Lists to remember Flashcards
What are 7 mandatory Professional Obligations all RICS members must follow?
- Members must comply with CPD requirements set by RICS
- Members must cooperate with RICS
- Members must provide all information reasonably requested by the Standards and Regulation Board.
- Firms must publish a complaints handling procedure which includes ADR method approved by RICS and a record of complaints
- Firms must display and RICS designation on their business literature to show they are regulated by the RICS
- All previous and professional work must be covered by adequate professional indemnity cover
- Firms with a sole principal must have arrangements in place if they can no longer work
What are the 6 principles of the 2010 Bribery Act?
Proportionality
Top-Level Commitment
Risk Assessment
Due Diligence
Communication
Monitoring and Review
What must be included in a firms annual return?
- Type of business and staffing details
- Statutory Regulated Activities - eg valuation firms for financial services
- Nature of clients
- Complaints Handling Procedure and Records
- PII Insurance details
- Whether the firm holds clients money
What improvements did the new Rules of Conduct make over the old ones?
- Simpler Structure
- Clearer examples
- Focus on respect, diversity and inclusion
- Understanding evolving technology
- Tackling global challenges
When should you NOT accept an instruction?
- If you are not competent
- You are not being provided with sufficient facts on the issue
- The proposed client will not sign off the terms of engagement or AML checks
- There is a conflict of interest that can’t be managed
- PII indemnity cap can’t be agreed
- The advice is for a friend on a pro-bono basis but your PII doesn’t cover this work
- The company is on the governments sanctions list
- The work could cause public embarrassment to your firm if it was made public
How would you start a new practice?
- Inform the RICS and register for Regulation by the Regulatory Board
- Appoint a Responsible Principal who ensures compliance with the RICS
- Arrange PII and send details to the RICS
- Set up procedures for client money handling
- Obtain RICS approval for your firms complaints handling procedure
- Appoint a complaints handling officer
- Ensure ‘logo kit’ and ‘regulated by the RICS’ is on all practice material
- Ensure you have a locum
- Ensure your members meet their CPD requirements
- Ensure completion of the RICS Annual Return at the end of each year
What are the 10 principles of GAAP?
Regularity R C S P N P C P M U
Consistency
Sincerity
Permanence
Non-compensation
Prudence
Continuity
Periodicity
Materiality
Utmost good faith
When are audited accounts needed and why?
All companies require an audit except for small companies with :
- Turnover below £10.2m
- Total assets below £5.1m
- Under 50 employees
Required by law and provide assurance to shareholders
What are the 7 principles of Data Protection Act 2018? (AKA 7 principles of GDPR)
Lawfulness, fairness, transparency
Accuracy
Accountability
Purpose limitation
Storage limitation
Data minimisation
Integrity and confidentiality
8 individual rights under GDPR?
Right to Information
Right to Access
Right to Rectification
Right to Erasure
Right to Restrict Processing
Right to Data Portability
Right to Object
Right to Automated Decision Making
What valuations are Exceptions to the Red Book?
- If for internal purposes (for client to know market value of their property)
- If for agency work prior to acquisition or disposal instructions (EG advertise at price X and if it does well, we’ll up the price but if it is not getting much interest then we will lower the price)
- If for stautory function (where the Law tells us what to do)
- If acting as expert witness (EG if you can’t agree a rent review or lease renewal, then you would give an expert witness report in court - arbitrator or judge would tell you what to do, not the Red Book)
- If in negotiation or litigation
Can you name some valuations that are carried out for a Statutory Function?
- Lease renewal EG reporting on rent at lease renewal - see s34 of LL & T Act 1954 to see rent definition (court determines the level of rent)
- Rating EG if giving a rating valuation there will be legislation to follow
- Also compulsory purchase
- Leasehold enfranchisement (for residential) – statutory – Buying the freehold or getting a long leasehold extension
What are the main contents of the Terms of Engagement for a Valuation?
