Governance Model

As delegates to the cpd courses will know, the RICS Rules of Conduct have been in play but the ByeLaws on which they are built have still been the pre 2007 set. The RICS now has a new proposed 'Governance Model' which is available for viewing on the RICS website today. Worth checking out if you still have an interview to look forward to.

James

Interview Process

Interview Process

Not sure of the original source but here is an example of how the assessors may test your understanding of an area( in this case leases) and how you might persuade them you know what you are talking about. Also a bit on ethics.

Question: Why might the rent be depressed by a short lease term?

Answer: Because tenants require security of tenure, and if, for example, the

majority of tenants require a lease of at least 5 years, the number of

tenants in the market for leases of 2 years or less will be relatively

limited.

Comment: Relatively brief answers are being given to the assessors, but the assessor

is asking follow up questions. The next question shows how you can look

to give more information to the assessors – but ensuring that is good

quality, concise comment.

Question: Back to the term of occupation then. What would be the position if

there were no express obligations in the lease?

Answer: The unexpired lease term would be the assumed length of term of the

hypothetical tenancy. This reflects the ‘presumption of reality’ principle.

However, the prospect of the renewal of the lease can also be reflected

insofar as it may weigh in the mind of the hypothetical tenant attracted

to the property. The prospect of lease renewal, and therefore continued

occupation, may, for example, be strong in the case of a modern office

block where the landlord is keen to retain tenants and optimise

investment value, but in the case of a warehouse within a development

site, the renewal is unlikely to be possible. Indeed, a short term to lease

expiry and enforced vacation would be unattractive to the market, and

could be a situation where rental value is depressed at rent review.

Comment: Note how the provision of more information produces a better quality

answer. Much more could be said, but you must know when to bring

your answer to a close and await the next question.

Question: What about the assumed length of term at lease renewal – what would

that be?

Answer: It would reflect the length of the new lease. The court could grant a

maximum of 14 years, but a range of factors could determine the length

of the new lease, such as the term of the current lease, any aspirations

for the landlord to redevelop the property and consequently require a

break clause, and the need for certainty for the tenant.

Question: Just remind me what the 21 year rule states.

Answer: The value of improvements cannot be taken into account at lease

renewal if they were undertaken during the current lease (whatever its length),

or where the improvements were undertaken during the 21 years prior to the

application for a new tenancy.

Question: While we are on improvements, what would be basis of compensation

for a tenant who has undertaken improvements, and is leaving the

property?

Answer: It would be the increase in the value of the property as a result of the

improvements, or the cost of undertaking the works today, whichever

the lower?

Question: Just finally before I hand over to the chairman, who can serve an interim

rent notice – the landlord, the tenant or both?

Answer: Only the landlord.

Assessor

We’ll ask you a bit more on rent review later, but in examining the main comparable, the rent review of the nearby property shown on your plan, tell me how you went about obtaining the information, and also how you analysed the transaction.

Candidate

When I first inspected the property, I also walked the high street and other retailing areas looking for boards. I contacted these agents, and also others covering the area. I was fortunate to be provided good quality information by the agent undertaking the rent review, which included areas of the property, including zoning breakdown, the effective date/valuation date, the new rent and the previous rent (and effective dates), the rent review frequency, the length of the lease and term to be assumed for the rent review, availability of break provisions, rent review assumptions, repair provisions, the user clause, alienation provisions and insurance provisions. All these factors can affect rental value, but there needs to be something significant in order to make it a particular point in negotiations.

Assessor

What were the main negotiating issues then?

