Background to the RICS Flashcards
1
Q
When was RICS founded?
A
1868
2
Q
When was RICS given Royal Charter
A
by Privvy Council in 1881
3
Q
How many members of the RICS are there
A
Over 130,000 worldwide
4
Q
What are the four levels of membership
A
- MRICS
- FRICS
- AssocRICS
- Trainee
5
Q
How do you become a fellow?
A
- 5 or more years as MRICS
- A leadership role
- Raising the profile of RICS
- Professional Achvievement
6
Q
Who is the CEO of RICS
A
Richard Collins
7
Q
Who is the Chair of the Governing Council
A
Nick McLean FRICS
8
Q
Who is the current president of the RICS
A
Clement Lau
9
Q
Who is the President Elect
A
Ann Gray FRICS
10
Q
What is the UK structure
A
4 National Associations
10 Regional Boards
Local Associations
11
Q
What is the Levitt Review
A
Public exposure of the lack of clarity, structure and purpose of the RICS Governance arrangements. Levitt called for a review of the purpose, governance and strategy of the RICS
12
Q
What is the Bichard Review
A
Independent review on the RICS to:
- clarify its purpose
- make recommendations on governing structure to deliver that purpose
- provide proposals for the incoming leadership and governing body on future strategy and culture of the institution.
13
Q
What is the future of the RICS
A
Want the RICS to stand in a position to be a beacon of best practice in governance, transparency and accountability.
14
Q
When is the Bichard Review due for publication
A
Due to be delivered to RICS 30 June 2022 and published shortly thereafter
15
Q
What is the role of the RICS
A
1, Maintain high standards in education and training
- protect consumers through strict regulation of professional standards
- Leading source of information and independent adivce on land etc.
16
Q
What are the 5 benefits of being an RICS member
A
- Status
- Recognition
- Market Advantage
- Knowledge
- Network
17
Q
What are the benefits of registration for firms for RICS?
A
Confidence - firms are regulated by the RICS
Professionalism - All adhere to a set of standards to provide clear advise
Security - PII and CHP
18
Q
When must a firm be regulated?
A
If 50% or more of the principles are RICS members
19
Q
What is the minimum number of RICS members within a firm for the firm to apply to be regulated?
A
25% of principles (i.e director or equivalent)
20
Q
Who liaises with the RICS?
A
The regulated firm must nominate a responsible principle - the responsible principle is responsible for ensuring all measures are in place to enable compliance with the RICS requirements - including reporting to the RICS when required.
21
Q
What is included in the RICS annual return
A
- Type of business and staff details
- Statutory regulated activities
- Nature of clients
- CHP and records
- PII details
- Whether the firm holds Client Money
22
Q
Who can use the RICS logo?
A
Only RICS members and firms can use the RICS logo
23
Q
Is there anything about RICS that should be included in TOE?
A
Regulated firms must include a prescribed text in TOE to explain what being regulated by the RICS means
24
Q
When were the Rules of Conduct updated?
A
Draft rules were published in October 2021 and came into effect 2.2.2022
25
Why were the rules of conduct updated?
- Simpler structure, easier for RICS members and firms to understand the rules and behaviours expected of them
- Clarity in the behaviours expected of members and firms to provide more confidence for clients and public.
- Focus on respect, diversity and inclusion.
26
What is Rule Number 1 of the Rules of Conduct?
RICS members and firms must be **honest**, **act with integrity** and **comply** with their **obligations,** including their obligations to the **RICS.**
27
Can you give me an example of a time you have complied with Rule 1
I ran a conflict of interest check to identify actual and potential conflicts of interest prior to accepting an instruction for a Red Book Valuation for secured lending purposes for a flat in Spencer Park, in line with the RICS Professional Statement Conflicts of Interest. I noted that one of our agency teams had sold the property to the borrower 6 months prior and as such I declined the instruction.
28
What is Rule 2 of the Rules of Conduct
RICS Members and Firms must maintain their professional competence and ensure services are provided by competent individuals with the necessary expertise.
29
Can you give an example of a time that you have complied with Rule 2?
I ensure I stay on top of my CPD requirements, undertaking at least 48 hours of CPD every 12 months, 50% of which is formal CPD. I am aware that once I qualify this will reduce to 20 hours CPD every 12 months (at least 10 hours formal) and I log this on the RICS CPD management system online.
30
What is Rule 3 of the RICS rules of conduct?
Members and Firms must provide good quality and diligent service
31
Can you give an example of a time you have acted in line with Rule 3?
