The Legal Services Act 2007 is set to change the landscape for legal services.
The Legal Services Board have set a target date of October 2011 for the start of Alternative Business Structures. This means providers of legal services may be owned by commercial enterprises and offer new services alongside their existing businesses.
The Solicitors Regulation authority are responding with a radical overhaul of regulation and intent to move to outcomes focused regulation enabling them to focus on important risks and acting to prevent problems rather than reacting to them. Their latest consultation called Outcomes-focused regulation - transforming the SRA's regulation is at www.sra.org.uk
2009
1 October - The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment No.2) Regulations 2008 comes into force
1 October Sales of residential property require an EPC less than 3 years old
New lettings of residential property require an EPC less than 10 years old
1 October - Part 3 of Consumer Estate Agents and Redress Act (CEAR) starts
30 September - Consultation on Property Information Questionnaire (PIQ) and leasehold information ends
1 September - Amendments to CML handbook on new home incentives
27 August - AHIPP welcomes report suggesting HIPs have cut down delays
26 August - RICS calls for major reform of HIPs
22 August - NAEA section of NFOPP calls for review of HIPs
The market downturn and looming recession have given extra weight to calls from both RICS and NAEA (now part of National Federation of Property Professionals) for the review and reform of Home Information Packs.
RICS approves of plans to give buyers more information but believes that information of a legal nature should be obtained by legal advisers ‘at the appropriate time’.
They also advocate removing searches from the pack – searches are being duplicated, as those in the pack are often out of date by the time a sale is being negotiated, especially in the current downturn.
They also believe the first day marketing rules should be dropped so that sellers can market their property without the requirement to commission a pack before doing so.
They suggest a voluntary property report could be commissioned by either buyer or seller in modular form.
Following publication of the Carsberg Report, RICS also renewed their calls for better regulation of the agency sector.
The NAEA echoed these views agreeing that the HIP only need contain a seller’s questionnaire, EPC and land registry documents. They too take the view that the inclusion of searches is causing duplication of costs.
Unsurprisingly AHIPP in a press release of 27 August continue to trumpet the HIP and call upon the government to increase the information in the HIP.
1 September brought amendments to the CML handbook in relation to the reporting of Seller’s Incentives in relation to new homes. The form to be signed by the lender’s valuer must disclose incentives such as ‘cash backs’ in relation to the sale of new homes. Whilst the aim is simple the procedure for the new rule could raise many questions as to its workability.
The consultation on the proposed Property Information Questionnaire (PIQ) and leasehold information comes to an end on 30 September. Readers will recall the original intention to include in the pack a Home Use Form – this had to be included as a required document but did not need to be completed. The PIQ is proposed as a required document and sellers will be required to answer the questions. Government believes a seller should be able to do so without professional help.
Whether a seller will take the time to do so is one question but the resounding response from buyers is likely to be that they want their solicitor to verify such a form and ensure it has been properly completed and updated.
From 1 October 2008 an EPC (not more than 10 years old) will be necessary in respect of all residential property which is let. Where buildings are to be sold or let then the responsible person must ensure that an EPC with recommendation report is available free of charge to prospective buyers and tenants at the earliest opportunity and no later than when a viewing is conducted or in any event before entering into a contract.
However an EPC does not have to be made available if the seller or landlord has reasonable grounds to believe that the prospective buyer or tenant is unlikely to have sufficient funds or is not genuinely interested or the seller or landlord is unlikely to be prepared to sell or rent the property to the person.
Regulation 5 of the Energy Regulations (The Energy Performance of Buildings (Certificates & Inspections) (England and Wales) Regulations 2007 requires the relevant person (seller/landlord) to make a free copy of an EPC available at the earliest opportunity - meaning upon enquiry or viewing. Under Regulation 5 an EPC must be provided before entering into a contract for sale. This requirement will apply to all dwellings irrespective of whether HIP legislation bites from 1 October 2008.
1 October - the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment No.2) Regulations 2008 SI 2363 come into force from that day. This extends the life of EPC’s for residential sales from 12 months to three years. These regulations also deal with access to the EPC registers.
Also from 1 October Part 3 of the Consumer Estate Agents and Redress Act comes into force. From that date all estate agents are required to belong to an approved redress scheme not just for Hips but in relation to all their work. There are two approved schemes - the OEA and SOS run for the RICS but to be opened to non-members.
Estate agents will be required in future to:
- Keep accurate records of all transactions with actual potential sellers and buyer of property.
- Operate a structure for in-house complaints handling. The procedure must be in writing and available to actual potential sellers and buyers.
- Publicise membership of an approved redress scheme and that disputes may be referred to The Ombudsman for Estate Agents.
- Observe higher standards of fairness, integrity and good practice.
- Have appropriate terms of business including clear arrangements as to fees.
- Ensure that all members of staff are conversant with legal responsibilities and have good working knowledge of the relevant law.
