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2011
What can you do to beat the recession? Can you protect your assets and your business? Is there a fast and low cost way to plan the sale of your property? You always have a choice - make sure you make the right one! Ring us and we will provide you updates on the most recent changes to regulation and to markets.

Tenancy
Rules for landlords to follow and to protect tenants regarding deposits details

Combatting Money Laundering
New and detailed amended rules to combat money laundering are in force As a result professional advisers must ask more questions and in some cases require more information and documentation from clients before they can accept instructions to act or advise. We will need to ask for more information in connection with acting for companies, partnerships, trusts, other bodies of people (such as clubs) and anyone who is acting as agent for another person. We may also need to go through the identification and verification procedures for shareholders, directors, managers, partners, trustees, beneficiaries, club members, anyone acting under a power of attorney, a receiver, administrator or insolvency practitioner or anyone appointed as an agent or broker of any kind. In addition, the exemption under the old rules for existing clients from the procedures for identification and verification has been removed. As a matter of policy we operate the new rules in relation to all clients and all matters. All we ask is that you attend at our offices with - your passport or picture driving licence - an original council tax, gas or electricity bill addressed to you and dated within the last three months For Data Protection Act purposes, we must also advise you that we are required to retain this information for at least five years.

HIP
The new government has kept one of its manifesto promises by suspending the HIPs legislation with immediate effect. EPC’s remain though under EU law but they are changing too: The EPC has to be commissioned before the start of marketing Commissioning means the Inspector has been asked to prepare the EPC and it has either been paid for or payment has been promised The person acting for the seller on the sale must be satisfied commissioning has taken place The seller and seller’s agent must make reasonable efforts to get the EPC within 28 days Penalties will be imposed for breaching these relaxed requirements The EPC will have a life of 10 years, not 3 years as at present or 3 months as originally envisaged. This brings it in line with EPC’s for rented property. Let marketing begin

Will
Did you see the Panorama programme on BBC 1 on 9th August? If you do not have a Will you need to know what to look out for so why not pop in for a chat. Link to the programme at www.bbc.co.uk/i/tfqqj or http://www.bbc.co.uk/iplayer/episode/b00tfqqj/Panorama_Wills_the_Final_Rip_Off/


 Archive
 Useful links
 Energy Performance Certificates
 Wills - a Plan for Life


    Archive

Archive

HIP now RIP But in rare cases they linger on and will be available
 
The HIP MUST include the following documents and in the following order
 
Freehold – both registered and unregistered

Index
Property Information Questionnaire (PIQ) Part 1
Energy Performance Certificate (EPC)
Sale statement
Title documents - Official Copy Entries/Index map search and epitome of title
Local authority search and enquiry report
Drainage and water search report
Any leases that affect all or part of the property
 
Leasehold
 
Index
PIQ Parts 1 and 2
EPC
Sale statement
Title documents - Official Copy Entries
Local authority search and enquiry report
Drainage and water search report
Copy lease
 
New Homes
 
Index
PIQ Part 1 for new homes
Energy Performance Certificate or Predicted Energy Assessment if the property is not yet finished
Sustainability Certificate
Sale statement
Title - freehold or leasehold Official Copy Entries
Local authority search and enquiry report
Drainage and water search report
 
If the new home is to be leasehold, in addition –
 
Copy lease or proposed lease
PIQ -Part 2 and estimate of the financial contribution for the property towards service charge, ground rent and insurance
 
Authorised content
 
This is optional and includes
 
A summary statement
A Home Condition Report
Additional Searches
Additional relevant information
Additional relevant leasehold information
 
Marketing with an incomplete HIP
 
The requirement is for the HIP to be in existence and available for buyers at FPM but, it is possible to start marketing where certain elements of the HIP have been applied for but are not yet available
 
The ‘incomplete‘ HIP must in all cases include –
 
Index
Property Information Questionnaire (PIQ)
Sale statement
Title documents
Proof of request for missing items
 
The Index and the proof of request must contain details of the elements that are missing and what is being done to obtain them along with a statement that they are expected to be available within 28 days.
 
If the EPC is one of the missing elements 14 days must elapse from the date of the original request for the EPC before the property is put on the market (FPM)
 
As each ‘missing ‘element is received it must be added to the HIP and the index updated to show its inclusion.  You cannot wait for all missing elements to be received before completing the HIP.
 
