A pilot project for single surveys is on course for next year

The Single Survey Pilot

I refer to previous Journal articles regarding HITF and now write to advise you about the progress being made by the HITF Single Survey Steering Group, which has held its inaugural meeting and will hold further meetings throughout the next few months to bring forward the pilot project for single surveys in 2004.

The objective of the pilot project is essentially to test whether the single survey improves the marketability of properties. The Steering Group makes recommendations to the Executive which then takes the final decisions.

The Steering Group has agreed that the pilot should take place in Greater Glasgow North and West, Edinburgh North and Leith, Greater Dundee and Inverness and the surrounding area. These four areas have been chosen because they reflect a diversity of market conditions, for example, urban, rural, high demand and low demand. The pilot will run for at least eight months and for up to a year if an insufficient number of transactions are generated within eight months.

Scope of the pilot

The Steering Group considered that certain properties (right to buy properties; new houses bought “off plan” and completed houses on first sale, both so long as they have an NHBC warranty; and certain categories of private landlord to private landlord sales) should be excluded from the pilot at this stage. Repossessions will however be included. There was general agreement that the proposed purchaser’s information pack (PIP) should also be piloted but it was agreed that piloting it at the same time as the single survey risked prejudicing the latter by over-complicating matters. It was broadly agreed that the PIP would follow on as a natural consequence if the single survey was a success and that the decision whether to pilot the PIP as such a follow on, perhaps even in the second half of the single survey pilot, should be revised once the single survey pilot is underway.

The Single Survey Report

It was agreed that the design of the report should be undertaken by RICS with an independent assessment of whether the design meets the objectives of the pilot. A Steering Group subgroup supplemented by an external technical expert in the field may undertake the assessment.

PI insurance; Transfer of liabilities: hidden defects

The RICS had some concerns about potential indemnity insurance issues and it was agreed that this item would be addressed as soon as possible. It was also agreed that legal advice would be sought about drafting a contract which would allow transfer of liability under the survey, given that the surveyor would initially carry out the survey on the instruction of the seller but that prospective purchasers could have access to it and it was likely that the successful purchaser would pay for it. It was also agreed that a hidden defects guarantee should be part of the survey pilot and that it would be desirable for the Executive to underwrite that aspect of the cost. It was considered by the Steering Group that the pilot should test reactions to the inclusion of the guarantee but since the cost per individual survey was likely to be quite high during the pilot stage it would be unreasonable for consumers to pay for it at this time. The expectation is that if the guarantee becomes a standard part of a widespread single survey scheme, the cost per individual survey would fall and the market would adjust to its inclusion. It was noted that the hidden defects guarantee would have consequences on the cost of PI insurance and this would require to be monitored.

The Steering Group are keen to ensure that members of all the professions involved are kept abreast of developments and are aware of how the pilot project is to be taken forward. It is certainly anticipated that solicitors and surveyors in the areas where the pilots are going to take place will require some specific advice about how the pilot is to operate and possibly some training. This is something which the Society has indicated we are willing to undertake with the RICS. Further information about any training programme to be implemented and further information about the HITF pilot project will be in future editions of the Journal.

Linsey J Lewin, Secretary, Conveyancing Committee

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