Candidate

The effective date of the subject review was four months after that of the comparable property, and the landlord’s agent felt that an uplift should be reflected. I resisted this, requesting that the landlord’s agent provided evidence. Another difference was that the subject property had a five year rent review pattern, whereas the comparable was of only three years. The landlord’s agent maintained that a five year period was more valuable to a tenant than a three year period, particularly in market conditions where values are rising strongly. I pointed out that inflation was currently low, economic conditions relatively stable, and that although there had been rental growth over the last five or so years, this largely reflected the market’s emergence from recession, and also that rental growth in retail rents was not expected to be substantial over the next few years – as indicated in the research of a large national practice. Another thing I checked initially was whether the rent could go up or down at review. For both leases it was upwards only. I held my ground, and agreed a rent of £25 per sq. ft. zone A, against £24.50 payable for the other property.

Professional ethics for the APC interview

Acting outside principal employment

Consider the question, ‘What would you do if a friend asked you to act on his behalf in respect of a rent review on his shop/the securing of planning permission for a house on his large garden/the drawing of plans for house/the arrangement of tenders/the monitoring of works?’

The question assumes that you are working for a firm, rather than being self-employed, and that the friend is seeking your assistance on an informal basis. You would, of course, have to decline to act for the friend. Remember that you do not hold professional indemnity insurance.

Although declining to act would be the correct answer in the APC interview, an assessor could still ask a private practice surveyor, ‘What about the opportunity to secure fee income for your practice - would you turn it down because the potential client is your friend?’

This may appear to be a rather stern approach by the assessor, but it is giving you the opportunity to acknowledge the prospect of securing an instruction for your practice, and ideally contributing further information to the assessors. You may say that you would invite the friend into the office to discuss a formal instruction. An assessor might say, ‘Is there anything to stop you discussing matters in the pub or in your home?’ You may say that there is not, but that you would just prefer to keep matters on a more professional footing. You may add that you would ensure that a colleague quoted fees bearing in mind your friend was the client.

Professional ethics is an area where assessors can bounce questions around in order to test a candidate’s understanding. Candidates should not feel things are not going their way in the interview in respect of professional ethics because assessors appear to be ‘moving the goal posts’.

James

Hello again

Hi APC sufferers and survivors alike.

Apologies for the delay in getting the blog active. Google have some sort of robot which tries to detect SPAM blogs and apparently mine at first appeared to fall in to that category. They said they would free it up in 4 days and 3 weeks later they have given it the all clear.

Please contribute your experiences or concerns and make it a useful APC resource, for free. You have to give email and a password to Log In but thats all there is to it, I believe.

James

Mode Presentation

Here is a recent presentation by a QS candidate with some comments by myself. Good example of how to cover all the bases and would be very effective if used in combination with a FLIP CHART which had a good picture of the propject during the introduction. Then there should be a series of mainly text flip charts comprising KEY ISSUES, MORE DETAIL ON THE KEY ISSUE OF TIME, PROCUREMENT OPTIONS CONSIDERED, OPTIONS REJECTED, OPTION CHOSEN, CRITICAL APPRAISAL OF OUTCOME, REFLECTIVE ANALYSIS ( This sections should be all about YOU rather than the job. Include lessons learned, show some development and talk about those transferrable skills you are claiming as your own such as teamwork and negotiation.

PRESENTATION

THANK YOU MR CHAIRMAN MY NAME IS xxxxxxxxxxx AND I AM CURRENTLY WORKING WITH xxxxxxxxxxx. THE PROJECT I WOULD LIKE TO PRESENT TO YOU WAS A SUBJECT OF A BUILDING INSURANCE CLAIM.

PERMISSION HAS BEEN SOUGHT FROM THE EMPLOYER TO USE THE INFORMATION. I WOULD ASK THE PANEL TO RESPECT THE EMPLOYER'S REQUEST FOR THE ANALYSIS TO BE USED ONLY FOR THE PURPOSE OF MY ASSESSMENT.

THE PROJECT CONSISTS OF DEMOLITION AND RECONSTRUCTION WORKS TO TWO PRIVATE SEMI-DETACHED OWNER-OCCUPIED BUNGALOWS BUILT AROUND 1960 AND LOCATED AT xxxxxxxxxxxxxxxxxxxx.

