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May 16, 2007

RICS launches HIPs legal challenge

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by Brian Turner

RICS launches HIPs legal challenge

The Royal Institution of Chartered Surveyors has launched a legal challenge to the government’s controversial HIPs scheme, asking for a judicial review to delay its implementation.

Home Information Packs – HIPs – are a package of documents, which includes legal documents relating to the property, standard searches, a sales statement, an energy performance certificate for a home.

These are paid for by the seller with an estimated price of around £500-£600, with the aim of preventing buyers from having to pay for multiple surveys of the same property.

It also aims to allow for greater transparency in the sales process, with buyers made more aware of potential issues with a property, so that a purchasing decision can be considered on the property’s actual, rather than perceived, merits.

However, they have been dogged with controversy since they were first proposed, with previous objections focusing on the inability of the market to supply the numbers of trained staff required.

Also, mandatory plans to include a surveyors report on the condition of the property had to be dropped, after major mortgage lenders insisted that they would still need to provide their own report. In doing so, this removed a potential source of income for estate agents, causing companies such as Rightmove to write-off millions cancelling their own HIPs packages.

The RICS now insists that HIPs cannot deliver on their original aims, and is setting out the challenge in order to prevent unnecessary costs to sellers.

However, it remains within the interests of estate agents, the legal profession, and the mortage industry continue to be served,


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