Stock Answers Flashcards
1
Q
What would you include in Terms of Engagement?
A
- Fees, including any commission received
- Payment of expenses
- Calculation of expenses and disbursements
- Firm’s complaints handling procedure.
2
Q
How would you outline a fee for a client?
A
- Calculated: Time Basis, Sales %
- Fixed: Job Specific, Cost
3
Q
What does confidentiality apply to ?
A
Clients affairs
Advice given to clients
4
Q
What are the principles of good practice for data handling?
A
- fairly and lawfully processed
- processed for limited purposes
- adequate, relevant and not excessive
- accurate
- not kept longer than necessary
- processed in accordance with the data subject’s rights
- secure and
- not transferred to any countries without adequate protection.
5
Q
How do you handle confidential information?
A
Statutory request - seek legal advice
Non-Stat - Seek written confirmation/permission
6
Q
What should be included in a Complaints Handling Procedure?
A
- How/where to send complaints (Written /Complaints Handler)
- An alternative dispute resolution (ADR) mechanism that is approved by the Standards and Regulation Board
- Free access to a Redress Scheme
- Timescales
7
Q
How can you mitigate against conflicts and disputes?
A
- Diligent contract drafting
- Risk analysis (Traffic Lights/ Risk Matrix- prob x severity)
- Manage expectations, clear communication (EWS)
- Transparent contract negotiation
- Good record keeping
8
Q
What is ADR?
A
*Alternative Dispute Resolution
- Processes & techniques falling outside the scope of court litigation for dispute resolution
- UK: Mediation, Arbitration, I Expert (for me)
(also: adjudication, early neutral evaluation, expert witness, advocate)
9
Q
What is Mediation?
A
A neutral who facilitates a confidential conversation to explore a solution between parties
*Non-binding / informal / ‘without prejudice’
10
Q
What is Arbitration?
A
A specialist is appointed to make an award, MAY invite a hearing or written representations.
*Binding / confidential solution / can be sued for negligence on a point of law
11
Q
What is Expert Determination?
A
An expert is appointed to make a binding determination based on their own experience and evidence provided.
Speedy / Specialist
12
Q
What is the difference in Expert Determination & Arbitration
A
Award / Determination
E - Governed by experience and evidence
A- Governed by legislation
E - Experience = Any value
A - Usually a value between the two parties +costs
E - Sued for negligence
A - Decision can be overruled in court of law
13
Q
What is a conflict of interest?
A
An instance where a member or a firms independence or impartiality is threatened.
14
Q
How can you manage a conflict?
A
- Outline facts & proposal to manage conflict
- Advise they may wish to obtain independent advice
- Obtain written informed consent
15
Q
What types of conflict are there?
A
Party Conflict (same instruction)
Own Interest Conflict (Personal Interest)
Confidential Information Conflict (Information between separate parties)
16
Q
What can a conflict management proposal include?
A
- Information/ Ethical Barrier
- No dual agency
17
Q
How would you implement an information barrier?
A
- ‘Reasonable steps’ must be taken
- Surveyors operating in separate offices / floor
- Store data securely
- Use different PA & support teams
- Keep audit trail
18
Q
What is the RICS Dispute Resolution Service?
What services are available to your industry?
A
Dispute resolution and avoidance services provided by RICS:
- Appointment of resolvers
- Panel of resolvers
- Training & Qualifications
My industry - The Property Ombudsman (free to consumers)
19
Q
How would you negotiate with another party & an example?
A
Newton Close
- Prepare
- Clarify goals
- Push for win-win
- Know when to walk away
20
Q
Are you aware of independent experts and expert witnesses?
A
They have a duty of care to the courts
Practice Statement 4th ed. - Mandatory
21
Q
Who is the president and what are their aims?
A
Kath Fontana
-Social Impact / Technology (BIM) / Diversity
22
Q
How do you become a Fellow?
