Episode 31 – Part 1: What are the requirements of the Home Survey Standard? With Steve Lees

The following transcript is autogenerated so may contain errors.

 Matt Nally: On this week’s episode, we have Steve Lees from the RICS. So thank you for coming on today. 

Steve Lees: Hi Matt. Thanks very much. Yeah, so my official Job title has seen a specialist for residential survey. So I’ve only recently joined RICS at the end of March of this year in a role to focus on residential survey.

Previous career was actually as a surveyor. So qualified after getting a degree in building surveying in the late nineties, which seems a million miles away but then qualified. In 2001 became chartered and worked for some SME businesses in the residential sector before working for two of the larger corporates, whilst also supporting RICS on a few papers, including cladding, valuation papers, Japanese knotweed.

And yeah, all the joys and then officially been appointed to lead the residential specialism and engaging with the sector. So thank you very much for the invite. And good to speak to your listeners. 

Matt Nally: No, it’s great to have you on. I suppose for anyone that’s wondering what we’re going to cover today and We’ll touch again on your background in a second, but we’ll be covering things like the sort of home service standard requirements and I suppose the future of residential and bits and pieces like that.

But I suppose before we get onto sort of topic one around the requirements of the home standard what made you want to move from working as a surveyor into. 

Steve Lees: It’s a really good question. Obviously I had a passion for property and enjoyed looking at people’s houses, but also supporting others.

So I had a little bit of a life event around 10 years ago where I was looking in lofts most of the day and out with the surveying equipment and providing reports. And unfortunately And I’m over it now, but I am getting throat cancer. So called for a change in direction in my career. And every cloud I moved into sort of the audit and technical support area and customer care on.

I really enjoyed that aspect of the role. So that then allowed me to go through my previous employers to become head of technical. So I was head of technical for a large corporate before I heard about the opportunity to lead. The RSS. sector for residential survey. And I thought I’ve built up 20 odd years of knowledge and experience and contacts, and I think time to give something back.

So it’s a little bit of a sideways move into a new and exciting role. There’s a few challenges and a few opportunities for our membership, and I think it really helps. I’ve had that experience and been out in the field and hopefully understand the challenges of our membership and hopefully the general public as well.

Matt Nally: Oh yeah, definitely. I think it’d be impossible to work on what you’re, we’re about to discuss if without that background to it, because it’s you need to have that in depth understanding of how it works and different challenges and stuff. But I’m glad that out of something like that, there’s, the positivity’s come and you’ve got the something you’re loving doing now, which is great.

Yeah, 

Steve Lees: absolutely. Yeah. RSS a very forward thinking and there’s a lot on the pad to be dealt with, which I’m sure we’ll discuss. 

Matt Nally: Definitely. Definitely. So I suppose coming into then the first thing we want to discuss around home standards and requirements. I suppose the background is it came out originally in 2019.

Is that right? 

Steve Lees: Yeah, that’s right. So previous to that home surveys had lots of documentations around different types of residential home surveys that were all amalgamated together from some research that was done in 2018. But officially the document was completed in 2019, but was effective in 2021.

And you might think that’s quite a big lead in time for any sort of document. But if we think back, the standard came into force around the period of covid. So in effect, surveyors were actually looking in people’s houses in that during that time. So it made sense to make it effective in 2021 to allow businesses to change their business model to reflect the home survey standard.

That’s when it became effective. And the first thing that landed on my desk at when I joined RICS was to start the review to bring together version two. So that’s what I’m in the midst of at the moment. 

Matt Nally: Interesting. I think I remember that sort of extension to the deadline coming in.

I think there was quite a few challenges at the time you had a mix of. Initially people might’ve been off on furlough because the businesses couldn’t operate. And then suddenly it was the busiest time in the market I’ve ever seen. And there was no time to review new things. It was a very interesting time.

I think. Yeah, 

Steve Lees: really interesting. I say actually being involved with the sector then that there was a lot of nervousness around how the market recovering, as you quite rightly say, it was a little bit of a boom time and with a new standard to introduce as well. 

Matt Nally: How’s it gone? Do you think this will roll out?

