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Written by rosalind renshaw

Incomplete searches by personal search firms for HIPs are storing up problems for buyers.

And those who could be liable if buyers find themselves disadvantaged and decide to sue include the professionals involved in the transaction.

The allegation explains why so many buyers' solicitors are still said to be ignoring HIPs and preparing their own information.

The claim is that HIP searches are commonly going back only ten years because of a false premise that this is all that HIPs legislation requires.

However, search provider Ronnie Park, chief executive of OneSearchDirect, has now taken Counsel’s Opinion over what he says is a widespread practice among his competitors.

Park alleges that many search companies are looking at only the last ten years of a property’s history because it is cheaper.

Park said: “Some firms assert that the HIP regulations are ‘silent’ on cut-off dates and therefore they have the right to apply a commercially convenient time date across all of their searches.

“In reality, this supposed ambiguity is anything but a grey area. The HIP regulations are very clear on the requirement to search all available property records. Arbitrary cut-off dates for searches are unacceptable and in breach of regulations, and run the risk of financial loss for the buyer.”

He went on: “It is crucial that all search services comply with the law. By not providing complete results based on a search of all available data – including any information for which a further fee is payable – search companies are not providing the service they should.

“There is a real financial risk to solicitors, estate agents and lenders in relying on searches with short planning histories.”

He said his own firm does not work to arbitrarily imposed cut-off dates.

Park added: “If a doctor only checked a patient’s medical records back to the age of 20, can that same doctor guarantee they have full knowledge of the patient’s medical history? No.

“Similarly, we know from our own comprehensive searches that many issues can be highlighted from searches that date back as far as the 1950s, such as planning permissions and listed building status.”

The legal opinion, which EAT has seen, is clear that search companies must provide full information.

Comments

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    So what your saying is alot (if not the majority)of HIPs are not legal! and how many years has it taken to find that out? HIP's should have had a RRP and local government told to fall inline with each other. HIP's were supposed to be of help to the consumer, yet again it has failed miserably and being produced in a way that is suitable to the industry and not the consumer. It's about time someone with guts scraped HIPs and start again BUT this time listen to the industry. At least John Prescott isn't around anymore .. Hooray.

    • 03 December 2009 10:06 AM
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    Oh Jonathan - you've gone and spoiled the fun for all of us now!

    • 02 December 2009 13:28 PM
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    As the proprietor of a search agency, I found Ronnie Park's comments quite hilarious - rarely can there have been a better example of the pot calling the kettle black!
    All Hips containing personal searches are potentially fatally flawed as the less reputable agents will cut corners in order to reduce their price and increase market share. This entails either relying on a dodgy database or 'taking a flier' - i.e. chancing that nothing untoward would have been revealed if the appropriate council fee had been paid.
    It galls us when we pay in excess of £100 to access official information and other firms pay the bare legal minimum of £11. When challenged, the usual comment is 'Our backs are covered by our indemnity insurance policy'!
    There are still a few independent agents with professional integrity out there, but we're a beleaguered breed!

    • 02 December 2009 01:30 AM
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    I love it when outfits like AHIPP and OneSearch get their press releases on here and then proceed to get good slagging by people from the industry who actually know what they are talking about! The bad PR completely outweighs to the good. Ho Ho Ho. If you want to publish fairy stories, do it on your own website instead of passing them off as news!!

    • 01 December 2009 21:43 PM
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    I'm afraid that 'Property Insider' is right to assert that you won't find many supporters of the personal search outside the search industry. The industry 'leaders' pulled one over the CLG when proposing that personal searches should be included in a HIP. Some search companies have taken advantage of the situation and combined with slack self regulation, as someone said earlier it's been a license to print money. Search agents need to get their act together on this and HIP suppliers need to wake up to dodgie practices.

    • 01 December 2009 17:59 PM
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    "I think those posting comments should be careful about suggesting whether personal search companies use data banking." Er, why? They do - as you go on to confirm. And as you correctly explain, they do it because its cheaper than using the actual data. Search costs have always varied between authorities. Data banking allows personal search companies to protect their margin whilst passing off second hand, second rate data. Defend that if you will but you won't find many supporters outside of the search business.

    • 01 December 2009 13:42 PM
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    I think those posting comments should be careful about suggesting whether personal search companies use data banking. Some undoubtably do, some don't, and some use it some of the time. However there is no doubt that some have had to turn to this technique as a result of further Govt meddling. In the pre HIP days, search companies used to search council data sources; any questions they couldn't answer due to councils restricting access to the data, the company covered with specific indemnity insurance along with their PI. Conveyancers then had the choice whether they were willing to accept these reports in return for a price much lower than the LAs. In effect a risk v cost decision.

    However in April, the Government ruled that insurance could not be used to cover unavailability of data and that LAs had to make the data available, but were able to make a charge on a purely cost recovery basis. Sadly, although some councils played fair, others didn't and saw it as an opportunity to charge amounts that would make it uneconomic for the search company to pay for the data and hence force them out of business. The Govt put no worthwhile controls in place to assess the fairness of charges and you would see councils next door to each other charging wildly different amounts for the same question.

    In these council areas search companies were therefore left in the position of having to use data banking or go out of business, making people unemployed and leaving consumers having to pay inefficient councils search charges.

    I have to admit that I am not comfortable with the concept of using data banking irrespective of the council charges. There is no doubt that where a council is charging fairly, search companies can make a reasonable margin, answer all the questions from council data sources, and offer a efficient and very competitive service to consumers.

    • 01 December 2009 13:13 PM
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    Brian - Your right! It's all Rightmove's fault -EVERTYHING!!!!