A
-£250 fee
-Submit an application with a personal statement & 3rd-party evidence
-Statement must demonstrate 4 key areas;
Champion, Expert, Influence, Role Model
23
Q
What other groups are within the RICS?
A
Lionheart - Independent chairty/ benevolent fund (grants, counselling, advise & information)
Matrics - Networking, CPD, Knowledge share - young professionals & recently qualified
24
Q
What is the governance structure of the RICS
A
Governing Council (Strategic Direction)
Standards & Regulation Board
Management Board
Audit Committee
A few subcommittees and regional boards
25
Outline the hierarchy of RICS documents.
International standards & Professional Statement - Mandatory
Code of Practice - Both
Guidance Note - Best Practice (think negligence)
Information paper, insight, marker report, consumer guide, research
26
How many professional groups and some examples
18 - QS & Cons, BS, PM, P&D
27
What is the role of professional groups?
Best practice guidance
CPD, networking & training
Setting assessment standards
Research to improve profession
28
What is the Royal Charter?
Document provided by Monarch & Privy Council enabling self-governance of the RICS.
Set at the incorporation of RICS 1881
'usefulness of the profession for the public advantage'
29
What are the Bye-Laws & Regulations?
B-L - Local laws specific to members and firms
R - Outlines greater detail of the Bye-Laws, these are approved by Governing Council
Bye-Law Examples; 2-Membership Classes, 5-Funds (Governing Council given the power to set fees)
30
What is the Carsberg report, what was the result?
A review commissioned by RICS and 2 other bodies which highlighted the voluntary regulation does not provide sufficient support to the public
Led to RoC for Firms, Revision of Rules, Intro a Conduct Board
31
What is the importance of Merrett v Babb?
| 2001
This is case law underpinning the need to have sufficient runoff cover.
When the valuer stopped working for a wound up company a negligence claim was successful and recovered losses from their personal assets
32
How has the RICS reacted to Grenfell?
- Min wording to PII (4-storeys)
- Training provision to increase number of EWS assessors (300/12,000)
- GN on valuation of tall buildings
33
Are you aware of the external review of the RICS?
Independent QC (Alison Levitt) will outline the events that transpired in 2018/19 and provide any recommendations
Will ensure due process was followed, following a condemning report by BDO highlighting risk to governance resilience (unknown events/ unidentified fraud) - report was not shared out of audit
34
Are you aware of Defining Our Future?
Surveys & Roundtables obtaining feedback on the role of the RICS in 2021 and beyond
(8 strategic themes; APC, member satisfaction, future)
Will be fed back to Governing Council in May & will update (where necc) Business Plan in November
35
Can you tell me about any updates to Ethics?
Consulting on consolidating RoC & Ethics to only 5 Rules w/example behaviours
36
Which Rules of Conduct resonate with you the most?
Service: Surveyors have a duty and power of technical knowledge. Service duty to clients (years of training)
37
Which of the Ethics resonate with you the most?
Integrity: cannot lose trust of public / society is pushing for more transparency (2008/ Occupy / BLM)
38
What is your opinion of the RICS?
150+ Years is impressive
Like the focus on protecting the consumer
Important role as a thought leader going forward (sus)
39
How have you engaged with the RICS
- RICS Inspire (STEM/Construction ambassador)
- Defining our future survey & roundtable
- Diversity panel
40
Can you demonstrate any of the global ethics standards?
Integrity - 'Newton Close'
41
How would you start an RICS firm?
* Inform RICS via Details Form
* Appoint Responsible Principle & Contact Officer
* Staff training plan
* Approval CHP (Complaints officer / Log)
* Set up procedure for handling clients money
* Arrange & send details of PII
* Succession Plan (Locum)
* Register w/ Companies House
* Pay data fee to ICO
* Compliance w/employment law (pension/wage/hours)
42
What are the benefits of being regulation?
```
C Confidence (to clients, regulated by RICS)
P Professionalism (clear, impartial, expert advice)
S Security (Redress/PII/CHP)
```
43
What is included in an annual return?
