10. Conduct Rules, Ethics and Professional Practice Flashcards
(95 cards)
1
Q
What is the RICS Mantra?
A
Est Modus Rebus = there is measure in all things.
2
Q
When was the RICS founded?
A
Founded in 1868 & Incorporated by Royal Charter 1881.
3
Q
What is Royal Charter?
A
Formal Documentation awarded by Queen Victoria, to maintain and promote the usefulness of the profession for the public advantage.
4
Q
Different Roles of RICS?
A
- Regulate the profession
- Maintain the Highest standards
- Promote the profession
- Provide Expert Advice
- Protect clients
5
Q
What services does the RICS provide?
A
Professional body enforcing highest international standards in the valuation, management and development of land, real estate, construction and infrastructure. Including; • Research • BCIS • Providing guidance notes • Training • CPD • High ethical standards • Adjudication and arbitration services
6
Q
What are the current goals of RICS?
A
- IPMS
- Increase global coverage in new international markets
- Data protection
- Get more young people into the profession
- Sustainability
7
Q
What are the RICS Long-Term Objectives?
A
As per RICS Business Plan 2018-2021 – updated on three-year basis:
• Influential thought leader
• Trusted by our stakeholders and society
• RICS professional qualifications remain in demand
• Sustainable 21st century
• professional body
8
Q
What are the three market sectors covered by the RICS?
A
Land, Property, Construction
9
Q
What are byelaws?
A
RICS has power to provide laws of local or limited application granted by Royal Charter, effectively powers granted by an Act of Parliament and are a form of delegated legislation.
These are for: members, firms, regulated non-members and any person under article 20 of the Royal Charter.
10
Q
What are the RICS Rules of better Regulation?
A
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
11
Q
How many RICS members are there?
A
Reported on website over 134,000 highly qualified trainees and professionals – definitely more.
12
Q
What is Lionheart?
A
Lion Heart is the charity for RICS professionals, past and present, and their families.
13
Q
What is lionheart providing?
A
The services we provide range from financial support, health and wellbeing packages, free professional counselling, work-related support and legal advice, and help if you or one of your loved ones become seriously ill.
14
Q
What are the different levels of RICS professional membership?
A
- Associate (AssocRICS) – entry level RICS qualification offers chance to progress to full status
- Member (MRICS) – most commonly way to qualify with related qualification and experience
- Fellow (FRICS) – champion [recognition], expert, influencer and role model within industry.
15
Q
What is the requirement to become MRICS?
A
- Relevant experience and an RICS-accredited degree
- 5 years of relevant experience and any bachelor’s degree
- 10 years of relevant experience operating at an advanced level by seniority, specialisation, or in academia.
16
Q
What is the APC?
A
The Assessment of Professional Competence – can be completed with or without structured training;
Structured training – develop your skills over 12 or 24 months of structured training before assessment.
Preliminary review – with 5 years of experience, you can go to final assessment following a review of your submissions.
17
Q
What are the benefits of RICS membership?
A
- Status – work to highest professional standards
- Recognition – public confidence and drives demand for services
- Market advantage – competitive advantage
- Knowledge – practice standards, CPD and practice guidance
- Network – global network
18
Q
Why do you want to become a member of the RICS?
A
The status that come with it showing that your ability to work to the highest professional standards and knowledge gained through becoming a members and retaining membership.
19
Q
What are the benefits of being a fellow?
A
Demonstrated individual professional achievement and integration measure of excellence
20
Q
What are the core principles of being a fellow?
A
- acting to further RICS and the profession
- acting for the benefit of a third party to reflect RICS’ public interest mandate
- promoting RICS objectives and the profession.
21
Q
What is required to become a Fellow?
A
Career must demonstrate 4 out of following 12 professional characteristics:
- Service to RICS
- Service to another professional body
- Market or industry recognition
- Qualification
- Teaching
- Dispute resolution
- Leadership
- Management
- Development
- Client care
- Operation
22
Q
What are the different available sector pathways in the RICS?
