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Home Information Packs – a quiet revolution in English and Welsh Conveyancing Procedures |
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As from the 1 June 2007, sellers of residential property in the UK will
be required to make Home Information Packs available when marketing
their properties.
By David Glass, Pritchard Englefield
This new requirement, being promoted by the UK Government under the
slogan “Better Buying, Simpler Selling”, is intended to make the house
selling procedure more transparent and effective. Under current law in
England and Wales, the general approach is “let the buyer beware” since
it is up to buyers to satisfy themselves on issues of legal title and
physical condition when buying properties. This can mean time wasted
and money spent by prospective buyers in finding out information about
properties which the current thinking is that prospective sellers
should provide anyway.
The Home Information Packs, which will be put together by private
sector organisations, will need to contain the following required
documents:-
· An index (containing a list of the contents of the Pack);
· A sales statement (summarising terms of sale);
· Evidence of title;
· Standard searches (i.e. local authority enquiries and a drainage and water search);
· An Energy Performance Certificate;
· Where appropriate, commonhold information (including a copy of the
Commonhold Community Statement) – “commonhold” is a special kind of
legal title to property affecting mainly various apartment
developments;
· Where appropriate, leasehold information (including a copy of the lease, information on service charges and insurance);
· Where appropriate a New Homes Warranty;
· Where appropriate, a report on a home that is not physically complete.
The Home Information Pack may also contain “authorised documents” including the following:
· A Home Condition Report;
· Guarantees and Warranties;
· Other searches
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In the first instance, the cost of selling properties is likely to be
increased but it will be interesting to see whether in the end the
buyer will end up bearing the increased cost through higher property
prices.
There are many questions which flow from the new proposals and the Home
Information Pack Scheme, which has been trailed through dry-run tests
for some time, has already been modified in a number of respects since
the idea was first introduced by the Housing Act 2004.
Conveyancing procedures in England and Wales have long been criticised
for their slowness and complexity and the Home Information Pack Scheme
is one aspect of the concerted attempt that the UK Government is now
making to break through this cycle. Other aspects which are being
looked at include trying to minimise “chain of title” problems whereby
individual house sales can break down because, for instance, a linked
transaction someway higher up the chain of sales fails for whatever
reason having knock-on adverse effects on sales lower down the chain.
There may well be other issues affecting the Home Information Pack
Scheme which will need to be sorted out before the Scheme finally comes
into force on the 1st June 2007 but the UK Government has made it clear
that there is no turning back from the essential proposals underlying
this Scheme.
© February 2007 David Glass
All Rights Reserved.
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