I HAVE CHOSEN TO PRESENT THIS PROJECT BECAUSE OF MY EXTENSIVE INVOLVEMENT WITH IT FROM INCEPTION TO COMPLETION. THE PROJECT WAS A VERY GOOD VEHICLE TO DEMONSTRATE MY SKILLS IN NEGOTIATION, COST PLANNING AND COST CONTROL. THE CONTRACTUAL AND OTHER ISSUES RAISED DURING THE COURSE OF THE PROJECT SERVED TO BOTH SUPPLEMENT AND EXPAND MY OWN EXPERIENCE OF QUANTITY SURVEYING PRACTICE.

IN VIEW OF THE TIME CONTRAINTS MY PRESENTATION WILL DEAL WITH ONE OF THE FOUR KEY ISSUES OUTLINED IN MY CRITICAL ANALYSIS REPORT. I HOPE TO DEMONSTRATE MY ABLITY TO COMMUNICATE EFFECTIVELY WHILE WORKING WITH OTHER PEOPLE AND SHOW YOU THAT I HAVE THE TECHNICAL SKILL AND PROFESSIONAL COMPETENCE REQUIRED BY THE PROFESSIONAL BODY.

PHOTOGRAPH ON FLIP CHART THROUHOUT THE INTRODUCTION

MAIN BODY

KEY ISSUES list these on the next chart and when you read through them tell us briefly why each one was key . this is important to remind us of the big picture.

THE KEY ISSUES WHICH I DEALT WITH IN MY CRITICAL ANALYSIS ARE:

1. TIME

2. COST CERTAINTY

3. APPOINTMENT OF THE MAIN CONTRACTOR

4. APPOINTMENT OF SUBCONTRACTOR

THE KEY ISSUE I AM GOING TO DEAL WITH IN DETAIL IS THE TIME.

PRIOR TO MY INVOLVEMENT THE PROJECT HAD BEEN TENDERED FOR AND A CONTRCTOR HAD BEEN APPOINTED. IT SUBSEQUENTLY TURNED OUT THAT THE APPOINTED CONTRACTOR COULD NOT SUPPLY SATISFACTORY CONSTRUCTION PHASE HEALTH & SAFETY PLAN, THEREFORE HIS APPOINTMENT WAS TERMINATED. Comment- tell us briefly why the contractor let this contract go after going to the trouble and expense of tendering just for the want of a h&s plan

Also make sure you are fully aware of the contractual basis for determination and appointment of new contractor

IT WAS AT THIS STAGE THAT I WAS INVOLVED AND WAS GIVEN THE INSTRUCTION TO APPOINT A SUITABLE CONTRACTOR WITHIN FIVE WEEKS OF THE INSTRUCTION.

New flip chart

THE FACT THAT THE BUILDINGS WOULD BE DEMOLISHED MADE IT APPARENT THAT AN ALTERNATIVE ARRANGEMENT HAD TO BE MADE TO ACCOMMODATE THE POLICYHOLDERS TEMPORARILY ELSEWHERE FOR THE DURATION OF THE CONTRACT AND THE PAYMENT FOR THE ALTERNATIVE ACCOMMODATION WOULD BE MADE BY THE INSURER. THAT MEANT THAT TIME OVERRUN ON THE PROJECT WOULD INCREASE THE COST OF ALTERNATIVE ACCOMMODATION THEREBY INCREASING THE TOTAL COST SPENT ON THE CLAIM AS A WHOLE.

CHOOSING THE CORRECT PROCUREMENT STRATEGY IS A KEY TO MEETING PROJECT OBJECTIVES. I REALISED THAT VARIOUS CONTRACT STRATEGIES WILL DELIVER PROJECT OBJECTIVES IN DIFFERENT WAYS. THEREFORE, IN ORDER TO ADDRESS THE TIME RELATED KEY ISSUE ON THE PROJECT, I KNEW THAT CHOOSING THE RIGHT PROCUREMENT ROUTE WAS CRITICAL TO MEETING THE PROJECT OBJECTIVE IN TERMS OF TIMELY DELIVERY.

