We was wrong!

Despite earlier confident predictions, Home Information Packs have been suspended with immediate effect - see here

Home Information Packs - the latest

Thanks to Rob Hailstone of the Bold Group for this:

What is the Current Position?

HIPs have not been scrapped by the Election result. The law still requires a HIP to be in place to market a property. The penalties for non-compliance still apply.

Grant Shapps (the new Housing Minister), has said he will not condone non-compliance by Estate Agents who fail to order HIPs

Grant Shapps has committed to a full industry consultation before scrapping HIPs

The Coalition Agreement refers to scrapping HIPs in the Environment section suggesting more consideration has been given to this topic

Unless a suspension order for the scrapping of HIPs is announced HIPs will remain in place for the foreseeable future. Legislation to adapt or replace them will take some time to pass in Parliament

What Happens Next?

* The new Parliament will be sworn in next week from 18th May. The first Queen’s Speech setting out the initial legislative programme is expected to be held on 25th May. An Emergency Budget will be presented to the House in the first 50 days of the new Parliament and debates on its contents will dominate the initial period before the Summer recess

* The first parliamentary session will run from the end of May to November 2011 (which is the date of the next Queen’s Speech). This means that the Coalition Government has a longer time than normal to get legislation through the Houses of Parliament. This will allow a larger volume of legislation to be passed, particularly as there is a Parliamentary convention that the Lords will not oppose legislation based on a Manifesto Commitment. Ministers are likely to exploit these two factors to pass the complicated and potentially controversial legislation they believe to be necessary.

* We are unlikely to get significantly more detail on how the pledge to scrap HIPs will be taken forward when the Queen’s Speech is published – if indeed it does form part of the initial legislative package. The Speech itself is often little more than a statement of intent and many of the Bills listed in it may not be published until after the summer recess.

* The Conservatives have pledged a consultation on transition and any successive legal framework. It is unlikely that this will be reversed, especially as David Cameron and Nick Clegg have pledged to restore the public’s faith in politicians.

* The pledge on HIPs is unsurprising – it was a commitment delivered in both Parties’ Election Manifestos. The Agreement provides no additional detail on how this will be achieved or delivered. The inclusion of it in the Environment section rather than under deregulation is perhaps significant. It suggests that there is an understanding that scrapping HIPs cannot be undertaken in isolation. It has also been decoupled from the Great Repeal Bill – which has already been flagged as being a very early Bill to be introduced to Parliament ahead of the summer recess.

* The Conservatives have pledged a consultation on transition and any successive legal framework. As David Cameron and Nick Clegg have pledged to restore the public’s trust in politicians it would be a breach of faith if this was reversed.

Rob Hailstone
The Bold Group
www.theboldgroup.co.uk

Home Information Packs - again

With the Conservatives and Liberal Democrats "promising" to abolish HIPs, it may instead be worth considering whether they can be improved to make them good value for money.

The recurrent problem we are experiencing at present is the delay in getting searches. We get sent a lot of incomplete HIPs, then have to keep checking to see whether searches are added. This seems to be because of the same old problem: selling down to a price, rather than up to a standard, and getting personal searches (as cheaper) rather than official ones. To my mind, this makes no sense: on the one hand, people get what they pay for and a cheap personal search is likely to be full of errors and omissions; on the other hand, most official searches are (a) speedy - speedier than cheap personal ones, certainly - and usually not very expensive. On the rare occasions we get asked to prepare a HIP, we always recommend official searches, in an effort to make them as exchange-ready as possible

On a related aspect, many properties have more than one registered title, yet this seems to astonish amateurish HIP providers - I was having great difficulty explaining to one such earlier this week that my client's access and courtyard was in a different title to the house and, yes, both titles were essential

The single best thing that could be done to improve HIPs would be to require them to include a draft contract (omitting the price and buyer's details, of course) and a full property details questionnaire. This would make them virtually exchange-ready and would have the extra benefit of removing the need for the sale statement and the almost-useless property information questionnaire.


This will not happen yet, of course, as it would mean only solicitors and licensed conveyancers could prepare the contract part, though this should change next year, and there will never be agreement on what the PDQ should contain - unless the government actually thinks it worthwhile consulting the people who know: property professionals

Always learning, always improving

I spent all of today on a conveyancing CPD (continuous professional development) course in Tunbridge Wells.

While most of the content was not new, it provided a forum for some interesting discussions with other solicitors about practices, procedures and attitudes to risk - and about "clients from hell"!

It also left me with about a dozen possible improvements to make to paperwork and procedures - life is a constant process of improvement, which I currently welcome, but I wonder how soon I will become demotivated (as many lawyers I know) and cannot find the enthusiasm to change

The majority of those attending feel Home Information Packs to be a waste of time and money, but I still feel that, done well, they help the conveyancing process significantly

Referral fees - are they actively destructive?

