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All you need to know about HIPS...

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Low cost HIPs risks

It is becoming clear that low-cost Home Information Packs (HIPs) are causing concern and expense for sellers and buyers due to inaccurate content and missing documents.

The lack of awareness about HIPs has meant that most consumers are choosing the lowest-cost products possible. With providers being forced to cut prices to survive, the resulting compromises in quality are having a major impact on buyers who are being discouraged by incomplete information contained in a HIP, making them increasingly nervous about their purchase. Although most HIPs are legally compliant, this offers no guarantee that they are either complete or accurate.

In a recent case, a buyer had been provided with a HIP that included a title document that contained a restrictive covenant, which was of major concern. However, the restriction had been released in a separate document, (which most providers do not bother to include) so the covenant was no longer valid. Although the HIP was legally compliant, this optional document was key to the interpretation of the title, and actually caused the buyer concern about whether to proceed.

In a second case, a seller chose a low-cost personal local authority search instead of a full, authorised local authority search. Such personal searches, which must carry insurance to protect against errors and omissions, mistakenly stated the property was not in a conservation area, when in reality it was.

Andrew Cross, of Hatchers Solicitors, representing the buyer was not impressed. “When we saw this mistake, we judged the remainder of the search could not be relied upon, and commissioned a full local authority search. If the seller had used an authorised search we would have had plenty of time to exchange contracts, but the use of a personal search has introduced a delay, and we will be passing this unnecessary additional cost back to the seller.â€?

As Peter Ambrose, director of The Partnership comments, “We share Hatchers Solicitors’ concerns about the shortcomings of low-cost HIPs many of which miss multiple titles and most are incomplete, which increase costs and slow the conveyancing process.â€? {mos_sb_discuss:5}