Residential panel managers

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1 1st edition, May 2016 Residential panel managers Protocol rics.org

2 Protocol 1st edition, May 2016 Published by the Royal Institution of Chartered Surveyors (RICS) Parliament Square, London SW1P 3AD, UK ISBN Royal Institution of Chartered Surveyors (RICS) May Copyright in all or part of this publication rests with RICS. No part of this work may be reproduced or used in any form or by any means including graphic, electronic, or mechanical, including photocopying, recording, taping or web distribution, without the written permission of RICS or in line with the rules of an existing licence.

3 Acknowledgments This protocol was drafted and approved by the Residential Cross Sector group: Alexandra Anderson (RPC) Jennifer Bourne (Council of Mortgage Lenders) Andrew Bulmer FRICS (RICS) Mike Dailly (Govan Law Centre) (Chair) Richard Deeprose FRICS (e surv surveyors) Ian Fergusson FRICS (J&E Shepherd) Fiona Haggett FRICS (RICS) Les Harris FRICS (Colleys) Daniel Prince (Hamilton Insurance Group) Martyn Stones FRICS (Countrywide Surveyors) Emma Vigus (Howden Insurance Brokers) Kevin Webb FRICS (Legal & General Surveying Services) Graeme Winser MRICS (Nationwide Building Society) Warren Wright FRICS (Connells Survey and Valuation) With the assistance of: Mel Kettle FRICS (Gateway Surveyors) ii RICS 2016

4 Contents Acknowledgments... ii 1 Introduction Scope Ethics and professional standards Processes and high level requirements Contract Software Case alloctaion and management Post Valuation Queries (PVQs) Site note retention Risk management Complaint handling Transparency Sustainability Glossary RICS

5 1 Introduction 1.1 This protocol has been jointly set up and endorsed by an industry wide group comprising representatives of the Royal Institution of Chartered Surveyors (RICS), lenders, insurers and panel management firms involved in the residential mortgage valuation market. It sets out professional standards for the industry and, as a model for best practice, aims to improve protection for all parties to the valuation process. The protocol does not replace any existing obligations placed on firms by their professional, statutory or regulatory bodies. 2 RICS 2016

6 2 Scope 2.1 This protocol is a voluntary set of high level principles, developed with a view to driving up standards and cultivating a culture of fairness and transparency which should underpin all activities undertaken by panel managers. It does not intend to prescribe in detail how these rules should be applied, as firms will have different working practices and client requirements that have evolved to meet their particular needs. 2.2 This protocol is not regulated by RICS. While most panel management firms will be regulated by RICS, this will not necessarily be the case; as such this protocol sits outside any independently led industry regulatory requirements. 2.3 Firms that sign up to the protocol agree to abide by its contents and, as such, give lenders and other entities making use of panel management services and their customers the assurance of good service. 2.4 The protocol applies the following four basic principles: robust processes fairness and integrity through transparency effective complaint handling; and sustainability of service. RICS

7 3 Ethics and professional standards 3.1 This protocol is drawn up in line with the five current RICS ethical standards. For the purpose of this protocol, they apply to any firm, regardless of whether or not they are RICS regulated and registered. For more information, please see Act with integrity Be honest and straightforward in all that you do. Always provide a high standard of service Always ensure your client, or others to whom you have a professional responsibility, receive the best possible advice, support or performance of the terms of engagement you have agreed to. Act in a way that promotes trust in [the profession] panel managers and those who work for them. Act in a manner, both in your professional life and private life, to promote you, your firm or the organisation you work for in a professional and positive way. Treat others with respect Treat everyone with courtesy, politeness and respect and consider cultural sensitivities and business practices. Take responsibility Be accountable for all your actions do not blame others if things go wrong, and if you suspect something is not right, be prepared to take action. 4 RICS 2016

