The current situation regarding HIPS: HIPs to slip through massive Government loop-hole
HIPs to slip through massive Government loop-hole: RICS Article
” New Home Information Pack (HIP) regulations published by the Department for Communities and Local Government will not require sellers to produce a HIP at the exchange of contracts making them fundamentally redundant.
In a legal loophole identified by RICS, sellers need only prove they have ordered a HIP at the point of sale, saving them the burdensome costs associated with the Government’s new regime.
The HIPs regulations require an Energy Performance Certificate (EPC) by exchange of contracts. They also require the seller or seller’s agent to show that a HIP has been ordered rather than actually acquire a complete one. If a buyer is found and the property is taken off the market before the HIP can be produced, the seller may never need to pay for it.
RICS spokesperson Jeremy Leaf said:
“This is another example of a rushed policy that fails to meet the needs of consumers and the housing industry. RICS members have been pressing for clarification on the new regulations, for fear of breaking the law. We have been forced to tell them that to the best of our knowledge, selling a house without a HIP would not be illegal during the interim period.
“Unless the Government can show us the regulation that says property cannot be sold without a HIP, consumers and industry will be left to draw their own conclusions. This will lead to two groups of consumers – those who pay for a HIP and those who legally get around the rules.”
RICS stressed, however, that it remains committed to the introduction of Energy Performance Certificates (EPCs), urging the Government to decouple EPCs from HIPs and the transaction process which is descending into the realms of farce. ”
Important things to remember when considering the proposed HIPs include:
– It only applies at present to properties with 4 or more bedrooms. It is anticipated that 3 bedroom properties and less will be included by January 1st 2008.
– You can market your property before you have a HIP, and if you manage to sell it before the HIP arrives, you do not actually need it.
– You DO need an energy performance certificate when you exchange however.
– The start date is now 1st August 2007, from this date you must at least order a HIP.
Please note that at present there are not sufficient domestic energy assessors to cover the expected UK demand for HIPs and EPCs. Berry Morris are not intending to offer this service for the time being.
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