RICS Assessment of Professional Competence (APC) Mandatory Competencies (Professional Practice, Ethics and Business Skills) Syllabus

What are the RICS minimum levels of indemnity for PII based on firm turnover (UK requirement)?

Minimum limit of indemnity is set by turnover band: turnover up to £100,000 → at least £250,000; turnover £100,001–£200,000 → at least £500,000; turnover over £200,000 → at least £1,000,000 each and every claim. Firms must also maintain run-off cover (typically a minimum period) after ceasing to practise.

What is 'run-off cover' in PII and why is it required?

Run-off cover is PII that continues to protect a firm (and its clients) after the firm has stopped trading, covering claims that arise later in respect of past work. It is required because PII is written on a 'claims-made' basis, so without run-off, claims notified after closure would be uninsured. RICS requires a minimum run-off period.

What is client money and what are the core RICS rules for handling it?

Client money is money held or received for a client (or third party) that is not the firm's own fee. RICS rules require it to be held in a separate, identifiable client bank account (designated as 'client'), kept distinct from office money, reconciled regularly (typically monthly), only used for its intended purpose, and accounted for with proper records and audit.

What is the RICS Client Money Protection (CMP) Scheme and what does it provide?

The CMP Scheme is a compulsory scheme for RICS-regulated firms holding client money. It reimburses clients if a firm cannot repay client money due to fraud, misappropriation or failure. It provides consumer protection and is mandatory for letting/managing agents in England under separate government CMP requirements, and underpins client confidence in the profession.

What does 'treating clients fairly' (TCF) require of a surveyor in practice?

Acting in the client's best interests within the agreed scope, providing clear and not misleading information, ensuring advice is suitable and competent, being transparent about fees and conflicts, managing expectations realistically, and ensuring vulnerable clients are appropriately supported. It aligns with the Rules of Conduct on service, honesty and public interest.

What are the three primary financial statements and what does each show?

1) Income statement (profit and loss account): revenue, expenses and profit/loss over a period. 2) Balance sheet (statement of financial position): assets, liabilities and equity at a point in time. 3) Cash flow statement: cash inflows and outflows (operating, investing, financing) over a period. Together they show profitability, position and liquidity.

State the fundamental accounting (balance sheet) equation.

$$\text{Assets} = \text{Liabilities} + \text{Equity}$$ Equivalently, owner's equity (net assets) equals assets minus liabilities: $\text{Equity} = \text{Assets} - \text{Liabilities}$.

What is the difference between gross profit and net profit, and how is each calculated?

Gross profit is revenue less the direct cost of sales: $\text{Gross Profit} = \text{Revenue} - \text{Cost of Sales}$. Net (operating) profit deducts all operating overheads, interest and tax from gross profit: $\text{Net Profit} = \text{Gross Profit} - \text{Overheads} - \text{Interest} - \text{Tax}$.

Define the current ratio and the acid-test (quick) ratio used to assess liquidity.

Current ratio measures short-term solvency: $\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}$. The acid-test/quick ratio excludes stock: $\text{Quick Ratio} = \frac{\text{Current Assets} - \text{Inventory}}{\text{Current Liabilities}}$. A current ratio around 1.5–2 is often considered healthy.

What are management accounts and how do they differ from statutory (financial) accounts?

Management accounts are internal, frequent (often monthly) financial reports used by management to make decisions — e.g. budgets vs actuals, cash flow forecasts, KPIs. They are not legally required, have no prescribed format, and are forward-looking. Statutory accounts are annual, externally published, prepared to accounting standards (e.g. FRS 102/IFRS), and historic.

What is credit control and name three techniques used to manage it.

Credit control is the process of managing customer credit to ensure prompt payment and minimise bad debts. Techniques: setting credit limits/terms and running credit checks before granting credit; issuing prompt invoices and statements; chasing overdue debts (aged debtor reports, reminders, stop-list); offering early-settlement discounts; and using debt collection or interest on late payment as a last resort.

What is the debtor (receivables) days ratio and what does it indicate?

It measures the average time taken to collect debts: $$\text{Debtor Days} = \frac{\text{Trade Receivables}}{\text{Revenue}} \times 365$$ A higher figure indicates slower collection and potential cash-flow/credit-control problems; a lower figure indicates efficient collection.

What core elements should a business plan for a surveying practice contain?

Executive summary; vision/mission and objectives; market and competitor analysis; service offering; marketing and sales strategy; operational plan and resourcing; management/staffing structure; financial plan (forecasts, budgets, cash flow, break-even); and a risk assessment with mitigation. It should set measurable goals (e.g. SMART objectives) and be reviewed regularly.

In business risk management, what are the four common responses to a risk (the '4 Ts')?

Tolerate (accept/retain the risk), Treat (reduce likelihood or impact through controls), Transfer (e.g. insurance or contractual transfer), and Terminate (avoid the activity causing the risk). Risks are typically assessed by likelihood × impact and recorded in a risk register with owners and mitigation actions.

