Case Study / Need to know Flashcards
What are the RICS Rules of Conduct?
Rule 1 - Members and firms must be honest and act with integrity
Rule 2 - Members and firms must maintain professional competence
Rule 3 - Members and firms must provide good quality and diligent service
Rule 4 - Members and firms must treat others with respect and encourage diversity and inclusion
Rule 5 - Members and firms must act in the public interest, take responsibility, and maintain public confidence in the profession.
Prior to working with a new client, what checks would you undertake?
I would ensure I am sufficiently knowledgeable, skilled and competent to carry out the work
I would check for any conflicts of interest
I would ensure the sufficient PII insurance was in place to cover the value of the instruction.
On receipt of a formal complaint, what would you do?
I would -
- Notify them that the complaint has been received and that we are working to rectify this.
- Issue a copy of my firms complaint handling procedure
- Report the complaint to the designated complaints handler
- Meet the client to receive feedback and address any areas of concern
- And if I was unable to resolve the complaint, I would refer this to the RICS.
If 2 separate departments within your firm were working for 2 rival companies, how would you ensure client sensitive data was managed?
I would -
- Inform clients of the conflict of interest and the risks associated with this
- Request a letter of instruction from them to continue
- Put measures in place to minimise potential risk, such as NDA’s, separate working locations, and secure storage of data.
What is work place diversity?
Diversity in the work place relates to the acceptance and inclusion of employees of all backgrounds.
When did the Rules of Conduct change?
February 2022
What are the CPD requirements for MRICS members?
Record 20 hours of CPD every year, where a minimum of 10 have to be formal.
Why did the previous Rules of Conduct change?
To provide a single document to enable greater clarity for RICS members and firms.
What are the professional obligations of members?
1 - Must comply with CPD requirements
2- Must cooperate with the RICS
3 - Provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
What is a Red Book Valuation and why do we need it?
The RICS Valuation – Global Standards, the red book, provides a global framework of standardized valuation procedures and standards that are necessary for installing consistency, high standards and public trust in valuation.
What should be included in a Red Book Valuation Report?
- Introduction
- Purpose & Basis of Valuation
- Assumptions & Special Assumptions
- Property Description
- Valuation Date
- Market Commentary
- Evidence
- Signatures
When is a Red Book Valuation compulsory?
Legal and accounting procedures such as:
- Probate
- Capital Gains Tax
- CPO’s
- Divorces
- Property Disputes
- Sales by Charities or NPO’s
- Valuation of Bank, Mortgage or Lending Securities
When is a Red Book not required?
- Advice given during negotiations or litigation
- Internal use with no liabilities
- Performing statutory functions
- When acting as an expert witness
What is included in a Red Book Valuation Terms of Engagement?
- Valuer & Client Details
- Valuation date & subject
- Basis and Purpose of Valuation
- Assumptions & Special Assumptions
- Fees
- Complaints Handling Procedure
Before accepting a valuation, what should you do?
- Establish the purpose of the valuation
- Identify if it is a Red Book valuation or not
- Check for conflicts of interest
- Check for legal requirements
- Check for 3rd Party Interests
- Ensure the sufficient PII is in place.
If I had arrived for the inspection & circumstances had changed or appeared unsafe, what would I have done?
I would have carried out a dynamic risk assessment
- continually re-evaluate to determine competence and safety.
- If there was unsafe conditions, I would immediately stop, seek assistance and rearrange.
What due diligence did I undertake before the inspection?
- Carried out a Desk Top Review
- Studied the lease / agreement
- Carried out a risk assessment
- Printed out plans
- Ensure I have the appropriate PPE.
What measures did I put in place to ensure safety when inspecting?
- Carried out Desk Top Due Diligence & A Risk Assessment
- Planned Travel Routes
- Checked the weather forecast
- Charged my mobile phone
- Kept colleagues informed of my whereabouts
- Asked the client / tenant of any potential risks, e.g. livestock
What did I include within my risk assessment prior to inspection?
- Identified hazards and risks
- Who may be harmed and how
- Mitigation strategy
- Who is responsible
- Actions required
- dates
- location
- contact details
What are the 5 methods of valuation?
- Comparable method
- Depreciated Replacement Cost Method
- Investment method
- Profits method
- Residual method
What happened in Stokes vs Cambridge (2008) ?
The case highlighted a key issue as to what the purchase of additional land for access purposes would cost a hypothetical developer of the subject land. The Court held that a proper price to be attributed to the ransom strip was one-third of the increase in value of the subject land attributable to acquisition of the ransom strip.
What is a ransom strip?
A ransom strip is a piece of land that must be crossed to enable adjoining land to be developed.
What is Market Value?
The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
What are assumptions? What are special assumptions?
Assumptions are conditions or situations affecting the property which (by agreement) are assumed to be true.
Special assumptions assumes facts that differ from actuality, are true.
What makes a good comparable?
A comparable which is similar in -
- Size
- Nature
- Ownership
- Location
- Disposal method
As close to the valuation date as possible.
What is the residual method of valuation?
The value of the property once developed, minus the costs of the development, including the developers profit.
