Property Information Packs
As part of the Housing (Scotland) Act 2006, the Scottish Executive is committed to introducing legislation to improve the process of buying residential property on the open market in Scotland by the adoption of Purchaser Information Packs (PIPs). The final details of the proposal are expected soon although the intention is not to introduce the legislation until October 2008.
The purpose of the PIP is to improve the residential property market in Scotland by meeting following policy objectives:
1. to provide sellers and buyers with better information about the house, including its condition and value;
2. to avoid the need for house buyers to commission valuations or surveys on a succession of properties that they do not ultimately buy;
3. to discourage the setting of artificially low upset prices by sellers which cause house buyers to commission a survey, only to realise that the value of the property is much higher than expected.
The seller will be responsible for preparing the PIP and failure to comply will attract a fine of £500, enforceable by Trading Standards. The PIP will include the following;
1. a brochure of the property,
2. a Single Survey which will contain a Home Condition Report, an Energy Performance Report, and Accessibility Report and a Valuation,
3. a Property Sale Questionnaire which will include the information normally contained in the Legal Searches, notably listed building status, building warrants, records of works carried out and the Land Certificate.
The PIP may not be commissioned more than 12 weeks before the property is marketed, and the survey report must be completed by a RICS registered surveyor or EU equivalent. The PIP must be supplied to a prospective purchaser within 7 days of being requested.
There will be no statutory shelf life for the PIP. Purchasers will need to assess the validity of the Single Survey if the property has been on the market for a number of months. Also, lenders will need to decide on the validity of the Valuation included in the document as it will have been commissioned by the seller and their client (the purchaser) will not be in a position to discuss the content of the report with the valuer.
The cost of the PIP will be met by the seller, and on the evidence from England, in the case of the HIP, is likely to be in the region of £600
PIPs clearly provide some advantages in that purchasers and their agents will be able to gather much more information on a property prior to making an offer. However, sellers may be reluctant to outlay the cost ahead of marketing the property when they are uncertain of achieving a sale.
Contact Neil Cameron for more information about PIPs.