A
Total of 13 different sector pathways including Building Control, Planning and Development, Building Surveying, Project Management, Quantity Surveying, Property Finance and Investment • Building Control • Building Surveying • Commercial Real Estate • Corporate Real Estate • Environmental Surveying • Facilities Management • Geomatics • Infrastructure • Land and Resources • Management Consultancy • Minerals and Waste Management • Personal Property / Arts and • Planning and Development • Project Management • Property Finance and Investment • Quantity Surveying and Construction • Residential • Taxation Allowances • Valuation • Valuation of Businesses and Intangible Assets etc
23
Q
What are the requirements for firm registration?
A
A Firm is required to register for regulation by RICS if:
• The Firm provides surveying services to the public.
• The Firm is operating in Regulated Area A.
• At least 50% of the Firm’s Principals are RICS Members.
24
Q
What makes a firm eligible for registration?
A
- Firm provides surveying services to the public; and
* At least 25% of the Firm’s Principals are RICS Members.
25
What are the different Regulated Areas?
* Regulated Area A United Kingdom
| * Regulated Area B All other areas
26
What is the procedure for registration?
An application to register for regulation by RICS must:
• Provide information to An application to register for regulation by RICS must:
• Provide information to RICS in such form as prescribed by the Regulatory Board;
• Agree that RICS may share relevant information about the Firm with government or other regulatory bodies as appropriate; and
• Agree that if RICS declines to register the Firm RICS may publish its decision.
Upon receipt of an application from a Firm to register for regulation the Head of Regulation may:
• Grant registration;
• Grant registration subject to conditions; or
• Refuse registration.
27
What were the new rules enforced as of April 2020?
* At least 25% of a regulated firm’s principals must be RICS-qualified members
* Regulated firms - responsible principal for oversight and accountability ensuring firm meets its responsibilities as a regulated firm
* Under certain circumstances, firm can register a division, department or practice area for regulation by RICS.
28
What are the advantages of firms being regulated by RICS?
1. Globally recognised standards
2. Behave ethically and act with integrity
3. Have the required skills and competence
4. Manage conflicts of interests transparently
5. Safeguard the security of clients money
6. Manage finances appropriately
7. Provide adequate and appropriate indemnity for its work
8. Handle complaints and disputes fairly
29
What is the RICS Matrics?
Network of supporting, networking and developing young professionals.
Ensure new members work with the RICS to shape future of surveying and grow size and respect of profession across industries globally.
30
What are the different status types of RICS documents?
* Mandatory (Information standards, professional statements)
* Recommended best practice (RICS guidance note, Code of practice)
* Information only (RICS information paper, RICS insight, RICS economic report, research)
31
What are the black and red books?
Guidance notes
• Black Book- is for QS and construction
• Red Book - is for valuing property and are mandatory
32
Name some examples of RICS information which is information only?
* Information paper
* RICS insights
* RICS economic/market reports
* RICS consumer guides
* RICS Research
33
Can you describe the RICS governing structure to me?
1. At the top is the Governing Council – main governing body (overall strategy). Working under;
a. Management board – inform and oversee RICS affairs under Governing Council.
b. Regulatory tribunal – Reports on activity and performance only
c. Audit committee – Monitors Integrity and Effectiveness of Financial Reporting
d. Presidential nominations committee – elects Senior Vice President
e. Standards and regulation board - Responsible for setting and upholding standards
f. Nominations committee – Global Appointments advisory in talent and succession
34
Who are the different RICS presidents?
* Timothy Neal – RICS President
* Kath Fontana – RICS President Elect
* Clement Lau – RICS Senior Vice President
* Anne Gray – Next RICS Senior Vice President = later this year 2020.
35
What are the different RICS rules for members?
* 1 – Interpretation
* 2 - Communication
* 3 - Ethical Behaviour
* 4 - Competence
* 5 - Service
* 6 - CPD
* 7 - Solvency
* 8 - Information to RICS
* 9 - Co-operation with RICS
36
What is the difference between rules for members and firms?
* 7 - Complaints Handling
* 8 – Client Money
* 9 – Indemnity
* 10 – Advertising
* 12 - Arrangement to cover incapacity / death of sole practitioner
* 13 - Use of designations
37
Can you explain update to RICS Rules of Conduct?
