On Wednesday 9th May Funds Centre published an article by Richard Evans under the title “Don’t let Hips catch you on the Hop”. According to the article from 1st August you would need a HIP in order to sell your property. Hip actually stands for Home information Pack which brings together a number of documents in order to sell a property. Hip includes the usual evidence of title, searches and leases, for example, along with a “sale statement” detailing basic information about the and a Hip index listing its contents. However there is also one new document – the energy performance certificate.
The main aim of HIP is to lessen the chances of surprises for the buyer, and this can go a long way when one intends to buy a new home. Also, The Government also hopes that energy performance certificates will highlight the amount of energy wasted in domestic use and encourage homeowners to take steps to reduce emissions of carbon dioxide.
For those who wish to avoid getting a HIP they can put there property on sale before 1st June, they will not need to get a HIP until January 1st if there property remains unsold but after that it would be compulsory. Those selling their homes after the deadline will have a number of choices about where to get their Hip. These include estate agents, solicitors and specialist Hip suppliers, although it is also possible to compile one yourself. Estate agents should not attempt to force you to use their own Hips.
However there is a downside to getting a HIP, you will not be able to put your property for sale immediately since it takes time to put together a HIP. Although the rules allow marketing to start before the Hip is complete, all parts must have been ordered and they must be expected within 28 days – and you must have the EPC.
While Mr. Bolton King thinks the leasehold information in Hips will be useful, he points out that it can take a long time to obtain. “It’s a real problem getting hold of. Managing agents, who supply information about leases and management charges, could charge what they like – especially if the information is wanted quickly. If so, the Government has totally underestimated the cost of Hips to the seller.”
Another potential source of delay to completing a Hip is pressure on the local authorities that carry out the searches. “The Government has admitted that some local authorities are not up to speed – this is why sellers are allowed to start marketing without a complete Hip,” says Mr. Bolton King. “We’ve heard that some local authorities have started rationing the number of searches that they will undertake each day.
There are a few circumstances in which Hips are not needed. These include sales that involve no marketing, such as those to a member of the family – although even putting up your own “for sale” sign counts as marketing, as does selling at auction or via websites. Also excluded are non-residential properties, seasonal accommodation and that used exclusively for holidays, mixed properties (such as a shop with a flat), right to buy homes, properties not being sold with completely vacant possession and unsafe properties or properties to be demolished.