I suppose we can come onto what the requirements of it in a minute, but. from your initial review of things. Has it been a successful role? Yeah, I think 

Steve Lees: with every standard that’s created into the market, there will be mixed views from the membership. But I think it was important to have all the documents in one central place.

I think the key thing to take away created a minimum standard for all aspects of the service that surveyors provide. So it is a minimum standard. People can build and grow from that. So not having to complete a formulate home survey, as long as it is to the standard that can build the product that they want.

People starting to use different technologies such as drones and incorporating data. But as long as it meets the minimum standard, we’re encouraging people to either use the RICS products, but equally they can build their own. They can build their own as well. General feedback is it’s landed pretty well.

Obviously you’ll speak to different people will have a different view because there has been a change, particularly introducing the levels of surveys levels one, two, and three, which is a change from the old parlance of a condition report, a home buyer report or a building survey. So a little bit of bedding in, I would say, but I spoke, sorry, I spoke to the property ombudsman and.

People from the dispute resolution service and they feel it works really well rather than having lots of documents to have this one central bible for regulated firms and members to work to seems to have landed pretty well. 

Matt Nally: I think the key with anything though, is it’s the idea that anything’s going to be a silver bullet and be perfect.

First time is unrealistic. Everything’s about continual improvement, we’ll come on to what are the, um, where’s the review side of things coming on a bit later on, but I suppose in terms of starting with the basics to recover, what are the requirements 

Steve Lees: around? Yeah, as I say, it should be seen as a framework.

So it’s a professional standard, which are members and regulated firms must adhere to. There’s a series of musts within the report. So a must means A member or a regulated firm must adhere to this. So create a framework for regulated firms to work to. For instance, creating a framework for what needs to go into a In terms of engagement, what the levels of surveys are how we liaise with our clients.

So before that area was pretty open, but now we encourage our members or the standard ask our members to speak to clients before they undertake, we undertake the survey to make sure they’re happy with the product and also to speak to them after the, after we’ve completed the inspection to make sure they, The client really fully understands the content of the report.

It also sets out to our members that they must have knowledge of the locality and the type of property that they’re undertaking. So there’s a lot more available information now, as Matt, we can look on online to look at properties before we buy. So if the surveyor in question doesn’t feel they’ve got the knowledge or experience in that particular area, the standard.

portrays to them that they shouldn’t undertake that survey if they haven’t got their competence. So it’s all about putting that really good framework around to make sure both the consumer and the surveyor are safe in the work that they do. 

Matt Nally: Interesting. Just interesting. We had a just recorded another episode around when you can do level threes.

And I’d be interested to get your take on this then I suppose, is it a case of, um, if you can’t, you couldn’t do the level three, if you couldn’t do the level two, i. e. your knowledge isn’t, you’re not competent for that type of property, but provided you were competent to do a level two on a property, you could do a level three.

Yeah, I think 

Steve Lees: it all comes down to continual professional development. At the moment. The home survey standard is self acceptation. So the person inspecting needs to have that knowledge and experience, which can only be gained by being mentored or being actually exposed to these properties and building up that knowledge base.

Level threes are the highest level of inspection that we do undertake. So they do need specialist knowledge. They need to be able to provide the correct level of advice. Again We’re all continually developing in our profession. So yeah, people undertaking level threes must have that level of experience and not reconnect, which only can be good by learned experience.

Matt Nally: If you are like a newer surveyor to the industry you’ve maybe qualified, you’re, you’ve been doing level twos for quite a while. How do you determine confidently that you’ve reached the sort of, level of, Experience and competency to start doing level threes. So what is there a way of feeling confident with that transition process to know that you’re not at risk of falling foul of the standards?

Yeah, 

Steve Lees: I think the key is to work with your regulated firm. In my experience, good regulated firms really put good controls around the work that’s been undertaken. At the end of the day, it will affect their PI if mistakes are made. It’s always important for senior members within the regulated firm to make sure they’ve got the right controls in place checking the work, exposing the lesser qualified surveyor to these works.

The company’s inspections are absolutely great. Reflecting on the report before it’s sent. In my own experience, I didn’t do level threes for three or four years after I came out of university and got qualified. Qualified through the APC did plenty of accompanied inspections and then started to do basic properties and then building up to more complex properties.

