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This information explains what a HIP is and how it affects residential property transactions. Purchasing a property is a substantial transaction and HIPs are now part of conveyancing. HIPs can be tailored to suit each seller and to attract a specific type of buyer. A poorly prepared HIP can have adverse consequences on the outcome of a property transaction.
‘HIP’ is an abbreviation for a Home Information Pack. The Government has placed a legal duty on sellers of residential property to provide potential buyers with a HIP. The HIP contains important information about the ownership of the property and its current condition. The purposes of HIPs are to improve the process of buying and selling a home. Traditionally it was the responsibility of the buyer to pay for the costs incurred of gathering this type of information however now the seller pays for the HIP.
Click here if you wish to know more about the Government’s legislation on HIPs.
To explore the HIPs legislation in greater detail please use the links below:
Compulsory documents in a HIP:
Other non compulsory information which could be of interest to the seller or attractive to buyers may also be included, for example a flood risk search.
HIPs are only used for residential properties in England and Wales. HIPs apply to residential property with “three or more bedrooms”.
Click here to check if your property is defined as ‘residential’ for the purpose of a HIP.
HIPs are only required for the sale of a “single dwelling house including ancillary land”. This is a “building or part of a building occupied or intended to be occupied as a separate dwelling”.
The property must be sold with ‘vacant possession’ for a HIP to be necessary. ‘Vacant possession’ means that no other person except the buyer has a right to live in it after the buyer purchases it.
Click here for examples of sales of property without vacant possession.
Where a property has been marketed prior to the 1st of August 2007 but the sale has fallen through and the property is subsequently put back on the market after this date then a HIP is not required. However for a HIP not to be required the property must be remarketed within 28 days of the offer being withdrawn or repudiated.
Until 31st of January 2008 there is a limited transitional period which means you will be able to market your property as soon as your HIP has been ordered and will not have to wait until it has been prepared.
The seller should obtain a HIP as soon as the property is to be put ‘on the market’, in other words when the fact that the property is for sale is made available to the public. If the property is being marketed exclusively outside England or Wales then a HIP is not required.
The HIPs law defines the first point of marketing (“FPM”).
If you take your property off the market or a different buyer is interested, then you can still use the same HIP provided that you re-market the same property within 12 months of the FPM.
Anyone who markets a property without a proper HIP is liable to a fine on each marketing attempt initially set at £200. Failure to provide a HIP may also be a breach of a statutory duty which could give a buyer grounds to make a claim against a seller.
We will provide your HIP package in consultation with you and others. We will then be well placed to advance your transaction to completion in the most efficient way. Unlike some estate agents’ HIPs it will be for your use without any limitations. The information in your HIP package will be prepared and kept in-house so as to ensure a smooth transaction.
Confirm your instructions for us to act in the sale of your property (contact us). We will call you and discuss the preparation of your HIP within the context of your overall conveyancing requirements.
We will need to obtain your ‘title deeds’. If you have them then please drop them in or send them to us by recorded delivery. If they are with a bank or building society, please let us have the relevant details including your account number. Some properties no longer have title deeds so do not panic if you cannot find them. We will obtain copies from the Land Registry of any deeds that you are not holding (including leases). It is important that we initiate this step without delay. If your title is unregistered then it is sufficient at the outset for us to include a simple search and a certificate that you have requested and expect to receive your deeds within twenty-eight days.
We are required to insert a copy of your Lease in the HIP package. If you have a copy, then please let us have it as soon as possible. We also need to include certain management information (e.g. details of service charge, etc.). Please therefore forward to us any relevant information or documents that you may have received from your landlord or from the managing agents in respect of the last three years, together with full details of your managing agents, as there is certain information that we shall need to obtain directly from them. There will be documents that we shall need to obtain from the freeholder/managing agents but we shall be able to finalise your HIP for marketing purposes by inserting a certificate to confirm that this information has been requested.
We will need to commission an Energy Performance Certificate (EPC) prepared by a Domestic Energy Assessor (DEA). We are fast establishing contacts with DEAS throughout the country and will be happy to place an instruction on your behalf. Alternatively, you may prefer to take this step yourself. If your property is put on the market before 1st January 2008 we will be able to proceed with the production of your HIP by simply inserting a certificate confirming that the EPC has been ordered and is expected back shortly.
When you contact us, we will provide you with information about the fee due and will arrange for you to make payment. It is likely that your initial fee (for the monies that we are expending on your behalf) will be in the region of £300 for a freehold property and £450 for a leasehold property but every property is different and prices will vary depending on region, size of house, etc. These monies are required by the various third parties who prepare documents to be included in your HIP. We will also charge you an additional flat fee of £750 plus VAT for our services which can be added to your conveyancing charge, at the end of the process.
This process will enable us to complete your HIP to a stage where your property can be marketed. The pack, in electronic or hardcopy form, or both, (as you wish), will be supplied to you and your nominated estate agent.
Your property should now be on the market. While it is being marketed, we will continue to collect any outstanding information which may be required for insertion on an ongoing basis during the ensuing period of 28 days. This, by way of example, will include, your EPC, search results and information from managing agents that we have not been able to obtain during the initial period. These will be added to your HIP, as received, and communicated electronically to you and to your estate agent.
We hope that you find this useful and informative and that it has achieved its purpose of putting HIPs in perspective as a straightforward process that will enable a quicker and more efficient sale of your property.