Starting, Closing a Practice & CPD

Question 1

What would you do if you were setting up your own firm?

Answer 1

• Inform the RICS of your intentions
• Appoint a Contact Officer – RICS Communication
• Obtain PII cover – send details to RICS
• Obtain Employer’s liability insurance
• Set up financial accounts inc. Client Money Protection Scheme
• Registered Valuer Scheme – if valuing
• Prepare a complaints handling procedure / complaints log / appoint complaints handling officer
• Obtain a logo kit from the RICS
• CPD Management System
• Staff training – Rules of Conduct
• Ensure completion of annual accounts

Question 2

When is a firm eligible to register?

Answer 2

1. If undertaking surveying services to public

2. If 25% or more of principles are RICS members

Question 3

When is a firm required to be regulated (mandatory)?

Answer 3

1. If undertaking surveying services to public
2. In UK
3. If 50% or more of directors are RICS members

Question 4

What is the statutory compliance for setting up a new practice?

Answer 4

• Requirement to disclose business name
• Disability discrimination compliance
• Financial services compliance
• Bribery act 2010 compliance
• Appoint a Money Laundering Officer and report annual to HMRC
• Health and Safety compliance
• Asbestos register
• Fire safety compliance
• Register for data protection
• Set up estate agency compliance – Estate agents act 1979, Consumer Protection Regulations 2008, Misrepresentation Act 1967.
• Inform HMRC for VAT and Tax registration.
• Ensure compliance with current employment law
• Ensure insurance complaint for employer and public liability

Question 5

What is the RICS compliance for closing a practice?

Answer 5

• Agree the closure date
• Seek advice if the firm is insolvent
• Inform staff and deal with any redundancies, ensuring you direct them to Government support if necessary
• Inform clients and let them know if another firm could take over ongoing work (at the discretion of the client)
• Deal with any outstanding money in client accounts (in line with the RICS Professional Statement Client Money Handling)
• Notify your professional indemnity insurer to arrange run-off cover (on a claims made basis)
• Make arrangements relating to hard copy and electronic files and keep them for as long as necessary (up to 15 years under the Limitation Act 1980). Any documents not required should be destroyed confidentially
• Notify former clients to return any leases or other original documents being held for them
• Inform RICS and fill in the firm deregistration form
• Set up a system whereby anyone trying to contact you after closing is notified that the firm is closed, e.g., notice of closure on any physical offices, voicemail, closure notice on the firm’s website, amended notepaper to confirm the firm is not practising, emergency contact number and a mail redirection to a home address
• Contact any other parties who need to be told about the firm closure, e.g., other insurance provider, accountant, solicitor, HMRC, bank and Information Commissioner (for data protection purposes)

Question 6

What are the RICS requirements for CPD?

Answer 6

• Members shall undertake a minimum of 20 hours CPD per annum
• At least 10 hours must comprise formal CPD
• All members must maintain a relevant and current understanding of RICS Professional and Ethical Standards during a rolling 3-year period
• All members must record CPD via RICS website

Question 7

What is a phoenix firm?

Answer 7

A phoenix firm is where an RICS regulated firm closes in a disorderly way and then re-registers quickly as a new trading entity. This typically relates to firms with 1 to 4 partners and happens where a firm becomes insolvent or closes without having sufficient run-off cover in place.