HIPS latest developments affecting new builds

The Housing Act 2004 (Commencement No.11) (England and Wales) Order 2008 made on the 13 March 2008 means that all new build properties will require a HIP when being marketed for sale.  However, if your new build homes are built under Regulation 17C of the Building Regulations 2006 then these are excluded.  However if you are carrying out building work which creates or combines a separate dwelling that has hot water, heating or air conditioning then this too will require an EPC.

A separate dwelling is one which is suitable for separate occupation by an independent household and may have its own front door and its own cooking and washing facilities. Applies to work under 2006 Building Regulations

When dealing with the Energy Performance Certificate, the EPC, you must also ensure that you use Energy Assessors specifically accredited for “On Construction Energy Assessment”.  This Assessment is based upon the Standard Assessment Procedure SAP rating as opposed to the rdSAP for existing residential properties.

Without the new build EPC it will not be possible to obtain the Building Regulations Completion Certificate but if you are in the course of development and selling “off plan” you can predict the energy rating and that Predicted Energy Assessment known as the PEA! can be inserted into the HIP.  The PEA should be based upon a predicted SAP rating calculated at the design stage but does not have to be carried by an “On Construction Energy Assessor”.  When the EPC is available this is then substituted for the PEA. 

If you are dealing with larger developments, although you will need individual EPC’s or PEA’s for each dwelling it is possible for an inspection of one dwelling and the Certificate to be “cloned” for identical types of dwelling. 

You can begin marketing without a HIP in place till the 1 June 2008 but only where all conditions are met.

If a property is taken in part exchange when selling a plot a HIP must be in existence or requested when the part exchange property is marketed.  If the owner of the part exchange property has a HIP a new index and sale statement would be needed in all cases but an EPC no older than 12 months and the land registry documents of less than three months can be used. The searches may not be relied upon by any buyer as the benefit will pass from the original part exchange seller to the builder buyer and the regulations do not necessarily provide for the benefit to pass in part exchange transactions to a subsequent buyer.   

The sale statement would need to record the sale should marketing begin before registration of the part exchange purchase has been completed and the Land Registry and it is not possible to provide the up to date Land Registry title. 

It should be noted that by October 2008 all residential and commercial properties whether on the market, built or rented with need an EPC which will include inspections for air conditioning systems and advice and guidance for boiler users. Public buildings will be required to display and EPC or be in breach of EU legislation. 

An EPC will also be required from the 6 April 2008 for large commercial buildings with a total floor area greater than 10,000m2 whether built, sold or let and all newly built homes.