Saturday 25 April 2009

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


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  2. Andrew: Why is your profile not publicly available? Please open it up, so that we can discuss your comment fully - I don't really mind you being opportunistic in using my blog to market your business, but be open about who you are!