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Ombudsman warns of the lack of understanding with HIPs

publication date: Nov 27, 2008
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ombudPeople who are selling their homes have been advised by the Ombudsman for Estate Agents to make sure they understand any agreements they sign covering the provision of Home Information Packs (HIPs).

In his report for the third quarter of 2008, Ombudsman Christopher Hamer says it is obvious to him there is a lack of understanding among people selling residential properties about when they have to pay for the HIP that is compulsory when a home is being marketed.

“In particular it appears that sellers see the charge for the HIP as simply a fee for selling their property and of course if it doesn’t sell, they do not expect to pay,” says Mr Hamer. “In drawing a client’s attention to the terms of the HIP agreement agents should emphasise that it is a legal requirement under the Housing Act 2004 for a pack to be produced; and if the relationship between seller and agent ends, the payment of the fee means that the seller gains ownership of the HIP.”

Mr Hamer outlines cases in his report where sellers disputed the need to pay for a HIP but makes it clear that in each case the estate agent’s terms made it obvious that payment would be required for the HIP whether or not the property was sold through them.

He also reminds estate agents that prospective buyers who ask for a copy of a property’s HIP must be given it unless there is good reason not to do so. If that doesn’t happen and he receives a complaint, he is bound by law to report the agent to the Office of Fair Trading, which could have serious consequences for the firm.

Since the start of this year, Mr Hamer has received 146 initial enquiries from the public regarding HIPs and he has now decided on 22 formal disputes.

Not all of them were necessarily solely related to the HIP but were part of a wider dissatisfaction being expressed by complainants.

With regard to his general workload, Mr Hamer says there has been a slight decline in the number of disputes referred to him when compared with the second quarter of 2008 and over the whole year so far cases have been averaging 65 per month compared to 64 last year. Lettings cases had also dropped during the third quarter of 2008 but over the year as a whole he had received 213 lettings cases, 115% of the figure for the whole of 2007.

 “The OEA only started dealing with lettings redress during 2006 and has since been recruiting a growing number of lettings agents so the rise in disputes is no more than I would expect to see,” adds Mr Hamer.

During the quarter under review, the OEA received 2,882 enquiries compared with 3,036 during the second quarter.