HIPs FAQ

When do I need a HIP ?

From 14th December 2007 all properties marketed for sale in England and Wales need a Home Information Pack (HIP), which includes a home energy rating. The Pack includes an Energy Performance Certificate, containing information on how to cut carbon emissions and fuel bills and also other documents such as a sale statement, searches and evidence of title.

At present any property that has been continuously on the market since the relevant start date (i.e. 1 August 2007 for sales of homes with four or more bedrooms; 10 September 2007 for those with three or more bedrooms and 14 December for all properties) does not need to have a HIP.

When do I not need a HIP ?

A HIP is not required for any property that is: unsafe or unfit for human occupation, due to be demolished, sold without vacant possession, non-residential, used as holiday or seasonal accommodation, mixed use (e.g. a shop and flat above) and being sold as one lot, dual use (e.g. a property that can be used for residential and non-residential purposes at the same time such as a guesthouse), part of a private sale (where the property is not marketed), or part of the sale of a property portfolio

How long does a HIP last ?

• Indefinitely if you do not take your house off the market
• 1 year if you take your house off the market (except if that was due to an abortive sale)
• You have 28 days to put your house back on the market after an abortive sale.
• If you take your house off the market and 1 year has passed since you first put your house on the market/commissioned the HIP then the documents in the HIP will have to be refreshed (effectively a new HIP) except if that was due to an abortive sale.
• If you take your property off the market due to an abortive sale the HIP will still be valid if it comes back onto the market within 28 days of the sale falling through.

Don’t the components ever expire ?

The only legal requirement is that the searches and Land Registry information are less than 3 months old when you receive the HIP and the Energy Performance Certificate is less than 36 months old.

What happens if I don’t get a HIP?

Many people think that the maximum fine is £200. This is not true. The initial fine is £200 but if the property remains on the market further fines will be imposed - there is provision to increase the initial fine to £500. If an Estate Agent is acting for the seller and does not arrange a HIP then they could ultimately be the subject of a Banning Order which would prevent them from continuing to trade.

Here is an extract from the regulations;

“Regulation 35 sets the penalty charge initially at £200. It should be noted that payment of this penalty charge does not entitle the person to continue marketing the property in breach of the home information pack duties. To do so could render that person liable to further penalty charge notices. If the person is an estate agent, it also amounts to an “undesirable practice” for the purposes of section 3(1)(d) of the Estate Agents Act 1979, and would render them liable to action by the Office of Fair Trading. This could result in a banning order which would prevent them from continuing to trade (see section 175 of the 2004 Act).”

The above is taken from “THE HOME INFORMATION PACK REGULATIONS 2007:

What if I change my Estate Agent ?

If your house has not been taken off the market i.e. there has been uninterrupted marketing then you will not need to order a new HIP but if there was a break in the marketing then unfortunately you will need to obtain a new HIP (except if that break was due to an abortive sale and the property has come back onto the market within 28 days).

I'm selling my house privately - do I still need a HIP ?

If you are marketing your property in any way, e.g by putting a 'For Sale' sign in the window or an advert in a newspaper, you will need a pack. However, where no marketing takes place e.g. where you are selling to a member of your family, you won't need a pack.

What is included in a HIP ?

A HIP includes most of the documents that are required when a home is bought and sold. Some documents are mandatory and others optional. The mandatory documents are: An index (i.e a list of the contents of the HIP), A Sale Statement (summarising the terms of sale), Evidence of title, Standard searches (i.e Local Authority Enquiries and a Drainage and Water Search), An Energy Performance Certificate (EPC), Commonhold information (where applicable), and a copy of the lease (where applicable). Documents that are optional include: A Home Condition Report (HCR), Additional leasehold information, Guarantees and warranties, Any other searches that are relevant to the particular area.

What is an Energy Performance Certificate ?

The Energy Performance Certificate (EPC) is part of the Government's commitment to reducing carbon emissions. It looks at how efficiently a property is heated and how it retains that heat. It also assesses the carbon emissions of the property. The EPC assessment, which usually takes up to an hour to compile depending on the size of the property can only be carried out by a qualified Energy Assessor or Home Inspector. Once the assessor has collected all of the data it is entered into a computer program that works out the relevant rating (A-G) for that property. This is then shown on a graph that is included within the EPC.

Who pays for the HIP ?

The seller is responsible for paying for the Home Information Pack. The cost of the Pack can vary but the seller will often be able to defer the cost for up to 9 months or until completion of the sale of the property (whichever is the earlier) ?

How long does it take to get a HIP ?

Usually it will take between 3-10 working days to prepare the HIP depending on the area and the type of searches that are required.

How can I get a copy of the Home Information Pack for a house I am interested in buying?

Potential buyers have a right to a copy of the Pack and this should be provided within 14 days of a request. Sellers (or their marketing agent) are entitled to make a reasonable charge to cover copying and postage costs. This may be provided electronically on-line or as a PDF file on a CD or pen drive, or as a printed hard copy.

If you believe that you are being denied a copy of the pack unlawfully, local authority trading standards officers are responsible for enforcement of these duties.

However, the seller or agent can refuse to provide a copy in certain limited circumstances. These are where the seller believes that the person making the request cannot afford the property, or is not really interested in buying the property, or is not a person to whom the seller would wish to sell the property (but this does not allow them to unlawfully discriminate against someone).

What was wrong with the old system ?

These are the reasons originally given by the government at the time of introducing HIPs:

• 28% of all offers that are made and accepted ultimately fail (this equates to 583,000 failed transactions per year, based on 1.5 million successful transactions in 2002)
• By 2002 a typical failed transaction cost about £1,000 comprising conveyancing costs, mortgage valuation and survey fees. This does not include wasted marketing and other costs incurred by Estate Agents.
• It took an average of 8 weeks from acceptance of offer to exchange of contracts. This is slow by international standards.

So to answer the question, “What was wrong with the old system”;

• key information available too late in the process.
• 28% transaction failure too high resulting in unnecessarily high wasted expenditure by buyers and sellers.
• transaction period too long and getting worse.
• too much time wasted in carrying out duplicated searches and surveys (paid for by the buyer) voluntary schemes to improve matters failed.
• system largely unchanged since the Law of Property Act 1925. The internet radically changed methods of information exchange and how many business transactions are carried out but property transaction businesses seemed unable to take best advantage of this.