New regulations including Property Information Questionnaire announced
The ending of temporary 'First Day Marketing' (FDM) rules, which allow homes to be marketed without a HIP providing a commitment is made to get one within 28 days, has been put back for the fourth time to April 5th 2009.
The DCLG press release which announced (what's becoming their almost habitual last minute) amendments, doesn't use words such as 'delay', of course. It says:
We are changing the regulations on first day marketing from April 6, to ensure buyers have certainty the HIP will be available as soon as a property comes onto the market, and that sellers get to see the product they are paying for.
New measures to benefit consumers - Corporate - Communities and Local Government
I dunno, is it right that party politics and ministerial vanity is allowed to (ab)use the machinery of Government to pollute important regulatory announcements in a similar marketing vein to that employed by credit card companies sending pre-signed cheques to strangers in the post?
'Don't look at the APR box, look at this big picture here instead - you could be on that beach! Don't you worry your pretty head about the details.'
Rant aside, moving on.
However, in the explanatory memorandum to the new regs - the APR box - it confusingly says:
It is the Department’s view, therefore, that this temporary exemption is not working in the consumer interest and should end at the earliest opportunity.
Explanatory memorandum (pdf)
But instead of sticking to the timetable everyone should've been planning to, it first wants to give "industry and consumers time to prepare". What?!
It then adds: "the Government believes that ending the temporary exemption should be synchronised with the introduction of the PIQ on 6 April 2009."
I suppose that's the holiday. Only it now (unhelpfully) coincides with the seasonal property upswing.
Simon Thomas of the Independent Pack Providers Association (IPPA) is keen to assure estate agents that marketing need not be delayed when FDM ends.
"Estate Agents have no need to worry as the elements of the pack that will be required prior to marketing commencing will take no longer to complete than most agents take to produce their sales particulars", he said.
Property Information Questionnaire (PIQ)
I've swayed for and against the PIQ since it was proposed earlier this year: isn't it really just trying to do the job estate agents should already be performing as part of the sales process? It's called product knowledge.
The fact that few do is justifiable cause to legislate, you might counter. Except, the memorandum points out that:
the PIQ is not intended to be a legal document or to replace the work of conveyancers and other property professionals, which will continue to be required as the transaction is finalised.
(emphasis theirs, not mine)
There is no legal bite to the document, just a warning that incorrect or misleading information may later endanger the sale if exposed.
It also admits that some questions in the PIQ are asked again later by conveyancers - duplicates.
The final format of the PIQ will include additional questions on flooding, gas and electrical safety, and the removal of questions relating to the title number and boundaries.
New build PIQ
A separate PIQ is being introduced for new build homes.
Personal searches
The temporary extension period also applies to private search companies using insurance protection against "information gaps in personal searches", a loophole many believe is being exploited to cut costs, thus lowering reliability and incurring duplicate search costs for the buyer.
IPPA is reserving final judgement on the full effect which, by the time FDM ends, will include a new Local Authority charging regime and improved access to search data.
Simon said: "It's important that the quality of Searches supplied within HIPs is improved and we support any action that achieves this aim. We will have to wait and see how changes to legislation impact those involved in the industry."
Leasehold
From 1st January 2009, documents "currently required to be included in HIPs in the case of leasehold sales" are to become authorised documents, except the lease itself.
The PIQ is to be used for providing summary information such as ground rent, property use restrictions etc... to overcome the time it takes to compile "large volumes of leasehold information before [sellers] begin marketing" under the current system. It will become a required document of the HIP from 6 April 2009.
Property portfolios
Only one HIP will be needed when selling a portfolio of properties, even when some of them may not be vacant possession (eg: sitting tenants).
Tags: home-information-pack, ippa, legislation, clg
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