terraced homes

Why do I need a home report?

Are you thinking of putting your home on the market, and been told you need a home report? As this a recent legislation change it can be confusing and you may not know what a home report is or why you need one. This article will guide you through the basics of what a home report is, and why it is important – dealing with the most frequently asked questions and common misconceptions on home reports.

A home report is a requirement of Scottish law. The Scottish government introduced home reports as a compulsory legal document in 2008 following recommendations outlined in a Stewardship and Responsibility report. A Scottish homeowner is required to be in possession of a home report before they place their property onto the open market. Failure to comply with this legislation can result in a fine of £500. There are a few exemptions to this law.

When do I need a home report in Scotland?

If you own a residential property in Scotland and you desire to sell it, you almost always need a home report. There are a few exemptions to the law, and instances when a home report is not needed. These include: –

  • New build houses that are being placed on the market for the very first time.
  • Buildings that have undergone recent conversion into houses and have not been previously lived in.
  • Temporary accommodation such as seasonal or holiday homes.
  • The landlord is not required to produce a home report when the house is being purchased through right to buy scheme.
  • A home report is not required for properties that have a commercial use.
  • A home report is not needed for houses that have been deemed unfit to live in or condemned.

If you are unsure whether you require a home report it is best to seek advice from a solicitor.

What is a home report?

A home report is a collection of documents that form a buyer’s guide. A Scottish homeowner needs to complete the home report before they can list their property as for sale. A home report is compromised of three main components a single survey, an energy performance certificate (EPC), and a property questionnaire.

What Does the Single Survey of a Home Report Include?

The single survey of a home report has to be conducted by a qualified surveyor who is a member of the Royal Institution of Chartered Surveyors (RICS). The survey is used to classify the conditions of the property and create a valuation of its worth. A three point-scale is used to grade the conditions of a property’s features: –

  1. No immediate repair is necessary.
  2. Repair or replacement of the feature will be needed in the future.
  3. An urgent repair or replacement of the feature is needed because it is affecting the condition of the building or is creating a safety

The surveyor will base the valuation of the property from this report.

The most common features of a property that affect a valuation are problems with utilities, problems with damp, cracking, problems with the roof and timber defects.

How is Energy Performance Certificate (EPC) of a home report determined?

The EPC details the energy efficiency of the house in a similar fashion to big kitchen appliances have an energy rating. The EPC section shows just how big a carbon foot the house leaves on the world by giving it a CO2 band that ranges from A (very energy efficient) to G (very inefficient). Performance is benchmarked against current building standards. By benchmarking the property, the report can suggest cost-effective ways to reduce carbon emissions and reduce expenditure on energy such as attic insulation or double-glazed windows. A house with a higher energy efficiency will have lower fuel bills.

Property Questionnaire Home Report

The homeowner should fill in the property questionnaire of the home report. The law society Scotland advises that it is the homeowners who are liable not the solicitor if the account is inaccurate. This is an accurate and detailed account of the house’s history and upkeep.

Some of the details that should be disclosed in the property questionnaire include: –

  • Council Tax Band
  • Local Authority notice served on the property
  • Alterations such as extension or replacement windows
  • Parking arrangements
  • Any easements that exist on the property grounds
  • History of flooding
  • Existing upkeep payment such as paying for a communal cleaner in a shared property.

This information will give the buyer an accurate and detailed account about the property.

Should I have damage discovered by a home report fixed?

The report allows the homeowner time to rectify the damage before placing it on the market. Whether you should get all damage fixed is dependent on your current situation. Without fixing the damage, the valuation of your property will be lower and will lower your asking price for the property. After you have rectified any damage an additional report needs to be compiled.

How long does a home report last?

After your report is complete, you have 12 weeks to put your property on the market before a new report is needed. Once your property is on the market; however, the report lasts indefinitely. If the house is on the market for a long time, it is recommended that you update your report to keep the information accurate and fresh. The buyer’s solicitor will usually insist on this. One of the most common misconceptions is that a property needs a new report every 3 months. This is not the case.

Who do I have to supply with the home report?

A home report should be sent to any prospective buyer that requests it within 9 days. The report only needs to be supplied to buyers that are serious about buying the property and have the means to do so.

Should a home report come with a mortgage valuation?

The single survey section of a report does not need to include a mortgage valuation to be legally compliant, only a property valuation. Some single reports do include a mortgage valuation, while others do no. If a property already has an interested party before it is on the market ,it is recommended that a company on the mortgage provider’s approved valuation list conducts a mortgage valuation at the same time. This will speed up the process exponentially. If a property has been on the market for a long time, the mortgage provider may want to conduct a second mortgage valuation before committing.

Are you thinking about putting your property on the market, and need some advice about the home report or want to know more about the cost? Our dedicated team is happy to answer your questions.