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WORDS KATIE PUCKETT ILLUSTRATION GIACOMO BAGNARA

Foundations

LEGAL 101

preclude any conflict, says John O’Neill FRICS, a partner in the valuation and advisory team at Cushman & Wakefield, who often discovers his agency colleagues are already involved in a project. “Banks in particular are subject to a lot more restrictions now, so you’ve got to have it all on the table from day one. If there’s any doubt at all, it’s better to walk away.”

“People expect professionals to be cleaner than clean. Standards of probity have always been there, but now they can be measured and assessed more readily by anyone” EVE SALOMON  RICS Regulatory Board Any failure to deal with conflicts will be followed up through RICS’ disciplinary processes and taken very seriously, warns Salomon. “There are regulatory ramifications, but there could also be professional indemnity ramifications, legal ramifications and ultimately reputational ramifications. That’s four different things that can hit you if you get it wrong.” Given the potential repercussions, acting with a material conflict of interest is not worth even the most lavish fee – and turning it down may be the best investment you ever make. As Crowther points out: “I don’t think it does any harm for a client to know that you’re protecting their interests ahead of your own.” FOR MORE INFORMATION about handling conflicts of interest, visit rics.org/ethics. RICS is preparing further conflicts guidance, and updates will be published on rics.org.

HOW TO DEAL WITH CONFLICTS OF INTEREST n  Client consent is not

enough: even if both parties agree for you to represent them, consider whether they are able to understand and manage a potential conflict. It is your job to determine if there is a conflict and, if so, decline the instruction. n  Write everything down. Keep a clear audit trail of conflict checks and written correspondence. Make sure to document phone calls as well. n  All professionals should have a defined process. Set

up a database at an early stage to save you trawling through old paperwork as your workload multiplies. n  Apply the “tabloid test”. If the situation was reported in the press, could you mount a convincing defence?

Getting the best of British CHRIS HARVEY partner and head of real estate investment, Mayer Brown International

The UK is an attractive investment destination for Asian investors. It offers a clear legal framework and certainty of title. But there are still quirks to the market. Here are the top five matters Asian investors should consider. Get approval  At present, there are no inbound restrictions on Asian investors buying commercial real estate in the UK. On the other hand, outbound investment from Asia may be subject to regulatory approvals. These can take time, so it is important to plan in advance. Act fast  Competition to invest in UK real estate has led to challenging transaction timetables. Investors must be prepared to meet these time limits by: n forming the investment structure to hold the real estate investment in the UK n calculating the total transaction costs, including any tax payable, such as value-added tax (VAT) n making sure that funding is in place n completing all compliance and identity verification with professional advisers n transferring a 10% deposit for exchange of contracts, and the balance of the price on completion. Understand the process To ensure a deal is executed quickly and efficiently, it is crucial that the investor understands the UK legal system and transaction

process. This is more complicated if purchasing an ownership structure rather than direct real estate – the investor takes on all of the assets of the entity, as well as current and historic liabilities. This requires more extensive due diligence. Build your team  The UK market is tricky to access as a first-time Asian investor, so an experienced buying team is imperative. Investors should use advisers with Asian-language capabilities and offices in Asia, who can offer an understanding of both markets. The market is very competitive, especially for prime properties. Some vendors prefer to sell to a well-known name because they see that as less risky. An experienced buying team provides better access to certain opportunities. Cover all your costs  It is important to consider the acquisition costs payable on the purchase. These include: n Land Registry fees, for the registration of a transfer of the property n building surveyor’s fees, to establish the condition of the property n agent’s fees, to identify suitable on- or off-market opportunities and negotiate the transaction n legal fees – each party usually bears its own costs n valuation fees, payable in relation to the valuation of the property  n bank fees (including the bank’s legal fees – unlike some Asian countries, the bank and the borrower will use separate law firms) n tax, which may include both Stamp Duty Land Tax and VAT.

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