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Guidance for professionals

Guidance for professionals

We know many firms and professional will have questions and concerns about how best to conduct their operations, deliver for clients and customers and remain resilient during this challenging time. At the heart of everything we do is delivering confidence in the public interest, so our priority is to support you as you work hard to maintain this.

 

The following guidance addresses key concerns and risks we have identified. As the impact of the outbreak is evolving fast, we will continue to monitor developments and find ways to give guidance, signpost to useful resources and flag ways to seek further help related to finances and wellbeing.

Professional guidance

  • We understand that regulated firms may have concerns about how COVID-19 impacts the processes and controls they have in place to comply with money laundering regulations, including requirements within the Countering bribery and corruption money laundering and terrorist financing professional statement (February 2019)

    To support firms, we have created COVID-19 anti-money laundering guidance for firms to alert firms to the additional anti-money laundering (AML) and corruptions risks they may face during this unprecedented time and identify some options available to maintain appropriate controls. The guidance provides general advice for all regulated firms globally about compliance with the RICS professional statement. It does not provide legal advice on specific obligations for firms carrying out regulated activities. Firms may need to seek advice from a legal professional or contact their AML supervisor if they are concerned about compliance with legal obligations.

    (Last updated 27 May 2020)

  • RICS is closely monitoring the Coronavirus (COVID-19) situation with a view to supporting firms holding client money during these unprecedented and challenging times. It is important to protect the security of client money - as firms seek to maintain their business operations. The effects of COVID-19 may give rise to increased risk to client money as key staff are off sick, or may have increased personal financial pressures, as fraudsters look to exploit the current situation.

    We continue to collaborate with relevant stakeholders to ensure that markets continue to operate as effectively as possible.

    Our review accountants have suggested that taking the following steps will help firms preserve the security of client money:

    Check if your business procedures are documented and easily available to key staff

    Where firms’ staff are unable to work due to illness and/or advice to self-isolate, there may be a need for other staff members to perform different tasks to cover for such absence and enable key business activity to continue. In such situations, clear, documented guidance and procedures will help to mitigate the enhanced risks of non-compliance created by such absence. We suggest you ask staff now to check that procedures for their area are up to date and ensure that all key staff know where to find procedures easily, that will help if someone has to take sick leave..

    Work out where the greatest risk of fraud and error is and focus on those areas

    Where normal staffing levels cannot be maintained, we acknowledge the added challenge faced by firms in ensuring that a suitable segregation of duties is in place regarding client money accounting. In such situations, a risk-based approach is encouraged, ensuring that segregation is maintained for functions deemed to be most susceptible to fraud and error. Where possible, an enhanced level of monitoring should be applied by firm principal(s) / senior management during this time of increased risk. We acknowledge that there will be increased risk to the security of client money arising from potential financial hardship likely to be experienced during the COVID-19 pandemic by both firms and individuals. Use this knowledge in your risk assessment to identify the most important controls and checks and establish how you can continue them even if people are working from home, or principals are off sick.

    Look out for online fraudsters

    Sadly, we know that online fraudsters may try to take advantage of the COVID-19 outbreak. Warn staff to be suspicious of any request to change payee details or make unexpected payments, particularly e mail requests, even if the e mail appears to come from a colleague within the firm. Remind them to put a second check in place for all such requests, preferably by calling the payee or client.

    Be vigilant generally online and be aware before clicking on any coronavirus-related links or attachments you receive via your email or messaging apps. Do not be tricked by legitimate-looking branding on messages you receive. Cybercriminals will also often use language with a sense of urgency, so be alert. Apply best practice by typing hyperlinks into your web browser. Do not enter your credentials on third party sites unless you are 100% sure you are on the correct site.

    Set priorities for record keeping

    Where most / all staff responsible for client money accounting may be working remotely from home, the maintenance of adequate and timely record keeping, including reconciliations, in relation to client monies is likely to present an additional challenge. Distinguish between essential record keeping required to be always maintained and other areas which could be backfilled from a paper trail at a later date. Include instructions to staff relating to all such temporary measures in the firm’s policies and procedures documentation to ensure clarity and consistency..

    See if you can reduce payments and receipts by cash and cheque

    In an environment where both firms and individuals are required to minimise travel and personal interaction, the handling and banking of cash and cheques is increasingly problematic. Consider contacting clients who would normally pay by cash or cheque to ask them to pay electronically and ensure they have the correct details to do so. Also contact any suppliers you would normally pay by cash or cheque to get the information needed to make these payments electronically

    Ensure that client money is protected in the event of an insolvency

    Complying with the mandatory requirements set out in the professional statement is important to protect client money from creditors in the unfortunate event of an insolvency. There are three particular elements that demonstrate that money in a client account does not belong to the firm and these must be prioritised:-

    • ensuring that the bank operating conditions are confirmed in writing and meet the requirements in paragraph 2.2.1
    • preventing monies in the client money account being used for purposes other than those stipulated or agreed to by the client in compliance with paragraph 2.2.4
    • maintaining records of the payments in and out of the client money account so that clients and the amounts belonging to those clients are able to be immediately identified in accordance with the requirements of paragraph 2.2.5

    (Last updated 2 April 2020)

  • The COVID-19 virus is having an impact on RICS professionals and regulated firms whose work involves direct contact with clients, customers and tenants, whether in an office or through visits to a property. This is causing significant uncertainty for many, especially as government guidance in many countries evolves daily.
     
