Why don't HIPs include contracts?

If HIPs (Home Information Packs) were really meant to provide a comprehensive package of pre-contract documents to speed up the conveyancing process, why do they not include a draft contract?

It is not because of any technical difficulty: the draft contract can be prepared at the same time as a property information form (see my earlier post). The details of the buyer and the price would need to be left blank until a buyer made an acceptable offer, but the buyer's details are normally provided by his or her conveyancer anyway, not included in the draft contract from the outset.

It could be argued that having a draft contract in the HIP, availablke to any interested party, means that multiple draft contracts have been issued, in which case all interested parties have to be informed. However, that is easily dealt with by amending the relevant practice rule, so that it does not apply where the draft contract is included in a HIP

The only reason that I can think of not to require a draft contract in a HIP is that even this government recognises that a contract is a legal document, which most sellers will want prepared by a lawyer, rather than by a HIP-provider, and the government would rather avoid involving lawyers for as long as possible.

With the new requirement for a HIP to include a Property Information Questionnaire (coupled with the selling agent's liability under the Property Misdescription act if the agent helps complete a PIQ that turns out to be inaccurate), it is likely that seller's lawyers will be involved in the preparation of the HIP more than they have been.

If so, I think this is a good thing: ideally, the seller's lawyer will review (or, indeed, prepare) the whole HIP, ensuring that it is accurate and comprehensive. Bedtter still if they can also ensure that a full property information form is completed, and best of all if they also include a draft contract.

That would make HIPs genuinely comprehensive and useful. OK, it means a lot of up-front work, but many lawyers will do that on a contingency basis - and it is no different to having to follow a pre-action protocol in issuing court proceedings, where the work is heavily front-loaded in the interests of a more efficient overall process

Heretical thought - HIPs do help (sometimes)

Despite the many faults of Home Information Packs and the way they were implemented, they do (on the whole) help to speed up the conveyancing process. Usually, the legal pre-contract work is now completed well before the buyer's mortgage offer is issued - it used often not to be so.

The slowest item in the legal aspects is now the provision of up-to-date property information by the seller. This is presumably why the curent rules now require a "Property Information Questionnaire" to be included in the HIP. However, as the PIQ is no substitute (in either scope or effect) for full property information, its inclusion hinders rather than helps the process.

If the government could bear to swallow its pride for a bit, it should invite the Law Society to convene a panel of experienced conveyancers to come up with a comprehensive but well-designed property information form - as was done for the Law Society's National Conveyancing Protocol, its Formulae for exchange of contracts by telephone, its Code for completion by post, etc. The Law Society has a good track record for this sort of thing, and it is crazy for civil servants to design forms and procedures they know relatively little about.

Any standard form is, of course, going to need supplementing in some cases, but a well-designed form can be used to cover all appropriate information for the vast majority of cases - the Property Details Questionnaire produced by HIPAG - the Home Information Pack Action Group - is a very good example of a comprehensive form; it could be improved, but it is very close to ideal.

If such a property information form were completed by a seller with his or her conveyancer's help, and in a genuine attempt to provide all relevant information in an accessible way, it could be included in a HIP at the outset (or, better, added during the marketing of the property), to make the HIP genuinely comprehensive - apart from a contract (see next post)

"The anonymous uniform of the professionally uninterested"

That phrase caught my eye when I read it during the past week. I think it was in reference to (for example) bank employees in uniform who don't really care about customers, only about achieving their targets

Yet I think it applies more to professionals who assume that a suit is required uniform - without necessarily looking at it from their clients' point of view

For myself, I rarely wear a suit if I am staying in the office - clients tell me they prefer to see me in a sports jacket and trousers, even in shirtsleeves, and that they find dealing with suited professionals very daunting - it is another barrier to overcome

I do wear a suit (normally) if going out on appointments - something to do with being a visitor and on my best behaviour, as opposed to being "at home" and welcoming - though I have not tried to work out the psychology

Does it matter?

