Negligence,PII, Client Money, Own Practice

Question 1

What does Yianni v Edwin Evans (1981) establish?

Answer 1

Duty of care of valuer to mortgagee relying on valuation of residential property for borrowing

Question 2

What does Hope Capital Ltd Vs Alexander Reece Thompson LLP (2023) establish?

Answer 2

Purpose of valuation is central to the extent of a values duty of care

Question 3

Limitation Act 1980

Answer 3

6 years from from date of negligence 14A of the act states 3 year limit from knowledge of the omission with hard stop of 15 years

Question 4

Name ways to avoid negligence

Answer 4

Clearly understand the client’s objectives and confirm precise instructions in writing in the terms of engagement
Ensure you are competent to undertake the
instruction
• Undertake the work in accordance with the relevant RICS advice, to include Professional Standards and Practice information
• Make detailed file notes and take photographs
• Keep up to date with market knowledge and legislation and undertake and record your
CPD
• Cap the professional liability excess on your PlI policy in the terms of engagement

Question 5

Why is PII important?

Answer 5

Protect clients, surveyors and third parties against negligence claims when there is a duty of care breached and a claim for damages arises

Question 6

Who can underwrite PII

Answer 6

RICS approved insurers found on website

Question 7

Minimum requirements based on turnover for PII?

Answer 7

<£100,000 = £250,000
£100.001 - £200,000 = £500,000
£200,001 - more = £1,000,000

Question 8

What should a firm do with their PII certificate?

Answer 8

Shared to RICS of an annual basis

Question 9

What is run off cover?

Answer 9

Upon cessation of trading

• consumer claims - a minumum of £1m cover is required over 6 years
• commercial claims it is more discretionary and in case by case basis
• if unable to obtain run off cover - can apply to the RICS run off pool

Question 10

Is PII required for pro bono work?

Answer 10

Yes

Question 11

What advice is contained in RICS Practice Information - Risk Liability and Insurance (2021)

Answer 11

• recommends agreeing a cap with client to manage risks
• be aware of third party reliance and make it clear that work can only be relied upon by intended party

Question 12

What are the 6 main areas of good practice set out by RICS professional standard: client money handling (2019)

Answer 12

1. Holding client money
2. Providing information to clients
3. Receipts of client money
4. Payments from client accounts
5. Accounting records and controls
6. Compliance

Question 13

What does RICS clients money protection scheme do?

Answer 13

In instances where a firm can’t pay clients money they will step in in certain scenarios

Question 14

What two areas of compliance are need for starting/closing a practice?

Answer 14

1- RICS compliance
2- Statutory compliance

Question 15

Examples of RICS compliance for starting a new firm?

Answer 15

• inform RICS by completing a Firm details form
• appoint responsible principal
• register with RICS for regulation of the firm
• arrange PII and send details to RICS
• set up procedure for client money handling
• register for Valuer registration scheme if necessary
• obtain RICS approval for CHP
• set up complaints log
• appoint complaints handling office (external if sole practitioner)
• use logo kit from RICS
• plan for succession of business
• ensure CPD is logged with RICS
• ensure completion of RICS annual return each year