    In addition to adhering to national government advice and guidance, RICS recommends that firms and professionals who are involved in work where there is direct contact with clients, customers or tenants, such as through inspections, repairs, appraisals, and viewings have a clear strategy in place for visits or on-site work to ensure the health and safety of all those involved.
     
    This strategy should consider:

    • Whether the instruction or request from the client, customer or tenant is absolutely necessary. For inspections, viewings, and appraisals, discuss with your client whether postponing the appointment would be possible, or whether safeguards could be put in place to comply with government guidance.
    • For some repairs a delay may have an impact on a vulnerable tenant or could result in disrepair, in these circumstances, if a decision is made to carry out a repair, it is essential to adhere to national government advice with regards to interacting with other people.
    • Where viewings are continuing, 360 degree on-line viewings may be offered as an alternative to visiting a property, especially where the property includes occupants who have been identified as being particularly vulnerable or at risk. Visits must not be carried out to properties where the occupants are in self-isolation.

    In addition to the above, you should set out in writing your approach to communicating with clients, customers, and tenants, explaining the health and safety measures that you are taking during this time and how they can continue to contact you. You should also keep written records of all conversations relating to any changes to services.

  • A number of RICS regulated firms have contacted us with concerns around renewing their professional indemnity insurance (PII) policies as a result of insurers and insurance brokers being closed and unobtainable. Whilst we are in unprecedented times, the feedback we have received is that the insurance market is well prepared and has implemented contingency plans to ensure the market remains open for business.

    The approach of insurance and broking firms will vary so we suggest contacting your insurance advisor or broker in the first instance. We also recommend checking the web-site of your insurance broker and / or insurer for further information on how they plan to service your requirements during the forthcoming period, or alternatively make contact with your designated advisor.

    Regulated firms may also wish to consider the following practical steps:

    If your renewal is due from now to 31 May

    • Complete and return your proposal form as soon possible (between 30 and 45 days prior to renewal).
    • If you have a quotation, insurers will be obliged to honour that quotation up until the specified validity date.
    • If you have accepted a quotation, this will be honoured and bound with the insurer.
    • If you are awaiting a quotation, you should seek feedback from your broker.
    • If you have not provided your renewal submission, you should do this immediately.


    If your renewal is due from 01 June onwards:

    • We are in the very early stages of dealing with this situation and will monitor and update accordingly.


    For all RICS regulated firms we recommend that you build in additional time for the negotiation of your renewal with the insurance provider and for documentation to be issued.

    Where an RICS regulated firm is unable to obtain PII cover, please contact RICS at regulation@rics.org at your earliest opportunity.

  • Our regulatory activities play a key role in delivering confidence to the public and provide assurance around our standards. We will continue to deliver our regulatory services using our remote working technology capabilities and are working on providing a range of enhanced digital services at this challenging time.

    This will include the provision of information via webinars, training videos and self-assessment tools to provide assurance-led services digitally, holding Regulatory Tribunal hearings using remote technology and access to technical support and advice wherever required.

    We are confident that we can continue to ensure that RICS professional standards are being upheld.

    We appreciate that RICS regulated firms and members of the profession are experiencing significant business and operational challenges at present and we are committed to adopting a flexible, supportive and proportionate approach to our activities. In particular, some members and firms will be facing or are at risk of bankruptcy or insolvency. It is important that members and firms seek help and advice as soon as possible. Members and firms should also inform RICS as soon as possible if they become insolvent. We will seek assurance that creditors have been dealt with appropriately and firms have been closed properly, following the steps in the guidance for SMEs considering closure. If this assurance can be given, RICS is unlikely to take disciplinary action.

    Other businesses are facing similar challenges and may be in the same situation. There are sources of support available, which, for surveyors would include Lionheart.

    (Last updated 03 June 2020)

  • The effects of the COVID-19 virus will affect the work carried out by RICS Regulated Members in a variety of ways, with varying impacts. The exact consequences of the COVID-19 outbreak are unknown but inspecting property may become difficult either through a firm’s own internal procedures, government imposed restrictions or unwillingness of occupants to grant access. Access to evidential data such as comparables may also be less freely available.

    Read more on the Valuation Practice Alert

  • The COVID-19 pandemic outbreak has disrupted daily business activity for all, but we know that small businesses may find it particularly difficult to understand how to adapt and remain resilient in such a rapidly changing situation. We are committed to supporting you to navigate these challenges.

    RICS has delivered an update on the approach for SMEs, information to address specific concerns, and relevant guidance and resources. This supplements the range of guidance we have already published in response to the ongoing impact of COVID-19.

    Guidance for SMEs

    Last updated 24 March 2020