a seller decides to use a HIP provider, you would be best advised to use a company like PSG that subscribes to the HIP code, be aware that not all do. All AHIPP members that provide HIPs must subscribe to the code which is independently monitored by the Property Codes Compliance Board (PCCB). The PCCB has a list of all subscribers on their website that you can view at www.propertycodes.org.uk. The HIP Code and Search Code both have a standard practice which companies must adhere to and which would give you free independent redress in the unlikely event of any issues arising.

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