As of April 1st 2020 – new rules for designation of logo;
• RICS logo has been restricted to members and regulated firms only
• Requirements for how the ‘regulated by RICS’ designation must be displayed have been strengthened, to ensure visibility
• Requirement has been added that regulated firms must include a prescribed text in the terms of engagement issued to clients in respect of its surveying services to explain what being regulated by RICS means and
• Partnership or a company can use the designation ‘chartered surveyor(s)’ in a
• trading name only.
38
What are Ethics?
Moral principles that govern a person's behaviour or the conducting of an activity.
39
What are the RICS global and ethical standards?
* Service – provide highest standards of service.
* Trust – act in a way to promote trust in the profession.
* Integrity – act with integrity.
* Respect – treat others with respect.
* Responsibility - take responsibility.
40
Give examples when you applied global and ethical standards?
* Service – respond promptly to clients and request advise from senior colleagues if required.
* Trust – always ensure work peer reviewed.
* Integrity – valuation – request for payment for MOS – substantiation.
* Respect – treat all team members with respect.
* Responsibility – always take responsibility for actions and any work issued.
41
Why are Ethics Important?
Behaving ethically is at the heart of what it means to be a professional; it distinguishes professionals from others in the marketplace.
42
What are the benefits of adhering to RICS Professional and Ethical Standards?
Acting ethically and doing business professionally has been shown to increase business.
The majority of clients are more likely to place business with you or your firm. They are also more likely to promote your services to others if they know about the standards you work to and whether you behave in a professional and ethical manner.
43
How would you define ethical behaviour for a chartered surveyor?
Acting in accordance with the 5 RICS professional and ethical standards
44
What is the RICS Decision Tree?
Flowchart to help members decide how to act in difficult situations where their professional ethics may be at stake
45
What factors does the RICS Decision Tree consider?
* Sufficient facts
* Legality
* Ethical standards
* Consultation of appropriate people
* Clear reasoning
* Impact if actions made public
46
What is meant by 'treat others with respect'?
Be courteous, polite and consider cultural sensitivities and business practices - never discriminate, encourage the fair and respectful treatment of clients
47
Why are the ethical standards important?
Create a clear and streamlined guide to members to ensure that clients and anyone else who deals with the RICS has confidence in the profession
48
What is meant by 'act with integrity'?
Being honest and trustworthy in all that I do
49
What is meant by 'take responsibility'?
Be accountable for my actions and don’t blame others if things go wrong
50
What is meant by 'provide a high level of service'?
Ensuring the best possible advice, support or performance is given to my clients
51
What is meant by 'promote trust within the profession'?
Act in a manner, both in professional and private life, that promotes me and my firm in a positive way
52
What is Professional Indemnity Insurance?
Protects clients, designers and contractors against claims of negligence for design, services or negligent advice provided.
53
Aims of PII?
* Protect members or firms against liability to pay damages where professional duties are breached.
* Ensure firms client do not suffer financial loss as a result.
* Protect clients against negligence
54
What are the different levels of PII required by RICS?
Minimum levels of PI subject to company’s turnover in previous year:
• Under 100K = £250,000.
• Between 100K and 200K = £500,000.
• Above £200K = £1,000,000.
55
What should a PII policy contain?
Updated in May 2020 to include items highlighted red:
• Any one claim or aggregate plus - unlimited round the clock reinstatement basis.
• RICS’ minimum policy wording or more comprehensive wording.
• Minimum level of Indemnity subject to a firm’s turnover in previous year.
• Maximum level of uninsured excess (part of each claim the firm must pay itself)
• Fully retroactive – can claim on former work carried out by the firm.
• Underwritten by a listed insurer
• Covers past and present employees
• Run-off cover
• Run-off pool (where unable to obtain run-off from insurer but obtain from general market)
• Fire safety exclusions – insurers may impose fire safety exclusions.
56
What is Run-Off Cover?
• Insurance protecting professionals against claims where a firm or individual stops trading.
57
Who takes out Run-Off Cover?
