Key Guidance Notes & Legislation

Question 1

What is mandatory and advisory?

Answer 1

Professional Statements - Mandatory (A professional statement is a professional or personal standard for the purposes of RICS Rules of Conduct)

Code of Practice - Mandatory
Guidance Notes - Advisory

Question 2

Fee Negotiations

Answer 2

Rules of Conduct 2nd February 2022

Members and firms are open and transparent with clients about their fees and services

Inform clients promptly and seek their agreement if estimated fees may be changed

Question 3

Conflict of Interest

Answer 3

Rules of Conduct 2nd February 2022

• Members should identify actual and potential conflicts of interest.
• Firms have effective processes to identify actual and potential conflicts of interest and make correct decisions.

RICS Professional Statement Conflict of Interest, 1st edition, January 2018

• This Professional Statement on Conflicts of Interest and Confidentiality sets out RICS’ mandatory rules within in this area.
• Effective identification and management of conflicts of interest.

Question 4

Complaints Handling Procedures

Answer 4

RICS Guidance Note on Complaints Handling, 1st edition, 2016

The purpose of this guidance note is to provide surveyors with information to assist in handling complaints.

Complaint needs to be handled reasonably and consistently to minimise reputational and financial risk.

Question 5

Professional Indemnity Insurance

Answer 5

Regulation UK professional indemnity insurance requirements version 9, effect from, April 2022
- ensure that if the firm faces a claim, it is protected from financial loss that it cannot meet from its own resources

• protect the insured member or firm against the consequences of its liability to pay damages to third parties for breaches of professional duty that it commits through its professional
  activities
• ensure that the firm’s clients do not suffer financial loss, which the firm cannot meet.

RICS Guidance Note Risk, liability and insurance 1st edition, April 2021
- Assist both RICS-regulated firms and their clients to understand the main risks and liabilities associated with professional services provided by RICS members.

Question 6

Handling Clients Money

Answer 6

RICS professional statement Client money handling, 1st edition, October 2019

The overall objective of this professional statement is that RICS members and RICS regulated firms understand their obligations to ensure:
- client money is kept safe
- client money accounts are used for appropriate purposes only and
- RICS-regulated firms have the appropriate controls and procedures to safeguard
client money.

Question 7

Gifts, Bribery and Corruption

Answer 7

Bribery Act 2010

• Aims to reduce bribery in business in UK and abroad
• Six Principles
• Policed by Serious Fraud Office

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 - as amended 2019
- Implements systems. policies and controls and procedures to address money laundering and terrorist financing risks.

Proceeds of Crime Act 2002

• Provides powers for enforcement authorities in the UK
• Creates a set of criminal offences intended to combat money laundering

RICS Professional statement Countering bribery and corruption, money laundering and terrorist financing 1st edition, February 2019
Divided into 3 parts:
- Bribery and Corruption
- ML & TF
- Guidance
- Supplementary Guidance

Question 8

Health and Safety

Answer 8

Healthy & Safety at Work 1974

• Duty to every employer to ensure, so far as reasonably practicable, the health, safety and welfare at work
• Policed by HSE

RIDDOR 1995

• Relates to injuries
• Injuries must be reported HSE
• Firm must have an accident book

Corporate Manslaughter and Corporate Homicide Act 2007

• Acts relate to duty of care by a corporate body
• Sets out penalties imposed to a company

Fire Risk Management Regulatory Reform (Fire Safety) Order 2005

• Risk assessment and fire preventative
• The ‘Responsible Person’ is the employer or occupier who controls the property

The Fire Safety Act 2021

• Following Hackitt Review 2018
• Multi-occupied residential buildings
• Requires all responsible persons to assess, manage and reduce the fire risks

Occupiers Liability Act 1957
- A common duty of care is imposed to lawful visitors: it is not only occupiers who may be liable to lawful visitors, but also those who have control over premises such as landlords

Construction (Design and Management) (CDM) Regulations 2015
- H&S during the design and management of all commercial building projects including residential development and refurbishment and maintenance work for both notifiable and non-notifiable work.

Question 9

Accounting Principles & Procedures

Answer 9

Companies Act 2006
- The Companies Act 2006 is the primary source of UK company law. It covers almost every aspect of how a company should be run, managed, and financed.

International Financial Reporting Standards
- The IFRS are issued by the International Accounting Standards Board (IASB).

• IFRS are a set of accounting rules for the financial statements of public companies that are intended to make them consistent, transparent, and easily comparable around the world.

Question 10

Conflict Avoidance, Management & Dispute Resolution Procedures

Answer 10

RICS Guidance Note, UK Mediation 1st edition 2014
- This guidance note is intended for surveyors advising
clients in relation to a dispute and gives guidance on
when mediation should be considered, how it works,
the benefits of mediating over litigating, and the
consequences if parties do not mediate.