    • 01 December 2009 10:17 AM
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    Industry insider. You seem to know what is going on. There are particular issues with data banking which cause great concern amongst professionals. Whilst it may be a cost effective model (this in itself is dabatable)there is plenty of evidence that they are 'missing' crucial data. Also, how long do data bankers rely on data before filtering it and re-using. I can't believe that they can be so foolish as to use all the data for one property on a street and apply it to all the properties.

    All the evidence points to a distinct lack of up take by personal search agents of data which is often available exclusively from a local authority on payment of a fee. The data bankers will of course have you believe that they can obtain ALL this from other sources without paying a penny to the local authority. In many cases, those sources seem to include the moon and the cow. Maybe they still believe in nursery rhymes.

    • 30 November 2009 23:32 PM
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    I am a solicitor working mainly on residential conveyancing matters. Having used One Search in the past, I agree that their data is incomplete, if not flawed. They may or may not have changed their methodology but until recently, their ability to consistently report Highways data was questionable and this is a key element of the Con29R. Also, given their pricing model, clients are often unaware that if they pay, say, £180 for what is described as a 'local search' they are actually supplied with a personal search from One Search's database. Whilst this may be disclosed somewhere in the small print, I find it hard to justify this hidden margin to clients who are already paying for the production of a Home Information Pack. I should add that One Search are not the only culprits but they profess to be the largest so they are in the frame along with PSG, Richards Gray and so on.

    • 30 November 2009 22:42 PM
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    "The legal opinion, which EAT has seen, is clear that search companies must provide full information" - Consulting with friendly legal counsel and then issuing a press release citing the subsequent advice seems to be the new PR gimmick of choice for the beleaguered HIP industry. Anybody that has ever commissioned advice from a law firm knows that they will say what they need to say to cover their behinds and get paid. I bet I can buy precisely the opposite legal advice - probably from the same firm Ronnie uses. By the way, which firm issued the advice? That would be revealing. But I don't suppose we'll get to know - that would be too much like fact checking for EAT to waste its time with.

    • 30 November 2009 20:50 PM
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    James, you're correct - OSD's model is to collect data on, say, 1 Acacia Ave and add it too its database. If a request comes in for a search on 15 Acacia Ave, OSD will assume that the data for number 1 will probably be good enough - so they sell that old date as a search in its own right. Kind of like a license to print money - or money for old rope depending on your perspective. With a local authority, at least you are going to the horse's mouth. With OSD, you are going to the donkey in adjoining field. I would really like to see some 'counsel's opinion' on how well this practice would stand up to a legal challenge if any error was made. It would be hard to see how OSD could prove they had taken all reasonable steps to provide accurate data.

    • 30 November 2009 18:17 PM
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    That's rich coming from a company which is known for relying on 'data banking' to complete searches. Data banking for those who do not know, (I did not know this until it was explained to me)means that search companies involved in this dubious practice don't always actually obtain the latest data available nor do they pay all the fees due to council for the latest data. Instead, they rely to a great extent on internet amongst other sources for data. That is fine up to a point, but some data is available only from the local authority from whom the data should be purchased. Consequently, there is a serious risk that companies which rely on data banking will miss certain crucial data which should be shown on a search. It is therefore not surprising that many conveyancers will NOT rely on personal searches in a HIP and instead commission their own search. Hence search duplication, added cost and time. This practice would seem to highlight another flaw in HIPs.

    • 30 November 2009 17:47 PM
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    Er, Pete, maybe you can explain how £5M which is the typical indemnity limit on a personal search (with a plethora of onerous conditions I might add) is less than 'unlimited' which is the indemnity if a claim is made against a local authority (provided they are solvent). Are you a personal search provider by any chance?

    • 30 November 2009 17:41 PM
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    I blame righmove for not doing searches, they would be the best in the world.

    • 30 November 2009 17:12 PM
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    Property insider you are not. Personal Searches have a higher indemnity than local authority searches and use the same records. The difference is that the search company are properly trained and can recognise a fault which council employees are not and cannot. That is why so many LA searches have mistakes.

    • 30 November 2009 16:52 PM
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    Hi Ray, You make me laugh. Get a conveyancer to get all the stuff together in 14 days and all will be well. What exactly are they to get together if not all the stuff in the Hip?

    • 30 November 2009 16:48 PM
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    Hi Ray

    That's a great idea you keep banging on about but there's only one massive problem, who pays the conveyancer ( who only has 14 days ) to source the searches and do all the legals required before exchange because it'd be a damn sight more that the consumer pays now for a HIP and the sellers conveyancer would still order a personal search if it's cheaper for his client, who knows when a buyer would be on the horizon and any search ordered may well be out of date!

    Or do you expect them all to work like a bunch of Estate Agents, sorry I meant idiots working on a No Sale No fee basis?

    • 30 November 2009 16:47 PM
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    Here we go again!
    So I will again!
    Kill HIP's (Keep EPC's - we have to - EU directive).
    Make it compulsory for a conveyancer to be instructed at same time as marketing. Give them 14 working (!) days to get everything together - fine them heavily if not.
    End of.

    • 30 November 2009 14:07 PM
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    Good old Ronny. Biting the hand that feeds him.He makes his living providing personal searches and yet feels the need to slag them off. He has been using this as a marketing tool for weeks telling all solicitors and Hip provioder "all search companies are poo, apart from my company of course". You know what they say in sales? Don't slag the opposition, it makes you appeare desperate.

    • 30 November 2009 13:27 PM
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    Many official searches from council’s only go back a few years too. For example Sefton MBC only reveal building control entries from July 2002. If you wish to go back further,they will charge you for this information.

    • 30 November 2009 10:17 AM
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    "Storing up trouble for buyers" Think not, as Sols re-do most anyway, just a padded PR story.

    • 30 November 2009 10:06 AM
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