8 4 Processes and high level requirements Panel management firms should always act in a professional manner, to the standards that would be expected from an externally regulated company. This includes accepting work in good faith and exercising a high standard of care and skill in accordance with honest industry and professional standards. The following requirements are set as a minimum standard expected of all panel management and valuation distribution firms. These do not replace the scope of the panel management work agreed between the lender client and the panel management firm. This should be outlined fully in an agreed contract between the lender client and the panel manager. 4.1 Contract The scope of work and terms of engagement should be fully outlined in a contract between the lender client and the panel manager. This contract should be fair and written in plain/intelligible language. As a minimum the contract should cover: agreed fee levels service levels/standards expected required management information; and termination requirements. 4.2 Software The panel management firm should use software that provides a secure means of management and delivery of the valuation product. This software should be: resilient secure; and compatible with customer, lender and valuer operated main industry accepted systems. 4.3 Case allocation and management The firm should have robust and documented case allocation and case management processes in place. These should include: A check to establish that the panel valuer holds professional indemnity insurance cover that accords with the lender client requirements and/or the requirements of the professional body of which they are a member. This insurance should relate to the work to be undertaken. A competency check. The panel manager should satisfy themselves that the professional work is being sent to valuers with: o an industry qualification as required by the lender client o membership and or registration with an approved professional body (e.g. RICS) o the appropriate skills and experience to complete work of the nature of the job being sent; and o the appropriate experience in completing unsupervised work in the geographical area in which the case sits. o access to the most up to date lender guidance notes or manuals. Processes to monitor that professional work is being completed within the agreed SLA standards. These standards should be documented in the contract between the lender client and the panel valuer. An effective case tracking process that enables the production of adequate management information; ensures that all cases are pursued in a timely manner and enables the firm to update the lender client on the progress of a case promptly. 4.4 Post Valuation Queries (PVQs) A monitored, documented and dedicated PVQ process should be in place. This should incorporate a record for chasing and tracking of queries, along with a system for ensuring a full audit trail of the query remains accessible for the entirety of the site note and report retention period. 4.5 Site note retention The panel manager should require all valuers to whom they send work to retain their site notes and reports in a secure and durable medium for a period of not less than six years. Records should be destroyed in a secure and permanent manner at the end of the retention period, which may be of longer duration, as agreed between the valuer and the panel management firm. RICS

9 4.6 Risk management Panel management firms and the panel firms to which they send professional work should have documented processes covering the following (ensuring all are compliant with current legislation): Conflicts of interest Before panelling, a panel manager should be confident that the end valuer has an established process to check for any potential conflict of interest. Where a possible conflict is identified the instruction should be directed to an alternative valuer or the possible conflict should be reported to the instructing lender client and the valuation not undertaken until full written approval to proceed is received Money laundering (identification and reporting) Firms should immediately report any suspicions they may have that another party is engaged in money laundering activities or other related financial crime. This should be reported to the lender client s own financial crime/money laundering teams, or to the National Crime Agency (NCA) Bribery prevention All firms should have a bribery prevention policy in place and ensure that staff receive regular (at least annual) training in the avoidance and detection of bribery Due diligence checks for panel firms Where the contract between the lender and the panel manager requires it, panel firms who receive work from a panel manager should be audited to ensure that the necessary risk management and corporate social responsibility processes are in place. This audit should check to ensure compliance with the minimum standards laid down by the lender client concerned. Repeat visits can be scheduled on a risk based approach or as outlined in the contract. The outcomes and follow up actions from these visits should be documented and made available for inspection by the instructing lenders Data protection All firms should have a data protection policy in place that ensures full compliance with current legislation. This should be supported by regular (at least annual) staff training. Firms should have a current registration with the Information Commissioner s Office (ICO) Corporate social responsibility All firms should have policies addressing the following: health and safety sustainability; and social and environmental issues Equal opportunities These should be supported by regular (at least annual) staff training Audit of valuations All valuers should be subject to regular audit checks, with the outcomes and follow up actions fully recorded and available for inspection by the instructing client or lender of the cases audited. 6 RICS 2016

10 5 Complaint handling 5.1 The firm should have a fully documented complaint handling procedure in place, which is commensurate with RICS requirements. This should be made available on request. This procedure should include: a procedure document for presentation to clients who complain processes for investigation and response within reasonable timescales controls around the management of complaints/ claims from receipt to resolution; and a process for referral of the complaint to an independent party in the event that a resolution cannot be achieved. RICS

11 6 Transparency 6.1 Firms should conduct their business in an honest, fair, transparent and professional manner. 6.2 Management information (MI) should be readily available to the lender customer in line with their contract requirements. 8 RICS 2016