Question 11

Data Management

Answer 11

General Data Protection Regulation 2016 (GDPR)
- Aims to create a single data protection regime for anypone doing business in the EU

Data Protection Act 2018

• The Data Protection Act 2018 is the UK’s implementation of the General Data Protection Regulation (GDPR)
• Covers all data previously covered by the Data Protection Act 1998

Freedom of Information Act 2000
- Gives individuals the right of access to information held by public bodies

Question 12

Diversity, Inclusion and Team-working

Answer 12

Equality Act 2010
- This is because the Equality Act protects people against discrimination because of the protected characteristics that we all have. Under the Equality Act, there are nine protected characteristics:

age
disability
gender reassignment
marriage and civil partnership
pregnancy and maternity
race
religion or belief
sex
sexual orientation

Question 13

Inclusive Environments

Answer 13

Equality Act 2010
- This is because the Equality Act protects people against discrimination because of the protected characteristics that we all have. Under the Equality Act, there are nine protected characteristics:

age
disability
gender reassignment
marriage and civil partnership
pregnancy and maternity
race
religion or belief
sex
sexual orientation

Question 14

Sustainability

Answer 14

Guidance Note Sustainability and ESG in commercial property valuation and strategic advice, 3rd Edition Effective from 31 January 2022

• Principally intended for valuing commercial property
• Advice on requirements relating to sustainability; resilience; and environmental, social and governance (ESG) are some of the most important issues facing world financial markets.

RICS Guidance Note Environmental risks and global real estate 1st edition, November 2018
- It aims to provide guidance to chartered surveyors who are not specialists in environmental considerations and management or in the preparation of environmental reports including Land Quality Statements and Environmental Screening Reports.

Climate Change Act 2008
- Amended in 2019 to require the UK to achieve “net zero carbon” by 2050

Minimum Energy Efficiency Standards 2015

• Require a minimum EPC rating of level E to let a building from 1st April 2018 onwards
• New leases from 1 April 2018 (commercial and residential)
• All existing leases from 1 April 2023 for commercial properties (1 April 2020 for residential properties)

BREEAM - The Building Research Establishment Environmental Assessment
- Voluntary environmental assessment tool to rate new and refurbished commercial and residential

Question 15

Local Taxation & Assessment

Answer 15

• Local Government and Finance Act 1988
  Introduced significant reform to the Business Rates system.
  • Introduced the list system for every 5 years with revaluation.
  • Empty Rates
  • Changes a local authority’s role in setting the rate to a uniform business rate.
• General Rates Act 1967
  Consolidated rating law within a singular act.
• Rating Valuation Act 1999
  Brought in the idea that the property must be considered to be in a state of reasonable repair and not in its current position.
• Rates Appeal Guidance Note 2017
  This was a guidance note brought in to assist surveyors with the change to the CCA system, a large change from the previous appeals system.
• Rating Consultancy, Code of Practice 2017 4th edition
  This outlined how Firms and surveyors must conduct themselves within the rating system. IT outlines the rules on marketing (be accurate, don’t criticise other rating advisers, don’t bring the profession into disrepute), finding new clients (it is okay to approach if they are represented, but may not badger, must go to the VOA with permission from the ratepayer) as well as Terms of Engagement being clearly set out.
• Rating (Empty Properties) Act 2007
  This built upon the empty rates scheme in the LGFA 1988 and outlined that the property would have its liability decreased to nil for the 3 months (6 months for industrial) and reverted to 100% of its original thereafter.

Question 16

Landlord and Tenant

Answer 16

• Landlord and Tenant Act 1954
  This introduced the rights and obligations of both landlords and tenant in relation to any premises leased for non-domestic purposes. It is key for security of tenure and the section notices needed within lease renewals and rent reviews.
• RICS Guidance Note ‘Surveyors Acting as Arbitrators in commercial property rent reviews’ 2013
  This guidance note outlines how a surveyor should act and who for in regards to Arbitration. It outlines the rights and obligations the surveyor has. It goes through a step by step process for the arbitration process and how a surveyor should act along the way, including ordering disclosure, evaluating the evidence and the award.
• Guidance Note on Conflict of Interest for Members acting as Dispute Resolvers 2012
  This guidance note outlines how to provide advice on a dispute resolution when there is a conflict in place. The key is to be transparent and provide independent advice.
• Guidance Note on Independent Expert Determination
  This guidance note outlines the procedures to be followed when called upon as an independent expert. This includes the establishing the facts, the independents experts approach to evidence and their determination.
• Arbitration Act 1996
  The arbitration Act was brought in to improve the law relating to arbitration, solving disputes fairly and agreeing how these are to be resolved.
• Guidance note on Surveyors Acting as Advocates 2017
  Your duty of care is to your client however you also owe an overriding duty to the tribunal to act properly and fairly.
• Guidance note on Surveyors Acting as Expert Witnesses 2014
  As a surveyor actively involved in a dispute that may come before a tribunal, one may carry out more than one role including an expert witness. You have a duty of care here to the tribunal where your evidence is given.
• PACT – Professional Arbitration on Court Terms
  PACT is a procession where the determination of all or some of the terms of a renewal is delegated to a third party who may act as an arbitrator or as a third party.