Requests for ‘missing’ elements must be correctly addressed and include, or undertake to, make payment of relevant fees

December Update 2008
 
The latest changes to the Home Information Pack were laid before Parliament on 8 December 2008 and quash any prospect of a change of heart by government. Indeed the pack is regarded as a success for a set of reasons that will not make a great deal of sense to most sellers. 

 

 

 

 

The Home Information Pack (Amendment)(No 3) Regulations 2008 SI No 3107 have been eagerly awaited because a number of concessions and transitional arrangements were due to expire on 31 December 2008.  The latest regulations deal with those transitional matters and set the date for launch of the Property Information Questionnaire (PIQ) which mirrors some aspects of the Seller’s Questionnaire in the Home Pack introduced in Scotland on 1 December.  
Drop Dead Date 
No ‘drop dead date’ (when all properties on the market that are not exempt will need a HIP) has been fixed.  Regulation 33 remains unaffected so property that has been actively marketed before a relevant commencement date has no need for a pack. As time passes this provision will affect fewer homes 
First Day Marketing
The concession for ‘First Day Marketing’ (regulation 34) is set to disappear on 6 April 2009.  From that date it will not be possible to put a property on the market as soon as the Pack has been commissioned.  The HIP must be in existence or, at least in existence so far as elements such as the Index, sale statement and title documents are concerned before marketing can proceed.  It will be possible to start marketing with an incomplete pack provided that certain conditions are met (See HIP Fact Sheet 21).  
EPC’s
Once the first day marketing concession disappears in April, a 14-day waiting period between requesting an EPC and commencing marketing without one in the Pack will come into force (See HIP Fact Sheet 21 ).

Leaseholds
The temporary concession regarding sales of a leasehold whereby the only compulsory document was a copy of the lease is made a permanent change from 1 January 2009.  The leasehold information formerly required and set out in Schedule 5 to the principal HIP regulations (The HIP No 2 Regulations 2007 –  SI 2007 No 1667) is now designated ‘authorised leasehold information’.  In its place additional information regarding a leasehold property will be required in Part 2 of the mandatory Property Information Questionnaire (see below). 

Property Information Questionnaire
This is a new component in the Pack; it is compulsory and must be completed by the seller - although there is provision for an answer of ‘don’t know’ to a number of the questions.  Such is its importance that it is to have prominence and take second place in the Pack pushing the EPC into third place and the sustainability certificate into fourth.  This change will be reflected in the Index. The government’s view is that this is a form that can be completed by a seller without professional help.
The rubric warns estate agents about any input to complete the PIQ. This is because of the Property Misdescription Act 1991 (PMA). The PIQ states – “The PMA does not apply where the form has been completed solely by the seller” (my italics) and then reminds the estate agent about the  responsibility to include the PIQ in the Pack.

The information required in the questionnaire is slightly different where the property is a new home (schedule 12) rather than  a ‘second-hand’ property (Schedule 11). 
It would appear that this document is one of those covered by the regulations relating to marketing with an incomplete pack provided the steps set out in regulations 17-19 are followed.  

Searches 
The concession for insurance to be used to cover the information gap of information unavailable for a personal search of local authority registers due to non-access to records is extended to 6 April 2009.  Ted Beardsall, formerly of the Land Registry, has been tasked by the government to form a task force to look into making searches simpler and easier to use.

Sales of property portfolios
It is now no longer necessary for each property in a portfolio for sale to be vacant. 

The government has now asked the OFT to embark on a review of the home buying and selling process.  Its remit will cover
looking at competition between service providers and how consumer interests are being served.

EPC's for Business Property and all Homes 
You have probably heard about EPC’s in connection with Home Information Packs for residential property sales.
The legislation, which is based on a European Directive, regulates EPC’s and also contains provisions that relate to residential properties that are let to tenants.

From 1 October 2008 all residential properties will require an EPC when they are built, sold or rented.
EPC’s are prepared by a qualified assessor who will inspect the building and having carried out calculations to assess the energy efficiency of the building, will issue a certificate with a rating similar to those seen on white goods.  An ‘A’ rating is at the top of the scale and the lowest rating is a ‘G’.

In addition to issuing the certificate, the assessor will provide a building owner with a recommendation report with suggestions for improving the energy efficiency and reducing the energy costs of the building. 

An EPC for a dwelling that is to be rented has a life span of 10 years in contrast to those for the sale of a residential property that must be no more than 12 months old when the property is first marketed.  