Police over-reaction

At last! Someone is writing about the Nottighamshire protest arrests: http://www.guardian.co.uk/commentisfree/henryporter/2009/apr/14/protest-power-station-arrest

If you are buying - get a survey

If you are buying a property, PLEASE get a survey. For a few hundred pounds, you can save yourself tens of thousands of pounds.

First, if the survey reveals defects, you can re-negotiate the price to reflect these

Second, if the survey does not reveal defects as such, it will include useful information, and at the very least will reassure you that there are no major problems

I used to think that the only cases where I would not strongly advise a buyer to get a survey was in the case of a newly-built house with a new home warranty - even then, getting a surveyor to prpare a properly-detailed snagging list is, in my view, well worth while. That was until the time that a client decided that, despite the new homes warranty, she would also have a survey. The surveyor spotted that the external wall on one side of the property was not tied in properly - the brick outer skin was not tied to the frame - and could collapse at any time. Though this would (presumably) have been covered by the NHBC Buildmark cover, it was far better to get the problem remedied before committing to the purchase and having to get the problem remedied afterwards.

So, I now recommend surveys in all cases

In addition, buyer should get electrical wiring, gas appliances, central heating systems, etc, all checked by appropriate specialists - remedying problems or renegotiating the price to reflect problems, is soooo much easier before exchanging contracts!

You know it makes sense - get a survey

HIPs "upgraded" from 6 April

Now that HIPs must include a PIQ, there is another hurdle to leap before marketing a property, but we at Nelsons Property Lawyers think we can help

There are different versions of the PIQ for existing homes and for new homes - a new home for these purposes is a home that is being designed or constructed or which has never been occupied. – and different versions for freehold and for leasehold properties.

The forms produced by the government do not have to be used; so long as the same information is collected. This gives those who want to prepare a more comprehensive HIP an opportunity to make the PIQ more useful than the minimal form would be, but the current trend with HIPs is to do as little as possible to comply with the legal requirements, rather than as much as possible to expedite the sale process, so I will not expect anyone to try very hard to improve on the “basic” PIQ.

It should take most sellers less than ten minutes to complete the basic PIQ for freehold properties, but completing even the basic PIQ for leasehold property will be a longer, more daunting process.

The PIQ says, “The Property Misdescriptions Act 1991 (PMA) does not apply where the form has been completed solely by the seller.” There is, therefore, a clear implication that an agent who helps a seller complete the PIQ could be liable for property misdescription if the PIQ contains errors. Accordingly, it would be best for the estate agent to get the seller to complete the PIQ alone, or to get the HIP provider to deal with it or to enlist the assistance of a local solicitor or conveyancer.

Most sellers will, after some initial grumblings, complete the freehold part of the PIQ without too much resistance. However, the leasehold part is another matter completely and I anticipate that many sellers may feel the need to speak to a solicitor or conveyancer - ideally, the solicitor or conveyancer who acted when they bought the property.

Where they cannot (or will not) do that, we will be happy to help. We will spend up to half an hour at our office free of charge, helping a local seller complete the PIQ and guiding them on where they can find any information they are lacking. If more than half an hour is involved, we reserve the right to make a charge (probably £50), but would normally waive this - our aim is to build relationships with local agents and prospective clients, and to help streamline the conveyancing process, rather than to make a profit out of this quasi-legal work.

If you want help in completing the PIQ, please contact Sam (Samantha Robb) or Anne (Anne Browne) at Nelsons Property Lawyers in Tenterden: telephone 01580 767100

Special offer for local first-time buyers

To help local people stay local, we have introduced a very special, not-to-be-missed, fixed fee offer for local first-time buyers of property - see our leaflet for details

Bankers suffer - but (litigation) lawyers will thrive

http://www.euromoney.com/Article/2175805/Category/204/ChannelPage/0/Abigail-Hofman-No-win-situation.html

What I try to do

I try to look after my clients as close friends or family members: giving punchy, practical, jargon-free and actionable help; keeping their legal difficulties and expenses to a minimum; using my knowledge to benefit them.

from The Moonstone ...