```
Type of Business (&staff details)
Nature of Client(s)
Statutory regulated activities (financial services)
PII Details
Complaints Procedure & Log
Do you handle client money?
```
44
What checks would you make prior to a new instruction?
CIT
Professionally Compliant?
No conflict or personal Interest
Confirm ToE (Fees/Expenses/Complaints)
45
What is the best practice for handling clients money?
Accounts must be separate & clearly identifiable
Include 'Client' in name
Always in credit with interest treatment agreed
Regular reconciliations & Annual audit by Chartered Accountant
*Client Money Protection Scheme - where firms cannot repay
46
What are the key elements required in obtaining and running a PII policy?
- Must be underwritten by RICS approved insurer
- 'Claims Made' basis (no matter timing)
- Cover to past and present employees
+Run off cover must be adequate & appropriate
+Common practice to cap liabilities
+Notify insurer as soon as possible
47
What is run off cover & how long do you need?
PII for when you cease trading (M v B)
Must be 'adequate and appropriate'
Consumer claims 6yrs, £1m (aggregate)
Commercial claims recommend 15 yrs ('A&A')
*If unable to obtain can apply to RICS run-off provider
48
Who deals with RICS disciplinary action?
| Bonus: Common breaches
Head of Regulation
Regulatory Tribunal
Appeal panel (50% panel lay members)
CPD / Professional Behaviour / Client Money
49
What disciplinary measures are available to a panel?
```
Issue compliance order
Issue fine
Impose condition on membership
Expulsion of membership or firm removed
Publish result online, Modus & local newspaper
```
50
What are MEES and when do they apply?
Minimum Energy Efficiency Standards
Applies to all property let & sold, must have an EPC rating of E
Commercial buildings have until April 2023 till it applies
51
What is an easement?
One owners right over anothers land (right of way)
52
What is an covenant?
An obligation or restriction over the use of a property
53
What are the principles of the financial viability in planning GN 2021?
- Sets out guidance financial viability assessments (requirement) in the plan-making and decision taking process
- This allows local authorities to set out planning policies that work within their plan reducing the need to do FVAs post-adoption
- System allows a L/O a return of EUV +a premium (BLV) & developers a return between 15-20% (PPG)
- LPAs create their policies based on fictional typologies that reflect their locality
- This aligns more with the PPG
54
What are the associated risks & implications of asbestos ?
Inhalation of fibres that can get into the lungs causing asbestosis or lung cancer (usually unknown till 20 years later)
5,000 deaths a year
55
When would you think you might be at risk of asbestos exposure?
- Buildings built & refurbished pre-2000
- Common ACM asbestos containing materials (Bathtubs, Pipe lagging, Cement, Concrete & Insulation AIB)
- Cannot be smelt or seen
56
What types of asbestos are are there and how would you treat it?
What types of survey are there?
Blue Brown White
Capped, Sealed or Removed by a HSE licensed contractor
Management survey
Refurbishment and Demolition Asbestos Survey
57
Can you undertake a red book valuation?
Yes, it must only be for internal purposes, marked as a draft and must highlight any revisions moving forward
58
What valuation approaches are there?
CIM - Cost Income Market
59
When do valuations need to be compliant with the Red Book?
Are there any exceptions?
Always - Mandatory for valuations
1. Advice during a negotiation or litigation
2. Valuations for statutory purposes (but not tax)
3. Internal purposes (without liability)
4. Report produce as part of agency/brokerage work in anticipation of receiving instructions (not a purchase report)
5. Valuation as an expert witness
60
What is informal and formal CPD?
Formal CPD has a learning objective
Informal CPD is self managed learning
CPD Decision Tree / Annexe A (examples)
61
What are the bribery offences in the Bribery Act?
1 Offering a bribe
2 Receiving a bribe
3 Bribing a foreign public official
4 Failing to prevent a bribe
62
What is an overage?
| Why would you use one?
A pre-agreed profit share w/landowner. Either planning or sales overage.