Which main UK taxes should a surveyor be aware of, and to which transactions do they relate?

VAT (on supplies of goods/services, including some property — option to tax); Stamp Duty Land Tax (SDLT) on land/property purchases; Capital Gains Tax (CGT) on disposals of assets; Corporation Tax (company profits); Income Tax/Self-Assessment (sole traders/partners); Business Rates (occupation of non-domestic property); and Council Tax (domestic). Awareness, not detailed advice, is expected — refer clients to tax specialists.

What is the 'option to tax' (VAT) in relation to commercial property?

Most supplies of land and buildings are VAT-exempt, but an owner can elect to 'opt to tax' a commercial property, making rents and sale proceeds standard-rated for VAT. This allows the owner to recover input VAT on related costs but adds VAT to amounts charged to occupiers. The option generally lasts 20 years and must be notified to HMRC.

What are the three modes of professional communication, and give an example of each in surveying.

1) Written — reports, letters, terms of engagement, valuations, emails. 2) Oral — client meetings, presentations, negotiations, telephone advice. 3) Graphic — drawings, plans, maps, photographs, charts, GIS outputs and CAD/BIM models. Effective surveyors tailor the medium and language to the audience.

What features make a professional surveying report clear and effective?

Clear structure (executive summary, body, conclusions/recommendations, appendices); plain, unambiguous language appropriate to the reader; logical flow; objectivity and evidence; clear scope and assumptions/limitations; consistent terminology; correct spelling/grammar; and professional presentation. The purpose and intended recipient should shape content and tone.

Name common negotiation styles/approaches and the concept of BATNA.

Approaches include distributive (competitive/'win-lose') and integrative (collaborative/'win-win'), plus accommodating, avoiding and compromising styles (Thomas–Kilmann). BATNA = 'Best Alternative To a Negotiated Agreement' — your strongest fallback if no deal is reached; knowing it (and the other party's) sets your walk-away point and strengthens your position.

What is stakeholder management and how can stakeholders be prioritised?

Stakeholder management is identifying parties affected by or able to affect a project, understanding their interests, and engaging them appropriately. Stakeholders are commonly prioritised using a power/interest grid: high power–high interest = manage closely; high power–low interest = keep satisfied; low power–high interest = keep informed; low power–low interest = monitor.

Distinguish conflict avoidance from dispute resolution, with examples relevant to surveying.

Conflict avoidance is proactive — clear contracts, good communication, risk management, partnering, early warning systems and dispute boards to prevent disputes arising. Dispute resolution is reactive — resolving a dispute once it has arisen, e.g. via negotiation, mediation, conciliation, adjudication, arbitration, expert determination or litigation.

Compare mediation, adjudication, arbitration and litigation as dispute resolution methods.

Mediation: voluntary, non-binding, a neutral helps parties reach their own settlement. Adjudication: fast (typically 28 days), interim binding decision, common in construction (Construction Act). Arbitration: private, binding award by an arbitrator under the Arbitration Act 1996, limited appeal. Litigation: public court process, binding and enforceable, with rights of appeal but slower and costlier.

What are the key data protection principles under the UK GDPR?

Personal data must be: 1) processed lawfully, fairly and transparently; 2) collected for specified, explicit, legitimate purposes; 3) adequate, relevant and limited (data minimisation); 4) accurate and kept up to date; 5) kept no longer than necessary (storage limitation); 6) processed securely (integrity and confidentiality); and 7) the controller must demonstrate accountability.

What is a personal data breach under UK GDPR and what is the reporting obligation?

A personal data breach is a breach of security leading to accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to personal data. A reportable breach must be notified to the ICO within 72 hours of becoming aware, and affected individuals must be told without undue delay if there is a high risk to their rights and freedoms.

What is the difference between an inclusive environment and accessibility in the built environment?

Accessibility focuses on enabling access for people with disabilities (e.g. ramps, lifts, compliance with Building Regs Part M). An inclusive environment is broader: it is designed and managed so everyone — regardless of age, disability, gender, background — can use it conveniently, safely and with dignity. Inclusion considers diverse needs from the outset, not just minimum compliance.

What protection does the Equality Act 2010 give and what are its nine protected characteristics?

The Equality Act 2010 prohibits discrimination, harassment and victimisation and requires reasonable adjustments. The nine protected characteristics are: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.

What are the three pillars of sustainability and how do they apply to the built environment?

The three pillars are Environmental, Social and Economic ('people, planet, profit'). In the built environment this means reducing carbon/energy/resource use and protecting ecosystems (environmental); creating healthy, inclusive, well-designed places (social); and ensuring viability, whole-life value and efficient use of resources (economic). Sustainability seeks to balance all three.

What is the difference between operational carbon and embodied carbon in a building?

