RICS Core Material Flashcards
Name some keys things you should/shouldn’t do within fee negotiations
-Fees should be market based and agreed on an ad-hoc basis with clients
-Firms should avoid price fixing
-You can enter into fee negotiations with prospective clients after submitting your initial fee proposal as long as you act in a professional manner
-Shouldn’t be seen to undercut other firms
-Referral fees should also be considered in the context of the Bribery Act 2010 & Ethical Standards 2015
Why are Terms of Engagement required?
States in writing the clients agreement to the proposed fee basis, payment of expenses (and how calculated) & that a copy of the firms complaints handling procedure is available upon request.
What are the three steps to follow in regards to TofE
- Check professional competent
- No COI or personal interests
- Confirm TofE in writing and get written approval from the client before you start work on the instruction
What right do consumers have under the Consumer Rights Act 2015?
Allows a cooling off period of 14 days from the date of the agreement
When would it be appropriate to decline an instruction?
- If you are not competent to undertake the work - outside your limitations
- You do not have sufficient facts on the issues
- The proposed client will not sign TofEs and/or complete AML checks.
- There is a COI or personal interest
- Professional Indemnity Insurance (PII) liability cap cannot be agreed
- The advice is for a friend or on a pro bono basis & your PII will not cover work carried out on a personal basis.
- Potential client is included in the UK Governments sanctions lists.
- Would you be content for your actions to be made public.
Define a Conflict of Interest and examples
When a member of firm’s independence and impartiality is threatened due to the existence of a conflict between two clients.
-Any financial interest
-A personal interest
-Commercial relationships
-Acting on both sides of a transaction
Define conflict avoidance
Conflict avoidance is when you do not accept the instruction
Define conflict management
When the instruction is accepted and steps are agreed and put in place to manage the conflict, such as an information/ethical barrier, with the written agreement of all parties
Define the mandatory statement that covers conflict of interest
RICS Global Professional Statement on Conflicts of Interests, 2017. Came into effect on the 1st Jan 2018.
States;
-Member must not advise/represent a client where doing so would involve a CofI or an interest of significant risk of a CoI, other than where all those who are or maybe affected have provided their informed consent.
-All conflicts must be managed in accordance with the professional statement
-Every RICS firm must have a system in place for the size of their firm
-Every RICS firm must keep records
When can you get informed consent?
Where the RICS member or regulated firm is satisfied that proceeding despite a CoI is in the interests of all of those who are or may be affected & is not prohibited by law (RICS, 2017).
-Has to be in writing
Name the three types of CoI’s
- Party Conflict - work on the same or related instruction for two different parties
- Own Interest Conflict - A personal interest
- Confidential Information Conflict - Work between two parties that is confidential
What are the three steps you as the surveyor should take when dealing with a conflict of interest
- Conflict avoidance - Consider if conflict is irresolvable because impartiality is compromised & should be avoid or can it be properly managed.
- Written advice to both parties - In writing disclose nature of the conflict, circumstances surrounding and your proposal for how the firm intends to deal with it, be clear, request written confirmation from both parties of their informed consent.
- Conflict management - With written consent, you then sent up a information barrier as agreed with the clients
What are some of the aspects included within an ethical barrier in terms of a CoI
-Robust enough as to offer no chance of info passing between the two parties
-The surveyors acting on the two sides must be different & they must be physically separated, ideally in different buildings with different support staff
-A clear audit trail should be kept
What does S.21 of Estate Agents Act 1979 state?
Declare facts promptly and in writing before you accept the instruction
How long must you hold files for after closing a job?
A minimum of 6 years
Explain how you would deal with a complaint from someone who you owed a duty of care to.
Who does a duty of care apply to?
To clients and third parties including pro bono (market appraisals) Burgess V Lejonvarn (2020) owed in tort
What is included in the Limitation Act 1980?
Current limitation periods for negligence;
-Contract - 6yrs from the breach of contract or omission, S14 provides alternative limitation period of 3yrs from the date of knowledge subject to the 15yr long-stop
What needs to have occurred in order for a negligence claim to be made?
When a duty of care is breached -> loss -> damages (negligence claim)
Name some key facts about complaints handling procedures.