And there are people that need to do further CPD for sort of historic properties as well, or bespoke one off, one off grand designs types. 

Matt Nally: Yeah true. No that, yeah, there’s, there’ll be some that I suppose that you’re a new to everyone that turns up to it, very bespoke type of property.

One, one thing you mentioned that, and I’ve seen this come up as to debate a number of times before is that pause for reflection before you send the report? Is there isn’t, a specified length of time that you must wait. And the reason I’ve seen this as a debate is, is it okay to offer same day turnaround or 24 hour turnaround on a report having done the inspection is there Is there guidance on or an idea of what counts as a suitable reflection period?

It is 

Steve Lees: interesting, it is covered off in the standard. So in section three does actually state that the member or the regulated firm must produce an accurate and comprehensive record of the property at the time of inspection to allow reflection before the service is delivered. In my own experience, you go to the property with an absolute clear mind.

you inspect the property and record what you’ve seen. And then you do need that period of reflection. Look at the property whole holistically. Look at your site notes and photographs. Make sure it’s proportionate. The report’s proportionate. So yes, services is in is important to clients, but this is probably one of the biggest purchases they’re going to have in their life.

So it’s really important that the surveyors take a step back and reflect. And if that means delaying the report going back to the client then so be, we definitely encourage that period of reflection turn around in, in, in terms of clients demands in the, Corporate word in terms of valuations, a slightly different matter, these can be quite detailed reports.

So we definitely encourage reflection. 

Matt Nally: Interesting. And is there a sort of a minimum time that we don’t stipulate 

Steve Lees: and again, no two properties are the same. It could be a modern property with very few defects to a very large estate property that a takes longer to inspect. There’s a lot more potential defects and things to reflect on and proofread the report check in site notes, et cetera.

So yeah, no one size fits all. Yeah, we don’t put, we don’t put it, we don’t put a framework around that. 

Matt Nally: No, that’s a fair point. Yeah. Cause if it’s a very new property and you genuinely can’t find anything wrong, then it doesn’t need, Days and days of reflection, whereas a really complicated historic building might need more time and an hour probably isn’t okay.

Yeah. Yeah. 

Steve Lees: Again, coming back, everybody’s got different levels of experience and knowledge around, around these properties as well. 

Matt Nally: Definitely. Okay. That’s really interesting. One of the other things I don’t know, we’ve touched on this briefly before starting the call is terms of engagement. And it’s an interesting one.

I know that the standard has requirements listed in terms of what needs to be included in the in terms of personalization and the documents and so on. We see quite different, preferences as to how people want to handle them, whether it’s a document that’s got the I suppose the fields that are listed in the appendix of one of the suggestions for the terms of engagement, it says like name and address and quotes and special constructions, et cetera.

Two other ones where it’s, Here’s a quick link to a webpage and, just confirm back in an email. You agree is what’s the actual requirement, around terms and what must be achieved at the end of it? Yeah, 

Steve Lees: I think just to go back to the original point terms of engagement is so important for both parties in this transaction.

Again, as I’ve referred to earlier, ensuring that people know that the product that they’re getting is suitable for their needs. The standard, again, going back to the word must, the standard in Appendix A ensures that certain elements are included in that. So whether that be the fee, the members, etc.

our member’s name. Also the format in which the report will be delivered. So again, ensuring and treating customers fairly to ensure that they absolutely know what product they’re getting at the end of it and how much they’re expected to pay for it. The cancellation rights, etcetera. The method of delivery can vary.

That could be a hard copy of a wet signature. It can be a link. As long as there’s an evidence trial to keep both the regulated firm and our member safe and the consumer, the person in the general public safe, there’s a documented record that can be electric, electronic or a wet signature. It just needs to adhere to the terms and conditions.

That’s not just home survey standard, any professional engagement. Terms of engagement are a must, that, that could be a very important document in the future for all parties. 

Matt Nally: Yeah, definitely. Cause I think, and this is what we’ve discussed with customers before is if you have a link to a webpage and you just say, just confirm you’re happy with that, it doesn’t provide you any physical I think there’s two, I understand there’s two problems with it.

