handling hips with confidence
DESCRIPTION
Handling HIPs with confidence. 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. Agenda. Ensure you understand what a HIP is! - PowerPoint PPT PresentationTRANSCRIPT
Handling HIPs with confidence
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
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
Why HIPs?
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 agent’s 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.
When are HIPs required?
When are HIPs required?
• From 1st August 2007 every residential property brought to market will require a HIP, subject to the phasing below:
– 4 bedrooms or more: 1st August– 3 bedrooms: 10th September – 2 bedrooms: tbc – 1 bedroom: tbc
• There are a number of exemptions (described later)• Properties listed prior to this date will require a HIP
from 1st January 2008 if still on the market
Which properties require a HIP?
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)
The contents of a HIP
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
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
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
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 bedownloaded from www.lms.com to make this quick and easy for you
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 don’t 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
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
How HIPs affect your business
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!
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
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
Things to consider!
• How do you manage the vendor’s 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?
Keeping it simple
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
Using the HIP
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.
Storing the HIP
• HIPs come in many different formats:– Paper (bound book)– CD– Online– USB StickAs a standard LMS HIPs will be provided online.Different formats can be ordered at £10 + VAT each.