A copy of the EPC and recommendation report must be given, free of charge, to any prospective tenant of the property at the earliest opportunity – when an enquiry is made or the property is viewed.  It must certainly be provided before a lease or tenancy agreement is signed. 

You do not need to renew the EPC each time there is a change of tenant.  Also, if a tenant is already occupying the property as at 1 October 2008 you do not immediately need an EPC.  Nor will you need to provide that tenant with one if the tenancy agreement is extended – you will just need to ensure you have a valid EPC when any new tenancy agreement is entered into whether with an existing tenant or a new one. 

We recommend an inspection for an EPC in advance of the start date to minimise possible problems regarding the availability of an assessor or gaining access to a property.

We maintain a list of assessors that we use and can recommend and would be pleased to assist you in arranging for the preparation of an EPC for your property.  We may be able to arrange a discount on the price if the assessor is instructed to prepare certificates on a number of properties in the same area.  Cost does of course depend on the size of the building(s) and we can, if you wish, obtain an estimate for you for your property. 

The obligation to arrange for these inspections for EPC’s rests with the ‘Relevant Person’ –
the building owner;
or where the property is being sold, the seller;

or if being let, the landlord.


TSO’s are the enforcement officers for ensuring compliance with these regulations.  Fines can be imposed for breaches – up to £200 for a breach relating to a dwelling.
 

Refresher on HIPs

2007 marked the end of property selling as we had come to know it!
The HIP Regulations from that date, covered mostresidential property marketed to the public. As with the all commencement orders, ‘marketing’ is a key defined term.

Further amendments to the HIP Regulations have been made - 

Regulation 34 - the relaxation of the pack requirements for first day marketing has been extended to 31 December 2008;
This means marketing can start once a pack is commissioned and a pack must be published when the EPC is issued. 

Note:  The provisions of Regulation 16 may apply where the FPM falls after 1 January 2009 so that where the EPC is not available before the first point of marketing a 14 day waiting period is required between the request for an EPC and the start of marketing. 

Leaseholds - A concession has been made to the documents and information in the ‘required’ category. Until 1 Janury 2009 the only additional document required for a leasehold property pack is the Lease itself (for both existing and new leaseholds). The rest has been relegated temporarily to the authorised category.  

Regulation 33 of the principal regulations is not affected - property that is put on the market before the commencement order for that type of property and is actively marketed with a view to selling before the appropriate commencement order does not require a pack.
 

Drop dead date - No announcement yet of the date when all property will require a HIP including those which are marketed without a pack under Regulation 33. So, property already on the market without a pack can remain on the market without a pack until sold or a further order is made. 
Exclusions - these remain the same -

 Not residential at time of sale;

 Not in England or Wales;

 Not sold with vacant possession;

 New property constructed under regulation 17C of the 2000 Building Regulations;

 Property excepted by regulations 25 to 32 of the Home Information Pack (No 2) Regulations 2007 (the principal regulations).

 NB -From 1 Ocotber 2008 an EPC is required even if there is no requirement for  a HIP 

For all you want to know about Home Information Packs including FAQ's and Fact Sheets visit  www.perpro.org  or to sign up for "Introducing HIPs" seminars click 'contact us' button on left side of screen.  

So, take a few minutes to browse our site – to find the services available, and how to contact us.  Sign up for our newsletter and for updates on topical matters that may be of interest to you. 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23 November   Final HIPs Commencement Order laid 

22 November             Ministerial statement on full roll out of HIPs 

22 November             Home Information Packs: Housing Market Analysis 

20 November             NAEA press release on latest survey results

15 November             5794 accredited HI’s/DEA’s 

13 November             RICS housing survey results published

5 November               Daily Telegraph article ‘Buyer’s ignore HIPs’ 

 

Until the end of the month, November was quiet with regard to HIPs.  The market slow down meant that little of the news focused the pack – the main concern being the effects of the shortfall in recovery on sub prime mortgages in the USA. Surveys published in the Daily Telegraph and other newspapers suggested that buyers were not that interested in the HIP for a property they were buying and that a poor rating in the EPC would not deter them from a property that was in the right location and at the right price. Other surveys confirmed the slow down in the market; figures for new properties going on the market, buyers registering and mortgage application approvals, all indicating that both buyers and sellers were sitting tight. 

 

The figure for accredited HI’s and DEA’s rose to 5794 which, with hindsight signalled the possibility that the final phase would be announced before Christmas – it was also foreshadowed by an AHIPP press release on 16 November suggesting that the government would proceed with an extension to the ‘first day marketing’ relaxation.

