For a subject that is so fundamental to your ability to hold a licence, Fitness and Propriety (F&P) receives very few column inches in the main trade publications. There are, however, several areas that many IPs seem to be unaware of.
Your regulator will hold you responsible not only for your own F&P but also that of your employees, sub-contractors and even your referral sources. You should be conducting regular, at least annual checks on each group and any new contacts should be ‘checked out’ before you are committed to employing them.
For employees, you should always take up references and get them to sign to confirm that they are fit and proper, including specific reference to dismissal from past employment, any insolvency proceedings and any other factors that could impact on their future suitability or integrity as employees. These F&P statements should be renewed annually. Contact me if you want to know where to find some appropriate wording.
For sub-contractors, similar rules apply, tailored to fit the work they are doing. For example, your agents and valuers should confirm that they are fit and proper and that they run similar checks on their staff. They should also confirm that they have a policy preventing them from purchasing estate assets that they have valued and obtaining secret profits.
Dealing with referral sources is naturally more delicate. Those in the accounting or legal professions should understand the need for you to check their F&P and their policy to confirm the F&P of their employees, but there is at least one firm touting business at present that has a suspect history and is obtaining profits from dealing on the fringes of the profession.
Ultimately, the key to it all is making the basic background checks and ensuring that your reputation is not damaged because you failed to do so. I have recently dealt with an IP who had not obtained a reference for a new employee because he came highly recommended by a professional contact. Thankfully, I recognised the name and was able to encourage the IP to seek a reference without having to explain exactly why he should do so. The previous employer turned the request down flat and a potentially dangerous F&P breach was avoided when the employee’s contract was not confirmed. Unfortunately, the suspect firm referred to in the previous paragraph is a more tricky problem, but sensible background checks on the ownership of any referral source should set alarm bells ringing if they approach you, especially if the subject matter is a ‘too good to be true’ pre-pack administration.
