What is a HIP
A HIP contains a collection of important documents that are required when houses are bought and sold. These include various legal searches, land registry documents and an energy performance certificate (EPC), which is intended to tell you and potential buyers how ‘green’ a house is.
Why are they being introduced?
The idea behind the HIP is to make the process of buying and selling your house easier and quicker, by providing key documents when the property is first put on the market. The goal is to deliver a more transparent and efficient process, thereby reducing the number of failed transactions, which currently cost consumers over £350m per year.
What is in a HIP
There are two kinds of documents that a HIP may contain, those that are required (mandatory) and those that are authorised (optional) to be included at the seller’s discretion:
MANDATORY:
- INDEX OF THE DOCUMENTS CONTAINED WITHIN THE PACK
- ENERGY PERFORMANCE CERTIFICATE (EPC)
- SALES STATEMENT SUMMARISING THE PROPERTY DETAILS AND TERMS OF SALE
- EVIDENCE OF TITLE FROM THE LAND REGISTRY
- LOCAL AUTHORITY SEARCHES AND A DRAINAGE AND WATER SEARCH
- ON LEASEHOLD PROPERTIES – KEY INFORMATION RE THE LEASE AND THE MANAGEMENT COMPANY
OPTIONAL:
- HOME CONDITION REPORT (HCR) – A REPORT CONDUCTED BY A HOME INSPECTOR WHICH GIVES DETAILS OF THE CONDITION OF THE PROPERTY
- ANY WARRANTIES OR GUARANTEES THAT YOU HAVE ON THE PROPERTY
- OTHER LEGAL INFORMATION REQUIRED FOR CONVEYANCING SUCH AS ENVIRONMENTAL, FLOOD AND MINING SEARCHES
How long does a HIP last
There is no obligation on you or your estate agent to renew anything in your HIP. If something significant happens whilst the property is on the market, then you may choose to do so, but it is the buyer’s solicitor’s responsibility to check if any documents need renewing.
If the property is withdrawn as a result of acceptance of an offer and this subsequently falls through, the property can be remarketed with the original HIP, provided that this is recommenced within one year from the date of the initial marketing date or, if later, then within 28 days of the sale falling through.
When is a HIP not required
There are certain circumstances when HIP’s are not required:
- WHEN THE PROPERTY IS SOLD BEFORE THE HIP IS RECEIVED. BUT AN EPC MUST BE MADE AVAILABLE BY EXCHANGE OF CONTRACTS
- A PRIVATE SALE
- NON-RESIDENTIAL PROPERTY
- SEASONAL / HOLIDAY ACCOMMODATION
- A MIXED SALE I.E. SHOP AND FLAT
- RIGHT TO BUY PROPERTIES
- SALE OF PORTFOLIO PROPERTIES
- UNSAFE / DEMOLISHED PROPERTIES
- NEW BUILDS UNDER PART L BUILDING REGULATIONS 2006
New build properties
HIP’s are also required for newly built homes, though these are subject to their own regulations and, in most cases, the EPC will be replaced by a Predicted Energy Assessment (PEA) produced from the design plans.
Homes built after the introduction of the recent Building Regulations (Regulation 17c Part L 2006) are currently unable to have an EPC/PEA produced as the software is under development but the requirement will be phased in. It is envisaged that all new homes will be legally obliged to have had a SAP based EPC produced as part of the Building Regulations sign off process.
What is an Energy Performance Certificate (EPC)?
An EPC will tell buyers and sellers about a home’s energy efficiency, using A to G ratings like those used on appliances such as washing machines and refrigerators. The certificate will also specifically show, for each individual property, various improvements that could be made to cut fuel bills and carbon emissions, the costs of doing this and how quickly these will be recouped through reduced spending on energy.
The EPC will be prepared by a Domestic Energy Assessor who has been trained and is licensed via the Government Certification Scheme.