-RICS Guidance note on complaints handling, 2016
-A firms CHP must be approved by the RICS
-Have to notify your PII insurance asap if there could be complaint claim
-Details of CHP should be issued at the same time as Terms of Business
-Complaints log must be kept & maintained
-An RICS approved Alternative Dispute Resolution within CHP
Name the details of the two stages standard minimum procedures of CHP
Stage one;
-Details of CHP issued, when a valid complaint received who the firm owes a duty of care
-Procedure must be quick, clear, transparent & impartiality implemented
-Details of the complaints handling officer must be stated
-Complaint must be made in writing
-Procedures & strict timescales to be followed for the investigation of the complaint should be recorded
-Complaint should be acknowledged within 7 days & investigated within 28 days
Stage Two;
-If complainant isn’t happy with the review, second step is to use a independent redress scheme that the firm has chosen
-Name of appropriate IRS must be stated to complainant
Name four requirements of Continue professional development
- Members must maintain at least 20hrs of CPD/annum
- At least 10 hrs must be formal
- All members must maintain a relevant & current understanding of RICS Professional & Ethical Standards every three years rolling
- All members must record their CPD using RICS CPD mangement system
Define formal and informal CPD
Formal:
-Includes All forms of structured learning that has clear objectives and outcomes
Informal:
-includes soft manage learning what is relevant or related to your professional role
Why are firms/sole practitioners required to have Professional Indemnity Insurance (PII)?
-To protect clients, surveyors and third parties against negligence claims why duty of care is breached
-All members must ensure adequate and appropriate level of insurance in place
-All polices must be underwritten by an RICS approved insure
-Certificate of insurance must be sent to the RICS yearly
Why do you need run off cover?
Because even if you retire/close the practice you can have a claim brought against you up to six years after the hobby or three years from when the claim was actioned.
What are the rules that govern clients money
-Rules of Conduct for firms
-RICS Professional Statement ‘Client Money Handling’ 1st edition 2019
Name the six main areas of good practice set out within RICS Profess Statement Clients Money Handling 1st ed 2019 .
Holding client money, providing info to clients, receipts of client money, payments from client accounts, accounting records & controls, compliance.
Name some key procedure when handling clients money as set out by RICS Profes Statement Client Money Handling 1st ed 2019
-Client accounts must be kept separately & clearly identifiable
-Word ‘client’ must be on the account
-Money must be available to the client immediately
-Interest payments must be agreed with the client
-Bank account & expenditure must be checked monthly
-Accurate records kept with running balance
-Annual audit reporting to certified accountant employed by RICS (they generally inspect every 3yrs)
-Cash transactions must be properly recorded
-Signatories must be agreed, two signatures should be required
-All firms handling clients money must display their procedures doc’s on website
What is the RICS Clients Money Protection Scheme
Made for claims from clients, last resort protection where RICS regulated firm can’t repay clients money.
-Limits on the scheme
-Split into two;
Clients money protection for surveying services & client money protection for residential agents
State the things you must do when starting a new practice
-Inform RICS of the new practice by filling out firm detail form
-Appoint Responsible principle for RICS communications & Complaints handling officer (in another firm if SP)
-Register with RICS for regu of the firm
-Arrange PII & send deets to RICS
-Set up procedures to address Client money handling
-Register for RICS Valuer registration scheme
-Get RICS approval for CHP & set up complaints log
-Obtain logo kit from RICS
-Plan for succession if SP
-Log CPD
-Set up staff training plan
-Complete RICS annual return
Name the statutory compliance required when starting a new practice
-Disclose business name
-Disability discrimination compliance, Equality Act 2012
-Financial service & market act, 2000, compliance. Financial Services Act 2012
-Bribery Act, 2010
-Appoint money laundering reporting officer
-H&S Act, 1974 compliance
-Asbestos register, 2012
-Firer Safety compliance, 2005
-Data protection
-Estate agency compliance, Estate agents act 1979
-Misrepresentation Act, 1967
-Inform HMRC for VAT
-Compliance with current employment law
-Insure
Name the two key data protection acts
General Data Protection Regulation, 2016
Data Protection Act, 2018
What do you need to do to be FRICS?
Be a member for a lest five years, have contributed to the RICS
