These are some of the more unusual and frequently asked questions about HIPs.
1. Private Sellers - Do they need HIPs?
Yes, they do if advertising their property to the open market but not if selling to a friend or relative.
2. Penalties for not providing a HIP.
The penalty for marketing a property in breach of the Regulations is a fine of £200 by way of a penalty charge notice. Payment of the penalty charge does not entitle the person to continue marketing the property in breach of the Regulations. To do so can result in further penalty charge notices. If the person is an Estate Agent it also amounts to an undesirable practice” for the purposes of Section 3 (1) (d) of the Estate Agents Act 1979 and would render them liable to action by the Office of Fair Trading. This could result in a banning order that would prevent them from continuing to trade. (Section 175 of the
2004 Act)
3. Part-exchange properties
If a developer takes in a property as a part exchange, even although it may have a current HIP, a new one will have to be produced. Only the EPC from the original HIP can be used (and only if the new responsible person is confident that no changes have been made since the last EPC was carried out). If the title document has not been changed, a letter confirming the part exchange that has taken place should be included showing old and new owners’ names. Developer clients should be made aware of this when considering a part ex.
4. Does PIQ cancel the need for a seller to complete the PMA form?
No. Both have to be completed.
5. Properties on the market which came on before they needed a HIP.
They still do not need a HIP, but they do need an EPC. Which properties required HIPs from which dates.
4 beds or more 1st August 2007
3 bedrooms 10th September 2007
2 bedrooms or less 14th December 2007
6. Properties on the market with other agents.
The following must be checked;
i) The property has not had a break of more than 28 days off the market if it has been on for over a year.
ii) The HIP is authentic and complete. For HIPs created post April 6th 2009, you must ensure the searches contained in it are complete and NOT insurance backed for Missing information. If they are Personal Searches, (most will be) they should however still contain insurance cover in the event that the search agent has made and error, and also in the event that the council’s data was incorrect. However, this insurance cannot be relied upon to cover missing information, because it was not obtainable or only obtainable at cost. If this is the case, we the HIP cannot be used. Post 6th April HIPs need a PIQ, pre 6th April HIPs don’t.
iii) The owner has authority to allow us to use it. (i.e. they have paid the other agent)
iv) The EPC is less than 3 years old (all will be at present but as time passes, this will need to be checked)
7. Properties with HIPS, which come on and off the market.
If it comes off the market after the initial 12 months, a new “first point of marketing” is created and any time sensitive documents in the HIP will have to be replaced if expired. These will typically include local searches, title documents, index and sales statement. The EPC will last for 3 years.
If however the property is under offer and the sale falls through any time during or after the first 12 months of it being on the market, the original HIP can be used, without renewing any documents, so long as the property comes back on within 28 days of the date of the sale falling through.
8. New Properties
All new properties on from 6th April 2008 require a HIP.
For new homes being marketed from plan or which are not yet fully built, a Predicted Energy Assessment (PEA) will be required. This needs to be replaced in the HIP with an On Construction EPC (OCEPC) within 14 days of construction being complete. The company that supplied the original PEA should supply this for no additional charge.
9. Sustainability Certificate
In addition to the documents required in a HIP for a second hand property, for all New Homes where a local authority has received full plans, a building notice or initial notice after May 1st 2008, new properties also have to have a Sustainability Certificate included. For part-built new homes, an Interim Sustainability Certificate must be produced and then replaced by a final Sustainability Certificate when construction is complete.
10. Do properties for sale with planning permission to demolish need a HIP?
Technically no, but we have to be very careful here. In some respects how the property is marketed will dictate whether or not it needs a HIP. No HIP is needed if it is clear from the marketing details that;
a) The property is only suitable for demolition,
b) The resulting site is suitable for re-development,
In such cases, all the relevant planning permissions, building and conservation area consents must exist in relation to the demolition and outline planning permission (minimum) and where relevant “listed building” consent must also exist in relation to the re-development.
If however a property is being marketed on an either or basis, i.e. someone could buy it to live in it, or knock it down and redevelop it, then it needs a HIP. This is a scenario that could exist currently as the price for land has fallen and there will be some properties out there that have PP etc but are border line as to whether they would achieve more (or as much) if sold as a plot rather than a residence.
11. Residential Properties which still don’t require HIPs.
Any which came on the market before they were required to have a HIP, (see above). But they do now all need an EPC before exchange of contracts.
These are exceptions for properties being sold without vacant possession, portfolios of properties (so long as all being sold to one buyer at once, and part-residential part-commercial building.)
