Corporate registration proposal

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Is Corporate Registration right for NSW?

By: Association of Consulting Surveyors NSWAuthor: Veronica Bondarew, Chief Executive OfficerDate: 21st August 2014

Is Corporate Registration right for NSW?21st August 2014

Association of Consulting Surveyors NSW of 13

Is Corporate Registration right for NSW?

Organisation:

Telephone:

Contact Person:

Postal Address:

Number of Pages:

ABN:

Office Address:

Email Address:

Telephone:

Association of Consulting Surveyors NSW Inc

Veronica Bondarew

PO Box A1155 Sydney South NSW 1235

(02) 9267 9728

67 174 505 197

Suite 4, Level 10, 99 Bathurst Street Sydney NSW 2000

[email protected]

13 including cover

Is Corporate Registration right for NSW? 21st August 2014


A CASE FOR CONSUMER PROTECTION AND PUBLIC CONFIDENCE IN THE SURVEYING PROFESSION: consulting endorsement; professional indemnity insurance; corporate registration

Introduction

• Consulting endorsement » Traditionally in NSW BOSSI has been responsible for ensuring that Surveyors are technically

competent. This fact tends to ignore how Surveyors in private practice interface with the wider community. In other words how Surveyors “consult”. Currently it is quite possible that a technically competent Surveyor could be a poor consultant thus placing his clients at risk. This situation needs to be addressed in the interests of public protection.

• Professional indemnity insurance » BOSSI does not currently insist on PI insurance for Registered Surveyors and hence does not offer

the public any protection for any losses suffered as a result of a Surveyors error. Such a position can be rectified by corporate registration.

• Corporate Registration » The concept of a firm being able to be registered as a Surveyor has already been established and

working effectively in Queensland since 1977 with demonstrated benefit to the public.

• NSW legislation » The NSW legislation was amended in 2002 to include firms. The amended Act includes Section 2A

Objects of the Act (b) to ensure that registered surveyors provide services to the public in a professional and competent manner. However now in 2014 no processes have yet been established to recognise corporate responsibility through corporate registration.

• Changing market environment » The changing nature of the surveying market evidenced in the growing number of mergers and

acquisitions of firms, has created an urgency for this matter to be addressed.



Overview of the Queensland Model

• Corporate Registration was brought into Queensland after pressure from the private sector for change

• A requirement of the Act is that a cadastral person has to have a shareholding of 51% of the business

• A minimum of $1 million PI Insurance is required

• Cadastral marks can only be placed by a registered person

• Registration is provided for Surveyors, Surveying Graduates, Surveying Associates & Emeritus Surveyors

• The Board has developed a number of competency frameworks for the different levels of registration as well as Cadastral, Consulting, Engineering, Hydrographic and Mining registration endorsements for both the individual and the Corporate entity as per the model below

• Plans lodged at the Titles Office are registered within 1-2 days instead of the 3-4 weeks in NSW taking enormous pressure off the limited staff at the LPI not to mention the cost to the Government

• The Queensland Board has also developed a “Code of Practice” under the Surveyors Act regarding professional conduct.

• Certifications on plans lodged for registration are signed by the registered surveyor who undertook the survey as well as the Body Corporate.

• Any complaints against a registered surveyor are dealt with by the Board and any action taken would not only be on the individual but also the Body Corporate.

• The registration & annual re-registration depends on the registered status of the person upon which the company registration relies



How is this system managed today?

• The introduction of the Surveyors Act 2003 in Queensland changed the requirement for registration as a Body Corporate

• The company must be incorporated in Australia

• The company must be assessed as competent.

• The company must maintain a minimum PI cover of $1m.

• The company employs or has an executive officer who is a consulting surveyor.

• The company can obtain other endorsements, if it employs surveyors with the relevant endorsement.

• A competency framework has been established for consulting endorsement.

• The competency framework describes the competency Units, Elements and Descriptors that are required to be met for endorsement as a Consulting Surveyor.

• The competency framework also describes the performance that the applicant is required to display.

• Competency is developed through the appropriate combination of qualifications, skills, knowledge and experience.

• The competencies for Consulting Surveyors will be typically demonstrated by experienced professional surveyors practising in any sector of the market who are able to manage a business providing surveying services to the public.

• They must be able to demonstrate that they are competent to manage the interests of their staff, their client/s, and the public at large and, if applicable, any statutory authorities, insofar as those interests are affected by the operations of the business entity or entities that they represent.

• They will have demonstrated sound technical competence and management skills during their years of professional experience.

• Surveyors at this level will accept responsibility for all professional work undertaken within their areas of expertise. However, they must recognise complex or critical situations where professional guidance is required. Professional Surveyors will be expected to progressively develop their levels of competency and accept a commensurate increase in professional responsibility.

• Details of competency table for consulting endorsement attached as Appendix 1.

Competency Requirements for Consulting Surveyor Endorsement

An applicant will need to demonstrate competency in the following Units:

• Unit 1: Professional Practice

• Unit 5: Business Management and Supporting Quality Assurance Programs

• Unit 6: Communications



Benefits to the Public

• The public would have greater confidence in the surveying profession knowing that they are dealing with a registered company that has been endorsed by the Board.