Operational carbon is the greenhouse gas emissions from a building's use — heating, cooling, lighting, power (in-use energy). Embodied carbon is the emissions associated with materials and construction processes across the lifecycle — extraction, manufacture, transport, construction, maintenance and end-of-life. Whole-life carbon = embodied + operational carbon.

Under the CDM Regulations 2015, name the key duty holders and one core duty of each.

Client: makes suitable arrangements and ensures duty holders are appointed. Principal Designer: plans/manages/coordinates health & safety in the pre-construction phase. Principal Contractor: plans/manages/coordinates the construction phase. Designer: eliminates/reduces risks through design. Contractor: carries out work safely. Workers: cooperate and follow instructions.

When do CDM 2015 'notifiable' project requirements apply, and what document must be sent to the HSE?

A project is notifiable if construction work is scheduled to last longer than 30 working days and has more than 20 workers simultaneously at any point, OR exceeds 500 person-days. An F10 notification must be submitted to the HSE. Projects with more than one contractor also require a Principal Designer, Principal Contractor and a written Construction Phase Plan.

What is the hierarchy of risk control (general principles of prevention) used in health and safety?

In order of preference: 1) Eliminate the hazard; 2) Substitute with something safer; 3) Engineering controls (isolate/guard); 4) Administrative controls (procedures, training, signage); 5) Personal Protective Equipment (PPE) as a last resort. Higher measures are preferred because they reduce risk at source rather than relying on behaviour.

What personal safety precautions should a surveyor take for lone working and site inspections?

Carry out a risk assessment and dynamic risk assessment on arrival; tell colleagues your itinerary and expected return (buddy/check-in system); carry a charged phone and lone-worker alarm; wear appropriate PPE; meet unknown clients in safe/public settings first; trust instincts and withdraw if threatened; and follow safe access procedures for hazardous or derelict premises.

What is asbestos, why is it hazardous, and what is the key duty under the Control of Asbestos Regulations 2012?

Asbestos is a naturally occurring fibrous mineral once widely used in construction; inhaling its fibres causes asbestosis, lung cancer and mesothelioma. The Control of Asbestos Regulations 2012 impose a 'duty to manage' asbestos in non-domestic premises — the dutyholder must find/presume asbestos, assess and record its condition in an asbestos register, and manage the risk with a written plan.

Name common hazardous materials a surveyor may encounter besides asbestos, and the regulation governing exposure to substances.

Examples: lead (paint/pipework), silica dust, mould/biological hazards, contaminated land, deleterious materials (e.g. high alumina cement, RAAC), radon gas, and chemicals/solvents. Exposure is governed by the Control of Substances Hazardous to Health Regulations 2002 (COSHH), which requires assessment, control and monitoring of exposure to hazardous substances.

What is the Building Safety Act 2022 and which buildings does it primarily regulate?

The Building Safety Act 2022 was enacted following the Grenfell Tower fire to improve building safety, accountability and resident protection. It creates a more stringent regime for 'higher-risk buildings' — generally those at least 18m tall or with 7+ storeys containing two or more residential units — overseen by the Building Safety Regulator (within the HSE).

What are the 'three gateways' and the 'golden thread' introduced by the Building Safety Act regime?

The three gateways are hard stops in the design/construction of higher-risk buildings: Gateway 1 (planning), Gateway 2 (before construction begins), and Gateway 3 (before occupation). The 'golden thread' is the requirement to create and maintain accurate, accessible digital information about a building's design, construction and safety throughout its lifecycle.

What is the difference between a hazard and a risk in health and safety terms?

A hazard is something with the potential to cause harm (e.g. asbestos, working at height, an exposed cable). A risk is the likelihood that the hazard will cause harm combined with the severity of that harm. Risk assessment evaluates the chance and consequence so that suitable controls can be applied: $\text{Risk} = \text{Likelihood} \times \text{Severity}$.

What is a break-even point and how is it calculated for a practice?

The break-even point is the level of activity/sales at which total revenue equals total costs, so profit is zero. In units: $$\text{Break-even (units)} = \frac{\text{Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}$$ The denominator is the contribution per unit.

What is the gearing (leverage) ratio and why does it matter when assessing a business?

Gearing measures the proportion of a business funded by debt versus equity: $$\text{Gearing} = \frac{\text{Debt}}{\text{Equity}} \times 100\%$$ (or debt ÷ (debt + equity)). High gearing means greater reliance on borrowing, increasing financial risk and vulnerability to interest-rate rises, but can boost returns on equity in good times.

What is the purpose of an information barrier register and gifts/hospitality register from a governance standpoint?

Both are transparency and audit tools. A gifts and hospitality register records what was offered/received, by whom, value and approval, evidencing that nothing improperly influenced decisions (supporting an anti-bribery defence). Conflict/information-barrier records evidence that conflicts were identified, disclosed, consented to and managed — demonstrating compliance with RICS Rules and supporting accountability.