 And that is exactly what happened on 22 November.  From 14 December 2007 all residential properties (that do not come within the exemptions in the current regulations) will require a HIP.  The ‘first day marketing ‘relaxation that allows properties to be marketed as soon as a HIP has been commissioned is to be extended for a further six months until 30 June 2008.  In addition the government has acknowledged that delays and cost in obtaining leasehold information may be encountered and so it will be amending the current HIP regulations to reduce the additional ‘required’ documents/information for a leasehold property to just a copy of the lease.  Whether this is a provisional relaxation of wider concession is yet to be seen. 

 

A government funded research paper ‘Home Information Packs :Housing Market Analysis was published with the announcement of the final phase for HIPs. This suggests that HIPs have had no effect on current market conditions and that the full roll out should not be affected by the impact so far. 

 

At the date of preparing this November 2007 update the Commencement Order has not yet been publsihed so the actual wording remains to be considered as do the proposed amendments to the HIP (No 2) Regulations.

17 October 2007         RICS Building Cost Information Service publishes report on EPC’s

16 October                  House of Commons debate on HIPs

15 October                  HIPAG launches HIPS2Xchange 

12 October                  RICS announces the Carsberg Review of Residential Propert

 

    ‘Drop dead date’ announcement by government

The RICS Building Cost Information Service research has found that the EPC will not produce the benefits for buyers that had made the EPC the poster boy for HIPs.  RICS says that home improvements recommended in the EPC as a means of both saving energy and saving costs will actually take years to recoup the initial outlay in reduced energy bills.  By way of example, RICS says that solar panels cost around £5000 to install but only reduce bills by about £24 a year – 208 years for payback.

 RICS is against the current HIPs system but applauds efforts to reduce energy use and cost –they suggest a government serious about climate change would introduce tax breaks, such as reducing VAT, on energy saving measures.  They also point out that the EPC regulations only ‘bite’ when a property is sold leaving the vast majority of the housing stock untouched by the legislation.

An opposition motion to repeal HIPs was debated at short notice on 10th October and, as with previous such motions, was defeated by the government.  Yvette Cooper roundly dismissed, any suggestion that HIPs had caused the market slow down - praying in aid the tale of Chicken Licken.  She stated in the debate ‘We know that new listings have been falling across the market since June – long before HIPs were introduced and we know there are other factors.’  There certainly are other factors – the US sub prime market crash and increasing interest rates, but an objective observer might ask why the government introduced a scheme that would diminish the number of properties on the market by taking out speculative sellers, whilst aware that the market was already falling.

 

The Opposition reiterated its intention, when in power, to scrap HIPs and also announced plans to bring in anti – gazumping legislation (the original Labour manifesto promise).  Yvette Cooper was correct, however, when she pointed out that the introduction of HIPs had improved both the cost and delivery of searches.  Was a new system required to achieve this, or would government intervention in the search system have had the same result?

 

AHIPP held its second conference on 16th October and continues to push for full implementation of HIPs across the board.  Government has accused property professionals of vested interests whilst overlooking the fact that AHIPP would not exist without HIPs and therefore has the greatest vested interest of all.  Press releases continue to express the benefits of HIPs completely ignoring reasonable doubts expressed by others.  Ian Wright , the government speaker at the conference announced a further postponement on HIPs citing market volatility as the sole reason behind this decision.

 15 October saw the launch of a value added HIP by Hipag, a pack provider.  This is an ‘exchange ready’ pack designed to further shorten the period between offer/acceptance and exchange of contracts.  It advocates the preparation of the basic pack of required documents with the twist that the seller’s solicitor continues to prepare for the sale by obtaining other information a buyer may require and ironing out any problems that arise in advance of a buyer being n found.  This may work – in the past sellers have been loath to instruct their solicitor before a buyer was found so as not to incur legal costs in case they were unsuccessful in selling.  Now, only committed sellers are in the market –they are incurring costs and so, if they instruct their solicitor to prepare the HIP the extra cost might be saved in the long run.

