Lists to remember Flashcards
What are 7 mandatory Professional Obligations all RICS members must follow?
- Members must comply with CPD requirements set by RICS
- Members must cooperate with RICS
- Members must provide all information reasonably requested by the Standards and Regulation Board.
- Firms must publish a complaints handling procedure which includes ADR method approved by RICS and a record of complaints
- Firms must display and RICS designation on their business literature to show they are regulated by the RICS
- All previous and professional work must be covered by adequate professional indemnity cover
- Firms with a sole principal must have arrangements in place if they can no longer work
What are the 6 principles of the 2010 Bribery Act?
Proportionality
Top-Level Commitment
Risk Assessment
Due Diligence
Communication
Monitoring and Review
What must be included in a firms annual return?
- Type of business and staffing details
- Statutory Regulated Activities - eg valuation firms for financial services
- Nature of clients
- Complaints Handling Procedure and Records
- PII Insurance details
- Whether the firm holds clients money
What improvements did the new Rules of Conduct make over the old ones?
- Simpler Structure
- Clearer examples
- Focus on respect, diversity and inclusion
- Understanding evolving technology
- Tackling global challenges
When should you NOT accept an instruction?
- If you are not competent
- You are not being provided with sufficient facts on the issue
- The proposed client will not sign off the terms of engagement or AML checks
- There is a conflict of interest that can’t be managed
- PII indemnity cap can’t be agreed
- The advice is for a friend on a pro-bono basis but your PII doesn’t cover this work
- The company is on the governments sanctions list
- The work could cause public embarrassment to your firm if it was made public
How would you start a new practice?
- Inform the RICS and register for Regulation by the Regulatory Board
- Appoint a Responsible Principal who ensures compliance with the RICS
- Arrange PII and send details to the RICS
- Set up procedures for client money handling
- Obtain RICS approval for your firms complaints handling procedure
- Appoint a complaints handling officer
- Ensure ‘logo kit’ and ‘regulated by the RICS’ is on all practice material
- Ensure you have a locum
- Ensure your members meet their CPD requirements
- Ensure completion of the RICS Annual Return at the end of each year
What are the 10 principles of GAAP?
Regularity R C S P N P C P M U
Consistency
Sincerity
Permanence
Non-compensation
Prudence
Continuity
Periodicity
Materiality
Utmost good faith
When are audited accounts needed and why?
All companies require an audit except for small companies with :
- Turnover below £10.2m
- Total assets below £5.1m
- Under 50 employees
Required by law and provide assurance to shareholders
What are the 7 principles of Data Protection Act 2018? (AKA 7 principles of GDPR)
Lawfulness, fairness, transparency
Accuracy
Accountability
Purpose limitation
Storage limitation
Data minimisation
Integrity and confidentiality
8 individual rights under GDPR?
Right to Information
Right to Access
Right to Rectification
Right to Erasure
Right to Restrict Processing
Right to Data Portability
Right to Object
Right to Automated Decision Making
What valuations are Exceptions to the Red Book?
- If for internal purposes (for client to know market value of their property)
- If for agency work prior to acquisition or disposal instructions (EG advertise at price X and if it does well, we’ll up the price but if it is not getting much interest then we will lower the price)
- If for stautory function (where the Law tells us what to do)
- If acting as expert witness (EG if you can’t agree a rent review or lease renewal, then you would give an expert witness report in court - arbitrator or judge would tell you what to do, not the Red Book)
- If in negotiation or litigation
Can you name some valuations that are carried out for a Statutory Function?
- Lease renewal EG reporting on rent at lease renewal - see s34 of LL & T Act 1954 to see rent definition (court determines the level of rent)
- Rating EG if giving a rating valuation there will be legislation to follow
- Also compulsory purchase
- Leasehold enfranchisement (for residential) – statutory – Buying the freehold or getting a long leasehold extension
What are the main contents of the Terms of Engagement for a Valuation?
- Valuer - name
- Client - name
- Property - address
- Purpose of valuation
- Basis of value
- Valuation date
- Nature and extent of the valuer’s work - including investigations - and any limitations thereof - the extent of these
- Assumptions/special assumptions - if you don’t make planning enquiries then you need to make planning assumptions
- The Fee –
Name three situations that can adversely affect the Certainty of valuations.
