Firms Flashcards
(28 cards)
What are the professional obligations of firms?
- Publish a CPHP including ADR approved by RICS and maintain a complaints log
- Ensure previous and current work is covered by appropriate PI insurance.
- Sole practitioners must make appropriate arrangements for work to continue in event of death or inability to work.
- Must cooperate with RICS
- Promptly provide all info requested by the Standards and Regulation Board.
- Firms must display RICS logo on business literature in accordance with RICS published policy on designations
- Must report to RICS on matters required under Rules for the Registration of Firms
What procedures must you follow if you are starting up a new firm?
- Contact RICS for guidance and obtain a company start up pack
- Inform RICS and register for regulation
- Appoint a contact officer for RICS communication
- Prepare a CHP
- Obtain PI cover
- Abide by RoC for Firms
- Use Regulated by RICS designation on practice material
Can you advertise your new company in the press?
As long as it is trustful and in a responsible manner in line with RoC for Firms,
What insurance do you need for a new firm?
PI Insurance
EL Insurance
PL Insurance
Building Insurance of and Office
What info do registered firms send to RICS annually?
Annual return undertaken online.
Includes:
- Type of business and staffing
- Nature of clients
- Training provision
- CHP details and records
- PI insurance details
- Whether firm holds client money
What processes do firms need in place for handling clients money?
Preserve the security of clients money which does not belong wholly to the company.
RICS regulated firms that operate a client account must:
- Set clear segregation of duties for employees
- A principal oversee the client money accounting functions
- Principles cannot override controls
- Competent and knowledgeable staff are to process clients money with cover provided for long term absence
- Accounting systems and data must be secure
- Client money must be kept seperate and named client
- Clients must always have access
- Must agree terms and advise client on bank details
- Account must not be overdrawn
- Must maintain client ledgers and provide a running balance
What are the didn’t types of client money accounts?
General accounts - hold money for more than 1 client.
Discrete accounts - reference a single named client
Limitation periods associated with under hand and deed forms of contract.
6 years excited under hand
12 years executed under deed
What must a complaints handling procedure contain?
RICS provides a model form.
Must include redress mechanism
Details of policy should be issued with the terms of business
Must be clear, quick, transparent and free of charge within the first stage
Name contact details of investigating person
Complaint must be investigated within 28 days.
All complaints progress and outcomes must be recorded
Note the need to advise PI insurer of a complaint.
Must have 2 stages minimum:
- Consideration of complaint by senior member of the firm or complaint handling officer
- If issue not resolved, it is referred to independent 3rd party authority to award redress. The complainant may be expected to contribute towards costs at this stage
What is the independent redress scheme?
Consumer scheme designed to handle small issues that would be too expensive to take to court
If scheme judges in favour of complainant it is binding
If in favour of firm then complainant can take to court
RICS firms must specify which redress scheme they want to use. Could be ombudsmen arbitration or sometimes adjudication.
If complaint is a large sum of money or if complainant wishes it can be taken to court.
What is the clients money protection scheme?
Money protection scene operated by RICS
Contains provision for member of the public to be reimbursed their direct loss of funds when using RICS regulated firm.
Provided through RICS insurance policy.
What is purpose of joint name client account?
Purpose of dual authorization
What does PII stand for?
Professional indemnity insurance.
What is the purpose of PII?
Provide financial cover in the event a client suffers financial loss in event of breach of duty e.g. negligence.
What are benefits of PI cover?
Professional is protected from financial loss and firm doesn’t need to meet claim from own assets.
Client is able to recover financial loss.
What basis is PI underwritten in the UK?
On a claims made basis.
What does claims made basis mean?
Insurance policy at the time the breach is discovered is responsible for the indemnity.
Not the insurance in place when the breach is made.
What are PI Insurance requirements set by RICS?
Policy cover must be each and every claim basis.
Must meet minimum levels of indemnity set out by RICS.
RICS sets out maximum uninsured excess.
Run off cover in place at least 6 years.
Should cover past and present colleagues and directors / partners.
Minimum PI levels?
Turnover
£100k or less = £250k minimum
Over £100k - £200k = £500k
Over £200k = £1m
Max uninsured excess?
£10m turnover or less = greater of 2.5% of sum insured or £10k
£10m + turnover = no limit set
What measures can be taken to avoid PI claims?
- Keep full and detailed records
2.
What measures can be taken to avoid PI claims?
- Keep full and detailed records
- Record recommendations given
- Use proper letters of engagement, scope of services and terms of engagement
- Don’t advise on specialism outside expertise
- Use RICS guidelines
- Avoid poor management and excessive work load
How to limit liability when agreeing terms with client?
Base appointment on reasonable care and skill rather than fitness for purpose.
If clients requirements are performance based this may imply fitness for purpose. It is advisable to request a clause limiting the appointment to reasonable skill and care only.
Run off cover must be in place
Execution under hand will limit to 6 years over 12 liability period.
What’s included in a fee proposal?
Terms and conditions
Scope of services
Exclusions
Assumptions
