Upfront Information - Light at the end of the Tunnel? 

They say that in fashion, if you wait for long enough, clothes that are hanging at the back of your wardrobe will come back in vogue. Well, I'm not sure about those green flares I have with yellow stars, but what is true in the fashion industry certainly seems to be true when it comes to the growing momentum to provide upfront information to buyers.

Whether we call this a Property Pack, a Sales Pack, Sales Ready or (whisper it quietly) a Home Information Pack, the reality is that we are now where we were just short of 20 years ago when the Labour Government introduced by legislation the requirement to provide a Home Information Pack on marketing of a property.

Commentators in the industry who committed to the provision of those packs still talk about the fiasco of implementation and the subsequent disorderly suspension of the requirements in 2010, but the fact remains that what was a mandatory requirement to provide upfront information floundered on the rocks of political expediency. And we are now looking again (without the express promise of direct legislation, it has to be said) at providing a pack of upfront material information to allow buyers to make a more informed decision on whether a particular property is suitable for them or not.

Where we are now is probably different from 2004 and there is hardly anyone arguing against more upfront information - the debate (and there is a fierce one raging) is what information exactly should be provided.

It should be remembered, when we consider this question, that there is long-standing legislation already requiring material information to be provided on the point of marketing as required by the Consumer Protection from Unfair Trading Regulations 2008. As Trading Standards themselves say, current practice is inconsistent around the industry - not helped by a lacklustre enforcement policy with too little staff to be effective. 

This all seems to be changing now - not only did the recent government Leveling Up White Paper state 'we will improve the home buying and selling process, working with the industry to ensure the critical information buyers need to know is available digitally wherever possible from trusted and authenticated sources' - but Trading Standards now require more detailed upfront information to be provided, starting from the end of May this year and carried out in three phrases.

Whilst we know what Part A is, we don't as yet have any detailed lists for B and C. We know, however, that B will apply mainly to utilities and Part C to particular circumstances, for example the location of the property. 

Part A, which will be with us before we know it, requires disclosure of the following details 

1. Tenure (applicable to sales listings only)

 If Freehold

•  disclose as ‘freehold’ 

If Leasehold

•  disclose as ‘leasehold’, and

 Current ground rent and any review period

If Shared Ownership, disclose

•  details of share being sold, and any additional liabilities or obligations

If Commonold, disclose

• details of rights and obligations that apply between the unit holders, and between the unit holders and the commonhold association 

2. Council Tax (England, Wales & Scotland), or Rates (Northern Ireland) - disclose 

• council tax band (E, W & S) 

• rates payable (NI)

3. Price or Rent

 For lettings, disclose 

• the monthly rent, and

•  any deposit payable 

Trading Standards say that the relevant data fields started to appear on portals from February 2022. By the end of May 2022, this information will be expected as standard on all property listings. From then, if an agent leaves a field empty, this will be flagged on the listing and will link to advice for consumers on why that information is important and how it may be obtained.

There is a slight let out as disclosure will not be made mandatory until the three parts of the project are completed. At that stage, agents will need to include all the required information before it is listed on a property portal. 

From a cursory look at the usual property portal suspects, there is already compliance with Part A, but it is patchy. All the ones I reviewed show the tenure - and, if leasehold, some will disclose the term left, but not so much the current ground rent or service charge. Work to be done then still. 

But, of course, disclosing material information to buyers is just one aspect of upfront information. Quite apart from Trading Standards, there are plenty of examples of industry initiatives where Property Packs (let's call them that) are already being prepared. This includes those by estate agents - corporate and independents - the Home Buying and Selling Group, conveyancers and specialist PropTech initiatives. 

The general feedback is that they are welcomed by the public - this was evidenced by the positive response to the Trading Standards project. 

But, what do these packs include? The standard core elements are title information (drilling down in leasehold to length of residue of term, ground rent and service charge level), Law Society transaction property information forms completed and sometimes local and environmental search details.

Without doubt, these are helpful disclosures and added to the material information required under the Consumer Protection Regulations, we are starting to see a move towards vendor disclosure where the onus is on the seller to disclose all relevant information (commonly seen in jurisdictions such as Australia). This is as opposed to the existing caveat emptor rule which tends to make the process inquisitorial.

Does it speed up the conveyancing process ? That of course is the $64,000 dollar question and one which is increasingly shown to be the case. Empirical evidence from the industry is revealing that a number of weeks can be cut off transaction times by providing upfront information (if you couple that with online onboarding).

More significantly, there is growing evidence that the abortive rate is substantially reduced - which can only be a good thing for those buyers who spend money on solicitors and surveys only to be seriously out of pocket if they have to pull out because of an issue which flagged earlier may have made them think twice before agreeing to buy.

What, then, is lacking? Well, as 1 out 5 properties are leasehold, the blindingly obvious omission is the lack of a full leasehold management pack which could show issues and future liabilities that would make some buyers run a mile. This is an issue because very few sellers are prepared to pay hundreds of pounds to a managing agent for a pack just to have to pay again after a delay or abortive transaction.

We will therefore have to wait and see what Part B and C lists contain and how far Trading Standards are looking to push the material disclosure bar. It may be enough to cover everything which is required and we will then be on the Vendor Disclosure  Express Train. It may need industry initiatives to support and help build the track. It does seem, however, that there is a train which is starting to roll down the track to full disclosure and that must be a good thing for the customers and the industry.

Shall we all take our positions on the platform?

*Eddie Goldsmith is the managing director of YouConvey and a former chairman of the Conveyancing Associaton