Having checked my competence, and run a COI check on the site in Rodenhurst Road, I then drafted TOE to be sent to the client prior to undertaking any work. I provided a breakdown of all the costs up front which included a dataroom, brochure and EG advert. As I started prepping the marketing materials, my client decided they no longer wanted the site to be published in the EG. I redrafted the TOE which my client signed detailing the updated costs.
32
What is Rule 4 of the Rules of Conduct?
RICS Members and Firms must treat others with respect and encourage diversity and inclusion.
33
Can you give an example of when you have acted in accordance with Rule 4?
I am committed to improving diversity and inclusive environments both in my personal and private life. I have attended multiple CPD sessions on Unconscious Bias so as to better understand how I can identify and manage my own biases.
34
What is rule 5 of the Rules of Conduct?
RICS Members and Firms must act in the public interest, take responsibility for their actions and act in a way to prevent harm and maintain public confidence in the profession.
35
Can you give an example of a time you have acted in line with rule 5?
When submitting the application to discharge a condition for the car parking allocation at East Ham Industrial Estate, I noted that the number of spaces outlined in the architects plans did not match the stated number of spaces in the planning consent.
I spoke to the architect to check why this was the case and they informed me that there had been a mistake in their work. I took responsibility when recognising a mistake had been made to ensure no harm was caused to my client in delaying the discharge of the condition. The condition would be seen by members of the public as it would be publicly available on the councils website and as such, its accuracy would serve to promote public confidence in myself, my company and the RICS.
36
What are the Obligations to the RICS outlined in Appendix A?
RICS members and firms must:
* Cooperate with the RICS
* Promptly provide all information requested by the Standards and Regulation Board or those acting on their behalf.
RICS Members must:
* Comply with CPD requirements.
RICS Firms must:
* Have a sufficient level of PII cover that meets the standards approved by RICS
* Have a CHP and ADR procedure which is approved by the RICS and maintain a complaints log
* If a sole principle, must make arrangements for their work to continue in the event of their incapacitation or death.
* Display business literature in line with the RICS policy on Designations to denote that they are regulated by the RICS.
* Report any matter they are required to under the rules of registration
37
What are three of the obligations in appendix A and how do you fulfil them?
1. Members must comply with their CPD requirements - I undertake 20 hours of CPD pa, at least 50% of it is formal and I log it on the RICS online CPD log.
2. Cooperate with the RICS - I ensure to always follow the rules of conduct and all other RICS technical guidance in my day to day role.
3. Firms must have RICS approved CHP and ADR procedures - I ensure that I issue details of our CHP in my TOE and follow the procedures if a complaint arises.
38
How is the RICS regulated?
Self - regulated
39
What triggers disciplinary procedures?
1. Someone complaining to the RICS
2. An allegation received by a client or third party
3. Information received by RICS.
40
What are the three levels of disciplinary procedures?
1. Action by the head of regulation
2. Regulatory Tribunal
3. Appeal panel
41
Does the RICS provide any support for decision making?
1. Ethics Decision Tree - a flow chart which encourages members to ask themselves questions to aid in decision making, such as ‘would I be happy to read about my actions in the paper?’
2. Case studies of different ethical scenarios
3. RICS Regulation Confidential Hotline offers assistance to members who have been unable to gain an answer from the decision tree.
42
What is the initial stage of investigation for disciplinary procedures?
Investigation by the Head of Regulation
43
What are the four actions that can be taken by the head of regulation?
1. Fixed Penalty Notice
2. Make a Regulatory Compliance Order
3. CPD Sanctions
4. Refer the matter to the disciplinary panel.
44
What is the procedure for more serious breaches?
Regulatory Tribunal - this is decided by the head of regulation under the disciplinary procedures.
45
What are the outcomes of the regulatory tribunal?
1. Compliance Order
2. Unlimited fine per breach proportional to the offence
3. Conditions upon future continued RICS registration
4. Expulsion of a member or firm
5. Publication of results must be put in Modus or a local newspaper where the member works
46
Once a member has been investigated and a decision about their offence has been made are there any options available to them?
Yes - they have the right to appeal the decision at an appeal panel.
47
What happens at an appeal panel?
The panel will review the decision based on the heard and any new evidence. They can then either uphold the action taken against the member or firm or vary the penalty.
48
Who makes up the Regulatory Tribunal and Appeal Panel?
50% are RICS members, 50% are lay members, i.e. not RICS
49
Is there any guidance on the use of social media?
Use of Social Media, Guidance for RICS Members 2021
50
What does the RICS Guidance Note on the Use of Social Media?
