The Home Information Pack was tried in England and abandoned in 2010, apart from requirement of an Energy Performance Certificate (EPC). A survey has been a requirement in Scotland since 2008, including an EPC, and ‘Home Reports’ are now an integral part of the conveyancing process.
Scottish Home Reports are all prepared by private contractors (albeit approved by certain private organisations). Some chartered surveyors are also operating as estate agents, so conflicts of interest are possible here. Results are recorded on an official register and therefore treated as authoritative. If and when other legal requirements are introduced, such as when the Scottish Government imposed restrictions on letting and selling houses below a certain EPC level (an idea also looming in England), these reports will be relevant and unchallengeable. Because the sellers are paying the bill, they can (remarkably) try to challenge the results before promulgation, therefore potentially influencing the official record. Conveyancers and estate agents are not in the habit of telling their clients this, but what may seem like an unimportant matter at the time could have serious future consequences. English conveyancers might like to consider two actual problems experienced on the sale of one Scottish house in these circumstances.
- Sellers had restored a small, listed two bedroomed terraced house from virtual dereliction and spent over £8000 (at 2013 prices) on insulating materials alone, creating a total cocoon of the equivalent of 16 inches of insulation. It was all but an eco-house. Typically insulation cannot be inspected in situ and the sellers produced to the home report surveyor receipts for the purchase and installation of this, and they actually had photographs of insulation being installed. Nevertheless the EPC emerged as band E i.e. fourth below best. As will be obvious to any casual observer of the property market in Scotland, all small terrace houses, whatever their condition, are listed as category D or E, so the ‘surveyor’ might as well not have bothered to turn up to inspect at all to produce this travesty. At the time of sale no-one was paying any attention to EPC’s, and as the buyers had seen the sellers’ building records they did not pay any attention either. The sellers therefore allowed the record to remain downright wrong. Subsequently the Scottish Government has decided to prohibit lettings, and eventually sales, of houses, below band C and even with evidence (such as seeing actual insulation in situ) it is likely that buyers (and particularly lenders) will refuse to accept anything but the official classification. Highly-insulated houses could therefore become unsaleable unless re-insulated – on every sale. They could finish up like the Michelin men of insulation, until the amount of insulation becomes so vast that there is insufficient room to live inside the houses, which would then become unsaleable in their own right.
- On purchase, 8 years earlier, the property had included completely floored and doored rooms in the roof space, lit by small old cast iron roof lights, all still in situ (and mentioned in the listed building report 23 years previously). Heating had been provided by still-in-place small Victorian fireplaces connected to the old flues leading to capped areas on the original chimney stack, next to live chimneys with original chimney pots. These rooms were served by a staircase the original of which was so rotten from age that it had had to be replaced (also detailed in building records and photographs). The rooms had quite probably been in use since the house was built in the1840’s.
The home report then said ‘the former roof space has been converted into living accommodation. It is assumed all necessary Local Authority and other consents have been obtained for alterations and the appropriate documentation … issued’. There was no justification for phrasing it in this suggestive way on a property the home report itself estimated as ‘170 years’ old. Planning breaches are enforceable (as in England) up to 4 years for building works and 10 for change of use. Enforcement of building regulation breaches have no time limit in Scotland (and in England are now 10 years), and criminal liability is a possibility. As a result of this the buyers’ ‘pile ‘em high’ conveyancers immediately demanded an indemnity policy. This reaction was no doubt because the catch-all manual issued to the (probably unqualified) operator involved would no doubt have said ‘if in doubt, demand an insurance indemnity’.
Because the issue was raised at a very late stage (as the result of the buyers’ conveyancers ‘just in time’ business model), this was reluctantly accepted, at a cost to the sellers of £140. This can be a wonderful new source of unearned and risk-free income to insurance companies (and those getting introduction commission) at sellers’ expense.