"it [is] always desirable for the sake of peace and quietness to be on the lawyer's side"
Hee! Hee!

Wealden Business Group

I am a member of the Wealden Business Group (WBG): a breakfast networking meeting for business people in the Weald of Kent and Sussex. We meet on Wednesdays at the Little Silver Country Hotel, Ashford Road, St Michaels, Tenterden - further information at http://www.wgb.me

Having previously been chairman and secretary and filled other committee posts, I felt I had done my bit for the group; indeed, when I gave up being secretary a couple of years ago, I promised my wife not to take on another job - at that AGM at least

So I was rather surprised to find myself volunteering to become secretary again at the AGM on 1 April (last Wednesday) - I almost felt I was playing an April Fool's joke on myself!

I didn't tell my wife until Thursday evening, 36 hours later - I tell myself that this was because we had both been busy during the days and she had been away overnight, but I suspect it was also because I thought she'd thump me!

However, it is quite good to be fully involved again - I bet I won't feel the same this time next year!

Donating blood

I have been donating blood for 25 years now - two or three times a year, as they normally only take a donation at least 16 weeks after the previous one.

The National Blood Service has, it seems, decided to reward "frequent flyers", as I have received a letter, congratulating me on giving blood 3 times in 12 months (not the first time, but the first time it has been commented on), and offering me a "a special cemmemorative slate coaster ... as a small token of our appreciation"

I feel quite touched! ;-)
(and I am NOT being cynical)

Home Information Packs - again

On Monday, the new, tighter rules for HIPs come into play -

• the HIP must be complete (well, nearly ...) before the property is marketed, rather than being in the course of preparation
• the HIP must include the Property Information Questionnaire: a very watered-down and pointless version of the full Property Information Form that buyers' conveyancerswill expect to see; either the HIP should include a full information form or no such form should be required: adding an extra, largely pointless form is ... pointless
• the HIP must include "full" searches - see below

Largely in order to produce HIPs as cheaply as possible - because everything is sold on price, not quality, these days, it seems - most HIP providers use agents to carry out "personal" searches, rather than getting "official" searches direct from the relevant councils. There is also, sometimes, an argument that personal searches can be quicker, but most councils, certainly in Kent, have an impressively speedy turnaround time now

Anyway, many personal searches did not contain answers to all the required questions, believe it or not. Usually, this was because some councils, apparently in an attempt to protect their income streams by encouraging the use of official searches, would refuse to allow access to relevant information unless obliged by law to do so. For instance, though the planning register must be open for inspection, the information relating to possible breaches of planning control need not

(BTW: some councils, including Ashford, offer "value added" searches, by including with the result copies of any conditional planning permissions, plans from Tree reservation Orders, etc - saving the need to apply separately for these once they were revealed by the local search result)

As a result, personal searches tended to paint a partial picture, while official searches painted the full (or, at least, a fuller) picture. Though personal search agents would offer insurance cover in respect of any "nasties" not revealed by the partial nature of the search, that is poor compensation (assuming the insurers in fact pay out) if your dream home is blighted by something that you would have known about in advance had an official search been available.

In addition, a significant number of lenders will not accept personal searches (or only if the buyer's conveyancer (as opposed to the person who carried out the search) guarantees their accuracy. As a result, if a HIP included a personal search (and most do) the buyer might need (or want) to get an official one too, increasing the cost despite the government's stated aim of reducing cost.

From 6 April, personal search will not be allowed to say "Don't know, but if there is a problem you are insured against it" - they will have to include answers to all the questions.

Unless the government is also obliging councils to answer all the questions (I simply do not know what is happening on this score), this will result in official searches being included in HIPs - something that I, as a conveyancer, will heartily welcome