Read the HIPs small print, says Ownerpack partner
Author: Gary Horsley · Posted: May 16, 2007
Concerns expressed over potentially misleading advertising
Home owners have been warned to make sure they check all the details before choosing a Home Information Pack after June 1st. Property solicitor Richard Harris of Holmes & Hills –partner with Steed & Steed in the Ownerpack HIP – believes that some potentially misleading advertising is starting to appear in advance of the introduction of HIPs legislation. If owners take some of the admen’s persuasion literally and fail to read the small print, they might be in for a shock later.
According to Harris, home owners may struggle to come to terms with the new requirements and might be misled by some of the claims.
‘Pricing will be a major concern for many and those who like the sound of a “no sale, no fee” HIP should be sure to get a commitment on exactly what this means. We have seen the no fee claims made in bold advertising only to find in the terms of business that there are numerous situations when the lack of sale will be followed by a bill for the work done on the HIP. This hardly adds up to “no fee”.
‘If you take a look at what is in the HIP, there are elements that have to be paid for. Legal searches and the Energy Performance Certificate cost money – around £350 at today’s costs. A HIP offer should state the price to be charged and the terms on which payment can be made. Offering a deferred payment – via a credit agreement or inclusion in the transaction costs for a sale – is fine so long as the owner knows the options from the start. Pretending that there won’t be a cost and then imposing one is not what the public deserves.’
What is right for the public has been a constant factor in the thinking behind the development of Ownerpack and constitutes, Harris believes, a major difference from other HIPs.
‘We started out from the position that we wanted to create a HIP that served the local property market, public and professionals alike. We quote the price of the Ownerpack HIP openly on our web site and we have specifically said in our agreements with estate agents that we will not permit mark-up: look at some of the trade advertising and you will see HIPs producers actively encouraging agents to charge commission for using their product.
‘The public needs help in understanding HIPs so that there is minimum disruption to the process of getting a property on the market. Advertising that misleads and charges that encourage mark-ups are counter-productive at a time when we – as professionals in the market – should be supporting the people we rely on to keep us in business. It will be a sad outcome if all of us are tainted by the negative actions of a few.’
So, the message is look carefully before you leap. Or, to quote one very concerned solicitor and HIP producer:
‘The existence of the “free lunch” has yet to be proven, despite promises over the years from individuals as varied as the snake oil salesmen of the past and the timeshare touts of recent days. It will be no different with HIPs.’