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Previously we optimistically said that it would not be
compulsory to include searches (or leasehold documents) when HIPs
become mandatory on 1 June. Unfortunately, that has not turned out to
be the case; we relied upon an early, incomplete, report.
It now seems
clear that the correct position is that it will not be compulsory to send
out the searches (or leasehold documents), but instead evidence must
be produced showing that they have been commissioned and will be
provided as soon as practicable (and within 28 days, except in
exceptional circumstances). So, in simple terms, you must have ordered
the searches and requested the leasehold documents, but you can send
out the pack without them.
The searches in the HIP have to be no more than three months old at
the first point of marketing. The CML Handbook requires searches to be
no more than six months old at the date of completion, so there is
potentially a problem with those two requirements. It is uncertain at this
stage whether a search validation insurance, which provides cover
against an entry between the date of an original search and completion,
will be an acceptable solution either to buyers or lenders.
One other point to note is that properties being marketed before 1 June
can continue to be marketed without an HIP until 31 March 2008; one
suspects that this may prove to be a popular loophole. For a
commentary on the latest HIP position see article in [2007] 186 Property
Law Journal 9.
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March 2007 |