- Valuer - name
- Client - name
- Property - address
- Purpose of valuation
- Basis of value
- Valuation date
- Nature and extent of the valuer’s work - including investigations - and any limitations thereof - the extent of these
- Assumptions/special assumptions - if you don’t make planning enquiries then you need to make planning assumptions
- The Fee –
Name three situations that can adversely affect the Certainty of valuations.
- If there are very few or no comparables – an unusual property or one in a unique location
- If the valuer is unable to make full enquiries or investigations
- When there is market volatility such as during the beginning of the pandemic -
What costs did you deduct (are deducted) in your / a Residual Valuation?
- Demolition / site clean up fees
- Cost of construction (the building cost) -
- Fees for construction (architects, engineers, surveyors, environmental survey etc)
- Costs of finance
- Contingency to allow for fluctuations in these costs
- Agent and Legal fees on acquisition
- Fees and stamp duty land tax on aquisition when you buy the site (only on acquisition)
- developer’s profit
- Agent and Legal fees on disposal
What could statutory due diligence include for a valuation?
Asbestos register
Business rates / council tax
Contamination
EPC rating
Flooding
Planning history and compliance
Environmental matters
Equality act compliance
What would you include in a valuation report?
Client name
Date of valuation
Valuation purpose
Property details
Basis of value
Methods of Valuation
Status of valuer & competency
Currency
Investigations Undertaken
Assumptions / special assumptions
Departures
Valuation Calculations & Comparables
Valuers Conclusion
Terms of Engagement
Can you name VPS 1-5?
VPS 1 - Terms of Engagement
VPS 2- Inspections & investigation records
VPS 3 - Valuation Reports
VPS 4 - Basis of Value, assumptions and special assumptions
VPS 5 - Methods of value
How do you know if you are competent to undertake a valuation (or any work)?
SUKE
Skills - Do I have the right skills/qualifications
Understanding - Do I understand what is required
Knowledge - Do I have the required knowledge
Experience - Have I got the right level of experience
What can the enforcements agents seize from the tenant when using CRAR?
- Only goods belonging to the tenant (Not 3rd Party)
- ‘Tools of the trade’ with an aggregate value of up to £1,350 eg computers. The tenant must still be able to operate a business eg can’t remove the chairs people are sitting on from an office
- Only non perishable goods with a value not greater than the rent arrears owed
What are the 9 mandatory requirements in Service Charge Professional Statement?
Recover expenditure in line with lease terms
Recover no more than 100% of costs
Annual provide budgets and explanatory notes
Annually provide service charge accounts (showing actual figures)
Annually provide service charge apportionment schedule
Service charge money to be held in separate bank account
Interest must be credited to SC account
When acting for tenant, advise that if disputing payment then withold the amount in dispute
What are 12 mandatory requirements for members set out in RICS Professional Statement, Real Estate Management 3rd Edition 2016?
Conduct business in honest, fair, transparent manner
Carry out work with skill and due diligence
Ensure clients are provided with clear terms of engagement
Avoid conflict of interest, and when they arise deal with them openly and promptly
Do not discriminate
Ensure communications are fair, clear, timely and transparent
Ensure all advertising and marketing is honest
Ensure client money held in separate accounts
Ensure professional indemnity insurance in place
Ensure scope of obligations of work is provided to all parties
Give realistic assessment of buying/selling/rental price
Ensure all inspections and meetings are carried out in accordancce with client wishes
Name the tenancies to which the 1954 Act does not apply
- Agricultural holdings
- Mining Leases
- Residential Tenancies
- Tenancies created as a condition of employment
- Tenancies not exceeding 6 months unless a) there is a provision for extension or b) T has been in occupation for more than 12 months
What must a LL s25 notice contain?
- Details of the landlord
- Tenant details
- Date of the notice
- Date of termination of the lease
- If friendly, the terms of the new lease
- If hostile, the grounds why a new lease won’t be granted