Mandatories Flashcards
If a client was going away for a year and gave you consent to pay professional fees and your own fees, how would you go about doing this?
Must ensure this is documented in clear Terms of Engagement (with any fees / expenses to be paid clearly detailed).
What is the amount required for Run-Off Cover?
Consumer Claims = a minimum of £1 million over a period six years.
Commercial Claims = “Adequate & Appropriate amount” for a minimum of 6 years.
Firms unable to obtain run off cover = apply for coverage to the RICS Run-off Pool.
What level of turnover do you as a firm need to apply for VAT?
A business must register for VAT when turnover in the preceeding year exceeds £85,000.
What accounts are required by Companies House each year?
COMPANY ACCOUNTS (aka audited accounts).
Legal requirement to have submitted year-end accounts that are publically available.
Submitted to Companies House each year and are audited by a Chartered Accountant.
What is the difference between Management Accounts and Company Accounts?
Management Accounts = Prepared for INTERNAL USE by a business and are not audited.
Company Accounts = Public. Legal requirement to have submitted year-end accounts that are PUBLICALLY AVAILABLE to companies house. These are AUDITED by a Chartered Accountant.
What would a set of Public limited company accounts include?
Chairman’s Statement
Independent Auditors’ Report (from the Chartered Accountant)
Income Statement (Profit & Loss account)
Statement of financial position (Balance Sheet)
Corporate Governance report
Remuneration Report
If I was to pick up your firm’s balance sheet - what is this and what are the two main headings on the balance sheet?
A balance sheet = A statement of a business’s financial position showing its ASSETS and LIABILITIES at a given date, usually at the end of the financial year.
A ‘SNAPSHOT’ showing what a company owns and owes.
Assets = Physical property, cash, investments. Things you get a future benefit from.
Liabilities = Borrowings, Overdrafts, Loans, Wages. The amount a business owes.
Why are cashflow forecasts beneficial in accounting?
Cash flow forecasts help predict seasonal fluctuations in your cash flows that could have uneven revenues throughout the year.
And to plan for periods of low cash flow and ensure you have sufficient cash available to meet your key obligations.
Why did you recommend a rental deposit in your case study?
Because they did not meet the market standard ‘Profits Test’ (3x3).
However, the last 2 years had shown significant profits.
I advised the client that requesting a 3-month rental deposit was justified, but recommended they seek professional accounting advice for further reassurance.
If you were to market a property on a joint agency basis, how would fees be set out between you and your joint agent?
Fees would be arranged on a pre-agreed basis, typically split 50:50.
For joint agency I have previously used 15% of the first year’s rent, ignoring any rent free period or other incentives. This would be split equally between both agents (7.5%).
What does Diversity & Inclusion mean to you?
Diversity & Inclusion means creating an inclusive environment where everybody feels equal.
UNCONSCIOUS BIAS is a key concept in this area - must ensure that these do not adversely prejudice people.
Diversty & Inclusion is also vital for the success of a business and ATTRACTING TOP TALENT into organisations.
If you were pulling together a team, how would you go about doing this? How would you decide leadership?
Comply with the Equality Act (2010).
I would want a blend of skillsets and ensure the team is DIVERSE & INCLUSIVE as this would lead to diversity fo thought when decision making.
Communication should be inclusive rather than discriminatory, and ensure all team members get involved.
Leadersip would be the person who embodies these characteristics (respecting, communicating, helping, encouraging, persuading, listening).
What section of the building regulations refers to sustainability?
Part L - Conservation of Fuel & Power.
What is the role of a Responsible Principal?
The Responsible Principal will ensure RICS professional, technical and ethical standards are applied and ENFORCED within the regulated firm.
Lead contact who will be responsible for all RICS communication.
What is the role of a Contact Officer?
Contact Officer (can also be known as responsible principal) will be the main liaison point between the Firm and RICS.
The Contact Officer will submit the Firm’s Annual Return.
What would you advise your client if there was Japanese Knotweed present? Can it be removed?
Japanese Knotweed is an INVASIVE PLANT which is hard to control, spreads quickly & is costly to eradicate.
A SPECIALIST COMPANY MUST remove and dispose of it - in accordance with the Environmental Protection Act (1990).
It must be disposed of legally - such as by using chemical treatment, digging it out and removing it from site to a LICENSED LANDFILL SITE (in accordance with the Environmental Protection Act, 1990).
Allowing it to spread is a criminal offence under the Wildlife & Countryside Act (1981). Magistrates Court can impose a max fine of £5,000 and/or max prison sentance of 6 months.
