The truth about HIPs (and EPC’s)

The background

Since 2007, sellers have been required to provide Home Information Packs (HIPs) when selling their residential properties. The contents of HIPs included property information, searches and energy performance certificates (EPCs).

HIPs are history….
The coalition government has suspended Home Information Packs (HIPs) with effect from 21 May 2010. However, energy performance certificates (EPCs) will still be required.

What is an EPC?
This is a certificate which will rate on a scale of A-G:

• How energy-efficient the property is, and
• The impact the property has on the environment.

The most efficient property that has the lowest running costs will come into band A. Recommendations are included in the certificate about ways to improve energy-efficiency, to save costs and environmental impact. Your estate agent is obliged to include these two ratings in the property’s sales particulars.

Who will obtain the EPC?
The duty is still on the seller to obtain this. Wards can assist if required and we have a panel of Home Inspectors committed to providing a very competitive and efficient service for our clients.

When must the EPC be obtained?
There is a new duty on the seller to have ‘commissioned’ an EPC before marketing the property. Previously the seller could not market the property unless a full EPC was available. The purpose of this change is to speed up transactions.

What does ‘commissioned’ mean ?
An EPC will be treated as commissioned when the seller:
• instructs an energy assessor to prepare an EPC; and
• has either paid for the EPC or given a clear undertaking to pay for it.
There is also a new duty on the person acting on behalf of the seller to be satisfied that an EPC has been commissioned before commencing marketing.
There is also a new duty on both the seller and a person acting on its behalf to make reasonable efforts to obtain an EPC within 28 days.

Do my estate agents need the EPC before they produce property sale details?
As before, there is a duty that written particulars for homes being marketed for sale include the EPC rating or have the EPC attached. However, the timing has been changed so that this is only required once the EPC becomes available.

What is the penalty for not providing an EPC – who will enforce it?
There is a fixed penalty of £200. Enforcement of these requirements is the responsibility of Trading Standards Officers. There are also penalties for not complying with the duty to commission an EPC before putting the property on the market.

If it is a private sale, is an EPC still required?
Yes, an EPC must still be provided to the buyer before contracts are exchanged

Can the EPC received in the HIP be reused when the home is sold again ?
Yes . Following the suspension of HIPs, all EPCs will be valid for 10 years.

If there was a HIP produced for the home prior to the suspension can the estate agent refuse to provide a copy?
Yes. There is no longer a duty on estate agents to provide a copy of the HIP to potential buyers.

Does this mean more expense for buyers?
Buyers will still receive the EPC from the seller but will now have to commission their own searches. These will typically cost in the region of £150 which is a relatively small amount in the context of overall transaction costs.

Will the suspension of HIPs slow down transactions?
In principle, the idea of having a full ‘sales pack’ early on in the transaction should assist and therefore, speed things up. To have a solicitor involved early also enables issues to be identified and resolved at the outset. The obligatory content of a HIP was however was limited and did not particularly help speed up transactions.

Sellers are however always well advised to gather information relating to their property prior to agreeing a sale, (regardless as to any regulations) in order to reduce delays.

And if we have any further questions?
Our extensive branch network means that we enjoy close business relations with local estate agents and other key professionals, and work together to provide successful and speedy property transactions for our clients.

For more information please contact Susan Ellis on 01275 850460

The contents of this article are intended for general information purposes only and shall not be deemed to be, or be constituted to be legal advice. We cannot accept responsibility for any loss as a result of any acts or omissions taken in respect of this article.

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