News & Updates

Home Reports

New regulations under the Housing (Scotland) Act 2006 come into force in December 2008 introducing the Single Survey, Energy Report and Property Questionnaire (known collectively as a Home Report) on a compulsory basis to house sales in Scotland.

 

What type of property is affected?

  

The Regulations affect any house (or flat) which is "on the market". A house is on the market when "the fact that it is or may become available for sale is made public".

 

There are exceptions to this rule which are briefly:-

 

  • The sale of 2 or more houses in one lot
  • A house which is restricted by a planning condition to use as seasonal or holiday accommodation
  • Mixed sales where a house is sold with commercial property
  • A property which is used for both residential and non-residential purposes
  • An unoccupied house which is in an unsafe condition, posing a serious risk to the health or safety of its occupants or visitors
  • A new house which has not yet been used or occupied
  • A house which is suitable for demolition provided the necessary statutory consents are in place for the demolition of the house and the subsequent re-development of the plot
  • A property which is being or has been converted to a house if it has not previously been used in its converted state
  • The sale of a tenanted house (unless the lease is for more than 20 years)

  

What paperwork is required for a sale?

 

There are three prescribed documents - a survey report, an energy report and a property questionnaire.

 

The survey and energy reports must be prepared by a surveyor registered with the Royal Institute of Chartered Surveyors. The survey report must:-

  • list the principal components of a house (roof, windows, main walls etc);
  • allocate a repairs category to each component - Category 3: urgent repairs needed, Category 2: repairs required in the future or Category 1: no repairs needed;
  • include an accessibility report giving information on elements like stairs, lifts and door widths.

 

The energy report must include information on the energy efficiency of the property, recommend measures for improving energy efficiency, cost those recommendations and detail potential savings.

 

The property questionnaire must be completed by the seller or a person authorised by the seller. It gives information on 16 topics such as Council tax banding, parking availability, alterations carried out by the current seller, whether the property has been affected by storm, flood or fire during the seller's period of ownership, utility suppliers and factoring.

 

The style of the reports and the questionnaire can be found on the Scottish Government's Home Report website: http://www.homereportscotland.gov.uk/

 

 

What dates are relevant?

 

The information must be available within 9 days of a request from a purchaser so in practice it needs to be ready when the property is put on the market.

 

The information must be dated not earlier than 12 weeks from when the house was put on the market.

 

The information does not need to be updated during the marketing process, unless the property is taken off the market for more than 4 weeks before being re-submitted for marketing. 

 

Effect on RSL sales/purchases

 

i.          Mortgage to Rent purchases

 

Exempt - provided the property sold under the mortgage to rent scheme is not placed on the market, the Seller will not have to provide the RSL with a Home Report.

 

ii.         Shared ownership

 

The regulations apply to the sale of a share of a house. There are 4 scenarios:-

 

  • Sale of a first share by an RSL to an owner - if the property is marketed, a Home Report is required (unless the property falls into one of the exempt categories such as the sale of a new, unoccupied property).

 

  • Sale of a share by an existing sharing owner to a new sharing owner - if the property is marketed a Home Report is required. If a private sale is agreed without the property being marketed, no Home Report is required.

 

  • Sale of a share by a sharing owner back to the RSL - if the property is marketed a Home Report is required. If the sale is agreed without the property being put on the market then no Home Report is required.

 

  • Staircasing - where a sharing owner buys a further share of the property they occupy, a Home Report is not required as the property is not put on the market.

  

  

iii.        Homestake sales

 

A new build property is exempt from the regulations provided it has not yet been occupied. The sale of any other type of house will be subject to the regulations.

  

iv.        Right to buy sales

 

Exempt - the regulations do not apply to RTB sales as these properties are not put on the market.

 

  • v. Purchase of a block of flats

 

Exempt - the sale of 2 or more properties as a portfolio is exempt from the regulations so the RSL will not receive Home Reports.

 

•vi.                Open market sale of a surplus house

 

Unless the house is an unoccupied new build property, the regulations will apply.

 

  • vii. Regeneration schemes

 

Where a house is sold by an owner for demolition it will be exempt provided either (1) the statutory consents are in place for the demolition of the house and subsequent re-development of the plot or (2) the house is not marketed. The subsequent sale by the RSL to the owner of a replacement house will be exempt provided the house is a new, unoccupied house.

 

  

Penalties

  

The penalty for breaching the regulations is a fine of up to £500. The regulations will be policed by Trading Standards officers.

 

Energy Performance Certificates

  

Under a new European Union Directive every house sold or rented (new lets only) from 4 January 2009 must have an Energy Performance Certificate. If you need a Home Report for the sale of your property then you are covered - the Energy Report includes an Energy Performance Certificate. However all properties which are exempt from the Home Report regulations must have an Energy Performance Certificate.  So as of 4 January 2009 every house which is sold must have an EPC.

 

Summary

  

A seller will need to commission a single survey and energy report and prepare a property questionnaire for the sale of any house which is put on the market from December 2008. There are some exceptions to this general rule, the most important being that the seller of a newly built house which has not yet been occupied is exempt from the regulations. Although a house may be exempt from the Home Report requirements the house must still have an Energy Performance Certificate.

 

Contact

 

If you would like any further information on the issues raised in this briefing please contact Alison Thompson on 0141 225 2589 or amt@tcyoung.co.uk. A briefing note on Energy Performance Certificates is also available from TC Young.

 

Please note that this briefing is a short summary of the new regulations as at May 2008 and is not a comprehensive statement of the law. Legal advice should be taken on individual circumstances.