An evaluation of Home Information Packages (HIPs) on UK home sales

HIPs have a content of mandatory documents to which data from a pre-approved list of voluntary authorized documents can be added, such as warranties, consents, etc. Guess what the vast majority have to do? Yes, the basic minimum because they are not aware of the options available to them and because they mistakenly consider that the additional costs are increased by the additional content. So when you need information to give you confidence to proceed with a purchase, what sources of data do you have at your disposal?

Below are PROinspect Consultancy’s opinions based on Surveyor’s experiences since the new selling rules were introduced a couple of years ago.

We start at the point where a potential buyer asks us to perform a survey inspection. We recommend a product at an agreed rate and confirm everything in writing (or email) and submit our Terms of Trade, including payment terms and practicalities. We then launch into our pre-inspection profiling mode to find out what we can about the property. This starts by looking at our own databases to find out if this Company ever inspected the particular house.

Basically, we scour the internet for data (and also check some commercial data sites we subscribe to that are not open to the public). The information collected typically produces the following type of data:-

• Prices paid for the dwelling in question and/or nearby similar dwellings.
• If any of the above is seriously out of date, we update it by applying indexing indices taken from other sites.
• Environmental risk analysis sites that warn about the susceptibility of locations to radon gas, landslides, (adverse) historical land use, subsidence, flooding, contaminated soil (and proximity), etc.
• Planning history documents publicly available for viewing.
• For homes registered under the Defective Premises Law (1972), general information on what is collectively wrong with them, how it can be rectified, etc…
• Verification of whether the home is Listed or within a Conservation Area.
• Plans and Maps – Viewing them can provide a lot of data (especially if you can find earlier County Series OS plans). The site of former farms, wells, boundary positions, sites of past industrial use, contour lines (comparison with modern maps can tell you how man has reshaped the land), etc.
• If the home has had a previous Energy Efficiency Certificate (a rate lower than the current rating will indicate that changes have been made to the property).
• By Googling the address of the house, photographic representations of the house can be seen and this tells the surveyor its probable construction type, key location features and much more.

We then move on to the Real Estate Agent Data. Often these include a sketch of the housing. This is very helpful to any inspector as it allows them to compare those plans to the lease plan within the HIP and therefore the inspector can act as the eyes of the attorney to determine if the modifications have been completed, allowing Have the legal team request consent checks. of the Department of Ownership and Control of Buildings.

Finally, we turn to what is perhaps the most valuable data source: the HIP. In short, a HIP can provide:-

• Plans showing the location of the water and sewage network.
• Specify details of known problems such as low water pressure, poor water quality, potential for flooding, distances to treatment works (which can stink if the wind blows in the wrong direction), distances to high voltage electrical substations , etc. …
• A copy of the lease: This will define the landlord’s repair agreements, any unusual obligations or liabilities and should contain a plot line plan and may contain a room layout plan. The term of the lease and details of the ground lease will be included and all of these details will affect the value of the premises, especially if we decide that, during occupancy, you may have to exercise your right (with other landlords). of apartments) to the lease franchise in order to protect your investment.
• A completed HIP should also contain details obtained from Managing Agents as to past repairs and those scheduled for soon or in the future (who pays for them, does he pay his prorated share, and does the price offered reflect that? responsibility?).
• The last type of information, the gold nugget, comes from the PIQ – Property Information Questionnaire.

The PIQ must be prepared with data provided by the occupants/owners and can be very revealing. On the one hand, short and minimalist comments say a lot about the attitude of the sellers, and on the other hand, you might see some interesting facts.

The PIQ has a variety of set questions about the home. These include leasing matters, details of any reforms carried out, whether there are any guarantees, whether all necessary permits and consents have been obtained, etc.

The PIQ separates the men from the boys. The informed Agent and/or Seller will scan, upload and deposit into the HIP matters such as:

• FENSA/Other certificates for replacement double glazing.
• Certificates of Approved Contractor of Electrical Works.
• Gas/Heating Approved Contractor Work Certificates.
• Asbestos risk assessment certificates completed.
• Documents/plans of Planning Permit and/or Construction Consent Approval.
• Certification/Guarantees and plans for works of Wood, Humidity and Coupling.
• Documentation of permission from the conservation officer/listed building to authorize modifications.
• Annual service records of heating boilers.
• Private sewerage service/emptying records.
• Raise the semi-annual service history.
• History of Thermal Improvements made (with guarantees).
• They might even give potential buyers the confidence to insert a previous survey report (although this probably wouldn’t get past the right to sue if it’s a negligent report, it would provide a lot of condition information for the buyer to consider before they buy it). make an offer).

Now some of you will say come on, this just doesn’t happen, data like this just doesn’t exist in real life. Well, I respectfully differ. I believe that the educated and serious seller should spend time researching and obtaining all of these types of documents. How much does it cost to spend a few hours preparing these papers? Your time, but without real costs.

The benefits can be significant. Personally, I once inspected a local period house where the local agent had just said that our commission charges include a free HIP. Yes, sellers got a free HIP but without any significant additional data. When he reached out to me as an inspector for potential buyers, he did not tell me if alterations had been authorized, if the works had warranties, the extent of structural works completed, if the local listed building control officer had ever visited, who did the works recent. and precisely when…

The effect of the above was that my Building Inspection was long and complex because I had to include additional advice based on WITH Consents and then WITHOUT Consents PLUS the possible adverse effect of non-compliance on property value (on a sliding scale in line with the scale of compliance with the Regulations). This materially delayed the transaction and the chain of property exchanges as I asked the sellers question after question, through their Attorneys. Without mine, and the close cooperation of the buyers, agent, and seller, this home could not have been sold (we got some thanks, you know the answer!).

So in summary: HIPs can be a real advantage and positively help a sale to proceed with the exchange of contracts. However, such success is highly dependent on multiple and variable factors including sellers’ willingness to cooperate, agents’ attitude, and their ability to ask sellers to research installation history and provide documentation.

What about the future?

HIPs should evolve. They should…

• Include a mandatory Sellers Survey (the only decision to make is whether to include a Market Appraisal; my opinion is that you should not include an appraisal unless it is in the form of a “mortgage certificate of the property”). ” – basically providing an appraisal that all lenders would agree to no matter who prepared it, as long as they were Qualified/Registered Appraisers).
• The works carried out in the house that are not accompanied by documentation must be considered of dubious quality and dubious compliance with the Regulations.
• Lawyers to demystify the legal jargon and insert a general description of the title, tenure and main characteristics of the house.
• Agent details must include a room layout plan and full details must be inserted in the HIP.
• Certificates of Better Energy Performance (EPC) that include the Availability of Subsidies for the suggested Thermal and Energy improvements. This is essential, which is why we increasingly correlate valuation opinion with good or bad energy/thermal performance.
• All previous EPC charts will be inserted into the HIP so that the public can see how energy and thermal improvements have evolved in any particular home.
• Much stricter HIP compliance audits and real estate agent penalty fees (I see many serious violations of the regulations these days).

In addition, all realtors are required to complete re-education seminars on how to be positive about HIPs (with the added benefit of producing a HIP that actually helps the mortgage appraiser and/or private buyers appraiser, further greasing the wheels of a rapid exchange of contracts for the benefit of all parties).