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Estate agents are routinely breaking the law by failing to prepare Home Information Packs for properties they are marketing, the Law Society claimed today.
The packs - known as Hips - were introduced a year ago and were made compulsory for all homes put on the market in England and Wales in December, with the aim of providing potential buyers with greater transparency.
But Law Society president Paul Marsh said that in the current slow market many estate agents and private sellers are delaying drawing up the Hip, which cost up to £400 for each property, until a sale has been agreed.
A representative of estate agents agreed that the practice was taking place, but said this was because the packs were “useless” to both buyers and sellers and were needed only as a legal formality once a sale is going through.
Mr Marsh said that the regulations introducing Hips were “tweaked” at the last minute to allow homes to be put on the market once a Hip has been commissioned, but before it has been completed.
He told BBC Radio 4’s Today programme: “The evidence is that these Hips are being ordered and not being processed. They are being suspended until such time as a buyer is found.
“I don’t think it is within the spirit of the regulations. Actually, I don’t think it is within the regulations.”
Nick Salmon, a member of the board of the National Association of Estate Agents, told Today: “There probably are some estate agents who are flouting the law, but it is understandable in this absolutely catastrophically bad market.”
Agents and sellers who know that a home may not sell for some months, or may not find a buyer at all, are wary of committing up to £400 upfront until they know that a pack will be needed, he explained.
“We don’t condone flouting the law, but I can certainly understand why they are doing it, especially as the pack is completely useless to buyer and seller,” said Mr Salmon, who heads the Splinta campaign against Hips.
“I have never yet had a buyer ask to see a Home Information Pack on a property. They ignore it. It is usually when the solicitor asks to see if there is a pack there that we provide it. The pack is of no interest to buyers and is considered to be a stealth tax by sellers.”
A spokesperson for Communities and Local Government said; “Home sellers have to have commissioned a Home Information Pack when they put their house on the market and after 28 days a Hip must be purchased. We introduced this flexibility to help home owners.
“More than 700,000 homes now have energy ratings as a result of Hips helping home owners save money on fuel bills and cut carbon emissions.”
Conservative housing spokesman Grant Shapps said: “It’s time that the Government finally admitted that Hips are not wanted or needed by either the industry or the market.
“At a time when the housing market is struggling, they need to help thousands of hard-pressed families and young people, follow our lead, and scrap this pointless and expensive piece of bureaucracy.”
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