12 7 Sustainability 7.1 Panel management firms should be solvent and financially stable. 7.2 Firms should have adequate professional indemnity insurance in place to provide full cover for their own services. 7.3 Panel management firms should ensure that all panel firms have adequate insurance cover to satisfy the lender client and to cover the work that is being sent to them. RICS

13 8 Glossary Conflict of interest: Where a firm or individual acts for clients who have competing interests, or where personal interests conflict, or could potentially conflict, with those of the client. Professional work: Formal valuation and/or survey advice upon which a customer relies, and which could lead to a claim of financial loss if carried out negligently. Reasonable: An objective legal standard, which is judged on the standard of conduct expected of a professional, experienced firm dealing with the same situation. Solvent: Able to pay debts as and when they fall due. Panel: Instruction of a separate or related firm to provide valuation services to the lender on the behalf of the panel manager. Panel manager: Any firm who in the course of business is instructed to manage and distribute residential mortgage valuations for a mortgage lender, whether or not they are an RICS member or regulated firm. Valuation: A valuer s opinion of the value of (a) specified interest(s) in a property, at the date of valuation, given in writing. Unless limitations are agreed in the terms of engagement this will be provided after an inspection and any further investigations and enquiries that are appropriate, having regard to the nature of the property and purpose of the valuation. Valuer: An RICS member who is registered under the RICS Valuer Registration Scheme (VRS) and provides a formal valuation report for lending or other purposes. Such a report is to be written in accordance with the current edition of the RICS Valuation Standards Global and UK (the Red Book ). 10 RICS 2016

14 Confidence through professional standards RICS promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure. Our name promises the consistent delivery of standards bringing confidence to the markets we serve. We accredit 118,000 professionals and any individual or firm registered with RICS is subject to our quality assurance. Their expertise covers property, asset valuation and real estate management; the costing and leadership of construction projects; the development of infrastructure; and the management of natural resources, such as mining, farms and woodland. From environmental assessments and building controls to negotiating land rights in an emerging economy; if our members are involved the same professional standards and ethics apply. We believe that standards underpin effective markets. With up to seventy per cent of the world s wealth bound up in land and real estate, our sector is vital to economic development, helping to support stable, sustainable investment and growth around the globe. With offices covering the major political and financial centres of the world, our market presence means we are ideally placed to influence policy and embed professional standards. We work at a cross-governmental level, delivering international standards that will support a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all. We are proud of our reputation and we guard it fiercely, so clients who work with an RICS professional can have confidence in the quality and ethics of the services they receive. United Kingdom RICS HQ Parliament Square, London SW1P 3AD United Kingdom t +44 (0) f +44 (0) contactrics@rics.org Media enquiries pressoffice@rics.org Ireland 38 Merrion Square, Dublin 2, Ireland t f ricsireland@rics.org Europe (excluding UK and Ireland) Rue Ducale 67, 1000 Brussels, Belgium t f ricseurope@rics.org Middle East Office G14, Block 3, Knowledge Village, Dubai, United Arab Emirates t f ricsmenea@rics.org Africa PO Box 3400, Witkoppen 2068, South Africa t f ricsafrica@rics.org Americas One Grand Central Place, 60 East 42nd Street, Suite 542, New York , USA t f ricsamericas@rics.org South America Rua Maranhão, 584 cj 104, São Paulo SP, Brasil t ricsbrasil@rics.org Oceania Suite 1, Level 9, 1 Castlereagh Street, Sydney NSW Australia t f info@rics.org North Asia 3707 Hopewell Centre, 183 Queen s Road East Wanchai, Hong Kong t f ricsasia@rics.org ASEAN 10 Anson Road, #06-22 International Plaza, Singapore t f ricssingapore@rics.org Japan Level 14 Hibiya Central Building, Nishi Shimbashi Minato-Ku, Tokyo , Japan t f ricsjapan@rics.org South Asia 48 & 49 Centrum Plaza, Sector Road, Sector 53, Gurgaon , India t f ricsindia@rics.org MAY 2016/20357/PROTOCOL rics.org

Rules for the registration of firms 01 April 2009

Regulation Rules for the registration of firms 01 April 2009 Version 5 with effect from 31 March 2017 rics.org/regulation Rules for the Registration of Firms Scope These Rules are made by the Regulatory