We are currently finding the firms that rely heavily on estate agent referrals are incredibly slow - it can take literally weeks to get a draft contract out of them, and on more than one occasion we have offered to draft the contract for them, based on the information in the Home Information Packs

Assuming they are not being lazy or incredibly incompentent (though ... - no, don't go there!) I can only think they are victims of their own successful marketing; in other words, that the referring agents are so keen to get a couple of hundred quid referral fee - guaranteed and, presumably, up front - that they would rather refer the case to someone who does not actually have the resources to handle the work, rather than lose the referral fee

How this can conceivably be in the best interests of their client, the seller, is beyond me. It is also not in the interests of the buyer or the housing market generally

If (and it is a big "If") my limited, recent experience is widespread, and if (another big "If") the reason is as I have surmised, this, surely, provides very strong support for those who wish to ban referral fees, at least where they are being used in such an unsophisticated way as to distort the whole market

Have any other conveyancers had similar experiences?

Home Information Packs - yet again

With a general election looming, the Conservatives are consulting various interested parties on what to do about HIPs - abolish then, improve them or leave them as they are?

My view is that, if done properly, a HIP can be a very good way of speeding up the house buying and selling process. The problem is that most sellers get a HIP because they must, and buy as cheaply as they can, instead of buying the best they can.

HIPs should be tightened up, not watered down

Home Information Packs (again!)

I know I keep banging on about this, but it is my view that a combination of inadequate consultation by government, vested interests in the property industry trying to stifle change and competition on price rather than value resulted in a huge missed opportunity. Home Information Packs, properly prepared, can be of great benefit in streamlining conveyancing, to the benefit of all concerned: buyers, sellers, agents, solicitors.

However, the crucial term is "properly prepared" - HIPs that take no account of the individual property and its idiosyncracies are almost useless - basically a waste of paper. On the other hand, a properly prepared and comprehensive HIP enables the buyer's solicitor to report on a very large part of the transaction at a very early stage, highlighting potential problems and outlining the scope of further investigations that might be needed

With a good HIP, we are usually waiting only for the draft contract and full property information form (both of which could, in my view, be included in the HIP in the same way as for an auction) or the mortgage offer (or both!) before a buyer client can exchange contracts

HIPs have the potential to do almost everything the government claimed for them, but they need to be properly prepared, not prepared on the basis of the cheapest that complies with the regulations.

I have revisited this subject because Rob Hailstone of HIPAG (Home Information Pack Action Group) fame is forming The Bold Group to campaign for "proper HIPs", and so I have been stirred to post again

HIPs "upgraded" from 6 April

Now that HIPs must include a PIQ, there is another hurdle to leap before marketing a property, but we at Nelsons Property Lawyers think we can help

There are different versions of the PIQ for existing homes and for new homes - a new home for these purposes is a home that is being designed or constructed or which has never been occupied. – and different versions for freehold and for leasehold properties.

The forms produced by the government do not have to be used; so long as the same information is collected. This gives those who want to prepare a more comprehensive HIP an opportunity to make the PIQ more useful than the minimal form would be, but the current trend with HIPs is to do as little as possible to comply with the legal requirements, rather than as much as possible to expedite the sale process, so I will not expect anyone to try very hard to improve on the “basic” PIQ.

It should take most sellers less than ten minutes to complete the basic PIQ for freehold properties, but completing even the basic PIQ for leasehold property will be a longer, more daunting process.

The PIQ says, “The Property Misdescriptions Act 1991 (PMA) does not apply where the form has been completed solely by the seller.” There is, therefore, a clear implication that an agent who helps a seller complete the PIQ could be liable for property misdescription if the PIQ contains errors. Accordingly, it would be best for the estate agent to get the seller to complete the PIQ alone, or to get the HIP provider to deal with it or to enlist the assistance of a local solicitor or conveyancer.

Most sellers will, after some initial grumblings, complete the freehold part of the PIQ without too much resistance. However, the leasehold part is another matter completely and I anticipate that many sellers may feel the need to speak to a solicitor or conveyancer - ideally, the solicitor or conveyancer who acted when they bought the property.

Where they cannot (or will not) do that, we will be happy to help. We will spend up to half an hour at our office free of charge, helping a local seller complete the PIQ and guiding them on where they can find any information they are lacking. If more than half an hour is involved, we reserve the right to make a charge (probably £50), but would normally waive this - our aim is to build relationships with local agents and prospective clients, and to help streamline the conveyancing process, rather than to make a profit out of this quasi-legal work.

