Paul Illes, a solicitor in the residential property unit of Hay & Kilner Solicitors, investigates what effect Home Information Packs have had on the conveyancing process for buyers and sellers of residential properties

The advent of the Home Information Pack (HIP) brought with it the Energy Performance Certificate which has seen homes graded in the same way as a fridge freezer. 

There is no doubt that the HIP regulations have affected the way properties are marketed in England and Wales, the emphasis now being placed on the seller to provide information to prospective buyers, enabling a buyer to make an informed decision about purchasing a property. However, this idealistic approach should be treated with some caution, after all the purchase of a property for most people is the largest financial commitment they will make.

A date for your diaries: 1 June 2008

Until 1st June 2008, the only HIP requirement placed on a seller is to provide an energy efficiency report "as soon as possible" ensuring that this is done before the exchange of contracts. As a result the introduction of HIPs has not had such a large impact as previously expected, however, from 1st June all properties must have a complete HIP before they are entered onto the property market. However, does a HIP really enable a purchaser to make an informed decision about buying a property?

What a HIP does not include

When the idea of a HIP was first proposed, amongst other things to be included was a home condition report. However, as was well documented in the press last year, the home condition report is no longer a mandatory document and effectively, at the moment, is no more. As such no reference to the condition of a property is made in a HIP and arguably one of the most important factors in deciding whether to buy a house is knowing whether it is about to fall down! The principle of "let the buyer beware", continues to apply and as such it is preferable to know as much as possible about the condition of a property before you commit to buy it. Many sellers may not know the true condition of their property so a survey would be a wise investment.

HIPs, searches & mortgage lenders

The most noticeable change in the conveyancing process brought about by HIPs is the requirement for the seller to provide the local and drainage search. The cost of these searches therefore appears to have switched from the Buyer to the Seller, however, on further inspection this is not entirely the case.

Although the HIP regulations specify that a local and drainage search must form part of the HIP, they do not specify who has to produce these searches and as such, understandably, most sellers will provide the cheapest available. As the cost of a "personal" local authority search differs from that of an "official" search by anything up to and over 50%, not surprisingly the vast majority of HIPs are offered with personal searches. Although a personal search contains the same information as an official search, they are not carried out by the Local Authority and as such many mortgage lenders do not accept them. If you therefore obtain a mortgage with one of these lenders you must obtain an official local search yourself.

In addition many mortgage lenders require search results to be under six months old. As the HIP regulations do not require the searches to be renewed if a property has been for sale for a long time, the chances are that you will be required to obtain your own search results to satisfy your mortgage lender.

Additional searches to consider

When instructing a local authority search there are many additional enquires that can be raised as well as the "standard" enquires. At around £10.00 per enquiry it is worth asking your solicitor to consider these for the property you intend to purchase as the result may have a serious impact on whether you wish to proceed.  It could turn out to be the best £10.00 you ever spend.

An example of some of the additional enquires that can be raised are in respect of road proposals by private bodies, parks and countryside, urban development areas, inner urban improvement areas, land maintenance notices, hazardous substances consents, public paths or byways, pipelines, completion notices, enterprise zone, mineral consultation area, environmental and pollution notices and hedgerow notices.

Of course there are many other factors that a person should consider before buying a house. Many of the legal factors that may affect your decision are covered by the wide variety of searches provided by various parties, none of which are included in a HIP. Obviously not all are necessary and your solicitor can advise which searches are really warranted.

Some searches to consider are:-

  - Coal search, a must have if purchasing a property in the North East;

 - Environmental search, properties built on flood plains or on or near a landfill site may be to the detriment of the property in the future, in addition the owner of contaminated land will generally foot the bill for cleaning it up;

 - Chancel search, although a medieval right it's still enforceable today to all properties in the parish;
Searches in respect of rights of way and access, fishing and sporting rights, agricultural tenancies and grazing rights, village greens and common land enquires - if not checked these could severely affect the serenity of your rural retreat.

The advent of HIPs has no doubt helped the purchaser but by no means can it be their sole reliance when looking to buy a property.  Selecting the right solicitor may prove to be far more beneficial, so be prepared to:

• Act quickly and choose a Solicitor who acts quickly to ensure your property is marketed quickly.
  
  
• Be prepared to pay for additional searches, the small cost could pay dividends
  
  
• Carbon neutral!
  
  
• Dependable Solicitors will ensure that you know as much as possible
  
  
• Employ Hay & Kilner for first rate legal service.

Get in touch with Paul Illes at Hay & Kilner on 0191 227 6798 or email: paul.illes@hay-kilner.co.uk

Please note: This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.