THE MAIN PROCUREMENT STRATEGIES WHICH I CONSIDERED WERE AS FOLLOWS;

· A COST REIMBURSEMENT CONTRACT,

· TRADITIONAL LUMP SUM CONTRACT, AND

· NEGOTIATED CONTRACT.

A COST REIMBURSEMENT CONTRACTS WAS REJECTED BECAUSE THE COST OF THE WORK CAN ONLY BE DETERMINED ON COMPLETION OF THE PROJECT, AS COST CERTAINTY WAS ONE OF THE KEY ISSUES ON THE PROJECT.

TRADITIONAL LUMP SUM CONTRACTS - THIS ALLOWS A CONTRACT SUM TO BE DETERMINED BEFORE CONSTRUCTION STARTS. THE CONTRACT PROVIDES FOR CONTROL OF THE COST OF VARIATIONS. THIS WOULD HAVE BEEN THE CHOSEN PROCUREMENT STRATEGY FOR THE PROJECT BEARING IN MIND THAT THE DESIGN HAD BEEN COMPLETED, BUT THIS WOULD NORMALLY REQUIRE THE PREPARATION OF DETAILED BILL OF QUANTITY FOR PRICING PURPOSEs, THIS WAS CONSIDERED TIME CONSUMING, DUE TO TIME CONSTRAINTS ON THE PROJECT, THEREFORE THE OPTION WAS REJECTED.

NEGOTIATED CONTRACT - THIS METHOD OF CONTRACTOR SELECTION INVOLVES THE
AGREEMENT OF A TENDER SUM WITH A SINGLE CONTRACTING ORGANISATION. ONCE THE DOCUMENTS HAVE BEEN PREPARED, THE CONTRACTOR PRICES THEM. THEN THE PQS AND THE CONTRACTOR QS ARRANGE A MEETING TO DISCUSS THE QUERIES RAISED BY THE PQS AND THE NEGOTIATION PROCESS BEGINS. IT ALSO GIVES THE OPPORTUNITY FOR THE CONTRACTOR TO SUGGEST MORE ECONOMICAL OR BUILDABLE WAYS TO ACHIEVE THE CLIENT'S OBJECTIVES.

THIS PROCUREMENT STRATEGY WAS CHOSEN BECAUSE IT WAS MORE LIKELY TO ACHIEVE THE PROJECT OBJECTIVES THAN THE OTHER OPTIONS ALREADY CONSIDERED. THIS WAS BECAUSE IT SATISFIED THE FUNDER'S NEEDS BEST IN TERMS OF TIME AND COST CERTAINTY AND IT WAS THE ONLY PROCUREMENT STRATEGY WHICH ALLOWED EARLY START ON SITE.

It would be good if you could also give some comment on the relative typical costs of a negotiated project for the same work at competitive tender. It would only be your professional opinion but then again that is what we want to know about. On balance I think we can assume that the negotiated price would be more expensive ( how much -as the assessor will probably ask you? ) but of course your point will be that this will be saved in decanting costs plus the benefits to the insurance company of having ‘happy customers’

HAVING DECIDED ON THE PROCUREMENT ROUTE SUITABLE FOR THE PROJECT, I LISTED THREE CONTRACTORS THAT I KNEW WERE CAPABLE OF EXECUTING THE PROJECT IN TERMS OF TECHNICAL ABILITY AND RESOURCES. ENQUIRIES WERE MADE AND I SELECTED ONE OF THE CONTRACTORS ON MY LIST THAT GAVE ME THE SHORTEST LEAD-IN TIME. THE SUCCESSFUL CONTRACTOR HAS A BUSINESS RELATIONSHIP WITH MY EMPLOYER AND HE HAS WIDE EXPERIENCE OF THIS TYPE OF WORK, THE GEOGRAPHICAL AREA ALSO FAVOURED THE CHOSEN CONTRACTOR AS ONE OF THE FACTORS WHICH CAN DELAY THE PROGRESS OF WORK WAS SHORTAGE OF LABOUR OR THE EASE OF GETTING MATERIALS TO SITE, ALL THESE FACTORS WERE GIVEN DUE CONSIDERATION PRIOR TO THE SELECTION OF THE MAIN CONTRACTOR.