* Professional and firms require after they leave/firm ceases trading.
* Company takes out on behalf of individual
58
What is RICS Requirement for Run-Off cover?
* Minimum of 6 years - typically 12.
* Consumer claims minimum limit of £1million.
* Non-consumer claims – must be adequate.
59
Provide a relevant Run-Off Case?
* Merritt vs Babb 2001
* Babb completed valuation as employee of company for Merritt.
* Babb’s company stopped trading.
* Court rules Merritt could pursue individual [Babb] for loss.
60
What should you do in case of a potential claim on your PII?
Must notify insurer in the event of:
• An actual claim
• A written or verbal threat of a claim
• Any circumstance that the firm has reason to believe may result in a claim
• Any complaint notified via the firm's CHP
61
What is the RICS Assigned Risk Pool?
1) Insurance facility for regulated firms that find themselves unable to obtain PII in the normal market
2) Firms can remain in the ARP for a maximum of 3 years, where they will be audited and guided in how to amend their business procedures/practices ready to obtain market PII again
62
What is CPD?
• Continued Professional Development
63
Why is CPD important?
* RICS standard based organisation
* Members operate in consistently changing environment i.e. new legislation, technology.
* Members should be up to date with changing environment to provide accurate advice.
64
Different levels of CPD required by RICS?
* 48 years pre-chartership.
* 20 hours once chartered.
* All must be recorded online and 50% formal
65
What happens if you fail to complete CDP hours?
Treated in the same way as any other rule breach under RICS Disciplinary Rules:
1. First breach – Fixed Penalty (caution)
2. Second breach - within 10 years of receipt of a caution – Fixed Penalties (caution and fine)
3. Third breach - within 10 years of receipt of a caution – referral to Single Member or Disciplinary Panel with presumption of expulsion.
66
What is a Conflict of Interest?
Anything that can impact on your impartiality in the best interest of the Client.
67
Give examples of Conflicts of Interest?
* Financial interest
* Personal relationship
* Interest of your firm
* Acting for two different parties with conflicting interests.
68
Procedure for handling conflicts of interest?
* Step 1: inform parties.
* Step 2: Inform parties you can’t act.
* Step 3: Offer to stand down.
* Step 4: Get written confirmation that you can / can’t act.
69
Why Novation potential conflict of interest?
Acting for two different parties with conflicting interests and can blur lines as to what constitutes a client/employer change.
70
What would you do in the event of novation?
* Advise client against it as conflict of interest – may not act in best interest.
* Introduce Chinese wall – Information Barrier preventing all communication and exchange.
71
What is a bribe?
The exchange of something of value in return for someone doing or agreeing to do something improper in a business context
72
What is Bribery Act 2010?
* UK legislation making bribery and corruption illegal.
* Gifts or hospitality should not be accepted where they impact impartiality or integrity.
* Cash gifts not tolerated.
* Jailed for up to 10 years and Expelled from RICS.
73
What standard are judgements under the current bribery legislation based upon?
'reasonable person' test - reasonable person expect in relation to type of function or activity.
74
What has the RICS published in regard to bribery and money laundering?
In 2019 the RICS published the professional statement: countering money laundering, bribery and terrorist financing.
75
What are 6 principles for dealing with bribery?
* Proportionality
* Top level commitment
* Risk assessment
* Due diligence
* Communication
* Monitoring and review.
76
What are the Money Laundering Regulations 2017?
* Legislation preventing money laundering and terrorist financing.
* Updated from 2007 version.
* Applicable to turnover £100,000+ (previous £64K).
* Must undertake money laundering and terrorist financing risk assessment.
* Implement systems and control systems
* Provide training to staff.
* Comply with customer due diligence.
77
What if a Client tries to pay you in cash?
* Ask them to pay it into the bank and transfer money
* If refused – seek legal advised
* Protect against money laundering
* Max 10,000 euros under money laundering regulations
78
What is customer due diligence (CDD)?
Collecting standard evidence to verify the identity of different types of clients and carry out additional checks if necessary.
79
Why is Handling Client’s Money Important?
