Home Report A guide for buyers and sellers in Scotland Scotland www.rics.org/scotland
What is a Home Report? The Home Report is a pack which contains information about a residential property (house, flat, apartment, tenement, villa etc) which is on the market for sale in Scotland. It should be given to anyone interested in buying that property. The Home Report is required by law for homes in Scotland marketed for sale from 1 December 2008. The Home Report has three parts: 1. Single survey and valuation of the property which must, by law, be carried out by a chartered surveyor who is a member of RICS. The single survey will give information about any problems the property has and how urgently it needs to be repaired. It will also state its current value and how accessible it is for disabled people 2. Energy report with an Energy Performance Certificate which can also be carried out by a chartered surveyor who is a member of RICS. The report will show how green the property is and will rate the home A-G for energy efficiency (similar to how fridges and freezers are rated). The report will recommend how to improve the property s energy efficiency 3. Property questionnaire which will be filled out by the home owner showing who the electricity supplier is; whether the home has satellite TV; what the parking arrangements are and the council tax band as well as other general information. Additionally, on request of the home owner, the chartered surveyor can provide a generic Mortgage Valuation Report for inclusion in the Home Report. This is a document for a person who wants to buy your home, to take to a lender to discuss a mortgage. It is not a legal requirement of the Home Report but has been included to assist potential buyers. 2 Home Report
How do I get a Home Report? If you own a property which is being put up for sale on or after 1 December 2008 you must arrange for a Home Report to be prepared. You should contact a chartered surveyor who is a member of RICS before your home goes on the market. There are several ways to find a chartered surveyor. Check your local phone book or Yellow Pages, visit www.yell.com or www.ricsfirms.com (search for a residential survey ) or call the RICS Contact Centre on 0870 333 1600. You can ask your selling agent to contact a chartered surveyor on your behalf if you prefer. The chartered surveyor will carry out the single survey and valuation and energy report in one visit. Additionally, if you request a generic Mortgage Valuation Report to be included in the Home Report, the chartered surveyor will complete this at the same time too. By law, a chartered surveyor who is a member of RICS must carry out the single survey and valuation. They are also able to do the energy report and Energy Performance Certificate. The property questionnaire must be completed by the home owner. If you are interested in buying a property, you should ask the owner of the property or their selling agent for a hard copy or emailed copy of the Home Report. By law, anyone genuinely interested in buying a residential property is entitled to receive a copy of the Home Report for that property. The seller or seller s agent may ask the potential buyer to pay a small fee for a copy of the Home Report to cover copying and postage costs. Home report 3
How much will a Home Report cost? For an average home such as a city centre flat or a suburban house, with no major problems, the single survey, valuation and energy report with Energy Performance Certificate will cost between 500 and 700 plus Vat. The home owner will arrange and pay for a Home Report. For a property in a remote area or with several defects or a large house it will probably cost more than this. For a small one bedroom flat, it may cost less. If, after the chartered surveyor has inspected the property, but not yet written up the single survey, the seller chooses not to use the report, the seller is still liable to pay 80% of the fee. Once the chartered surveyor has written up the single survey, the seller will have to pay the full fee regardless of whether they choose to use the report or not. This will discourage sellers from shopping around to find the best survey and valuation for their property. The property questionnaire aspect of the Home Report will be filled out by the home owner. However, if the home owner has asked their selling agent to compile the Home Report on their behalf, there may be an added cost. Home owners should check with their agent. 4 Home Report You must have a fully completed Home Report before putting your property on the market from 1 December 2008.
Does my home need a Home Report? If you are putting your residential property (house, flat, apartment, tenement, villa etc) in Scotland up for sale on or after 1 December 2008, you will need to arrange a Home Report. There are some types of properties that don t need a Home Report (see page 6 for the list). Homes marketed for sale continuously before 1 December 2008 will not need a Home Report. You must have a fully completed Home Report before putting your property on the market from 1 December 2008. Allow up to two weeks for the Home Report to be ready. Home report 5
Which homes don t need a Home Report? Homes already up for sale (and not taken off the market at any point) before 1 December 2008 Brand new homes sold off plan or recently completed Newly converted premises where a property converted to a home has never been used in its converted state Right to Buy homes Seasonal and holiday accommodation which, legally, can only be lived in for up to 11 months of the year. This does not include second homes or holiday cottages that could be used all year A portfolio of residential properties a group of homes which will be sold in one transaction, to one commercial buyer and not as separate homes Mixed sales where the home is sold as part of the business such as a farmhouse which is part of a working farm or a flat above a shop which is sold with the shop Dual use of a dwelling house where the home is, or forms part of, a property most recently used for both residential and non-residential purposes, such as a commercial studio where the owner also lives in the home Unsafe properties which are obviously dangerous for people to live in Properties to be demolished which have the consents needed for demolition and consents obtained for redevelopment. 6 Home Report
Who pays for the Home Report? The home owner will arrange and pay for the Home Report. Anyone interested in buying the property can request a paper or email copy of the Home Report from the seller or the seller s agent. By law, interested buyers must receive it within nine days of asking for a copy. The seller or seller s agent may request the potential buyer pays a small fee for a copy of the Home Report to cover copying and postage costs. Why are Home Reports a legal requirement? Home Reports have been introduced by the Scottish Government under the Housing (Scotland) Act 2006. Before Home Reports came along, only one in ten buyers had a Homebuyer survey (also known as a scheme 2 survey) done on a property before buying it. This meant some buyers got a nasty surprise when they moved in to their new home and discovered the roof needed to be repaired or that there were other expensive problems with the property. A Home Report will give potential buyers information upfront about the condition of the property. Home Reports may encourage owners to take care of their homes and better maintain them. The Home Report may also stop sellers setting very low, unrealistic asking prices for their homes, just to get more people interested. The chartered surveyor will already have stated the value of the property in the Home Report so people interested in buying the property will know in advance what the value is. The energy report which offers ways to make your home greener could also encourage owners to make their homes more energy efficient, benefitting the environment and possibly reducing their gas, oil and electricity bills. Sellers will benefit from having a Home Report available to them when they are buying a house. First time buyers won t have to worry about finding the money to pay for surveys and valuations on any of the houses they are interested in buying because they will be provided with a Home Report by the seller. Home report 7