THE MAIN CONTRACTOR OFFERED TO CARRY OUT THE WORKS FOR THE SUM OF £245,430.00. I CONSIDERED THAT THE MAIN CONTRACTOR HAD OVERSTATED THE CONTRACT, AS HIS ESTIMATE WAS 16.5% MORE THAN MY PRE CONTRACT ESTIMATE. Briefly tell us a little about this, based figures on what? Office database or external sources, did you use I.T? THIS NOW FORMED THE BASIS OF OUR NEGOTIATION MEETING, WHICH WAS HELD ONE WEEK AFTER THE ESTIMATE WAS RECEIVED.

DURING THE MEETING, IT WAS ESTABLISHED THAT THE CONTRACTOR HAD ALLOWED VARYING PERCENTAGES FOR ATTENDANCE ON SUBCONTRACTORS, THIS RANGED FROM 50 - 60%. IT AFFECTED THE FOLLOWING ITEMS;

· DEMOLITIONS,

· PILING/FOUNDATIONS

· FIRST FIX M&E

· SECOND FIX M&E

THE CONTRACTOR'S ARGUMENT FOR THE HIGHER PERCENTAGE FOR ATTENDANCE ON SUBCONTRACTORS WAS THAT THEY HAD NO ENOUGH TIME TO PREPARE THE ESTIMATE AND OBTAINED COMPETITIVE TENDER FROM SUBCONTRACTOR FURTHERMORE THEY COULD SEE THE RISK OF RUNNING THE PROJECT AT A LOSS IF CARE WAS NOT TAKEN. I REFERRED THE CONTRACTOR BACK TO SOME OF THE PROJECT HE HAD EXECUTED FOR MY EMPLOYER IN THE PAST, WHICH ONLY ALLOWED 15% UPLIFT FOR ATTENDANCE ON SUBCONTRACTOR. THE CONTRACTOR AGREED TO STICK WITH 15% UPLIFT AS AGAINST THE 50% HE QUOTED.

THE NEXT ITEM TO BE CONSIDERED WAS BRICKWORK, THIS INCLUDED ALL NECESSARY INSULATION. PRIOR TO THE MEETING I HAD A DISCUSSION WITH THE DESIGN TEAM TO SEE IF THE SPECIFICATION FOR INTERNAL BRICKWORK COULD BE CHANGED TO THERMAL BLOCKS, AS THIS WOULD CONSTITUTE A SAVING ON INSULATION. THE POSSIBILITY WAS CHECKED AND THIS WAS PRESENTED TO THE CONTRACTOR AND REDUCED THE CONTRACTOR'S ESTIMATE FROM £31,230.00 TO £26,130.00

CONSIDERATION WAS GIVEN TO THE AMOUNT ALLOCATED FOR PRELIMINARIES WITHIN THE CONTRACTOR'S ESTIMATE. A SUM OF £947.96/WEEK WAS ALLOCATED, THIS WAS CONSIDERED EXCESSIVE. I ASKED THE CONTRACTOR TO ITEMISE ALL THE PRELIMINARY WORKS HE HAD INCLUDED IN HIS ESTIMATE, WE JOINTLY PRICED THIS UP AND CAME TO AN AGREED COST OF £670.71/WEEK.

THE LAST ITEMS FOR CONSIDERATION WERE PROVISIONAL SUMS ON BATHROOM, KITCHEN AND FIRE & SURROUND. BEARING IN MIND THAT IT WAS AN INSURANCE CLAIM AND THE POLICYHOLDER SHOULD BE PUT BACK IN THE SAME FINANCIAL POSITION HE HAD BEEN PRIOR TO THE DAMAGE, THEREFORE THE INSURER WAS NOT LIABLE TO RENEW THE KITCHEN, BATHROOM OR FIREPLACE. THEREFORE THE EXISTING UNITS SHOULD BE CAREFULLY REMOVED, STORED AND REFITTED.

