Definition

Establishing fees means determining and communicating the charging basis before or at the commencement of an instruction. The fee structure must be clear, fair, and disclosed in writing as part of the terms of appointment. The RICS Rules of Conduct (effective 2 February 2022) require written confirmation of charges, whether a fixed fee, hourly rate, percentage, or another agreed basis.

Why this matters for Client Care

  • Unclear fee arrangements are a leading cause of client complaints; clear, written communication reduces this risk directly.
  • The Consumer Rights Act 2015 requires pricing information for consumers to be prominent and intelligible.
  • Transparency about fees expresses Rule 1 (Honesty and Integrity) and Rule 3 (Service); APC candidates must be able to explain their fee rationale.
  • Under-pricing to win work, then recovering costs through scope creep, damages client trust and may constitute misleading conduct.

Key principles

Fee structures and their implications

A fixed lump sum provides client certainty and incentivises efficient working. A time-charge basis suits instructions where scope is difficult to define upfront, but requires rigorous recording and regular reporting. A percentage fee, common in project management and agency work, must be disclosed and must not create a conflict of interest. Whichever basis is used, the method of calculation must be explained in plain terms before work begins.

Factors informing the fee level

A fee should reflect complexity, anticipated time, expertise required, overhead costs, and market rates. Fees set so low that a competent service is not deliverable are a professional risk; unjustified premiums may attract complaints. Candidates must be able to explain, in the APC interview, how they arrived at a specific fee on a real commission.

Variations and additional charges

If scope changes, the fee must be reviewed and any variation agreed in writing before the additional work is performed. An unexplained invoice for unannounced additional work is a client care failure. The terms of appointment should include a variation notice mechanism; issue one promptly whenever scope changes.

Invoicing and payment terms

State the invoicing schedule and payment terms in the terms of appointment. Common arrangements include invoicing on report delivery, at milestones, or monthly in arrears. Disclose interest on late payment and consequences of non-payment. Where client money is held, the RICS Client Money Handling professional standard applies.

Relevant RICS guidance and legislation

  • RICS Rules of Conduct (effective 2 February 2022) — Rule 3 (Service) requires that clients receive a written record of the charges applicable to the instruction.
  • RICS standard form terms of appointment — provides standard fee, invoicing, and variation provisions that can be adapted to each instruction.
  • Consumer Rights Act 2015 — requires that consumer clients are given transparent pricing information; provisions on unfair terms may affect liability cap clauses.
  • RICS Client Money Handling professional standard — mandatory where the firm holds money on behalf of clients, including deposits or advance fee payments.

Ethics and Rules of Conduct angle

Rule 1 (Honesty and Integrity) requires surveyors not to overcharge, misrepresent fee basis, or conceal charges. Rule 3 (Service) requires fee structure to be communicated before work begins and any variation agreed in advance. Rule 5 (Responsibility) is engaged where systematic under-pricing is unsustainable and reduces service quality across the profession.

APC-style Q&As

Q (Level 1) What information about fees must a surveyor provide to a client before starting work?

The surveyor must provide the client with a written statement of the fee basis, the rate or amount to be charged, the invoicing schedule, and the payment terms, before or at the commencement of the instruction, in accordance with the RICS Rules of Conduct Rule 3.

Q (Level 1) Name three common fee structures used by surveyors and give a scenario where each would be appropriate.

A fixed fee is appropriate for a defined-scope instruction such as a homebuyer report, providing price certainty for the client. A time-charge basis suits instructions with an uncertain scope, such as expert witness work, where the volume of input cannot be reliably estimated upfront. A percentage fee is used in some agency and project management instructions, where the surveyor's remuneration is linked to the contract sum or transaction value.

Q (Level 2) How would you handle a situation where a client disputes an invoice, arguing that the work performed exceeded the agreed scope without their prior approval?

(example) I would review the file to establish whether a written variation had been issued and acknowledged. If it had been sent without objection, I would share that documentation and offer to discuss the client's concerns. If no variation notice had been issued, I would accept the process failure, issue a revised invoice limited to the agreed scope, and put in place a clear variation procedure for the remainder of the instruction. Future scope changes would always be communicated in writing before the work was undertaken.

Q (Level 2) A potential client asks you to reduce your fee significantly below your normal rate to win a competitive tender. How do you approach the decision?

I would assess whether the proposed fee would allow me to provide a competent service. If a deeply discounted fee would require cutting corners or compromising quality, it would be professionally inappropriate to accept regardless of the commercial opportunity. I would explain my fee rationale transparently and seek to demonstrate value rather than compete purely on price. If the client requires a price I cannot match without compromising quality, I would decline the instruction.

Q (Level 3) You discover partway through an instruction that the actual time cost is likely to exceed your fixed-fee quote by a significant margin because of unforeseen complexity. The client has a tight budget. How do you manage this situation?

(example) The fixed fee is contractually binding unless scope has changed or a material unforeseen event occurred. If the additional complexity is something I should have identified at quoting, the extra cost is mine to absorb. If it results from a genuine change in circumstances outside the original brief, I must notify the client promptly, quantify the likely additional cost, and seek written agreement before incurring further time. Presenting an unannounced overrun invoice is a client care failure; raising it early and transparently, with a proposed solution, demonstrates professional integrity and keeps the client in control of their budget.