New mandatory requirements on conflicts of interest for land, property, construction and infrastructure industry.
- New conflicts of interest requirements for RICS professionals launched following extensive industry consultation.
- New global rules launched with mandatory requirements for UK commercial property investment market that bans controversial practice of dual agency.
- All RICS professionals and regulated firms will be required to meet the new standard to be effective from 1 January 2018.
- Major UK REITS, Land Securities and SEGRO commit to adopting new requirements ahead of 2018 deadline.
RICS is tightening up requirements for professionals and regulated firms working in land, property, construction and infrastructure, with the publication today of a new global professional statement on conflicts of interest.
Following on from this, in April, RICS will be publishing an additional UK-specific professional statement for the commercial property investment market that bans the controversial practice of dual agency – known colloquially as ‘double-dipping’. Both of these standards will be effective from 1 January 2018.
The new global professional statement, which will become mandatory next year, is being launched today at MIPIM, (a major international real estate exhibition and conference held in Cannes, France) having been developed as the result of an extensive consultation that saw industry professionals and regulatory experts offer their views.
The key findings from the global consultation showed that respondents would like to see RICS address:
- definitions of confidentiality.
- full disclosure and transparency between parties.
- the practice of ‘‘dual agency” in the UK commercial property investment market.
- tighter rules around multiple agency relationships.
The new requirements aim to address these concerns, providing both greater confidence for investors and increased clarity for RICS professionals.
Michael Zuriff, Americas Director of Regulation for RICS said:
“Conflicts of interest in the property sector in the Americas pose a serious risk to the public trust and confidence. RICS professionals working under this practice statement should boost trut and confidence in the industry by increasing transparency and openness in the global land, property, construction and infrastructure profession”.
The new UK professional statement will now see the controversial practice of dual agency, whereby agents act for both sides in an instruction, banned in the UK.
On a global level, multiple agency relationships will now only be permissible with informed consent and, the professional statement introduces better processes for managing that consent and promoting transparency. The professional statement will also offer clearer guidance on confidentiality, building greater understanding of where the information gained during a transaction should not be used.
Following launch of the global statement and the UK-specific statement, RICS will seek to review the practice of dual agency outside of the UK market, including the Americas, and consult on the requirement for further market specific standards. Already, some of the best-known commercial property firms, such as SEGRO, JLL and Land Securities have indicated their support for the new standards.
It is vital that agents and real estate professional advisers are seen to adhere to the highest standards, conducting themselves with the greatest integrity. For too long public trust in the industry has been blighted by concerns around conflicts of interest. Action urgently needed to be taken and I’m pleased to see that RICS has taken the lead in banning the practice of ‘dual agency’ or ‘double-running’. Across our industry, we should view this as a very welcome move.
RICS believes that it is uniquely placed to provide world-class standards for a global profession in land, property, construction and infrastructure. Regulating the profession in a way that holds it to this promise is vital to inspire confidence among clients and the public.
The RICS professional statement on conflicts of interest, is being launched today at MIPIM by RICS Chief Executive Officer, Sean Tompkins.