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Hot Topic Highlight - 5 things to know for your Spring 2019 RICS APC

RICS APC and AssocRICS mandatory competency business planning

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What is today's blog about?

Today, we will be discussing 5 things to know for your Spring 2019 RICS APC - make sure you know about those relevant to your chosen pathway and experience.

Essential reading for AssocRICS and RICS APC candidates.

You can also listen to our CPD podcast on Anchor for more free AssocRICS and RICS APC training and support.

1. Changes to RICS Firm Regulation

RICS have made changes to their rules for Firm Regulation, as well as use of the RICS logo and designation by firms.

The aim of the changes is to allow RICS and firms to adapt to the current marketplace, updating the rules which were mainly published in their current form in 2007.

The changes apply from 1 April 2020, allowing firms a 12 month transitional period to ensure they comply with the new requirements.

Under the requirements, a qualified member is defined as being AssocRICS, MRICS or FRICS. It doesn’t include student members or other non-qualified designations.

The main changes in the RICS Rules for Registration of Firms (Version 6) are:

  • Firms must register for regulation if they provide surveying services to the public, operate in Regulated Area A (UK) and at least 50% of the Firm’s Principals are RICS Members

  • Registration eligibility criteria are amended so firms have to have at least 25% of RICS qualified Principals

  • Firms who cannot meet this can implement a plan to secure compliance or be supervised by another RICS Regulated Firm

  • Firms must designate a Responsible Principal who provides oversight, accountability and engagement with RICS standards and regulation

The Rules for the use of the RICS logo and designation by firms (Version 4) have been restructured to provide simplicity and readability.

The key changes are:

  • Use of the RICS logo is restricted to Regulated Firms only

  • Use of the designation 'Chartered Surveyors' is restricted to trading names only of firms

  • Regulated Firms must include prescribed text in their terms of engagement to explain what being Regulated by RICS means to clients

RICS have published guidance on the new Rules, which is essential reading for RICS APC candidates.

2. New residential legislation, Homes (Fitness for Human Habitation) Act 2018

We will discuss this new legislation at length in a future blog article.

However, by way of a short summary it applies to landlords of domestic rented properties from 20 March 2019.

It aims to ensure that all rented accommodation is fit for human habitation, as well as strengthening tenants’ means of redress.

Whilst it does not create any new obligations, it ensures that landlords are meeting their existing responsibilities relating to property standards and safety.

It applies to the following tenancies:

  • Tenancies under 7 years granted on or after 20 March 2019

  • New secure, assured and introductory tenancies (on or after 20 March 2019)

  •  Tenancies renewed for a fixed term  (on or after 20 March 2019)

  • From 20 March 2020, it will apply to all periodic tenancies, i.e. all tenancies which started before 20 March 2019

There are a number of exceptions where the landlord is not required to remedy unfitness, e.g. problem is caused by the tenant's behaviour of an 'Act of God'.

When considering breaches, the Court will consider Section 10 of the Landlord & Tenant Act 1985 and the 29 hazards set out in the Housing Health and Safety (England) Regulations 2005.

The penalties for non-compliance include compensation awarded by the Court and a requirement for the landlord to undertake the relevant works.

Read more about the legislation on the Government website.

3. New Streamlined Energy and Carbon Reporting (SECR) regime

The Carbon Reduction Commitment (CRC) Energy Efficiency Scheme was a mandatory carbon emissions reporting and pricing scheme for large public and private sector organisations using over 6,000 MWh of electricity p.a. and who had at least 1 half hourly meter.

However, it will be abolished following the 2018-2019 compliance year, with the last reports submitted by companies in July 2019.

It has been replaced by the Streamlined Energy and Carbon Reporting (SECR) Regime for financial years of companies starting on or after 1 April 2019.

It requires additional carbon emissions, energy use and efficiency reporting, e.g. global energy use (quoted companies), UK energy use (large companies and LLPs) and energy action taken.

It applies to quoted companies, large private companies and large LLPs, with specific eligibility criteria set in relation to turnover, balance total and employees. There are also exemptions relating to the total quantum of energy use and if disclosure of energy usage would be ‘seriously prejudicial to the interests of the company’.

Reporting is via the directors’ report in a company's annual report or in a new energy and carbon report introduced for LLPs.

Failure to prepare and report in line with the new regime will constitute a criminal offence punishable by a fine.

From April 2019, the Climate Change Levy will recoup some of the revenue lost due to closure of the CRC Scheme. The rates charged are 45% for electricity and 67% for gas. These were previously less than 3% p.a., increased in line with RPI.

4. Changes to MEES from 1 April 2019 for domestic landlords

The Government have introduced additional requirements under the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019 (the 2019 Amendment Regulations). These add to the original requirements of the Minimum Energy Efficiency Standard (MEES).

From 1 April 2019, where energy efficiency improvement works cannot be wholly financed by third party funding, a landlord will only be able to lawfully let a domestic property with an EPC rating of F or G ('sub-standard property') if it has spent up to £3,500 on improvement works. This is known as the 'cost cap', which is subject to specific deductions under the amendments to MEES.

5. Changes to RICS rules relating to Professional Indemnity Insurance run-off cover

RICS have made changes to the requirements around Professional Indemnity Insurance (PII) run-off cover in the UK. These are published in the Version 4 guidance effective from 1 April 2019.

The aim is to ensure that all RICS Regulated Firms have access to run-off cover, providing better protection to consumers.

Run-off cover is required when a firm or member ceases to trade. This must be on a claims-made basis and fully retroactive, so it covers all historic work carried out by the firm.

The new requirements still require firms to have ‘adequate and appropriate’ cover for 6 years in relation to commercial claims.

However, for consumer claims firms must obtain cover for a minimum of 6 years with an aggregate limit of £1m. This should be automatically included in the insurer's minimum wording without any premium paid to trigger it. Firms should obtain longer periods or higher levels of cover if it is ‘adequate and appropriate’ to do.

RICS have also extended the Assigned Risks Pool to include a Run-Off Pool, so firms that cannot reasonably procure run-off cover for commercial claims on the open market have an additional option to secure cover.

How can we help?

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Stay tuned for our next blog post to help build a better you

N.b. Nothing in this article constitutes legal or financial advice.