Property information questionnaire (PIQ) The question most estate agents are asking themselves is “Do I help the seller complete the Property Information Questionnaire or do I leave it to the HIP provider, conveyancing lawyer or the seller to complete it unaided?” There are pros and cons whatever you do, so, what should you do?:
Option 1 - Estate agents helping the seller complete the PIQ:
Damned if you don't: The main priority as an agent is to get the property on the market as quickly as possible. Left to the Home Information Pack provider or the client or, heaven forbid, the lawyer to complete the Property Information Questionnaire, an agent will be faced with the prospect of not being able to market the property for days or weeks. Many agents would rather have destiny in their own hands and complete the PIQ with the client.
The agent can take a hard copy of the PIQ when they collect the instruction letter and assist the seller with the form. This action has Property Misdescriptions Act implications but some agents will be convinced that their competitors are going to run this risk with a view to securing the instruction and ensuring that the property is marketed as quickly as possible.
Damned if you do: It is clear from the wording of the Property Information Questionnaire itself that if an agent completes (or assists in completing) the PIQ with the client they are potentially liable under the Property Misdescriptions Act 1991 for any inaccuracies that may be found.
These inaccuracies may surface during the conveyancing process. It is highly likely that conveyancing lawyers will ask the question as to whom completed the PIQ. If errors becomes apparent and the questionnaire was completed by the agent or with the assistance of the agent, then it is likely that many conveyancing lawyers will not hold back in referring the matter to the Office of Fair Trading. The Law Society have recently shown their hand in respect of their current regard for estate agents (please see report in the Times).
There is also a possibility that the agent will have potential direct liability to the purchaser and indeed the seller in terms of assisting in providing inaccurate information. Fridaysmove has obtained an Opinion form a leading QC specifically on this point of law.
If an agent guides the seller through the current government prescribed form in providing inaccurate information, then the purchaser may well argue that they relied on this information with a view to placing an offer on the property. If that fact can be established, having now incurred significant costs, they will seek to recover from the seller. The seller in turn will seek to recover those costs from the agent. There is also a possibility that the purchaser can have a claim directly against the estate agent for negligent misstatement as well.
In the worse case scenario a combination of a civil action as well as prosecution by the Office of Fair Trading could result in a pay out in the region of £7, 500.
Option 2 - Relying on the HIP provider to help the seller complete the PIQ:
Damned if you don't: The HIP provider has a direct dialogue with the client having already made arrangements for the Energy Performance Certificate to be carried out. The HIP provider may receive a lot of business from an agent and therefore commercial reality should dictate that they will chase the client to complete the questionnaire. They will no doubt have assured the agency that they have a team in place what will offer guidance to the seller and take them through the form.
Assisting in completing the PIQ is not an option due to the Property Misdescriptions Act 1991. Furthermore, leaving it up to clients to deal with is equally not viable as they will delay in completing the PIQ thereby delaying the property being marketed.
Damned if you do: Very few HIP providers have experience in dealing with the seller in a meaningful way. To date HIP providers have had to focus purely on compiling documentation without any recourse for significant communication with clients and certainly not giving them any legal guidance in completing questionnaires. Agents must ask themselves whether or not they are prepared to take the risk to have the third party chase the client and guide the client through what can be a fairly complex questionnaire. No pilot scheme has been carried out to see how HIP providers deal with the PIQs and it is interesting to see that none have issued guarantees as to how quickly they can turn them around.
Option 3 - Relying on the conveyancer to help the seller complete the PIQ:
Damned if you don't: Conveyancing lawyers have the relevant expertise in guiding the clients through property questionnaires. They have insurance and the legal expertise (especially on leasehold properties) to be able to address any questions that the client has. Furthermore, if an agent directs the seller to a conveyancing firm that they trust, then that firm will put pressure on the client to complete the PIQ .
The agent also has the added comfort of knowing that they do not run the risk of 'Property Misdescriptions Act' claims hanging over their heads.
Finally, in recommending a pet conveyancing lawyer, who will give the guidance free of charge, the agent may gain a referral fee if the lawyer signs up the client for conveyancing .
Damned if you don't: Conveyancing solicitors are the bane of most agents lives, a 'necessary evil' some might say. When faced with the prospect of recommending a lawyer to assist in completing a PIQ many must be must be thinking to themselves “ For years they conveyancers have been delaying my transactions …. do I rely now want them delaying me putting a property on the market?“ Does it make any sense to add a third party into an already complex and overcrowded process? Is it realistic to expect a client to deal with a HIP provider and then a lawyer before they can even market the property?
Furthermore, in recommending a conveyancing lawyer separately to the HIP provider, an agent may consider that they are undermining the quality of the HIP provider’s service?
So what is the answer?
The ideal solution would be the quickest solution but one that also protects all parties in the transaction; the buyer, the seller, the agent and the HIP provider.
The ideal solution would be an online Properly Information Questionnaire that clients can complete themselves or, with the agent over the phone (as soon as the agent receives the instruction) but with the agent enjoying total indemnity from potential liability against being sued by the seller or purchaser for misstatements within the PIQ and an indemnity from any fines under the PMA .
Help is at hand with the launch of the 'Online Property Information Questionnaire' offering all of the above and adding the further benefit of phrasing answers so as to qualify any potential issues in such a fashion as to maximise buyer appeal.