One, it’s not personalized, so it doesn’t specify what the agreed fee is and, customer name and job address, all that type of stuff. But equally, you’ve got no document at the end of that to prove what version of terms are agreed. That webpage might change over. Six to 15 years as your as legislation changes and what you want to offer changes.

And so when you, if you do have to defend yourself, you haven’t got evidence of what version was actually present at the time and what was written on there. Yeah, 

Steve Lees: I think this is where the Holmes survey standard in terms of in this centralized Bible is really important because it is specific in all of the elements that should be agreed and which subject property should be detailed.

The client’s name. The RSS member who’s undertaking it, the fee, it’s an individual terms of engagement with each individual transaction, so it should be bespoke to the property and the client. But I think the key point to take away is if regulated firms and members follow the home survey standard, Appendix.

They’re going to be absolutely safe. 

Matt Nally: Yeah, I think that’s quite a clear document to be fair. And I’ve reviewed it does stipulate what needs to be in there. And it’s you can copy and paste that really can’t Yeah, absolutely. 

Steve Lees: Ticket tick off. All the points are covered. Member firms are going to be absolutely safe, but it is so crucial.

It can play a part if things should go wrong in the future or clients. Member firms can go back to, to clients as well to say, it was clearly stated to you and it’s all about that transparency of service. Good surveying firms have that transparent conversation. Follow it up with the terms and conditions that are agreed.

Matt Nally: Definitely. My last Question on terms, you mentioned about having either an electronic or a wet signature, so you know, the customer’s signed. Is there a time where it’s acceptable not to have it signed in any way or does that put you at risk potentially? Yeah, 

Steve Lees: I’m not legally minded, but I would say for absolute security, Signature in either of those two formats would be the minimum requirements.

It just shows that it’s been acknowledged. Yeah, firms might need to take legal advice on that, but I think that, but that’s definitely the safest way from my perspective. 

Matt Nally: Yeah, definitely. No, we’ll be clear. It’s definitely, none of this is legal advice, general information to consider.

Awesome. I suppose in terms of standard phrases, then that gets used a lot, obviously in different apps to help. Save time and writing reports, and they’ve obviously got value in terms of helping to put content together at their times where standard phrases aren’t appropriate. And I know obviously that still have to be tailored.

You have to adjust that standard phrase to suit the property. There are scenarios where that’s not allowed. 

Steve Lees: It’s an interesting one. This has been in time and memorial around the use of standard phrases. Now staccato reporting. Using standard phrases can be called into question by the client.

It’s just a repeated, I’ve had a same report from the same firm is just get the same paragraphs are in there. Now I am sitting on the fence here. I can see the value to both. So a well structured standard phrases over key issues that are pertinent to different types of property around referring with regard to legal or describing the element.

It does keep the surveyor safe. But again, Properties are bespoken, they can’t, phrases need to be tailored to meet that property. Some people generate reports completely from scratch on a bespoke basis, which, again, is absolutely fine. It’s all about the resultant report. Does it meet the standards?

reflect the property. Does it give clear advice to the customer? In terms of clear advice, we’ve always got to assume that people buying the property haven’t got a level of knowledge around buildings and building pathology. So it needs to react to be read really clearly. So I think the answer is there is a place for standard phrase geology.

I think everybody that I don’t use standard phrases probably has got a stock of keywords and key phrases that they actually do use. But again, it’s this period of reflection, look back does the phrase that’s been inserted in the report actually reflect the property that’s been seen over reliance on standard phrases, i.

e you start to Put phrases in around cavity wall tie failure when there’s no cavities, that just is not acceptable. So period of reflection to the output phrases reflect the property that’s been seen. 

Matt Nally: Yeah, I think that’s fair because ultimately what you don’t want to do as a consumer is read something that feels cut and paste because then you lose the value and then there’s the frustration and you don’t get the good reviews out, out the back of it.

Yeah, 

Steve Lees: absolutely. Yeah. So handle with care, I think would be my summary of that. 