How will the home owner pay for the Home Report? This depends on the agreement between the owner and the chartered surveyor or the agreement with the company they ask to compile the Home Report for them (if any). Does the Home Report have a use-by date once the home is on the market? There is no set shelf life or use by date of a property s Home Report but home owners should take advice from a chartered surveyor if their property takes a long time to sell as it may need refreshing. Even a cold winter can have an effect on your home s condition. If after the Home Report is compiled, your property suffers from the effects of a flood or fire or other damage, you should consult your chartered surveyor immediately as the single survey and valuation will need to be updated. How far in advance of a home being marketed for sale can a Home Report be compiled? By law, the Home Report documents can be no more than 12 weeks old when the property is put on the market for sale. If I buy a property which has a Home Report and sell that same property soon afterwards, do I have to get another Home Report done? Yes. A new Home Report has to be arranged each time a property is put on the market for sale. 8 Home Report
How long will it take for sellers to get a completed Home Report? The seller must have a complete Home Report before marketing their property for sale so that there is no delay in providing the report to potential buyers. Sellers should allow up to two weeks for the chartered surveyor to complete the single survey, valuation, energy report and Energy Performance Certificate. It may take longer than two weeks for a very large or remote house. The documents from the chartered surveyor will then be added to the property questionnaire completed by the seller to make up the full Home Report. Will all mortgage providers accept the generic Mortgage Valuation Report? Mortgage providers usually have a list of chartered surveyor firms they will accept generic Mortgage Valuation Reports from. Buyers should check with their mortgage provider as soon as possible to see if they will accept the one contained in the Home Report. What if the home owner chooses not to get a generic Mortgage Valuation Report? The home owner is not legally required to include a generic Mortgage Valuation Report in the Home Report but it is likely they will choose to. If they decide not to, it is possible the mortgage lender will request that the potential buyer pays for one. What happens if I don t get a Home Report? If you put your home in Scotland up for sale on or after 1 December 2008 and you don t arrange a Home Report, you are breaking the law and could be fined 500 by your local Trading Standards officer. An estate agent or solicitor is unlikely to help you sell your home if you do not have a Home Report as you are breaking the law. An interested buyer will expect to see a Home Report for your property and probably won t buy your property if you do not provide them with a Home Report. If you are interested in buying a property in Scotland after 1 December 2008 and the seller hasn t had a Home Report done, you should not buy this property. However, there are a few types of properties that don t need a Home Report. See the list on page 6 of this brochure. Buyers should ask for evidence from the seller that the property does not need a Home Report. Home report 9
Can buyers trust the single survey and valuation in the Home Report? Yes, absolutely. The single survey and valuation part of the Home Report must, by law, be carried out by a chartered surveyor who is a member of RICS. Chartered surveyors are highly trained and one of the most highly regulated professions in the UK which means they follow very strict rules when surveying and valuing a property. The system they use to value a home is recognised throughout the world. Chartered surveyors must have special insurance called Professional Indemnity Insurance which protects buyers and sellers if there are any problems. Can I get my own survey or valuation done on a house I want to buy? Yes you can but there should be no need to because the single survey and valuation in a Home Report can be trusted by the buyer and seller. Chartered surveyors are highly trained and one of the most highly regulated professions in the UK which means they follow very strict rules when surveying and valuing a property. The system they use to value a home is recognised throughout the world. 10 Home Report
Where can I get more information? Any firm of chartered surveyors who are doing Home Reports can help you. To find a firm see your local phone book; Yellow Pages; www.yell.com or www.ricsfirms.com (search for residential survey ) or call the RICS Contact Centre on 0870 333 1600. For general information on Home Reports: RICS Scotland website www.rics.org/scotland or call the RICS Contact Centre on 0870 333 1600. Scottish Government website www.scotland.gov.uk/homereport What if I am unhappy with parts of the Home Report? If you feel you have a concern, you have the right to complain about the single survey, valuation or energy report in the Home Report. Both the buyer and the seller have a legal right to damages if the chartered surveyor is found negligent in any way. First of all you should write a letter to the firm of chartered surveyors stating why you are unhappy. If you are unhappy with their response and can t reach an agreement, you should contact the free independent surveyor ombudsman service who may be able to help investigate your complaint and decide what action should be taken. The chartered surveyor must accept the ombudsman s decision. For consumer advice about Home Reports: Consumer Focus Scotland www.consumerfocus-scotland.org.uk Which? www.which.co.uk If you have a complaint against a chartered surveyor contact the independent surveyor ombudsman service www.surveyors-ombudsman.org.uk or call them on 01925 530270 or email enquiries@surveyors-ombudsman.org.uk Home report 11
Advancing standards in land, property, and construction. RICS is the world s leading qualification when it comes to professional standards in land, property and construction. In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism. Over 100,000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members. RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity providing impartial, authoritative advice on key issues affecting businesses and society. 12 Home Report contact RICS Scotland RICS Scotland 9 Manor Place Edinburgh EH3 7DN United Kingdom T +44 (0)131 225 7078 F +44 (0)131 240 0831 contactrics@rics.org www.rics.org/scotland