Sellers’ packs – the sequel

Sellers’ packs made a return to the Government agenda last week, but under the new name of ‘home information packs’, when they were included in the new Housing Bill.

Housing Minister Keith Hill said the new legislation would be “a key reform in helping deliver sustainable communities and by protecting the most vulnerable and helping deliver decent homes and places for all”, and outlined its contents. The legislation would give local authorities more powers to tackle antisocial behaviour and reform the role of local authorities in assessing poor housing conditions.

He also took the opportunity to announce that the Government was reviving the sellers’ pack. “Buying and selling a home will be made easier, with the packs making the process more certain, transparent and consumer-friendly,” claimed the Office of the Deputy Prime Minister. “They will reduce the stress and wasted costs suffered by hundreds of thousands of homebuyers and sellers each year.” The sellers’ pack was renamed the ‘home information pack’ (HIP) in recognition that “it favours neither seller nor buyer, but is of benefit to both”.

Michael Garson, Law Society Council member for residential conveyancing, said the prospect of HIPs made it even more important that the Law Society’s ban on referral fees remained strong. The Law Society Council last month decided once again to reject the arguments in favour of paying referral fees in the face of opposition from the Office of Fair Trading, which regards the ban as anticompetitive. Leading figures in the Law Society are also calling for a relaxation. “Clearly, if there are lawyers who are going to buy their way into being providers for estate agents [through paying referral fees], the estate agents will monopolise the production of packs,” argued Garson. “The estate agent has a delicate balance of controlling the interests of the vendor and the purchaser. Their protection is that they each have totally independent legal advice that they consent to, but if the agent basically has the gift of the solicitors’ and the buyers’ instructions, then that independence is likely to be compromised.”

Garson argues that the restriction on referral fees should remain in place on public interest grounds. The recent Law Society Council vote was the second time the issue had come up in three years at Chancery Lane. “It was defeated reasonably clearly, but the issue will keep coming back because everyone seems to think our position is anticompetitive, whereas it’s not – it’s a public interest position,” he added.

Stuart Durrant, a conveyancing partner at Reading firm Gardner Leader, said he saw “advantages in principle, but was somewhat sceptical” about the impact of HIPs. “I don’t think anyone will believe a seller’s survey, and it will pre-load the whole exercise [in relation to the legal work], but it won’t take us forward greatly,” he commented.

As for competition from estate agents, Durrant did not think they were a great threat. “We need to go to the estate agents first as lawyers and tell them that they don’t want to get involved in this and we’ll do it,” he said. “Estate agents don’t want to be looking at title deeds and other legal documents. It’s not their job.”