If you want help in completing the PIQ, please contact Sam (Samantha Robb) or Anne (Anne Browne) at Nelsons Property Lawyers in Tenterden: telephone 01580 767100

Home Information Packs - again

On Monday, the new, tighter rules for HIPs come into play -

• the HIP must be complete (well, nearly ...) before the property is marketed, rather than being in the course of preparation
• the HIP must include the Property Information Questionnaire: a very watered-down and pointless version of the full Property Information Form that buyers' conveyancerswill expect to see; either the HIP should include a full information form or no such form should be required: adding an extra, largely pointless form is ... pointless
• the HIP must include "full" searches - see below

Largely in order to produce HIPs as cheaply as possible - because everything is sold on price, not quality, these days, it seems - most HIP providers use agents to carry out "personal" searches, rather than getting "official" searches direct from the relevant councils. There is also, sometimes, an argument that personal searches can be quicker, but most councils, certainly in Kent, have an impressively speedy turnaround time now

Anyway, many personal searches did not contain answers to all the required questions, believe it or not. Usually, this was because some councils, apparently in an attempt to protect their income streams by encouraging the use of official searches, would refuse to allow access to relevant information unless obliged by law to do so. For instance, though the planning register must be open for inspection, the information relating to possible breaches of planning control need not

(BTW: some councils, including Ashford, offer "value added" searches, by including with the result copies of any conditional planning permissions, plans from Tree reservation Orders, etc - saving the need to apply separately for these once they were revealed by the local search result)

As a result, personal searches tended to paint a partial picture, while official searches painted the full (or, at least, a fuller) picture. Though personal search agents would offer insurance cover in respect of any "nasties" not revealed by the partial nature of the search, that is poor compensation (assuming the insurers in fact pay out) if your dream home is blighted by something that you would have known about in advance had an official search been available.

In addition, a significant number of lenders will not accept personal searches (or only if the buyer's conveyancer (as opposed to the person who carried out the search) guarantees their accuracy. As a result, if a HIP included a personal search (and most do) the buyer might need (or want) to get an official one too, increasing the cost despite the government's stated aim of reducing cost.

From 6 April, personal search will not be allowed to say "Don't know, but if there is a problem you are insured against it" - they will have to include answers to all the questions.

Unless the government is also obliging councils to answer all the questions (I simply do not know what is happening on this score), this will result in official searches being included in HIPs - something that I, as a conveyancer, will heartily welcome

Trade guilds against HIPs?

Entrenched interests always fight change - see Seth's Blog - which may be why so many vested interests undermine Home Information Packss (apart from the fact that their implementation was, and remains, crap, of course!)
In addition, those who are merely competent will resist change, because it undermines their competence
However, I do find that a well-prepared HIP (with, for instance, official rather than personal search results) combined with a carefully completed comprehensive set of property information forms does enable a very swift transition to exchange-ready status - assuming there are no fundamental problems with the property or its title, of course - well-packaged rubbish is still rubbish

Oven-ready chips? Exchange-ready HIPs!

In an earlier post, I commented that the latest "improvements" to HIPs would not in fact make them more useful. What is needed (IMO) is a cultural change, so that sellers, agents and solicitors accepted that, however badly-thought-out (by civil servants and poloticians) HIPs are, the property professionals can make them work and use them to benefit buyers and sellers

If, instead of going for the cheapest HIP - which probably adds alsost nothing to the efficiancy of the conveyancing process - sellers could be persuaded to commission a HIP that would contain everything that a buyer could reasonably want before exchanging contracts, the only things that would prevent immediate exchange of contracts (and certainty) would be (a) the buyer getting a mortgage offer, (b) the buyer selling his or her own home (if needed) and (c) the seller having somewhere to move to

Exchange-ready HIPs would have -

• official search results, not personal ones which are not acceptable to all lenders
• a comprehensive set of property information, not the half-baked pointlessness that is the Property Information Questionnaire
• even a seller's survey by a real surveyor

If done properly, that would cut out delays, removing the opportunities for gazumping and gazundering, and actually achieve the objective the government said it had when it originally introduced HIPs

Will it happen? Only if enough people insist on quality work rather than the cheapest possible price

Home Information Packs

Setting to one side (for now) the inept way in which Home Information Packs (HIPs) have been introduced, and assuming (for the sake of this post) that they are, if properly implemented, a Good Thing, the changes that will take effect on 6 April 2009 are likely to have a significant impact for sellers, buyers, estate agents and lawyers. To take a couple of points -

1: The HIP will need to include a Property Information Questionnaire (PIQ). This must contain some information about the property, but it is not clear why the specified information has been selected, and the PIQ will not remove the need for the seller also to supply full, relevant information about the property. It is therefore hard to see how the requirement for a PIQ improves the HIP system. However, it can make the system worse, simply because there will be yet another document needed to complete the HIP and (from 6 April) the agent cannot start marketing the property until the HIP is complete

2: OK, so the PIQ is not difficult to complete, but I anticipate that a lot of sellers will put it to one side, if allowed to, and then complain that the marketing of the property has been delayed! To avoid that, the agent may decide to help the seller complete the PIQ - thereby risking a complaint under the Property Misdescriptions Act if any details are wrong. So, the agent risks delaying the start of marketing or risks a misdescription complaint - what a choice! The solution is (in my biassed view) to pass the responsibility on to the seller's conveyancer: if the seller uses a local conveyancer, the agent can encourage them to pop in to their office to complete the form, minimising the delay and the risk of liability

Or am I wrong? Are HIPs a great improvement, made still better by the PIQ?