The HIPs regulations require all estate agents who deal with residential property to belong to an approved complaints and redress scheme to handle complaints and, in      appropriate circumstances, to order redress in relation to Home Information Packs. 

This is the limit of the remit under this legislation – the Consumer Estate Agents and Redress Bill that is making its way through the parliamentary process will widen the remit considerably and cover all types of complaints (see Fact Sheet 17). 

The scheme run by the Ombudsman for Estate Agents has received approval from the DCLG and its remit is already wider than that contemplated under this legislation. 

Failure to belong to an approved scheme is one of the grounds for the issue of a Penalty Charge Notice, along with failing to have a complaint HIP and failing to provide a copy of a HIP or any component of a HIP to a Trading Standards Officer within 7 days of request. 

A Penalty Charge Notice (PCN) will, unless successfully challenged, result in a fine of £200.  A PCN can be challenged by requiring the local authority for whom the TSO works to review the issue of the PCN and, if that is unsuccessful, appeal can be made to the County Court. 

The sting in the tail for estate agents is that a TSO may report a breach of the legislation to the OFT but MUST report the issue of a PCN with the potential of disciplinary proceedings following. 

It also appears that, in common with the Property Misdescriptions Act (PMA), a PCN can be issued against both the individual who is in breach and against the employer. 

There is a defence of reasonable belief similar to that in the PMA save in respect of the Index and the Sale Statement for which the estate agent will always have liability.  Whether this defence would also be available if a complaint or claim were made is questionable. 

The HIPs regime places the obligation of compliance (save for that of belonging to a complaints and redress scheme) on the Responsible Person – the seller or, if there is an estate agent involved, the estate agent.  An estate agent can also be liable for breaches if he or she commits a ‘qualifying action’ – taking marketing steps even though not instructed to do so by the seller. 

Enforcement under the EPC regulations is not dissimilar.  A PCN can be issued and a fine of £200 can follow but there is no requirement for a referral to the OFT.  This may be as a result of the obligation to comply with the EPC regulations is that of the relevant person – the seller where a property is being sold and the landlord where it is being let. 

Get to know your local TSO’s and sound them out on their guidelines for enforcement.  Also check the wording and format of any PCN – challenges may be available if the correct procedure has not been followed.   

Take advice as soon as possible if you are unlucky enough to receive one.