Matt Nally: Perfect. I think that ties in nicely to my next question, which is when can you, and can’t you recommend further inspection? And the reason I feel like it ties in is you obviously will see standard phrases for recommended inspections and so on and and so where is it okay to say yes, we’re not suitable to advise on this.

You need to get further inspection. When is it too much just in there as a caveat to cover and it’s not appropriate. 

Steve Lees: Yeah, I think. Surveyors, due to CPD, their training, should be going out and advising purchasers on all elements of the property now. One that gets raised quite often is around services.

We are, and we’ll hopefully talk about it shortly, we’re looking to review the home survey standard. One of the criticisms of reports Is that the customer gets a condition rating of three for people that use the condition rating system. And there’s no apparent defect to that, to the electrical installation.

It’s just the fact that it hasn’t been tested recently. I do get that frustration from the consumer around that part. Other areas of building pathology, we’d expect our surveyors to appraise the elements and provide commentary, particularly on level twos and level threes, where we go into further advice and detail and only recommend special advice when absolutely necessary.

Structural issues where clear diagnosis can’t be made on site may require a structural engineer to provide that. We’re also looking at currently at the moment around the diagnosis of damp. We’ve brought out, working with others, a joint positioning statement. So we’re encouraging our members now to look at the building.

If there’s a broken down pipe, for instance, and a wall hasn’t been pointed recently, and there’s damp in that area, then we’re doing the pathology rather than just passing it on to a timber and damp specialist for them. to make a call. We’re continually encouraging our members to assess and provide reasonable advice.

But yeah, services is one that’s on my radar, and I think that’s probably common between our membership as well. And the people I’ve spoken to in my limited time here said, we probably need to review some of the areas to and provide additional support and training to our members to make sure they’re providing a one stop shop rather than a list of recommended Onward reports.

Yeah. 

Matt Nally: Yeah, because it’s finding a balance, because I suppose if you’re, if you’ve just paid a few hundred pounds for a report and then. It’s saying for a lot of areas speak to someone else and it is ultimately to frustration. 

Steve Lees: Yeah, it can undermine the value of the report and we need to keep make sure that surveys are relevant.

Yeah, 

Matt Nally: definitely. This next question actually might fall under sort of the review that we’re going to come on to. Could you just mentioned obviously about the services is one that does, you’re right, does crop up a few times and for example, electrics or gas covered as a three because it’s. I don’t know, we haven’t seen a certificate to say it’s tested or we can’t verify that the one that’s the sticker that’s on there is a genuine or that type of stuff is What’s the right type of advice to put there?

Is it a three or do you just put not inspected? Cause it’s, we’re not specialists. 

Steve Lees: We, in the standard, we allow firms to, to create their own rating systems if needed. If the element is visual, the survey should be making a call there. Now, for instance, the NIC, EIC’s recommendation.

So that’s in the world of electrical recommend that before purchase, everybody should have An electrical report undertaken. And again, the provenance of the sticker on the consumer unit, et cetera. So most firms will veer towards a condition that rating three for most of the elements. There are surveyors out there at the qualified electricians as well, or it can offer that service within the package, which sort of home survey standard allows for people to go into specialist areas.

It’s one area that I would like to really get under the bonnet of in the review and make sure we’re providing practical advice. My own view again, is there a position to say we shouldn’t rate the services? We can rate everything else around the property, but potentially, do we say, It doesn’t carry a rated system, but here are our observations.

And this is the recommended advice from GASA for NIC, EIC. 

Matt Nally: Yeah, I think my view is probably that might be a sensible route going forward, just because you do see a lot of comments where. Consumers misunderstand and they think that the house has been condemned because you know, that, that actually is now what got a three and they need to rewire and actually it’s not the case.

It’s just saying, yeah, 

Steve Lees: I think they, yeah, quite clear. I’m quite a visual that when you look at the ratings, you’re automatically attracted to the threes and it’s in red and, what do we need to do here, but I think It’s definitely going to perform part of the review. So it’s on my pad already.

Matt Nally: Interesting. I think there was one other question I was going to ask, but before I do that, should we actually cover the review and what’s prompted the review of the standard, and what we’re looking, what you’re looking to achieve from it and where we’re looking to get to.