* Key principal of client care.
* Money laundering and terrorist financing.
* Money Laundering Regulations 2017.
80
How would you handle a Client’s Money?
* Bank Account - Separate designated bank accounts.
* Authorisation - Signatories agreed, only authorised staff allowed access to accounts.
* Availability - Monies available to client on demand.
* Terms - Advise client they must agree account handling terms in writing.
* Auditing - All firms will be audited by RICS appointed accountants.
81
What is RICS Client’s Money Protection Scheme?
* RICS Insurance policy.
| * Provides protections to members of the public for moneys handle by RICS firms/members.
82
What is Structure of RICS Disciplinary Procedures?
RICS Head of Regulation will investigate any accusations.
83
What is the process for RICS Disciplinary Procedure?
When an allegation is received, the RICS Head of Regulation will:
• Make further enquiries.
• Inform the person the allegation is made against in writing, who can write a response within 28 days.
• Decide whether there are grounds for the complaint.
• If there is, they will either
o Issue a consent order.
o Issue a fixed penalty.
84
What is RICS regulatory compliance order?
Agreement between RICS and a Regulated Member that they are liable for disciplinary action
• Rules of Conduct for Members, Rule 6 – Continuing Professional Development (CPD)
• Rules of Conduct for Members, Rule 8 – Information to RICS
• Rules of Conduct for Firms, Rule 14 – Information to RICS
• Rules for the Registration of Firms, Rule 10.1a – Fees.
85
What sanctions can Disciplinary and Appeal Panel impose?
* Caution
* Reprimand
* Undertakings as to future conduct
* Fines, Costs and Administration Fees
* Conditions on the Member’s continued membership of RICS
* Conditions on the Firm’s registration for regulation
* Expulsion of the Member from RICS
* Removal of the Firm’s registration for regulation
86
What is the RICS doing about the coronavirus outbreak?
* Providing free training and CPD
* Research into the effect of Covid
* Forecasts
* APC online
* Guidance on different professions to continue work
87
What if a friend asked for advice?
* No terms and conditions
* No PII
* Potential conflict of interest
* Follow the RICS Decision Tree
* Say no and offer to set up a formal meeting with a director of my firm
* Alternatively, refer them to the RICS 'Find a Surveyor' service
88
If a contractor wants to buy you lunch on the day of an interim valuation, how would you respond?
Reject offer - as it can improperly influence judgement or give the appearance of doing so.
89
A contractor invites you to their Christmas dinner dance / Give you bottle of champagne- Accept?
* Maybe – only offer or accept gifts and hospitality happy for other to know about.
* Accept – reasonable value and frequency and no conflict of interest.
* Reject - if conflict of interest that will influence decision/judgment.
90
What would you do if a contractor offers you a gift such as a scale rule with the contractor's name on it?
Accept - bona fide promotion intended to improve the image of an organisation
91
Client has contacted you asking to reduce your fee, what would you do?
* Avoid price fixing, fee cutting or collusion with competitors.
* Original fee should reflect the works required.
* Scope of works may be different or another firm may not exist
* Reducing costs may require cutting corners and quality to make a profit
* Client may expect same next time as well and this is not suitable.
92
Can chartered surveying practices work for a client, but not charge a fee?
* Commercial decision based on opportunity and risk – charitable work.
* Need to question quality of work and incentive if no fee in place.
* Legal advice required regarding formation of contract i.e. no consideration
93
Can a client claim for negligence if an estimate is wrong?
* Not necessarily, the client would need to prove that the QS said it is an accurate cost.
* If very wrong, the client would need to prove that its because of a lack of skill and care.
94
How, in your profession can you have a role in bribery?
* Due to the role i play in facilitating deals and awarding contracts
* Valuation work I carry out, I may be asked to turn a blind eye and provide false certification
* Gifts and hospitality is the biggest area of bribes
95
Example of limit in your competence where you asked from advice from senior staff?
* Party Wall Award process
* No experience prior to BTP – asked senior colleague at time to address issue.
* Contractor providing requested information to PW Surveyor to send for comments.
* Then went away and researched the process separately.
