The HIP Scheme to Disadvantage House Sellers

Law companies warn house sellers that they can be sued by potential buyers under the new Home Information Pack (HIP) scheme. Originally, HIP was introduced 2 years ago in order to simplify the process of selling a property.

It was supposed to make the seller, rather than the buyer, fill in all the required documents to eliminate any delays. The pack costs an average of £350 and contains a list of useful information about the property.

The new version of the HIP scheme is coming into force next week; it has been revised and strengthened. One of new features of the scheme is that it requires all house sellers to fill in a highly detailed questionnaire about the property, which is being sold. Many lawyers expect that as a result, many sellers will leave themselves open to be sued.
The questionnaire, called Property Information Questionnaire, includes 30 catch questions, such as: “Are you aware of any flooding at your property since you have owned it or before?” or “Is your property a listed building or contained in a listed building?”

The answers to the questionnaire will be included in the HIP document pack, which will be available to any buyer willing to make an offer for the house.

Originally, the questionnaire was included into the HIP scheme. Now, as it has been introduced, it aims to provide the potential buyer with as much information about the house as possible. The buyers are supposed to make their decision on whether to buy the property or not based on the information, given in the questionnaire. The problem many lawyers are concerned with is that the information might be incorrect. And if it is, theoretically, sellers are left open to be sued by buyers.

However, most lawyers agree that the majority of buyers would not bother suing the seller; rather, they would prefer to use the incorrect information to beat down the property price, which is highly undesirable under current market conditions.

The Department for Communities and Local Government said that the sellers will not be disadvantaged as they can answer “don’t know” to any of the questions. Also, the representative of the Department claimed that buyers were always able to sue sellers for false information and that is why the introduction of the questionnaire will not make sellers more vulnerable.