- If there are very few or no comparables – an unusual property or one in a unique location
- If the valuer is unable to make full enquiries or investigations
- When there is market volatility such as during the beginning of the pandemic -
What costs did you deduct (are deducted) in your / a Residual Valuation?
- Demolition / site clean up fees
- Cost of construction (the building cost) -
- Fees for construction (architects, engineers, surveyors, environmental survey etc)
- Costs of finance
- Contingency to allow for fluctuations in these costs
- Agent and Legal fees on acquisition
- Fees and stamp duty land tax on aquisition when you buy the site (only on acquisition)
- developer’s profit
- Agent and Legal fees on disposal
What could statutory due diligence include for a valuation?
Asbestos register
Business rates / council tax
Contamination
EPC rating
Flooding
Planning history and compliance
Environmental matters
Equality act compliance
What would you include in a valuation report?
Client name
Date of valuation
Valuation purpose
Property details
Basis of value
Methods of Valuation
Status of valuer & competency
Currency
Investigations Undertaken
Assumptions / special assumptions
Departures
Valuation Calculations & Comparables
Valuers Conclusion
Terms of Engagement
Can you name VPS 1-5?
VPS 1 - Terms of Engagement
VPS 2- Inspections & investigation records
VPS 3 - Valuation Reports
VPS 4 - Basis of Value, assumptions and special assumptions
VPS 5 - Methods of value
How do you know if you are competent to undertake a valuation (or any work)?
SUKE
Skills - Do I have the right skills/qualifications
Understanding - Do I understand what is required
Knowledge - Do I have the required knowledge
Experience - Have I got the right level of experience
What can the enforcements agents seize from the tenant when using CRAR?
- Only goods belonging to the tenant (Not 3rd Party)
- ‘Tools of the trade’ with an aggregate value of up to £1,350 eg computers. The tenant must still be able to operate a business eg can’t remove the chairs people are sitting on from an office
- Only non perishable goods with a value not greater than the rent arrears owed
What are the 9 mandatory requirements in Service Charge Professional Statement?
Recover expenditure in line with lease terms
Recover no more than 100% of costs
Annual provide budgets and explanatory notes
Annually provide service charge accounts (showing actual figures)
Annually provide service charge apportionment schedule
Service charge money to be held in separate bank account
Interest must be credited to SC account
When acting for tenant, advise that if disputing payment then withold the amount in dispute
What are 12 mandatory requirements for members set out in RICS Professional Statement, Real Estate Management 3rd Edition 2016?
Conduct business in honest, fair, transparent manner
Carry out work with skill and due diligence
Ensure clients are provided with clear terms of engagement
Avoid conflict of interest, and when they arise deal with them openly and promptly
Do not discriminate
Ensure communications are fair, clear, timely and transparent
Ensure all advertising and marketing is honest
Ensure client money held in separate accounts
Ensure professional indemnity insurance in place
Ensure scope of obligations of work is provided to all parties
Give realistic assessment of buying/selling/rental price
Ensure all inspections and meetings are carried out in accordancce with client wishes
Name the tenancies to which the 1954 Act does not apply
- Agricultural holdings
- Mining Leases
- Residential Tenancies
- Tenancies created as a condition of employment
- Tenancies not exceeding 6 months unless a) there is a provision for extension or b) T has been in occupation for more than 12 months
What must a LL s25 notice contain?
- Details of the landlord
- Tenant details
- Date of the notice
- Date of termination of the lease
- If friendly, the terms of the new lease
- If hostile, the grounds why a new lease won’t be granted
Explain when tenant’s improvements are disregarded under Section 34 of the LL & T Act 1954?
If improvements were carried out within the last 21 years, or during the prior tenancy
Not all alternations are improvements - an improvement must add value
Note: not disregarded if they were lease obligation
What key information does surveying safely contain?
- Personal responsibilities for RICS members and firms
- Assessing hazards and risks
- Workplace health & safety
- Occupational hygiene and health
- Visiting premises and sites
- fire safety
- procurement and management of contractors
What does RIDDOR stand for, what is it and when was it introduced?
Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995.
- If an incident occurs and the member of staff is incapacitated for more than 7 days, the incident must be reported to HSE within 15 days from the date of the incident.
