A key policy that was once the cornerstone of the new Labour manifesto in 1997 is facing an important legal challenge. The Home Information Packs or HIP's for short that are due to become law in England and Wales in June 1st run the risk of becoming a complete and utter non-starter.
The Royal Institute of Chartered Surveyors (FRICS) had stated that it would seek a judicial review because it felt that the government had not consulted properly on the legal ramifications of the new information packs.
This follows hot on the heels off a fairly damning report compiled by a select committee from the House of Lords that recommended the policy should be scrapped. The trouble with the whole scheme really appears in one way to revolve around the issue that nobody knows how much this will cost.
Government figures suggest that the packs could cost anywhere between ?400 and ?600 but private industry estimates suggest this figure could be wildly inaccurate with the possibility of the end cost passing the thousand pound mark.
Now the real problem with the whole scheme is that as you can imagine with a policy that was drafted in 1997and is shortly to become law is that quite a few changes have been made along the way. One of the major changes involves who will and who cannot accept the information from the pack as accurate and valid.
It was initially proposed with the first draft of this scheme that mortgage lenders would accept a valuation provided in the sellers Home Information Pack as being valid for lending purposes. As with all situations where there are large sums of money moving around it usually falls to the provider of these funds to decide upon which rules they are going abide by. In This case it appears that the government may not have taken that into consideration.
Strange that, as that would appear to be pretty logical to me. You pay the piper, you call the tune.
As a result the government have removed this evaluation aspect from the information packs and buyers and their prospective lenders will still be required to undertake separate and independent valuations.
So we are fast approaching a situation whereby sellers will be legally obliged to produce a document that not many people are going to pay attention to.
Now if this doesn't sound like stupidity personified I don't know what does.
That having been said, what information will an information pack include? Well firstly it is designed to produce evidence of title. In layman's terms this is proof that the seller has the right to be able to sell the property in question. Secondly the information pack should include copies of planning, listed building or building regulations consents and documents. It should also include copies of local searches, guarantees for any work carried out on the property and lastly and this might appear to be a fairly contentious aspect. The home information packs are meant to contain an energy performance certificate for the property being sold.
The rational being according to the Home Office Minister Yvette Cooper 'if you get this information on a fridge then you ought to be able to get this information for a home'.
God help us with thinking and rationale like that. Someone keep them talking while I ring for the ambulance.
