HIP - hopeless, inefficient and pathetic?

*HIPs will be required from August 1, 2007 but only for four-bedroomed or larger properties. So it is likely most flat sales will be excluded, but four-bedroomed flats will require a HIP;

*The requirement to have the HIP collated and in place before an estate agent can market a property will be suspended until December 31, 2007. The marketing can commence as long as the HIP has been commissioned or ordered from a HIP provider – likely to be an estate agent or solicitor;

*One key part of the HIP for Government is the EPC or energy performance certificate. It was a requirement that the EPC be no more than three months old at the time a property would be put on the market. This requirement will be relaxed for now and an EPC could be up to 12 months old when the HIP is needed;

*HIPs will become a requirement for other properties including one to three-bedroomed ones as soon as possible. The problem has been a lack of trained and accredited energy assessors to fulfil the demand for EPCs. The Government estimated at least 2,000 assessors would have been needed on June 1, but only 520 had been fully accredited by May 22. So look out for further announcements on the phasing in of HIPs that will bring more flats into play.

Meanwhile the flat management world has been preparing for HIPs. Remember if you are selling a leasehold flat you will be required to provide the following additional information for your HIP:

*The lease;

*Any rules or regulations relating to the management of the property;

*Statement of account for service charges;

*The most recent request for payment made by or on behalf of the landlord in relation to service charges, ground rent and building insurance covering the 12-month period preceding the date the property was put on the market for sale;

*The name and address of the landlord and any managing agents appointed or proposed to be appointed by the landlord;

*Any amendments proposed to the lease, to regulations or to rules relating to the management of the property;

*A summary of works affecting the property current or proposed.

Flat sellers will need to approach their managing agents to obtain a lot of this information even though they may have been sent it previously. LEASE is producing two free leaflets, one will be aimed at leaseholders and explain the need to retain certain documents received from agents; the other is a more general explanation of the impact of HIPs on leasehold flats.

ARHM and ARMA have issued advice to members to review and improve their service to leaseholders who request information to assist with sales including setting out timescales for response, a complaint procedure and a clear menu of possible charges for information, which must be reasonable.

So what happens next?
The Government will publish a revised set of regulations and everyone is waiting for details before reacting. This will be the third set of regulations issued to implement HIPs; the other two have been withdrawn. Third time lucky? Many in the property industry remain sceptical of HIPs and are calling for the requirement for an EPC on sale to be kept and not linked to HIPs. The Law Society called the situation a shambles and the RICS issued a statement that it had not agreed to withdraw its judicial review of HIPs, only that it had been “stayed”. The RICS is seeking a 12-week consultation period on HIPs and EPCs and would like a debate on whether the required information for leasehold flats in HIPs is really necessary. Given what has happened so far, more twists and turns in this cliff hanger of a saga can be expected.