- Employers must keep a log book of all 3 day plus injuries
- Information should be kept in an accident book which must be stored for at least 3 years from the date of the previous injury
What are the 6 pack regulations under the H&S at Work Act 1974?
6 Pack of regulations (Very similiar to Surveying Safely:
Management of Health & Safety at Work Regulations 1999
Manual Handling Operations Regulations 1992
Health & Safety (Display Screen Equipment) Regulations 1992
Workplace (Health, Safety and Welfare) Regulations 1992
Provision and Use of Work Equipment Regulations 1998
Personal Protective Equipment 1992
What is the hierarchy of risk?
Elimination
Substitution
Engineering controls
Administrative controls
Personal protective equipment (PPE)
Assumptions in a RR?
The unit is fit to be occupied immediately
Property can be used for intended use
The unit has vacant possession
Let on Open Market by willing lessor to willing lessee
Tenant has satisfied lease obligations
Disregards in a RR?
Goodwill
Tenant’s occupation
Any improvements with LL permission
Any licenses including alcohol licenses
Sections 23-40 under the LL & T act 1954?
23: act applies to business tenancies
24: tenancies protected under act only to be terminated in accordance with act
25: Landlord’s notice to terminate
26: Tenant’s request for new tenancy
27: Tenant’s notice to quit
28: Agreement for new tenancy = original tenancy becomes unprotected
29: Timescales for application to court
30: Landlord’s grounds for opposing tenancy
31: Court will dismiss tenant application if s30 is successful
32: Court decides what property is comprised
33: Court power to order new tenancy for a term
34: Rent, assumptions and disregards
35: Other terms under new tenancy
36: Carrying out of order for new tenancy (order is binding)
37: Compensation where new tenancy not granted
38: Contracting out of S24-28
39: Saving for compulsory acquisitions
40: Duty to provide information
What is included / excluded in NIA?
Included:
Usable area, measured horizontally to IF
Skirting/ trunking
Atria with clear height above
Entrance halls
Notional Lift Lobbies
Kitchens
Ventilation/ heating grilles
Non structural lightweight internal partition walls
Excluded:
Interior walls & columns
Toilets / Cleaners Cupboards
Corridors / Circulation areas
Areas less than 1.5m in height
Permanent air conditioning
Lift rooms / Plant rooms
Stairwells / Permanent lift lobbies
What is included / excluded in IPMS 3?
Included:
Usable area, measured horizontally to IDF
Skirting/ trunking
Atria with clear height above
Entrance halls
Notional Lift Lobbies
Kitchens
Ventilation/ heating grilles
Interior walls & columns
Half the common wall
Areas less than 1.5m in height
Excluded:
Standard facilities:
Toilets / Cleaners Cupboards
Corridors / Circulation areas
Permanent air conditioning
Lift rooms / Plant rooms
Stairwells / Permanent lift lobbies
Diff between IPMS 3 and NIA?
Common walls in half: IPMS 3 yes NIA no
Internal walls and columns: IPMS 3 yes (but stated separately) NIA no
Areas less than 1.5m: IPMS 3 yes (but stated separately) NIA no
Passages between buildings: IPMS 3 (but stated separately) yes NIA no
Basic definitions of measurement bases?
IPMS 1: The sum of the areas of each floor level of a building measured to the outer perimeter of external construction features and reported on a component basis for each floor of a building.
IPMS 2: The sum of the areas of each floor level of an office / resi building measured to the internal dominant face and reported on a component basis for each floor of a building.
IPMS 3: The floor area available on an exclusive basis to an occupier, excluding standard facilities and shared circulation areas, reported by an occupier-by-occupier or floor-by-floor basis
IPMS 4: The sum of floor areas in a building to a finished surface, used for measuring part of a building.
GEA: The area of a building measured externally at each floor level
GIA The area of a building measured to the internal face of the perimeter walls
NIA: The usable area of a building measured to the internal face of the perimeter walls
Due diligence before any valuation?
Competence check
COI check
Check for good title
Inspect property
Check for environmental matters i.e contamination
Check the surrounding area (market conditions)
Planning enquiries
Check for alterations / improvements
Check the EPC
Check compliance with statutory H&S
Research with agents
