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Lord Avebury: Perhaps I may add a few words to what the noble Viscount said about subsidence. In the part of London where I live, Camberwell, our insurance company suddenly imposed a very large increase in the premiums because it said its experience in the postcode in which we were living was of large claims having been made under buildings insurance policies for subsidence. That came completely out of the blue and I am happy to say that we were able to switch to another insurance company which had a different policy. That is a good example of the kind of
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information of which an unwary purchaser might not necessarily be aware if it was not included in the home information pack. Therefore, whatever information is available about the insurance experience of properties in a particular area should be included in the pack.
Some noble Lords mentioned flooding. As your Lordships will be aware, there have been some remarkable instances of serious flooding in low-lying areas where houses have been built on what is described as the flood plain. I hope that future expansion of housing in this country will take careful note of that phenomenon and ensure that new building is kept well away from such areas. Some large housing estates are already vulnerable to overflowing rivers. A purchaser would be entitled to know something about that.
I understand that the Prime Minister has today warned about the serious effects of global warming. That may have an effect on properties in certain areas; for example, on the coast of East Anglia, where, as your Lordships will be aware, there is a gradual tilting of the country, so that properties are more likely to be overwhelmed by high tides in the future than they have been in the past.
Those are all factors that people are entitled to know about, but with the scarce information about what will be contained in the home information packs there is no mention of any of those natural phenomena. It would be useful if the noble Lord could be a bit more specific about the nature of the information that will be required.
Lord Borrie: My noble friend the Minister will feel that the last two speakers, the noble Viscount and the noble Lord, Lord Avebury, have been knocking at an open door. In addition to energy efficiency, which is specifically mentioned in this clause, it is desirable that other matters relating to the environment, flooding, subsidence, and so on, are all included in a home information pack.
Baroness Hamwee: My example is at the frivolous end of the spectrum. "Relevant information" in subsection (4), which the noble Baroness seeks to delete, is,
"information about any matter connected with the property . . . that would be of interest to potential buyers."
It might be of interest to a potential buyer that the unusual colour that the fac"ade of the house has been painted is number whatever of a particular paint range. I said it was frivolous. If we had more detail, we would understand where the balance lies.
Lord Phillips of Sudbury: I do not think my noble friend's point is at all frivolous. I get a little anxious about just what a burden could be imposed on the whole process if the Secretary of State is in risk-averse mode. The Committee needs some help as to what is meant by those loose words,
I do not know if the Minister has anything in his brief about what those words mean. This amendment would strike out subsection (4) altogether, so we would all like to understand its meaning.
The Earl of Caithness: I have listened with care to what the noble Lord, Lord Borrie, said, and a lot of it was backed up by other noble Lords who spoke. If the information he refers to is included in the home information pack, first, it gets more difficult for the estate agent to assemble the pack; and secondly, the pack gets bigger. The noble Lord, Lord Rooker, took me to task for saying that the Danish pack was 800 pages long, and told me the figure was actually 210. I said that the quote came from the Office of Fair Trading.
I have some more information, taken from a speech given from Palle Ulstrup, the chief executive officer of the Danish Association of Chartered Estate Agents at a Property Forum dinner in 2002. That is the same person from whom the noble Lord received his information. In that speech, Mr. Ulstrup said:
"A Danish real estate expert told the study that the paperwork for an owner-occupied dwelling had increased from an already substantial 100 pages to a frequent 800-page set of documents. This increase in workload may have contributed to the rise in agency fees that has occurred in recent years, despite the already large increases in agency income caused by rising house prices since the mid-1990s".
That is going to happen here. I know the Minister has the pack at 100 pages, but it grows bigger every time we expand it and look for more information.
Some of that information is entirely valid. Subsidence does not follow postcodes. I had just such a problem with a house: when I bought it, there was no evidence at all of subsidence. The surveyor did not find anything; indeed, he could not have done so unless he had peeled the wallpaper and paint off one particular section of the house in the course of a full structural survey. I give way.
Lord Avebury: I am most grateful to the noble Earl. Of course, subsidence does not follow postcodes, but insurance companies think that it does.
The Earl of Caithness: Indeed, it does not follow postcodes. However, the problem with my house was not following shrinkage of the land, but had been caused as a result of a bomb from the Second World War. We discovered that only last year when the wall was renewed. An extension was built on to the house in the early 1990s and the weight of that extension had caused the house to crack. Proper foundations had not been laid because whoever built it had not realised that he was building over a bomb hole. It was all rather fun, given that it had to be dug out by hand. Machines could not do it, and the nice man who did the work was intrigued to find that the subsidence had been caused by a bomb hole.
What we are discussing is very important because it will influence the size of the pack and the duty of estate agents to put it together within a sensible time.
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Lord Bassam of Brighton: Again we have had a useful discussion about the contents of the home information pack. By now I am sure that all noble Lords will have read Clause 144 carefully. It gives the Secretary of State a power to prescribe the documents to be included in the pack. Before prescribing a document for inclusion, the Secretary of State must be satisfied that it contains information that is relevant.
Subsection (4) defines "relevant information" as information about any matter connected with the property, or the sale of the property, that would be of interest to potential buyers. The amendment seeks to delete this subsection, the effect of which would be to enable the Secretary of State to require the pack to include information that is completely unconnected with these matters and is of no interest whatsoever to a potential buyer. Where that would leave us, I am not sure, but it would be a chaotic state of affairs and one that we could not accept.
The amendment would substitute a new subsection (4). First, I would like to assure noble Lords that no one will ever be committing an "offence" by failing to comply with these duties as suggested by this amendment. As the noble Earl, Lord Caithness, has acknowledged, we have moved from criminal penalties to civil sanctions because we have accepted arguments on that issue.
The proposed new subsection (4) would provide that the responsible person could omit a prescribed document from the pack as long as it,
That would require a subjective judgment by sellers, estate agents, potential buyers and enforcement officers on whether the omission of a particular document would affect the value of the property being sold. We would argue that that would cause great practical difficulties and the seller would already have had to commission all the relevant information in order to be sure that the documents did not reveal any flaws which might affect the value of the property.
The discussion has centred on what might be relevant and which documents ought to be included. I thought the noble Viscount, Lord Ullswater, was right to question whether environmental reports would be included, and whether they would include information about contaminated land. Contaminated land is a category in the standard local authority search and we would expect it to be included in the pack. In fact, Clause 144(6) states:
We would expect those matters to be included. As I recall, they are already included in CON.29. Indeed, if the noble Lord looks at our consultation document, to which I referred earlier, on the contents of the home information pack he will see that the various
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appendices to refer CON.29 and the issues covered in it. Page 18 of the document makes reference to Environment Agency searches and states at paragraph 5.29 that:
"Environmental issues are of significant interest to consumers and home buyers are no exception. The Environment Agency are working to implement Environment Agency property search reports as a standard part of the conveyancing process, alongside local authority, drainage and water searches".
We would expect all those things to be relevant information and for those to be provided as part of the home information pack.
I hope that has answered the various points raised about what might and might not be included. Obviously, it is very hard to be entirely prescriptive. But these things are very relevant, whether it is brown fields, contaminated land and whether water and drainage issues are of importance. All those things need to be covered. We have consulted very extensively on what should be included in the pack on other environmental information. Generally, we have had a favourable response to what we intend to do. It is worth reiterating the point that we shall want to discuss the issue further with those who wish to ensure that we get it right and that the information revealed is of value to a potential purchaser. Having heard that, I hope that the noble Baroness will be able to withdraw her amendment.
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