General

Question 1

What professional statements do you need to be aware of?

Answer 1

1. RICS Real Estate Agency and Brokerage, 3rd Edition

2. RICS UK Commercial Real Estate Agency, 1st Editio

Question 2

What does the RICS Real Estate Agency and Brokerage cover?

Answer 2

Professional statement which sets out 12 principles to shape fairness and transparency in real estate agency activities and sets out best practice to underpin the core principles.

Question 3

Can you give me an example of some of the 12 principles included in the professional statement?

Answer 3

1. Conduct business fairly and honestly
2. Provide terms of engagements which are fair and clear
3. Carry out work with due skill, care and dilligence
4. Do not discriminate
5. Ensure advertising is honest and truthful
6. Have adequate PI

Question 4

What topics are covered in the RICS Professional Statement?

Answer 4

1. Ethics
2. Securing instructions
3. Acting for sellers
4. Acting for the buyer
5. Ending the instruction
6. Safety and Security
7. Agency management

Question 5

Can you give me an example of some of the best practices contained in the Professional Statement?

Answer 5

1. Ethics - Avoid conflicts of interest
2. Securing instructions - agree terms of engagement which details fee liability, basis of agency cooling off period and whether you intend to offer services to other parties
3. Marketing - particulars should be prepared by someone who has inspected the property and keeping records of viewings.

Question 6

What does the RICS UK Commercial Real Estate Agency cover?

Answer 6

It assists RICS members to apply the 12 principles that shape fairness and transparency in a UK jurisdiction.

Question 7

Can you give me some ethical examples members should follow under the UK Professional statement?

Answer 7

1. Requires members to have regard to UK legislation when acting as an agent, such as the Estate Agents Act 1979, Money Laundering Regulations 2019, Consumer Protection Regulations 2008 and the Anti Bribery Act 2010.
2. Have regard to RICS Rules of Conduct, avoid conflicts of interest and not accept gifts that could be construed as a bribe.

Question 8

What basis of agency are you aware of?

Answer 8

1. Sole selling rights
2. Sole agency
3. Joint agency
4. Multiple agency

Question 9

What is sole selling rights?

Answer 9

Where the instructed agent will be due a fee after contracts have been exchanged with a purchaser introduced by the agent, another agent or the seller.

Question 10

What is sole agency?

Answer 10

Where the instructed agent will be due a fee after contracts have been exchanged with a purchaser introduced by the agent or another agent. No sale, no fee.

Question 11

What is joint agency?

Answer 11

Where two agents are instructed and they agree to split the fee.

Question 12

What is multiple agency?

Answer 12

Where multiple agents are instructed and the agent that introduces the purchaser will be due a fee after contracts have been exchanged.

Question 13

What common law duties do you have as an agent?

Answer 13

1. A duty of care - a duty of skill and care
2. A duty of loyalty (confidentiality, trust)
3. A duty to account in full (pass on all offers to your client)

Question 14

What is dual agency?

Answer 14

Where the agent acts for the buyer and the seller, although this is prohibited by the RICS in commercial transactions.

Question 15

What is RICS Conflict of Interest in Real Estate Agency?

Answer 15

Professional statement with mandatory requirements for members and firms to avoid conflicts of interest when transacting commercial real estate in the UK.

Question 16

What should you do if acting for both buyer and seller (dual agency)?

Answer 16

Prohibited in the UK.

In jurisdictions where it is permitted, the agent must seek consent from both buyer and seller.

Question 17

What should you do when you have received instructions from different clients competing for similar property (multiple introductions).

Answer 17

1. Agent must seek consent in writing from the new client.
2. Make it clear in ToE whether appointment is exclusive or non exclusive.
3. If exclusive, the agent can no longer proceed with the instruction. If non exclusive, the agent must ensure information barriers are in place to protect client confidentiality.

Question 18

What should an agent do when approached to provide incremental advice?

Answer 18

1. Seek consent from client if it is an exclusive instruction.
2. If a non exclusive instruction, inform the client and then ensure information barriers are in place to maintain client confidentiality.

Question 19

What should you include in your ToE when conducting agency instructions?

Answer 19

1. Basis of agency
2. Fee and when the fee becomes payable
3. Marketing costs and disbursements
4. Confirmation of no conflicts of interest
5. Money laundering requirements
6. Details of complaints handling procedure

Question 20

What actions would you taken when dealing with an acquisition for a client?

Answer 20

1. Conflicts of interest and money laundering checks
2. Agree terms of engagement
3. Understand client objectives and search parameters
4. Locate suitable properties
5. Inspection and valuation
6. Check planning use and undertake due diligence
7. Negotiate / agree conditional contracts
8. Instruct solicitors

Question 21

What types of due diligence would you undertake when dealing with a property acquisition?

Answer 21

1. Tenure / Title
2. Planning
3. Contamination
4. Flooding
5. EPC
6. Building survey
7. Asbestos

Question 22

What is a ready able and willing purchaser clause?

Answer 22

Clause included in the terms of engagement where the agent will be due an abortive fee if they have introduced a purchaser that that is ready and able to proceed and the client subsequently withdraws from the transaction.