New guidance from National Trading Standards requires sellers of property to provide buyers with upfront information. Jeremy Davy, partner and head of new build at BDB Pitmans, asks: have we just witnessed the reintroduction of Home Information Packs.
Having been involved in residential conveyancing for over 25 years, I’m often struck by how little the industry has changed during that period. Aside from the brief flirtation with Home Information Packs (HIPs) in the Noughties, the procedural steps in a conveyancing transaction have remained unchanged. There is more use of technology today, but its adoption has been slow and patchy.
The one thing that has changed though is the amount of time it takes to complete a conveyancing transaction. In 2007, it took approximately 90 days, on average, to get to completion, but the time scale today is close to an eye-watering 150 days.
Many industry commentators are championing ‘upfront information’ to speed up transactions. The idea is that, if a vendor prepares a pack of key data at the point of marketing the property and prior to securing a buyer, the conveyancing process will get off to a flying start when the property is sold subject to contract.
If this all sounds a lot like HIPs, that’s because it is! And things took an interesting turn last November with what might be described as government intervention via the back door!
National Trading Standards then published guidance on the ‘material information’ that should be provided to potential purchasers when properties are listed for sale. While the guidance is primarily aimed at estate agents, any business that lists a property for sale without disclosing the required information will be in breach of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) which could lead to a significant fine and reputational damage. Trading Standards’ stated aim is that property listings without the required information should not be uploaded to Rightmove or any other website.
The guidance provides clarity on what is material information. In other words, what is the data that is now required to be made available to consumers when properties are marketed for sale?
The answer is more surprising and certainly more extensive than you might expect, including data traditionally collated by conveyancers, for example details about tenure, restrictive covenants, easements, parking rights, tree preservation orders, building safety, flood risk, planning and mining risk.
For years housebuilders and their lawyers have been preparing ‘sale packs’ of upfront info in advance of plot reservations to speed up transactions. The best results now are achieved digitally – in my business, we prepare a ‘digital sale pack’ to ensure that, upon reservation, the buyer’s conveyancer has immediate online access to all the required conveyancing data to enable their purchase due diligence process to commence without delay. This is the most effective way to minimise transaction delays and optimise our housebuilder clients’ cashflow.
There is no question that the provision of upfront information in a digital format reduces conveyancing delays, but the benefit is reduced by the one single biggest cause of conveyancing delays, namely property chains. It’s an unfortunate but undeniable fact that a property chain only moves as fast as the slowest party in the chain.
Therefore, until the preparation of digital upfront information is adopted across the industry, many transactions will continue to suffer delays.
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