Steve Lees: Yeah. Time marches on. So it’s three years in the making. It’s quite a sea change at the time. I think it’s a really good opportunity now for us to lift the bonnet and also ask our members of you. So I’ve got a little bit of a three, pronged attack in terms of we are sending out a membership questionnaire.

So everybody who’s an RSS professional in the residential sector will get a questionnaire. And I’d really urge members to complete that. It doesn’t have to be one person from a regulated firm. It can be all of our membership and we look at it. the whole survey incrementally. So where does it work? A bit like gold deluxe analogy.

Does it go too far? Is it not prescriptive enough? Is it just right? And then we go through we’re going to go through the whole current standard and then build the review off the back of what our members say. But in parallel, we’re also going out to people that have recently purchased. So we’re using an external company to provide feedback from a purchaser.

They might say, using your example, I found the services confusing. I really wanted to know more about Schools in the area or

why wasn’t this particular area covered? I’m trying to struggling to find examples, but from that and our member question. So we’ve got the member questionnaire. We’ve got the consumer. questionnaire, but I’m also looking at our own internal data and speaking to other associated bodies as well. And from that, we’ll have a clear picture of what works well, where do we need to add more detail?

Where do we need to provide more clarity? Now, I don’t want to preempt the results of that. It could be everything’s fine. Let’s keep it as it is. It might be. Yeah, we’ve got a bit of an issue here because in the last three years, the use of drone technology has risen and there’s no, no section around using.

Drone technology, just using that as a particular example, we might want to look at other areas such as snagging reports for new build properties or compliance reports for new build properties. Do we need to bolster areas around the inspection of historic buildings? Example, do we need to make the levels a little bit clearer?

How do we look at non traditional property? So there’s a whole range, but I don’t want to preempt what the new standard will look like. We really have got to reflect on member and general public sentiment around the property. the standards as it stands at the moment. 

Matt Nally: And yeah, definitely don’t want to put thoughts in people’s minds and then they don’t come up with other things.

I agree. 

Steve Lees: Membership, we’ve got some really good ideas. I’ve spoken to people. You can have people with different end of the spectrum people saying we shouldn’t touch services at all to people say we should upskill to, to look at services or that middle ground of Providing advice, but signposting it as to why we haven’t provided a condition rating or we’ve provided a particular condition right in it.

Yeah, I think it’d be 

Matt Nally: really interesting to see the results from both sides. Obviously there’s the surveyor side where it’s, this is what we find challenging to maybe understand in certain areas. And then from the consumer side, it’s how do we actually receive the product, which you don’t always get feedback on.

As in, someone might say that they’re generally overall happy, but not necessarily specify. Yeah. The services or whatever it was that were helpful in terms of addressing. Just yeah, how people generally approach things as well. Is there a time frame on the review? 

Steve Lees: So we’re looking to get the questionnaires out to membership and to general public and conclude that by the end of July.

And the current date for publication For the completed project, look at the end of quarter one 2025. Now, depending on how big the review needs to be after the questionnaire, that may get pushed back, but we will go through the usual protocols of public consultation and we’re pulling together an expert group as well, which will involved.

Corporate firms, SME firms, specialists in particular areas around green and retrofit academics, legal the usual sort of process for RICS development of a standard. So yeah, really looking forward to getting stuck into that, to be honest, Matt. 

Matt Nally: Awesome. I think that’s probably a nice place to end topic one and we’ll move into yeah, looking at the future of residential in a moment.

So join us for topic two on there. But certainly I’d say if you’ve got feedback about the standard, whether it’s just you love it or there’s certain bits you want to change, it’s definitely worth providing that feedback or, anything you do want to address can’t be. Yeah. 

Steve Lees: Yeah. Look, I would say to members that are listening, look out for the questionnaire, your opportunity to have your voice.

We’ve kept it to a reasonable amount of questions and there’s multiple choice, but there’s also wide space to put a view in there. We’re looking for people to be constructive and tell us what works and and what doesn’t work. So yeah, should be landing in people’s inboxes imminently.

Matt Nally: Definitely. Said. It’s a nice point to end on is yeah, outline the problem, but also the solution that you think should go with it. And that, that will help drive the change. Absolutely.