The Home Condition Report (HCR)

The Home Condition Report is the only part of a Home Information Pack that is not currently provided during the existing home selling and buying process.

From 2007, each home will have to be inspected, and a Home Condition Report prepared, before a property is marketed for sale.

The report will contain data that can be used by lenders in their underwriting processes for mortgage lending.

It is based on a 'level 2' inspection which gives a similar volume of detail to that provided in the RICS Homebuyer Survey and Valuation, known as the HSV, excepting there is no valuation. This is somewhere between a mortgage valuation type report known to the industry as a 'level 1' inspection, and the more detailed Building Survey or "full structural survey" known as a 'level 3'.

The report will be in a standard format with built-in flexibility to accommodate all sizes and types of properties from the small studio flat, to the 'listed' country home. It is designed to be easily understood by the lay reader - that means it will need to be clear, consistent and accurate.

The report is made up of a number of sections. Section A contains the terms of engagement, which will match those that will have been sent to the Client with the mandatory 'Confirmation of Instructions' letter. This section also describes the condition ratings that are used in the main body of the report and which are designed to help readers find their way to any urgent and serious defects within the property, thus avoiding the need to trawl through the document searching for the most important information.

An appendix to the Terms of Engagement describes the extent of the inspection telling the reader what the home inspector is going to inspect and describing those parts of the property that are outside of the inspection requirements.

Section B looks similar to some lenders' mortgage valuation forms and provides general information about the property, its age, size, accommodation, re-instatement cost for insurance purposes, general construction, including whether it is a system built property. It also provides an overall opinion. Further, it lists all the condition ratings from the main body of the report.

Section C identifies matters that may require further consideration by the conveyancer, any environmental issues apparent from the inspection that need further investigation and health and safety matters that potential buyers should be aware of.

The home inspector is the 'eyes and ears' of the conveyancer and should highlight any matters observed during the inspection that need further legal investigation. These might include the adoption of highways, rights of way, easements provision of planning consents, 'listed' building and/or conservation area consents and building regulation approvals.

The home inspector may be aware of environmental issues relating to the property, such as flood risk, and this section enables him to ensure that the conveyancer asks the appropriate questions on this.

The report next goes into detail on the condition of the exterior (Section D) and the interior (Section E) of the property and the services that are connected to it (Section F).

Each element of these parts of the property is dealt with individually. For the exterior this includes, chimney stacks, roof coverings, rainwater pipes and gutters, main walls, sub floor ventilation, windows, exterior doors, all other woodwork, claddings and external decoration.

The interior covers roof space, ceilings, internal walls and partitions, floors, fireplaces and chimneys, built in fitments, internal woodwork, bathroom fittings, dampness, internal decorations and cellars.

The services deal with electricity, gas, water, heating, and drainage.

When completing these parts of the report it is necessary to describe the construction in simple terms to help the reader identify what is being discussed, along with justification for the rating given and comments on the condition, identifying, in particular, the serious and urgent defects seen. Each element, with the exception of internal decoration, will be given a rating.

Section G of the report deals with outbuildings, grounds, boundary walls and fences. The home inspector will look at all of these, with the exception of leisure facilities such as swimming pools, tennis courts and non-permanent outbuilding such as timber garden sheds. He or she will comment on their general condition but is not required to ascribe a rating to them.

Section H of the report will provide an energy performance certificate for the property. This will be in line with the requirements of the 2002 European Union Directive on the Energy Performance of Buildings. In order to do this the home inspector will collect the appropriate data required and either submit it to one of the Government approved energy rating software organisations or use the licensed software from one of these organisations to deliver the energy efficiency rating for the property. The software will generate recommendations on how energy efficiency can be improved, but the home inspector will have the opportunity to remove any inappropriate recommendation before the report is signed off.

The final part of the report is the sign off.