Flat-owners should be thinking now about the implications of Home Information Packs (or the ‘seller’s pack’, as they used to be known). You’re aware from the extensive, and generally hostile, media coverage that HIPs will be a fact of life from July next year and that anyone wishing to market a flat after that time will have to produce one. Because of the nature of their property title the burden of HIPs will fall much more heavily on flat-owners: there is so much more information to be provided.
So why think about it now?
The contents of the HIP will be set down by law and there is a huge amount of information a flat-owner will need to provide. This includes easy things like a copy of the lease, but also copies of all recent demands from the landlord for service charges or ground rent and full details of any proposals for works to the building, including copies of all formal consultation notices served under Section 20, Landlord and Tenant Act 1985. Obviously the intention is fairly sensible, allowing any prospective purchaser to be aware of general levels of service costs and to be forewarned of any major works planned. Now, all of this information will be retained by the managing agent, who should be able to produce it when you ask, so why worry about it?
The issue, of course, is about cost. The managing agent provides a service for a fee and that fee will not include providing HIP information to individual flat-owners. The agents are expected to co-operate and will provide the requested information, but it will be an additional - and not necessarily welcome - task, beyond their contracted duties, and they will be entitled to levy a fee for providing the information. The HIPs legislation does not provide any guidance or controls relating to levels of fees for information. It is unknown territory at the moment as to whether such fees would constitute ‘administration charges’. A new legal definition introduced by the Commonhold & Leasehold Reform Act 2002, administration charges have to be reasonable and can be challenged at the LVT.
However, it will take a LVT or court decision before we know this, so until then, flat-owners may not be effectively able to question what the manager charges. Neither will they be able to control how long the manager takes to answer HIP enquiries.
In that much of the information to be sought from the agent has already been in the flat-owner’s hands at some point there seems little reason in spending money, and wasting time at what might be a critical point in selling the flat, to obtain again what you’ve already had.
The message, of course, is that if you are thinking about selling your flat at any time in the future you need to think now about building up a file of relevant documents that will provide much of the necessary content of the HIP. Full guidance will be issued by Government in due course as to exactly what needs to be in the pack, but if you’re thinking of selling, it is better to be prepared. Saving a service charge bill or a S20 document today could save time and money in the future.
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