Exception reporting: when is it unnecessary to provide a Home Report?
Home Reports, now a wholly accepted part of Scotland’s residential property landscape, celebrated their tenth anniversary late last year. But, remarkably enough, there remains a significant degree of ignorance of the fine detail surrounding their required use.
Home Reports replaced a system in which every buyer who was seriously interested in a single property had to commission a survey, which was money wasted in the event of an unsuccessful offer. These multiple surveys could run into thousands of pounds in a competitive market.
So, Home Reports are where we are today, but still, lots of relatively unrecognised exemptions exist. Home Report requirements do not apply to properties that are not marketed, such as those being sold to sitting tenants under the Right to Buy or sales by agreement between family members. Please be aware, if you are selling your home yourself without an estate agent/solicitor but post a notice on social media or a sign in the window this represents marketing of the property and a Home Report must be in place.
New housing which has not been previously used or occupied as a house or as any other premises is exempt. Any subsequent sale will not be, however, exempt from the requirements even if the property has a NHBC certificate.
Similarly exempt, are premises which have recently, or are in the process of being, converted to a house, or a portfolio of residential properties (except ancillary houses such as certain “granny flats” and lodges). Such instances are regarded as a commercial sale. Equally exempt are seasonal and holiday accommodation which is restricted by planning conditions to be occupied for less than eleven months in any twelve-month period and to be used only for holiday accommodation.
Not surprisingly, unsafe properties where a house is unoccupied and whose conditions poses a serious risk to the health and safety of its visitors and clearly unsuitable for occupation in that condition, or properties that have demolition consent, are exempt from Home Reports.
Exemption applies also to more complex situations where, for example, there are mixed sales as in where a house is to be sold with, or forms part of non-residential properties. This is provided the seller does not intend to accept an offer to buy residential property separately from the non-residential property.
These exemptions are based on common sense principles and, to my mind, enhance the quality of the Home Report legislation. They should be better known.
Tom Laurie is a partner in the Perth office of DM Hall Chartered Surveyors.
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