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OFT advises estate agents on their obligations 31 July 2007 |
(OFT) HIPs - OFT advises estate agents on their obligations - 31 July 2007
The OFT has today advised all estate agents in England and Wales that a failure to comply with the new Home Information Packs (HIPs) regulations could result in a ban from estate agency work.
From 1 August 2007, all homes for sale with four or more bedrooms in England and Wales will need a HIP with details of the property title, energy performance, planning permissions and searches for prospective buyers. Under the Estate Agents Act and HIPs regulations, the OFT has the power to assess whether an estate agent is fit to practise.
The OFT can impose a ban on an estate agent found to be in breach of the Act and can also issue a Warning Order. Once a Warning Order has been issued, if the agent continues to breach the Act, the OFT can make a Prohibition Order banning the agent from practising as an estate agent in the future.
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Home Information Packs (hips) |
Home Information Packs (HIPs).
As of 10th September a Home Information Pack will be required for homes put on the market with three or more bedrooms.
This replaces the previous requirement which was introduced on the 1st August 2007 which stated that, Home Information Packs were required for
four bedroom properties and larger.
Packs will be extended to
smaller properties as soon as sufficient energy assessors are fully
qualified.
Background to Home Information Packs (HIPs)
Home Information Packs derive from the Governments 1997 manifesto
commitment to &ldquomake it easier for people buying and
selling homes through a new "sellers pack".
Aims of the Home Information Packs.
The Home Information Packs Regulations 2007 state the aims are:
- To make the home buying process more transparent, certain
and less stressful (and to address the currently high rates of
transaction failures).
- To reduce the current level of 27% of UK carbon emissions
that come from homes.
What does a Home Information Pack contain?
A Home Improvement Pack must contain legal documents:
- Title information
- Sale statement (summarising terms of sale)
- Leasehold documents where relevant (including a copy of
the lease, information on service charges and insurance)
- Searches (ie local authority enquiries and a drainage and
water search)
- An Energy Performance Certificate.
In addition, sellers may choose to include a Home Condition Report,
providing information related to the condition of the property.
All the required components of the Home Improvement Pack are
documents that will need to be produced at some stage in the
transaction.
What is an Energy Performance Certificate?
The purpose of an Energy Performance Certificate is to record how
energy-efficient a property is as a building. The certificate will
provide a rating of the property from A to G, where A is very
efficient and G is very inefficient. The ratings will vary
according to the age, location, size and condition of the building.
Two ratings are shown:
The environmental impact rating is a measure of a home's impact on
the environment in terms of carbon dioxide (C02) emissions - the
higher the rating, the less impact it has on the environment.
The energy-efficiency rating is a measure of a home's overall
efficiency. The higher the rating, the more energy-efficient the
home is, and the lower the fuel bills are likely to be. The average
property in the UK is in bands D-E for both ratings.
The certificate also lists the potential rating of the building if
all the cost-effective measures were installed.
What are the advantages of a Home Information Pack?
According to the Home Improvement Pack Regulations 2007, a HIP will
ensure the home buying selling process is:
- More transparent &ndash giving consumers a clearer,
up front picture of what they are buying / selling.
- Quicker &ndash with reduced transaction times.
- More certain &ndash a reduction in the number of
transactions that fall through between offer and exchange.
- Reduced wasted cost.
- Smoother &ndash less stressful and less confusing for
consumers.
FAQ about Home Information Packs.
Who provides a Home Information Pack?
Under Part 5 of the Housing Act 2004 a legal responsibility will
fall on the person selling the property (the vendor) or their
marketing agent to ensure all relevant documents are ready to
present to prospective buyers on request.
How much does it cost?
The cost of Home Information Packs (HIPs) have yet to be announced,
though they are likely to cost between £500 and £1000.
This will be dependant on several factors such as location, price,
condition of the property and also commercial factors.
What protection do I have?
Estate Agents in England and Wales must join a Government approved
redress scheme by 1st June 2007 when HIPs are introduced.
This will ensure consumers have free access to redress for HIP
&ndash related complaints about estate agents, should the
compilation of the HIP by an estate agent be done incorrectly. This
does not extend to the quality of professional advice in the
documents
Is anyone exempt from a HIP?
Properties originally placed on the market before 1st June 2007,
do not need a HIP until 31st December, 2007. (Regulation 34)
Provision requiring a report on an incomplete property is not
required (Regulation 10a)
Useful websites for further information on HIPs.
www.homeinformationpacks.gov.uk
www.opsi.gov.uk
(Office of Public Sector Information)
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