• Plans for registration are certified by the Body Corporate which spreads the risk from the individual to the corporate entity providing a safety net for consumers in the case of a surveyor’s retirement or death.

• Assurance that since the Director has counter signed the plans a corporate quality control culture exists and the business is focused on quality control.

• The system promotes entities to have established best practice policies and procedures to deal with surveys and plans which improves quality practice and underpins public confidence.

• Current growth of merges and acquisitions is causing the whole surveying profession to have a more corporate approach and with consulting endorsement processes in place the public will acquire greater confidence in dealing with the profession.

• This rigorous system of registration with its competency frameworks and endorsements will tend to weed out the individuals and entities that are not willing to put in place PI Insurance, Quality Assurance systems and suitable business which further enhance public confidence and protection in dealing with the profession.

Benefits to the NSW Government & BOSSI

• A reduced cost to the Government with the knowledge that all the endorsed registered companies carry PI Insurance and as a consequence it has reduced claims against the Government’s title insurance – spurring the surveying profession to lift its performance

• Manage and control surveyors/companies endorsed to undertake cadastral, engineering, hydrographic, mining and consulting firms

• Govern a greater sector of the profession by registering Surveyors and Surveying Graduates

• A better system of disciplinary action against individuals and corporate entities which monitors the quality of surveys produced and issues appropriate fines when the need arises up to $100,000

Benefits to the Profession

• Allows flexibility and sharing of the responsibility within the company – staff take on ownership of the survey and if something goes wrong it is the company’s responsibility not the individual

• Allows the entity to market its services as a registered surveyor with the various endorsements by the Board

• The increased power of the Board has given the surveying profession in Queensland greater faith in the system and if a surveyor does the wrong thing, those that are responsible are dealt with appropriately

• In larger engineering companies the registered surveyor could move up the corporate ladder as they have to own 51% of the business or the work would be outsourced

• Increased fees such as those charged in Queensland better reflects professional status, education and



experience

• This program could give other forms of registration to graduates, technicians, engineers etc.

Interesting Facts about the Queensland model

• Endorsed companies know that if their requisition rate creeps above the profession average they will be asked to explain to the Board

• The Board in conjunction with the Titles Office has a system of monitoring the quality of the surveys being prepared and approximately every tenth plan is checked in full to maintain standards. If the plan examined is not an acceptable standard, then the Titles Office will further investigate other surveys undertaken by the individual or entity.

Drawbacks

• This program could create two classes of registered surveyor

• If one person has to control (own) 51%this such a requirement may limit growth and or corporate development

• What would happen if the 51% leaves, dies, leaves without notice etcetera? This would have a pronounced effect on value

• The 51% condition would leave many survey firms ineligible due to various other partnership arrangements with multi-disciplinary firms.

• Could be consider anti completive

• Must ensure that employees maintain their annual registration

• If an employee surveyor is negligent then the entity is open for action by the Board

• If the employee surveyor loses his registration for whatever reason, the company loses their registration

• Additional fees could deter registration process

• Although speeding up the process of lodging plans, corporate registration has caused concern amongst surveyors, as registered firms examine their own plans. At times this task is performed by a relatively junior staff member, and the quality of the plans emanating from some of these firms, unchecked by the QLD titling office has caused concern

Process for Competency Certificate

• Application form provided for applicant

• Assessment fee charged

• Applicant provides evidence to meet competency framework

• Assessor issues competency certificate if all conditions have been met

• Competency certificate presented to BOSSI for endorsement.

• Firm added to BOSSI list of firms



Experience in South Australia

The experience of corporate registration has not been so positive in SA.The surveyors in SA report that they only had Corporate registration (CRE) for a few years before the 90’s productivity reviews closed it up. The view was that it was an additional regulation adding little value and considerable burden, a view that appears to still stand.

The report proposed that CRE did involve most companies and partnerships having to rewrite their constitutions to conform to the Act and some of the smaller 2-5 man practices had to completely re-structure their setups. It appears that one company was prosecuted while the Act was in place for placing undue influence on a Licensed Surveyor to sign a certified survey. However, in the same circumstance the South Australians consider that they could still have done that under the current legislation.

The provisions in SA were set up in such a way that the company had to be in the majority control of Licensed Surveyors. This caused great difficulty for a company like FUGRO. It meant that there was need to establish a special exemption for them. This could be an issue for many of the multi-disciplinary companies that are currently growing in number and are also considered to be a problem for NSW.

Association of Consulting NSW proposal

Over the past few years ACS NSW has been in contact with the Surveyors Board of Queensland and Queensland Surveyors to discuss and understand the existing Queensland model with particular emphasis on the above points. It is proposed that the model works well in Queensland but would benefit from some adjustments in NSW to ensure that it does not follow the SA path.

ACS NSW is eager to pursue these matters in the interest of better consumer protection. The Association proposes that it has the experience and resources to undertake the task of consulting endorsements and would be pleased to discuss further any questions that BOSSI may have.

Corporate registration proposal

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