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Apr
On HIPs - a question for our readers

This, from a Rat and Mouse reader:

Really enjoy your blog.

I see many benefits to the market with giving potential buyers the expectation that searches, contract etc will be immediately available to inform their decision but think the compulsory addition of the environmental report is ludicrous. To pay however many hundred pounds for a report stating that I could save money using low wattage bulbs does not give me anything I don't already know. Far better for the government to spread the message through advertising.

I would be interested in the views of your readers on my plan to sidestep this lunacy - I have a number of let flats that I may or may not wish to sell later in the year. The legislation exempts properties on the market prior to 1st June (until the end of the year) so I propose placing a single ad in a cheap local paper to place them on the market (however ineffectually) before that date. Would this work?

Regards,

**********

Which - I guess - boils down to what does it mean to have a property on the market? My guess is that if our reader decides he later wants to advertise them with an estate agent, he'll have to cough up for a HIP. But I can't give a technical answer to his question. Can you?

UPDATE - FROM HENRY PRYOR OF PRIMEMOVE.COM:

The Housing Act 2004 defines the meaning of "on the market" in section 149 (2) as "A residential property is put on the market when the fact that it is or may become available for sale is, with the intention of marketing the property, first made public in England and Wales by or on behalf of the seller." As such, "the Responsible Person" (usually an estate agent but in the case of a private sale the seller) must prepare a HIP - including the EPC if the property is first marketed after 1st June. Estate Agents up and down the country are advertising to the public that by instructing them before 1st June will mean that until the end of the year, they will not require a HIP. By advertising the properties (and I mean all of them) before 1st June they should qualify for the exemption. BUT.... your reader may not be aware that from 1st October next year all rental properties will require an EPC. I suspect that the Government have got you both ways!

Thanks, Henry. And notice Henry says, "until the end of the year"... this is a short-term plan, with a cut-off to the exemption (see the comments, below).

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Comments

You can see the answer at http://www.communities.gov.uk/index.asp?id=1509214 or my resume at http://www.fsbo.org.uk/blog/?p=12.

If he/she is already 'marketing' the flats before June 1 (I am not a legal person so this is only a lay comment) and manages to shift them before December 31 by means of the original channel then they would appear to be OK.

A new instruction to an Estate Agent during the interim period would probably result in the AGENT insisting on the EPC since I have been told that they can be fined themselves for not having the EPC on the particulars and the instruction was taken after June 1.

The 'drop dead' date means exactly that. Any properties being marketed after that date must have a HIP. 'Marketing' means by any means, not just Agents. By my reading even a newspaper ad will need one!

Hope this helps.

Cheers

-- Jim Craft propertiesdirect

http://www.propertiesdirect.co.uk

Posted by Jim Craft at April 25, 2007 3:28 PM

Comments

Hi

We have advice on the http://property.laystar.co.uk web site on HIP issues.

I understand the resentment of a home efficiency report, it seems nonsense. Originally the Home Condition Report (mid-way survey) was to be compulsary, which of course would have been more use to your average buyer. Seems the gov got scared off on this issue and settled for something which would be more useful to gov stats than a buyer.

Anyway, the HIP official website has now been enhanced, thankfully, and it explains what is meant by 'on the market'. And yes, being on the market is about being to prove just that, but i think it has to be continuous. A one-off paper ad is not really continuous marketing.

By the way though, you could market continuously with LayStar right now for free. We're filling the books so get in quick ;-)

Best wishes

Posted by LayStar at April 26, 2007 12:55 PM

Comments

Continuous marketing must be proven ie. keep records of ads etc.

If a property is marketed pre-June it will not require a HIP until 1st January 2008 if unsold.

EPC are a EU initiative and will be compulsory for all buildings inc commercial/BTL's etc by 2008.

The original question relates to investment property. These are exempt from HIP requirements.

HCR's will also be compulsory by 2009 - you read it here first!

You can sell property FREE at www.tickeverybox.com

We have a lot of talk about HIPs on our forum along with other important property issues,
see www.tickeverybox.com/forums

Posted by David Roberts at April 26, 2007 5:04 PM


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