Home Survey Standard

RICS draft professional statement - Home Survey Standard

2 Setting up the service

RICS members and RICS regulated firms must:

  • have a clear understanding of client needs
  • have the appropriate knowledge (including that of the locality), skills and experience to provide the agreed service
  • ensure potential clients understand the nature of and differences between the levels of service offered so they can make an informed choice and
  • agree the full details of the terms of engagement with the client before the service is delivered.

2.1 Conflicts of interest and referral fees

The RICS member must declare any potential conflicts and how these are managed in accordance with the current edition of the International Ethics Standards, RICS Valuation - Global Standards 2017, RICS Valuation - Global Standards 2017: UK national supplement 2018, RICS Rules of Conduct and Conflicts of interest (1st edition) RICS professional statement.

RICS members and regulated firms must be transparent and open with their clients or potential clients by acknowledging that they have offered or received a referral fee or other inducement prior and relating to taking the instruction.

RICS members and regulated firms must provide clients or prospective clients a written statement (which should be included in the terms of engagement) stating one of the following, depending on which applies:

  • that the RICS member or regulated firm does not pay a referral fee or equivalent to any party who may have recommended them or
  • that a payment has been or may be made, either individually or part of a third- party commercial relationship.

2.2 Qualifications and competence

To ensure professionals provide a high level of service, RICS members must have the appropriate knowledge, skills and experience to carry out their duties.

RICS members must be qualified, competent and able to deliver services by:

  • having knowledge of the tasks to be undertaken and the risks involved
  • possessing the experience and ability to carry out their duties in relation to the appropriate level of service and
  • identifying their limitations and taking appropriate action where this is found to be inadequate.

2.3 Knowledge of locality and nature of property

RICS members must be familiar with the nature and complexity of the property type, the region in which it is situated and relevance to the subject instruction, including:

  • common and uncommon housing styles, materials and construction techniques. This is particularly important where services are offered for older and historic buildings where understanding the interaction of different building materials and techniques is essential
  • current advice and guidance relating to asbestos and other common deleterious materials
  • modern methods of construction
  • environmental issues including publicly available information. See appendix C for further details
  • the location of listed buildings and conservation areas/historic centres, and the implications of these designations
  • relevant requirements specified by local and regional government organisations and structures and
  • awareness of the social and industrial heritage relevant to the instruction.

Although an RICS member with this knowledge may be able to provide all levels of service, those who provide level two services on older and/or complex properties, historic buildings and those in a poorer condition and all level three services will require a broader and deeper technical knowledge. Where appropriate, the RICS member should decline the instruction if the subject property type is beyond their knowledge and skill level.

Please note Single Survey Scotland variations apply. Refer to the RICS Property Inspection Technical Guidance for the Completion of Single Surveys.

2.4 Client liaison

RICS members and RICS regulated firms must take all reasonable steps to ensure that clients:

  • understand the differences between the levels of service, including the extent and limitations of each option
  • are advised of the range of options the RICS member can offer, together with the key features and benefits of each
  • are aware of the fee that will be charged for the service and
  • agree the terms of engagement.

Clients may not be familiar with their choice and will require advice on which level best suits their needs. The RICS member or regulated firm should confirm the client has access to appropriate information before any contract is formed.

Where instructions have been received from a third party (for example, from a lender or a panel manager), the RICS member or regulated firm should satisfy themselves the instruction is best suited to both the property and the needs of the client.

Where the instruction is ultimately found not suitable, the RICS member should further advise the client with the reasons why and the best way to resolve the matter.

2.5 Levels of service

RICS members must ensure their service is clearly 'benchmarked' against one of the defined levels included in appendix A. These levels are not prescriptive or detailed. Instead they provide enough detail to allow the nature of the service to be identified while maintaining sufficient flexibility for RICS members to respond to changes in the market and client requirements.

The benchmarked level against which the RICS member's service is most closely based must be clearly stated. For example:

'This service is delivered in accordance with the Home survey standard (1st edition) RICSprofessional statement and is equivalent to level [insert appropriate level]. In addition, this service has the following particular features: [insert any enhancements from the level defined by this professional statement].'

The 'equivalent level' definition should be included on the RICS member's website, in their standard literature and, most importantly, in their terms of engagement. The RICS member should also explain the equivalent level in any communications (verbal or otherwise) with clients or potential clients before those terms are agreed.

See appendix A for a detailed description of the different levels.

Please note Single Survey Scotland variations apply. Refer to the RICS Property Inspection Technical Guidance for the Completion of Single Surveys.

2.6 Terms of engagement

The client must receive an up to date document that describes the terms of engagement matched to the specific instruction. At levels one and two on less complex properties, these are likely to be standard documents amended to take account of the property type and any specific client requirements.

Standard documents may also be appropriate for some level two services on older and/or complex properties, historic buildings and those in a poorer condition and all level three services but careful consideration should be given to whether any variation is required for the specific instruction. Where these are varied, these should be clearly described and explained by the RICS member or RICS regulated firm during the pre-inspection discussions with the client.

A minimum requirement for terms of engagement has been included in appendix D.

The terms of engagement should be issued and returned by the clients before the inspection is carried out. Where this is not possible, the terms of engagement must be agreed before the delivery of the service, ideally before any professional advice on the property is given.

RICS members and RICS regulated firms supplying professional services to consumer clients must be aware of applicable regulations including the current version of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations2013. These regulations contain important provisions and the RICS member should take legal advice to ensure that the contract letter, engagement procedures and related materials being used are compliant with all current legislation in these respects.

The terms of engagement must point out that the service does not include an asbestos inspection and it falls outside the current The Control of Asbestos Regulations 2012. However, the report should properly emphasise the suspected presence of asbestos-containing materials if the inspection identifies that possibility.

Please note Single Survey Scotland variations apply. Refer to the RICS Property Inspection Technical Guidance for the Completion of Single Surveys.

2.7 Leaseholds

Any survey of a leasehold residential property raises separate and additional factors arising from shared responsibilities and the wide variety of repairing covenants in common use. Additionally, where the leasehold property is a flat, the inspection is usually restricted to the subject property and the accessible common parts and grounds. Onerous repairing liabilities may exist independently from the property, for example where the lease imposes a liability on the property owner/occupier to pay a proportion of the total estate repair costs.

The RICS member should set out the limitations of any advice given, such as stating that no due diligence has taken place in relation to the true legal effect of the lease - this is exclusively the responsibility of the client's legal advisers.

However, legal advisers will not have inspected the property and so the RICS member should:

  • be aware of any issues that may arise with leasehold tenures
  • identify any obvious and relevant matters that may affect the client's responsibility for carrying out repairs and liability to pay towards their cost and
  • recommend that the client obtains independent legal advice on the interpretation of the lease.