RICS professional guidance, global Real estate agency ??RICS professional guidance, global Real estate agency and brokerage guidance 2nd edition rics.org/guidance RICS practice statement

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  • RICS professional guidance, global

    Real estate agency and brokerage guidance2nd edition

    rics.org/guidance

    RICS practice statement and guidance note

  • Real estate agency andbrokerage guidanceRICS practice statement and guidance note,global

    2nd edition

    Published by the Royal Institution of Chartered Surveyors (RICS),Parliament Square,London,SW1P 3AD, UKwww.rics.org

    No responsibility for loss or damage caused to any person acting orrefraining from action as a result of the material included in thispublication can be accepted by the authors or RICS.

    Produced by the Professional Groups of the Royal Institution of CharteredSurveyors.

    First edition published as Real estate agency and brokerage standards2011.

    ISBN 978 1 78321 074 9

    Royal Institution of Chartered Surveyors (RICS) November 2014.Copyright in all or part of this publication rests with RICS. No part of thiswork may be reproduced or used in any form or by any means includinggraphic, electronic, or mechanical, including photocopying, recording,taping or web distribution, without the written permission of RICS or inline with the rules of an existing licence.

    Typeset in Great Britain by Columns Design XML Ltd, Reading, Berks

    rics.org

  • Contents

    RICS professional guidance .......................................... 1

    Glossary of terms .......................................................... 3

    Part 1: Real estate agency and brokerage and realestate management: RICS practice statement ........

    4

    The practice statement.................................................. 5

    Links to RICS ethical standards.................................... 5

    Part 2: Real estate agency and brokerageguidance: RICS guidance note...................................

    7

    Introduction.................................................................... 8

    GN 1 Ethics.................................................................... 9

    GN 2 Securing instructions ........................................... 12

    GN 3 Acting for the seller: marketing the property....... 16

    GN 4 Acting for the seller: agreeing the sale or lease.. 19

    GN 5 Acting for the buyer ............................................. 21

    GN 6 Ending the instruction .......................................... 23

    GN 7 Safety and security .............................................. 24

    GN 8 Agency management ........................................... 26

    Real estate agency and brokerage guidance

    ii RICS practice statement and guidance note, global

  • RICS professional guidance

    International standards

    RICS is at the forefront of developing internationalstandards, working in coalitions with organisationsaround the globe, acting in the public interest to raisestandards and increase transparency within markets.International Property Measurement Standards (IPMS ipmsc.org), International Construction MeasurementStandards (ICMS), International Ethics Standards (IES)and others will be published and will be mandatory forRICS members. This practice statement and guidancenote link directly to and underpin these standards andRICS members are advised to make themselves awareof the international standards (see www.rics.org) andthe overarching principles with which this practicestatement and guidance note comply. Members ofRICS are uniquely placed in the market by beingtrained, qualified and regulated by working tointernational standards and complying with thispractice statement and guidance note.

    RICS practice statements

    Part 1 of this document is a practice statement. It isthe duty of every member to comply with relevantpractice statements, and take account of otherguidance produced by RICS in a particular area ofexpertise, to maintain high professional standards.RICS considers that any practice statements aretechnical standards for the purposes of Rule 4 of theRules of Conduct for Members 2007 and the Rules ofConduct for Firms 2007. There may be disciplinaryconsequences for a failure to comply with a practicestatement.

    Members should also note that when an allegation ofprofessional negligence is made against a surveyor, thecourt is likely to take account of any relevant practicestatement published by RICS in deciding whether ornot the surveyor acted with reasonable competence.Failure to comply with practice statements may,accordingly, lead to a finding of negligence against asurveyor.

    In the opinion of RICS, a member conforming to therequirements of this practice statement should have atleast a partial defence to an allegation of negligence.

    Where members depart from the practices set out inthis practice statement, they should do so only forgood reason and the client must be informed in writingof the fact of and the reasons for the departure. Theremay be legal and disciplinary consequences fordeparting from this practice statement.

    It is the members responsibility to be aware ofchanges in case law and legislation since the date ofpublication.

    RICS guidance notes

    Part 2 of this document is a guidance note. Whererecommendations are made for specific professionaltasks, these are intended to represent best practice,i.e. recommendations which in the opinion of RICSmeet a high standard of professional competence.

    Although members are not required to follow therecommendations contained in the note, they shouldtake into account the following points.

    When an allegation of professional negligence is madeagainst a surveyor, a court or tribunal may takeaccount of the contents of any relevant guidance notespublished by RICS in deciding whether or not themember had acted with reasonable competence.

    In the opinion of RICS, a member conforming to thepractices recommended in this note should have atleast a partial defence to an allegation of negligence ifthey have followed those practices. However, membershave the responsibility of deciding when it isinappropriate to follow the guidance.

    It is for each member to decide on the appropriateprocedure to follow in any professional task. However,where members do not comply with the practicerecommended in this note, they should do so only for agood reason. In the event of a legal dispute, a court ortribunal may require them to explain why they decidednot to adopt the recommended practice. Also, ifmembers have not followed this guidance, and theiractions are questioned in an RICS disciplinary case,they will be asked to explain the actions they did takeand this may be taken into account by the Panel.

    RICS practice statement and guidance note, global 1

    rics.org

  • In addition, guidance notes are relevant to professionalcompetence in that each surveyor should be up-to-date and should have knowledge of guidance noteswithin a reasonable time of their coming into effect.

    This guidance note is believed to reflect case law andlegislation applicable at its date of publication. It is themembers responsibility to establish if any changes incase law or legislation after the publication date havean impact on the guidance or information in thisdocument.

    Document status defined

    RICS produce a range of professional guidance andstandards products. These have been defined in thetable below.

    Type of document Definition StatusStandardInternational standard An international high level principle based standard

    developed in collaboration with other relevant bodiesMandatory

    Practice statementRICS practice statement Document that provides members with mandatory

    requirements under Rule 4 of the Rules of Conduct formembers

    Mandatory

    GuidanceRICS code of practice Document approved by RICS, and endorsed by another

    professional body / stakeholder, that provides users withrecommendations for accepted good practice asfollowed by conscientious practitioners

    Mandatory or recommendedgood practice (will beconfirmed in the documentitself)

    RICS guidance note (GN) Document that provides users with recommendationsfor accepted good practice as followed by competentand conscientious practitioners

    Recommended good practice

    RICS information paper (IP) Practice based information that provides users with thelatest information and/or research

    Information and/or explanatorycommentary

    2 RICS practice statement and guidance note, global

    Real estate agency and brokerage guidance

  • Glossary of terms

    Appraisal: In the context of this guidance note it is the term used for valuation in some jurisdictions outside the UK.

    Broker: person acting as an intermediary between the parties buying and selling real estate. In many jurisdictions thisis a licensed activity.

    Buyers: anyone seeking to acquire an interest in real estate. This includes tenants seeking a lease.

    Client: anyone instructing a real estate agent to act on their behalf for the buying or selling of real estate.

    Companies providing agency services: companies undertaking real estate agency or brokerage (see above).

    Conflict of interest: where an agent acts for clients who have competing interests, or where an agents personalinterests conflict with those of their client.

    Customer: clients of real estate agents and potential buyers, sellers, landlords and tenants

    Dual agency: where you have a contractual agency relationship with both the seller and the buyer at the same time.

    Interest in real estate: real estate held under any form of tenure.

    Market evidence: details of properties with the same or similar characteristics, in the same or similar location to theclients property, that have been sold within a reasonable timeframe, and the price or rent achieved.

    Multiple agency: where you have competing cont