AT THE END OF THE MEETING THE CONTRACT SUM WAS AGREED IN THE SUM OF £205,000.00 THIS INCLUDED £6,000.00 FOR CONTINGENCY.

This section is very good and again could be enhanced by use of flip chart showing how you built up the negotiated savings to bring the cost in to line with your estimate

CRITICAL APPRAISAL

MY CLOSE INVOLVEMENT WITH THE CLIENT GAVE ME AN INSIGHT INTO AN
OWNER-OCCUPIER'S PRIORITIES ON A PROJECT. I LEARNED THAT LISTENING TO THE CLIENT AND BEING CONSTANTLY AWARE OF HIS OBJECTIVES WAS CRITICAL TO ME PROVIDING A QUALITY SERVICE TAILORED TO HIS NEEDS. THE PROJECT WAS CONSIDERED A SUCCESS AS THE WORKS WAS COMPLETED WITHIN THE REVISED PROGRAMME AND TO THE POLICYHOLDER'S REQUIRED QUALITY. ALTHOUGH THE FINAL PROJECT COST, HOWEVER, WAS OVER RUN BY 10.87%, THIS WAS DUE TO UNFORESEEN GROUND CONDITION WHICH ALSO

INCREASED THE CONTRACT DURATION BY SIX WEEKS, THE VARIATIONS TO THE CONTRACT WERE SEEN AS INEVITABLE BUT THIS WAS CONTROLLED TO ITS NEAREST MINIMUM.

REFLECTION

MY ESTIMATING AND IT SKILLS HAVE BEEN ENHANCED AS A RESULT OF MY INVOLVEMENT IN THIS PROJECT. MY PROFESSIONAL SKILLS INCLUDING COST CONTROL TEAMWORKAND NEGOTIATION WERE KEY TO MEETING THE FUNDER'S PRIMARY OBJECTIVES OF TIMELY DELIVERY AND COST CERTAINTY. DUE TO THE SUCCESS OF MY NEGOTIATION ON THIS PROJECT I HAVE BEEN GIVEN THE OPPORTUNITY TO NEGOTIATE FINAL ACCOUNT WITH FIVE CONTRACTORS WHO
CARRIED OUT FLOOD REINSTATEMENT FOR US IN CARLISLE.

THE OUTCOME OF THIS PROJECT HAVE SHOWED ME THAT WHILE A SITUATION MAY SEEM PROBLEMATIC THERE IS USUALLY A WAY TO ACHIEVE YOUR OUTCOME BY TAKING AN INNOVATIVE APPROACH AND THROUGH TEAMWORK. IT ALSO BROUGHT HOME THE NECESSITY OF COMMUNICATION BETWEEN ALL CONSTRUCTION TEAM MEMBERS AND IN PARTICULAR WITH YOUR CLIENT.

THANK YOU FOR YOUR TIME - I WILL NOW BE HAPPY TO TAKE ANY QUESTIONS YOU MAY HAVE.

APC What's that all about?

Welcome to the latest wheeze to help APC candidates get free help and support from their 'betters', their peers and fellow sufferers. I will be posting help and information on a regular basis but obviously this will only be a success if the 'readers' can also contribute. I suggest that for those about to be assessed it would be helpful to consider likely hot topics for questions and possible answers. Here is a list sent to me today by Liam Hawes who is in commercial property and being assessed shortly. Any additions or even answers to potential questions on these.

Empty Rates Relief

Energy performance certificates

Sustainability

Service Charge code of practice

Red book updates

Asbestos regulations

Fire safety

DDA

Code of measuring practice

Code for leasing business premises

money laundering

Credit crunch

REITs James