Mandatories Flashcards

1
Q

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?

A

Must ensure this is documented in clear Terms of Engagement (with any fees / expenses to be paid clearly detailed).

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2
Q

What is the amount required for Run-Off Cover?

A

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.

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3
Q

What level of turnover do you as a firm need to apply for VAT?

A

A business must register for VAT when turnover in the preceeding year exceeds £85,000.

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4
Q

What accounts are required by Companies House each year?

A

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.

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5
Q

What is the difference between Management Accounts and Company Accounts?

A

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.

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6
Q

What would a set of Public limited company accounts include?

A

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

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7
Q

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

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.

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8
Q

Why are cashflow forecasts beneficial in accounting?

A

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.

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9
Q

What does Diversity & Inclusion mean to you?

A

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.

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10
Q

If you were pulling together a team, how would you go about doing this? How would you decide leadership?

A

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).

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11
Q

What section of the building regulations refers to sustainability?

A

Part L - Conservation of Fuel & Power.

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12
Q

What is the role of a Responsible Principal?

A

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.

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13
Q

What is the role of a Contact Officer?

A

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.

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14
Q

What would you advise your client if there was Japanese Knotweed present? Can it be removed?

A

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.

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15
Q

What man made feature typically gives rise to Japanese Knotweed?

A

Railway lines.

It was introduced to the UK because railway companies used it to sure up the banks of railway tracks as it is incredibly effective at making soil not slip.

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16
Q

What does Japanese Knotweed look like?

A

Purple/Green hollow stem with Green leaves.

Grows all year round, grows fast.

17
Q

How would the presence of Japanese Knotweed impact on a valuation?

A

Of great concern to property lenders who may refuse a loan if it is present or nearby to a property.

18
Q

Are you aware of any case law of Japanese Knotweed?

A

Williams vs Network Rail Infrastructure (2018).

Network Rail was liable for the cost of treating the JK plus damages for the loss of use and ‘enjoyment’ of their neighbour’s property - even after the invasive plant was treated.

19
Q

When inspecting a warehouse built in the 1950’s, what deleterious material would you have regard for?

A

A deleterious material = degrades over time.

RAAC (Reinforced Autoclaved Aerated Concrete).

Form of concrete used in construction during the 1950s - mainly used in roofs during (1950s - 1990s).

Estimated lifespan of 30 years - it’s topical because it’s not as durable as other concrete building materials. It can DEGRADE from water ingress from leaking roofs.

20
Q

Where is the asbestos register filed? Who is responsible for it?

A

The DUTY HOLDER must produce an asbestos register.

This must be kept on site and made available to all relevant parties who might disturb it.

The Duty Holder must regularly review the asbestor register (HSE recommend 6 monthly).

21
Q

Where would you find asbestos?

A

INSULATING material in buildings constructed pre-2000.

You are most likely to find asbestos:

  • SPRAY COATINGS to columns and steel beams.
  • Asbestos cement WATER TANKS.
  • Lagging on BOILERS and pipework.
  • Loose fill insulation.
  • Textured decorating coatings (e.g. ARTEX).
  • Asbestos cement panels (roof covering / wall cladding).
  • Toilet seat & cistern.
22
Q

Did you analyse the offers received on your letting on a net effective basis? How did you do this?

A

I established the Headline Rent first so that I could devalue it to produce a Net Effective Rent.

I used the STRAIGHT LINE BASIS in Excel until the next lease event.

To do this, I AGGREGATED the cost of all rental payments (to include rent-free / any other incentives) and divided this by the term certain.

I deducted a 3-month fitting out period from the rent-free before devaluing (unless the space was already fitted).

23
Q

If you had an asset that was not income producing liked a power station, how could you value this?

A

Depreciated Replacement Cost.

DRC is used when a specialist, unique asset that does not produce an income is to be valued.

Used for ‘owner-occupied’ property rarely sold on the open market.

  1. Value the land (site value) in its existing use (assuming planning permission exists).
  2. Add current cost of replacing the building with a modern equivalent (estimated using BCIS). Then depreciate based on age & obsolescence (functional, technical and economic).
24
Q

If you had a multi-let property like in your case study, how could you value this?

A

Using the Investment Method.

Capitalising the income stream to produce a capital value.

25
Q

What is included in a set of public limited company accounts?

A

Chairman’s statement

Independent auditor’s report

Income Statement (Profit & Loss account)

Statement of financial position (Balance Sheet)

Corporate Governance Report

26
Q

With regards to GDPR, how do you ensure information is stored securely?

A

Ensuring data is stored in PASSWORD PROTECTED folders with ‘Code Names’ where necessary.

Firewalls

Disk encryption

Any paper copies are kept in locked cupboards, main reception security 24-hours a day.

Regular back ups off site + Cloud based storage.

27
Q

What is an EPC and when is one required?

A

Energy Performance Certificate (EPC).

EPCs are required:

For all commercial buildings over 50 sq m.

When it is newly built/sold/leased for a term of more than 6 months (and less than 99 years)

As of April 2023 - all existing leases on commercial buildings require and EPC as well as new leases. Must be minimum ‘E’ or above.

When it is newly refurbished and the Heating/Ventillation/Air Conditioning has been altered.

28
Q

When is a building exempt from having an EPC?

A

Listed Buildings

Religious Buildings + Places of Worship

Temporary Buildings

Buildings with no heating

Buildings due to be demolished / redeveloped within 2 years

Stand alone buildings with a total floor alrea of less than 50 sq m (circa 500 sq ft)

29
Q

How often do you review client money?

A

At least MONTHLY.

Regular bank reconcilliation checking that payments recieved are transferred to the bank account and expenditure records are checked at least monthly.

30
Q

What types of Dispute Resolution are there?

A
  1. NEGOTIATION (the problem-solving efforts of the parties themselves).
  2. MEDIATION (a third-party intervention which does not bind the parties to a decision - but assists them to resolve difficulties).
  3. ADJUDICATIVE PROCESS (An outcome is determined by a third party, such as LITIGATION or ARBITRATION).
31
Q

What is Alternative Dispute Resolution (ADR) and what are the benefits of ADR?

A

These are dispute resolution processes that fall OUTSIDE of the scope of court.

Benefits:

SPEED (taking less time than lengthy court proceedings)

INFORMAL (outside a court setting)

Greater opportunity for negotiation

CHEAPER (less money on professional fees/litigation).

Outcome can be made by a Surveyor rather than a Judge.

Confidentiality.

32
Q

What are the various forms of Alternative Dispute Resolution (ADR) used in the UK?

A
  1. MEDIATION (neutral mediator).
  2. ARBITRATION
  3. INDEPENDENT EXPERT determination
33
Q

What is your firm’s Complaints Handling Procedure?

A

(5-10-10-5)

Contact Head of Division

Acknowledge receipt of the complaint within 5 days.

Within 10 working days, the Head of Division will inform the complainant about an outcome.

If disatisfied, Managing Partner can conduct a separate review and get in contact within 10 working days.

If still unsatisfied, an independent redress system will be provided within a further 5 days - we use the Property Ombudsman (Residential) and the RICS Dispute Resolution Service (Commercial).

34
Q

What are the timscales used for business planning?

A

Short, Medium and Long Term

35
Q

How would you go about making a business plan?

A

SWOT Analysis

Key factors to include in a busines plan include an analysis of the opportunities and risks of the business, and the resources required to service clients.