Provides L/O security on profits over and above expected levels
(Maidstone any increase in Dev area = attenuation)
63
What is data?
Units of information that can be collected
| E.G House Price or Demographic Data
64
What insurances might a business need to put in place?
```
Public liability
Buildings insurance
Contents insurance
Employers’ liability cover
Directors and officers cover
Business interruption insurance
```
65
Define the following; Price, Value, Cost & Worth
Price - amount offered/paid for an asset
Value - *estimate* of price when an asset is sold on the market
Cost - amount required to acquire an asset
Worth - amount a specific investor is prepared pay to pay based on their objectives/benchmarks
*This is important when undertaking any valuation to ensure you ESTABLISH THIS FIRST
66
Calculate the capital value of an asset which has a passing rent of £10,000/pa with a yield of 4%?
Other YPs?
YP - 100/4 = 25
Total -£250,000
5% - 20
10% - 100
67
How can you calculate the yield of an asset?
Income or Capital Value?
income/capital value *100
Capital Value= income * YP (100/Yield)
Income = Capital Value * Yield (Yield/100)
*Write it out / take your time
68
What's the equivalent, initial and all risks yield?
Example yields in property
Finance rates in appraisals?
Equivalent - avg yield between the term & reversionary rates
Initial - Current yield at the passing rent/price
ARY - fully let asset rate when all risks and prospects have been accounted for
Prime Retail 6.5%, Bond Street 2.75%, Shopping C 8-10%
LDN Prime office 4% SE Town Off 5.25% Prime Logistics/Industrial 4%
3-4% above base rate (0.1%), LIBOR (0.9%)/SONIA, 10yr GILTs 0.79%
69
What are hope & marriage value?
Hope - The expectation that a future land value will change due to a change in circumstance (e.g. planning permission)
Marriage - The value created from merging of interest (can be done 50:50 or pro-rata)
70
What do you understand by STC and WP?
Subject to contract - useful designation acknowledging the parties are still negotiating contracts
Without Prejudice - whether discussing orally or n writing, this prevents discussions/negotiations from being used against either party in court later. Encouraging negotiation out of court
71
What types of appeal are available in planning?
Don't forget JR period?
PINS considers your evidence & other stakeholders
1. Written Representations - common; easy, quick and cheap
2. Informal Hearing - PINS will hold discussion with all parties present
3. Inquiry - Cross-Examination of various parties. Large, complex cases
JR 6 weeks on legalities of determination
72
What can you find in an option agreement?
Vendor / Purchaser
Property (Title and/or Plan)
Min Price & Land Price (i.e. Discount if any)
Dev Obligations (minimise infra & S106 Costs, Promote, L/O Updates)
L/O Obligations (not to object to PA, poss continue farming?)
Option Term / Premium / Term Extension
Payment Terms (deferment)
Overage (Planning or Sales)
73
Who policies MEES and which penalties may apply?
Policed by Local Authority
Commercial Property, Greater of:
Less than 3Mos £5,000 or 10% of RV (Max £50,000)
More than 3Mos £10,000 or 20% of RV (Max £150,000)
Residential
Less than 3Mos £2,000
More than 3Mos £4,000
74
Can you outline the stages of the Ethics Decision Tree?
```
Sufficient facts?
Legal?
In line with Ethics Standards?
Consulted others?
Clear reasoning for your decision?
Content if actions made public?
```
75
What is a Bribe?
The offer, solicitation or receipt of something of value in exchange for a commercial advantage
76
How does IPMS differ from the Code of Measuring Practice?
-IDF & Limited use areas included (compartment)
IPMS 3 (Offices) - Similar to NIA
- No longer exclude internal columns
- Party wall centre line
- Balconies are included where client has exclusive use
IPMS 3C (Resi) Room by Room approach (similar)
77
What are the implications of non-compliance with CDM15 Regulations?
Up to 2Yrs Imprisonment
Fine up to £10m
HSE may issue prohibition or improvement notices
