THE public are being “short changed� by “rogue� providers of Home Information Packs, according to legal professionals.
The Law Society is warning home sellers and buyers to be vigilant with HIPs after the government raised the alarm that some providers are including the wrong documents.
It has expressed concern that some providers are using photocopies of Land Register records despite the fact that only an official copy is legally sufficient.
Law Society Vice-President, Paul Marsh, says: “This is further proof that some HIPs providers do not understand, or choose not to understand, the regulations. The result is that sellers and buyers are being short-changed with sub-standard HIPs that will be quite rightly thrown in the dustbin by the buyer’s solicitor."
Evidence of title is one of the compulsory documents required in a HIP – if there are errors in the register the Land Registry will take responsibility for it. But photocopies (register views) do not provide such a safety net for consumers.
Mr Marsh added: “Buyers as well as sellers need to make sure the property’s HIP contains the correct documents. If it later emerges that there was an error and the property’s HIP contains nothing more than a Register View, there is no recompense.�
Angela Hesketh, head of property at Leeds Lloyd Whitley, said this was an issue of concern for solicitors on Merseyside but came as no surprise to those in the HIPS marketplace, who endeavoured to highlight the problem even before the introduction of the packs.
She said: “A number of companies with varying levels of experience, background and knowledge in this area have emerged including search companies, HIP providers – some of whom have not traded within this field prior to the introduction of HIPS – and surveyors.
“Many suppliers have looked to minimise cost without taking account of the requirements of the regulations that govern the production of HIPS. This has lead to the fact that many packs in the market place incoporate substandard documentation which cannot be relied upon within a conveyancing transaction.
"This is a technical issue which is obvious to the legal profession but may be lost upon others within the HIP arena. There is always space within the market for competition to prevent complacency and ensure a high level of service, but it is essential that this competition does not place the customer at more risk.�
Julia Posener, partner and head of property at Goodmans, said: “Confusion continues to be a word that is synonomous with HIPs and is a consequence of insufficient emphasis on the relevance of the expertise of the legal profession. It seems that HIP packs may be being prepared on the basis that the property is freehold when it is actually leasehold. The cost of a leasehold HIP is likely to be higher than for a freehold, and there may be some confusion as to the level of charges.�
Consumers are advised to seek out a legally qualified professional, preferably backed by the HIPCODE quality standard, which provides a reassurance that the companies carrying this mark comply with the regulations and have the correct protection in place for errors and ommissions.