Handling HIPs with confidence

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• Handling HIPs with confidence

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Agenda

• Why HIPs?
• When will HIPs be required?
• Which properties require a HIP?
• Required contents of a HIP
• Enforcement/penalties
• How this effects your business
• Keeping it simple!
• Using the HIP
• Storing the HIP

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Objectives

• Ensure you understand what a HIP is!
• Give you confidence to answer questions about
  HIPs
• Help you understand the contents
• Understanding the legislation
• Help you start thinking of ways to make HIPs work
  within your office

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Why HIPs?
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Why HIPs?

• The Government introduced HIPs because
• Millions of s are lost through aborted sales
  each year
• There has been an increase in the number of
  vendors testing the market at an agents
  expense
• Because of global warming sellers must have their
  homes energy rated (EPC element of pack)
• The pack will increase transparency in the market
• The Home Condition Report (HCR) will allow buyers
  to see the general condition of a property before
  making an offer.

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When are HIPs required?
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When are HIPs required?

• From 14th December 2007 every residential
  property brought to market will require a HIP
• The drop dead date has not yet been confirmed.
  This is the date when all properties on the
  market, regardless of when they were put on the
  market, will require a HIP.
• Temporary provisions regarding first day
  marketing have been extended to 31st December
  2008 meaning you can continue to market property
  as soon as the HIP has been ordered and paid for.

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• Which properties require a HIP?

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Which properties require a HIP?

• All residential properties designed for domestic
  use, including new build homes, require a HIP.
  The exemptions are
• Properties to be demolished
• Unsafe properties
• Commercial properties
• Mixed residential/commercial properties
• Seasonal/holiday accommodation
• Right to buy and similar sales
• Sales of property portfolios
• Properties being sold without vacant possession
  (i.e. with a tenant in place)

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The contents of a HIP
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The contents of a HIP

• Required contents are compulsory. They are
• Index (list of documents in pack)
• EPC (or predicted Energy Assessment for
  incomplete properties)
• EPC can now be up to 12 months old
• Sale Statement
• Land Registry official entry and title plan
• Leasehold/Commonhold information (if applicable)
• Local Authority search
• Water Drainage search
• Until 31st December 2008 marketing may commence
  once HIP has been commissioned and paid for.
• Copies of the title deeds if unregistered and
  a certificate of search result of the index map

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The contents of a HIP

• Authorised contents are optional. They include
• Home Condition Report (HCR)
• Environmental searches
• Mining, Radon searches etc
• Documents relating to repairs/improvements etc
• Warranties/guarantees
• Translations

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Leasehold HIPs

• The regulations regarding leasehold documents
  have been temporarily amended. Until 31st
  December 2008 only the lease document will be a
  required document, other leasehold documents
  will simply be authorised.

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Energy Performance Certificate (EPC)

• The EPC was introduced by European legislation
• The EPC grades property energy efficiency
• Checks include heat retention, loft insulation,
  boiler efficiency, lighting, cavity wall
  insulation
• Inspection takes 35-45 mins
• EPCs have to be registered by Landmark Solutions
  before they are put in the pack
• Agents sales particulars must contain/attach
• A copy of the EPC or a copy of the 2 EPC graphs
• Our free EPC Graph Generator software can be
• downloaded from www.lms.com to make this
• quick and easy for you

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Enforcement/ Penalties

• Enforcement will be through the local Trading
  Standards Office
• Any agent who markets a property without a HIP
  post implementation date will face a fine of 200
  per incident
• The fine can be cumulative (i.e. if you dont get
  a HIP on a property you can be fined again)
• Repeated offences may render the agent liable to
  a prohibition/suspension under the Estate Agents
  Act
• Agents are responsible for any part of the HIP
  that would contravene the PMA

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Glossary of Terms

• HIP Home Information Pack
• EPC Energy Performance Certificate
• HCR Home Condition Report
• CLG Communities and Local Government
• DEA Domestic Energy Assessor
• HI Home Inspector

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How HIPs affect your business
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Booking an Appraisal

• A seller should be made aware if they will
  require a HIP at booking stage
• Ideally the valuer should cover off costs and
  available options at the appointment
• Be prepared to answer questions
• Not everyone knows about HIPs!

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Carrying out the Appraisal

• HIPs should not change the way you value a
  property
• Be prepared for some negativity surrounding the
  subject
• Remember it is legislation so take a neutral
  stance if possible
• Offer your HIPs solution confidently - remember
  solution is a positive word!
• Other useful words to use flexible, funded, your
  pack!
• Look to identify who the seller will use for
  conveyancing at the earliest opportunity

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The Order Process

• Instruct LMS
• LMS commence HIP compilation
• When all documents are complete we send you
  access to the electronic copy of the HIP
• The conveyancer will have access to an electronic
  copy

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Things to consider!

• How do you manage the vendors expectations at
  booking stage?
• Giving property access to DEAs may be a challenge
• Who will be responsible for managing HIPs within
  the office?
• Where will you store the HIP?

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Keeping it simple
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Keeping it simple

• The documents within a HIP (apart from the EPC)
  are used in all your transactions today
• It is still the responsibility of the conveyancer
  to discuss the legal documents contained in the
  pack with the buyer.not yours
• Because the HCR is not mandatory most buyers will
  not scrutinise the HIP too much
• Remember you are still selling the property on
  its features and benefits not the pack
• A good EPC is a good selling point

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Using the HIP
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Using the HIP

• Use the fact your new listings have a HIP as a
  positive message
• When you have an interested buyer offer the HIP
  as a matter of course to aid the decision process
• If you are uncertain about anything or have a
  question you cannot answer contact your LMS
  account manager
• If you are selling a 200 year old property you
  should not expect a high energy rating. Should
  the buyer?? Manage expectations realistically.

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Storing the HIP

• HIPs come in many different formats
• Paper (bound book)
• CD
• Online
• USB Stick
• As a standard LMS HIPs will be provided online.
• Different formats can be ordered at 10 VAT
  each.