22 May 2007 was a pivotal date in the life of HIPs.  Ruth Kelly announced the government was abandoning 1 June as the start date for HIPs was introducing HIPs in phases and that there would be a 12 week consultation on EPC’s over the coming summer.  All as a result of the judicial review proceedings by RICS. The consultation ordered has yet to be launched but RICS has announced its own review chaired by Sir Bryan Carsberg, a former director general of the OFT.  This review will look at the entire residential property market focusing on the buying and selling process.  Sir Bryan evidenced a less than supportive view of HIPs stating HIPs and EPCs ‘have introduced significant new regulatory and redress structures into relatively low risks aspects of the property transaction while leaving consumers in other parts of the sector, that may carry higher risks, apparently unprotected’.  He contrasts this with the more holistic approach taken to regulation in, for example, the financial sector.

It had been intended that HIPs would be brought in across the entire residential property market on 1 June 2007 but the 22nd May announcement mentioned above changed the game, the playing field and the rules.  Originally therefore all new properties would have required a pack BUT the wording of the commencement orders exempted those properties built under the requirements of regulation 17C of the Building Regulations 2000.  When considering new build therefore a further check has to be carried out to see what building regulations apply.

Issue 23 of the progress newsletter dated 12 October 2007 and to be found at
www.homeinformationpacks.gov.uk clarified what was meant by the Drop Dead Date and how it affected HIPs. Drop Dead Date (DDD) is another piece of jargon introduced into HIPs. This is the date when all properties that are on the market will be required to have a HIP, regardless of when they were first marketed and therefore had the benefit of transitional provisions to avoid the HIP.

The government says it will ‘set this date in the light of market conditions as HIPs bed in.’ Accordingly no date has yet been set nor is one envisaged in the near future.  Put together with the hold on introducing the last phase that would bring all properties into the scheme, one wonders how the government’s promise that HIPs would be of most benefit to first time buyers is holding up!

August 2007  -Following upon the July OFT reminder to estate agents as to their obligations under the new legislation, DCLG have now published Guidance to Enforcement Officers and an example of the form that the Penalty Charge Notice will take.  The Guidance is 39 pages long and is essential reading for all those involved in the preparation of packs so that they are aware of the approach Trading Standards Officers may take.

The latest numbers for assessors have been published and as at 17 September these were
Fully accredited - 4315 
Qualified and awaiting accreditation - 926
Examinations passed but not yet qualified and accredited - 3728

making a total of 8,969 but, of course, it is not known how much double counting is involved because assessors may be accredited with more than one organisation.

Morgan Whittaker, a domestic energy assessor training organisation based in Brentford, West London , lost its authorization from City and Guilds apparently as a result of ‘contractual issues’ rather than problems over the quality of training.  This has left some would-be assessors in difficulties, having paid not insubstantial fees.  C&G are apparently helping these students, both those staring a course and those halfway through their course, to transfer to other courses.  The Government insisted that such a hiccup would not affect the roll out of HIPs as Morgan Whittaker was just one of 34 assessment centres

The headline of the Guardian article could be regarded as misleading – the true story is that the lack of 4 bedroom homes coming onto the market has pushed down the average house price in and .  The fall in August 2007 was 2.6%.  The number of 4 bedroom homes coming onto the market dropped by 41% according to Rightmove – from 40,000 to 23,400 in August while ,during the first week in September 2007, the total of homes coming onto the market was just 4,159 instead of the past and expected average of 10,000.  This summer slowdown is put down to the increased cost of selling a home (and not just due to HIPs); the lack of speculative sellers and the expense of trading up all of which tempts people to ‘stay put’.

 

 

 

 

 

Paul Marsh, the Law Society Vice President, met with the Housing Minister, Yvette Copper, to draw attention to failings in the implementation of HIPs that could cause market disruption.  He drew attention to the continued problems with searches, pointing out the problems they caused to lawyers, particularly where searches with little or no value were included in a pack. Buyer’s solicitors then have to explain to buyer clients why they had to buy official searches. All this despite the publicity that the pack would save them money in this regard.  Paul Marsh also pointed out the dangers to consumers in the loss/reduction in transparency, competition and choice being brought about by referrals and the bundling up of services to include the pack, marketing and legal work.

The Law Society has a dedicated HIP website at www.hip.lawsociety.org.uk

On the day 3 bedroom homes were brought into the HIPs scheme, the DCLG also published a progress report ‘Green Findings’.  Most 4 bedroom homes are being rated with an E for energy efficiency. The accompanying reports suggest that the rating could be improved to a C on cavity wall and loft insulation being installed and with consequent annual savings of £180 on heating; £80 on lighting and £30 on hot water costs.  

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