Packed away

At present, and despite the unfounded perception in certain quarters that home information packs (HIPs) are a waste of time, the good news is that most estate agents around the country are adhering to, and complying with, the requirements of the Home Information Pack Regulations 2007.

A number of proactive trading standards departments have found, after recent investigation, that overall estate agents are following the law, and that an acceptable percentage of the properties on the market have a home information pack attached. There was, however, a handful of agents who were found in breach and who were issued with an 'on the spot' fine, as well as a warning that they could face OFT investigation and ultimate closure.

The big question, however, is whether this level of compliance can be maintained in the light of the political uncertainty hanging over the home information pack. The Conservative party, headed by the shadow housing minister, Grant Shapps, has vowed to make the HIP a number one target if his party is elected into government in May or June of next year. As to why this should be top of the party's shopping list given other far more important issues '“ such as Europe, health and the economy, to name a few '“ is beside the point, and is a topic for another occasion.

The threat of non-compliance

The real danger here is that some estate agents may, in spring 2010, decide in the light of the Conservative stance on HIPs, to turn a blind eye to marketing without a HIP believing that as the HIP is close to extinction no one will really care. Could we see the start of a widespread epidemic of non-compliance?

Some say Shapps' unhealthy obsession with the removal of the HIP may also have the effect of once again stalling the property market. This is a point that has not escaped the eye of one of the major players in the estate agency market: Rightmove. In a recent press release, Rightmove was quick to point this out, arguing that the political uncertainty needs to be addressed and for this to be done sooner rather than later.

As lawyers, do we really care? As a lawyer with a conveyancing practice that has thrived on the back of the HIP, I do. However, even though you may not have embraced the HIP with open arms, and the many marketing opportunities it presents, you could still find yourself and your practice affected by non-compliance. Your pockets could be hit with litigation and perhaps also a sharp increase in the already crippling indemnity insurance premium.

It is one thing for a small minority of estate agents to act irresponsibly by taking a risk at flouting the law, but is completely unacceptable for a conveyancer, and indeed the partners of a law practice, to ignore the requirement upon a seller, and the implications of that requirement, under section 5 of the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007(2) (EPC Regulations).

Regulation 5 sets out a duty on the seller where a building is to be sold to make available free of charge a valid energy performance certificate to any prospective buyer, (a) at the earliest opportunity and (b) in any event before entering into a contract to sell the building.

There is a further duty in regulation 5(5) of the EPC Regulations on the seller to ensure that a valid certificate has been given free of charge to the person who ultimately becomes the buyer. Given that the majority of all residential EPCs are delivered in a HIP, how many of you or your conveyancing colleagues actually ask the seller's conveyancer for the HIP to be produced, and to check to make sure the EPC is available? How many report to the buyer on the results of the EPC? More to the point, how many conveyancers have exchanged contracts without first checking that their client has seen the EPC?

Risk of a negligence claim

Failure to do so, and exchanging without inquiring about an EPC, and ensuring the buyer has seen it, could present grounds for a negligence action. Putting it very simply, and not getting embroiled in the ins and outs of the criteria for a successful professional negligence claim, how would a buyer's solicitor stand if a client purchased a property without an EPC only to later find that the energy efficiency rating was so low that if known before exchange this would have led to either a downward re-negotiation of the selling price, or even a decision to withdraw from the purchase?

We should all be checking our filing cabinets just to make sure we have been undertaking this due diligence on behalf of our buyer clients. I wonder how many potential claims exist and could exist if we do not begin to make sure the seller is complying with the requirements of the EPC Regulations. We should all be speaking to our 'friendly' estate agents to make sure they are not marketing without a HIP, and to ensure the HIP '“ including the EPC '“ is produced promptly on an offer being received so that it can be checked and a report given on its results to the seller. If they are not, the buyer should be advised to report the failing of the seller and, if engaged, estate agent to trading standards departments for investigation.

Incidentally, by doing this your client will also be helping to make a significant contribution to the worldwide effort to reduce the level of carbon emissions. A 'win, win' situation all round!

David Pett is a partner with Norwich-based solicitors Morgan, Jones and Pett, and director of Hipshomes Limited, trading as Hip2go.com

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