Question 17

Valuation

Answer 17

• Guidance Note on Comparable Evidence in Real Estate Valuation 2019
  There are four main purposes of the GN:
• To outline the principles of the use of comparable evidence
• To encourage consistency in the use of comparable evidence globally
• To address issues of availability and use of comparable evidence, especially in challenging market conditions
• To consider potential sources of comparable evidence and their relative importance.
• Guidance Note on DCF for commercial property investments 2010
  This guidance note outlines the methodology of discounted cash flow valuations including:
• Fundamentals of the discounted cash flow approach
• Estimating the cash flow
• Estimating the exit value
• The discounting process
• Selecting the discount rate
• Reporting

RICS Guidance Note Reinstatement cost assessment of buildings 3rd edition, February 2018
The guidance note provides detailed recommendations on:
- the manner in which assessments should be approached
- the nature and extent of the information to be collated and
- the manner in which this information should be processed and the assessment calculated and submitted.

Question 18

Development Appraisal

Answer 18

• Town/Country Planning Act 1990
  The Towns and Country Planning Act states the policies and proposals for the development and other use of land in its area. It also provides framework for local plans.
• Guidance Note valuation of Development Property 2019
  It provides guidance to the valuer in the approach to development property valuations. The guidance outlines the valuers responsibilities and outline that the valuer should work in conjunction with IVS 410.
• Guidance Note on DRC method of Valuation for financial reporting 2018
  Outlines guidance around the Cost approach and the reporting requirements that come alongside it as outlined in the UK VPGA 1.5
• Covid-19 Impact on Valuation Practice Alert 2019
  COVID practice alert brought out to combat the lack of market evidence at the beginning of the pandemic, has since been retracted (March 22)
• Guidance Note on Rights of Light 2016
  Guidance Note to assist the surveyor in:
• Providing accurate and comprehensible information to clients to remove misunderstanding.
• Ensuring that if there was to be a dispute over the matter, the facts are to be set out clearly.
• Safeguarding the interests of owners, investors, insurance providers and others who rely on reports. Whether assessing the viability of a development or the viability of a development

Question 19

Measurement

Answer 19

• Professional Statement: RICS Property Measurement 2nd Edition (IPMS) 2018
  This Professional Statement brought in IPMS to decrease the variance of 24% from the different interpretations throughout the RICS jurisdiction. It mandated IPMS for Office and Residential unless dual reported or explicitly stated with reasoning.
• Code of Measuring Practice 6th edition 2015
  The purpose of the code is to provide definitions to permit the accurate measurement of buildings and lands and the descriptions of specification on a common and consistent basis.
• Drafted IPMS Retail & Industrial
  This follows the same precedent from Offices and Residential
  Inspection

Question 20

Inspection

Answer 20

• Guidance Note on Surveying Safely 2018
  This sets out basic, good practice principles for the management of health and safety for RICS regulated firms and members. This sets out these principles and introduces the safe person concept.
• Guidance Note ‘Contamination, The Environment and Sustainability’ 2010
  This guidance note includes detail on:
• Role of Chartered Surveyors and other professionals in advising on environmental matters and contamination
• Types of environmental reports, e.g. Environmental Screen Report (ESR) including risk rankings and Land Quality Statements (LQS)
• Impact of environmental law on valuation, e.g. air quality, water quality, waste management, contamination, chemicals, resource management and biodiversity
• Property observation checklists, enquiries and recommending further investigations
• Reporting the outcomes in a valuation, including negative and positive impacts of environmental factors and contamination
• Guidance for acquisitions, disposals, lettings and property management instructions
• Environmental Protection Act 1990
  The key element here is the ‘polluter pays’ principle. This outlines that whoever knowingly caused the contamination will be responsible for the remediation costs. If it is not possible to locate the polluter then the landowner is responsible.
• Japanese Knotweed and Residential Property 2022
  New Guidance sets out 4 stage management plan. But Highlights that a surveyor should observe and assess the visible above-ground elements of the plant. Where it is situated relative to the property, and if any material damage to structures is being caused.
• Wildlife and Countryside Act 1981
  Classes Japanese knotweed legally classed as a controlled plant, meaning you are allowed to have it, but not allowed to let it spread in the wild.