Home information packs

Home Information Packs

As from 14 December 2007, Home Information Packs and Energy Performance Certificates became part and parcel of the Home buying and selling process. But what does this mean to a Home owner looking to sell or someone looking to buy? Churchill Home Insurance have put together some useful information to try to help customers understand a little bit more about what this means…

A Home Information Pack (HIP) is a set of documents which provides important information about a property for sale.
Although most of the information contain in a HIP used to be provided as part of the buying and selling process, the new packs bring this important information together at the very start of the home-buying process making transactions more efficient and less likely to fall through between offer and exchange. A HIP should provide consumers with a clear, up front picture of what they are buying and selling. HIPs only apply to properties in England and Wales.

The Home Information Pack (HIP) is compulsory for most homes on the market in England and Wales. It is a legal requirement to have a HIP and you cannot market your house without one.

You don't need a HIP for:

• properties where there is no marketing, for example if you are selling to a member of your family
• non-residential properties
• properties limited by law to use as holiday accommodation or occupation for less than 11 months per year
• mixed sales, for example a shop with flat
• sales of portfolios of properties, for example selling two properties together
• properties not being sold with completely vacant possession, for example with a sitting tenant
• unsafe properties and properties due to be demolished
• properties sold through the ‘Right to Buy’, ‘Right to Acquire’ and ‘Social HomeBuy’ home ownership schemes

Compulsory documents
The following documents are compulsory and must be included in the in the Home Information Pack.

• Home Information Pack Index

  This lists all the documents contained in the pack and provides a checklist for sellers, buyers, estate agents and enforcement authorities. If any compulsory items are unavailable, the index must say so, state a reason why they are missing and specify what steps are being taken to obtain it. The index should be update in the event that documents are added to or removed from the Pack at a later stage.

• Energy Performance Certificate

  An EPC tells you how energy efficient a home is on a scale of A-G, with the most efficient homes (which should have the lowest fuel bills) falling in band A. The Certificate also tells you, again on a scale of A-G, about the impact the home has on the environment. Better-rated homes should have lower carbon dioxide emissions. The average property in the UK is in bands D-E for both ratings. The certificate also includes recommendations on ways to improve the home’s energy efficiency to save the buyer money and help the environment. A seller of a newly built home has to provide a predicted assessment of energy efficiency but should provide the buyer a full certificate when the home is completed.

• Sale Statement

  This statement provides basic information about the property being sold such as the address; whether it is freehold, leasehold or commonhold; whether it is registered or unregistered; and whether or not it is being sold as a vacant possession (i.e. if there will be a sitting tenant at point of sale).

• Standard Searches

  These include:-
  - the local land charges register relating to the property being sold
  - other 'local enquiry' records held by the local authority which will be of interest to buyers such as planning decisions and road building proposals
  - details of the provision of drainage and water services to the property.

• Evidence of Title

  These prove that the seller owns the property and therefore has the right to sell it. Where the property being sold is registered, certain documents from the Land Registry must be included in the pack to provide an up-to-date record of who owns the land. For sales of unregistered land, evidence of an official search of the index map must be provided.

• Information for Leasehold and Commonhold Properties

  Majority of the compulsory documents mentioned so far apply to all sales. However some are only needed for Leasehold and Commonhold properties. These include but are not limited to details on any regulations or rules that apply and any proposed amendments to these, service charges and ground rent, buildings insurance, personal injury insurance, ownership/registration, details of the current/proposed lessor, details of any managing agent and summary of any works being undertaken/proposed

• Property Information Questionnaire (PIQ)

  The Property Information Questionnaire needs to be completed by the seller. It provides a helpful checklist of simple information about a property buyers need to know before making any decision on the property.

Some documents in the Home Information Pack are purely optional but would be of benefit to both the buyer and seller. These include:-

• Home Condition Report

  A Home Condition Report contains information about the physical condition of a property, which sellers, buyers and lenders will be able to rely on legally as an accurate report.
  This report will give the Seller the opportunity to carry out any necessary repairs or obtain quotes prior to selling their property and the Buyer will be made aware upfront of any additional costs as a result of repairs.

• Home Use and Contents Forms

  This includes information on boundaries, notices, services, sharing with neighbours, planning permissions and other information which would be of interest. It is also usual for sellers to declare which fixtures and fittings and other contents of the property are included in or excluded from the sale or open to negotiation.

• Legal Summary

  The HIP contains some complex legal documents which may be difficult to understand. The legal summary is a legal advisors view of the content of the pack and should identify any issues that may wish to be taken into consideration when buying the property. However this document is not a substitute for legal advice.

• Other documents

  Other documents which could be included to help speed up the purchase process may include non-standard searches such as a mining search in areas where coal mining has taken place, rights of way, ground stability and actual or potential environmental hazards such as flooding and contaminated land.
  Packs may also include guarantees and warranties for work already carried out on the property.

Sellers can hire estate agents, solicitors or specialist pack providers to put a HIP together, or can compile one themselves without help.

If you're a buyer then nothing as a copy of a HIP are free to buyers. However, a seller or their agent may charge a reasonable fee for copying and posting the pack

The seller is responsible for the cost of a Home Information Pack. The cost of the Pack is down to the market but sellers will often be able to defer costs until late in the sale. Some providers may even offer free packs, or a no-sale, no-fee arrangement.
The overall cost of buying and selling a home will be similar to the costs before the introduction of the Packs as with the exception of the Energy Performance Certificate, most of the costs already existed although these costs will now be spread more evenly between buyers and sellers.

As long as the property is on the market there is no need to provide a new pack. If marketing stops and then starts again sellers are normally required to put together a new pack, although there are some exceptions.

A pack will not be required for properties where there is no marketing – when you are selling to a member of your family for example – plus non-residential properties, seasonal and holiday accommodation, mixed sales such as a shop with a flat, right to buy sales, properties not being sold with completely vacant possession (i.e. there will be a sitting tenant at point of sale), unsafe properties and properties to be demolished, and sales of portfolios of properties.

In short the answer is no. There is no direct relation between a Home Information Pack and Home Insurance. However, a Home Information Pack could help you in obtaining a Buildings and Contents quotation from Churchill simply by having all necessary information to hand. It may also help asses whether Churchill's standard blanket cover is adequate for your new home of whether you need a higher sum insured. Once you have these details it's quick and easy to apply for a Home Insurance quote with Churchill.

The above information is intended as a basic guide to Home Information Packs and Energy Performance Certificates. For more details – for buyers and sellers – including examples of essential HIP documents visit the Home Information Pack website.