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Rics finds legal loophole in Hip rules

The Royal Institute of Chartered Surveyors has discovered a legal loophole in the Government’s Home Information Pack which means sellers could avoid buying a pack.

Rics says the rules allow sellers to have simply ordered a pack when they exchange contracts and, if they manage to sell their home quickly, they may not have to pay the fee, which is likely to be around £500.

Hip rules only require the energy performance certificate to be in place when contracts are exchanged, not the complete pack, although the complete pack must be on order.

This means that buyers would miss out on title deeds and local searches, or would have to source them themselves.

Rics spokesperson Jeremy Leaf says the loophole is another example of rushed policy that fails to meet the needs of consumers and the housing industry.

He says: “Rics members have been pressing for clarification on the new regulations, for fear of breaking the law. We have been forced to tell them that to the best of our knowledge, selling a house without a Hip would not be illegal during the interim period.

“Unless the Government can show us the regulation that says a property cannot be sold without a Hip, consumers and industry will be left to draw their own conclusions.

“This will lead to two groups of consumers, those who pay for a Hip and those who legally get round the rules.”

But a spokesman for the Department for Communities and Local Government says: “This is nonsense. There is no loophole. We set out in the statement to Parliament on May 22 that people could begin marketing their properties provided they had commissioned their Hip. A Hip includes documents such as searches and evidence of title which are required before a sale can take place. Rics have neglected to point out this key fact.

“We know that Rics as an organisation is now split on the issue of Hips with many of their own members expressing other views We are surprised they are not focusing on putting their own house in order.”

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