1. **Reminds** members about the **high standards** of **professional behaviour** expected by the RICS
2. RICS is **likely to investigate** concerns about **social media posts where** they involve:
1. _Discrimination_
2. Abusive or _threating behaviour_ likely to cause harm or distress to a person
3. _Bullying_, harassment or victimisation of a person or people
4. A _pattern_ of frequent or large number of _concerning communications_
5. _Ignoring_ previous advice or warnings about concerns
3. RICS will also investigate social media posts made by members in their _personal capacity_ ‘particularly if **extreme or highly offensive views** are expressed which may cause **reputational damage to the profession**.’
51
Can you give an example of social media activity which may cause reputational damage to the profession?
A member posting racist tweets. The views of that member are not reflective of the RICS, however the members association with the profession may cause the public to assume those views are accepted. This causes reputational damage as the actions of one will be associated with the views of all.
52
How do you set fees?
Based on the scope of the work and agreed on an ad-hoc basis.
53
What if the client comes back and says that another firm will do it for cheaper?
I would assess whether the scope of work has changed and whether a marginally reduced fee would still enable me to provide a high quality of service. If not, I would decline the instruction.
54
Can you accept referral fees?
Only if I am completely open and transparent with my client in receiving or offering a referral fee. I would state this within the terms of engagement. I would ensure to comply with the principles of the Bribery Act and Rules of Conduct.
55
What is a conflict of interest?
A conflict of interest is a situation in which a potential or actual risk may arise that could impair the members ability to provide impartial, independent advice.
56
Can you give an example of a conflict of interest
personal interest
financial interest
acting on both sides of the transaction
57
Is there any guidance on Conflicts of Interest?
RICS Professional Statement on Conflict of Interest, 2017
58
What are the three types of conflict?
* Party Conflict
* Own Interest Conflict
* Confidential Information Conflict
59
How do you handle a conflict
Step 1 - Conflict avoidance
Step 2 - Written Advice to both parties seeking informed consent
Step 3 - Conflict Management
60
Can you give an example about when you have seen a conflict managed at your firm?
61
What is dual agency?
Where the agent has a contractual agreement with both the seller and the buyer at the same time - this must not be undertaken by any RICS member at any time.`
62
Is there any guidance on Complaints Handling?
RICS Guidance Note on Complaints Handling, 2016
63
What are the key points of RICS Guidance Note on Complaints Handling, 2016?
1. Notify insurers as soon as a Complaint is made
2. CHP should be issued with TOB
3. Complaints log must be maintained
4. CHP and ADR must be approved by the RICS
64
What is PII?
Private Indemnity Insurance - protects surveyors, clients and third parties against negligence claims where there is a duty of care breached and a claim for damages arises
65
Who provides PII?
An insurance firm
66
What are the minimum requirements for PII?
This is based on the firms annual global turnover:
If the turnover is £100,000 or less, the minimum level of indemnity required is £250,000
If the turnover is £100,001 - £200,000 the minimum level of indemnity required is £500,000
If the turnover is £200,001 or above, the minimum level of indemnity required is £1,000,000
This is the minimum level required for each and every claim.
67
How do new businesses work out their level of PII?
Estimate their annual turnover and adjust accordingly
68
What is the maximum level of uninsured excess required by the RICS
2.5% of the sum insured
69
How much PII is needed if a firm ceases trading?
A firm should have a minimum of 6 years run off cover with an aggregate of £1,000,000. RICS recommends longer cover as claims can be made up to 15 years after the work was undertaken.
70
Do you need PII if the work is unpaid
Yes - still providing a service in which a duty of care is owed and as such can be breached, damages caused and negligence claims necessary.
71
Does the RICS provide any guidance on PII\>
Yes, RICS Guidance Note - Risk, Liability and Insurance, 2021
Recommends the use of liability caps and advises members to be aware of third party reliance.
72
What is the limitation on Negligence claims?
Limitation Act 1980
Contract - 6 years since the negligent act with a 15 year long stop date.
Tort - 6 years from the date the claiment suffered the loss.
73
How can one avoid a negligence claim?
* Ensure clarity in terms of engagement
* Ensure your competence to undertake an instruction
* Cap the liability excess in TOE.
* Follow RICS Guidance and Standards
* Ensure to document process - keep detailed file notes and photographs
74
Is there any guidance on Handling Client Money?
RICS Professional Statement on Client Money Handling, 2019
75
What are the 6 areas of good practice outlined in the RICS Professional Statement Client Money Handling 2019
1. Providing **I**nformation to Clients
2. **H**olding Client Money
3. **R**eceipts
4. **C**ompliance
5. **P**ayments from Client Accounts
6. **A**ccounting Records
**I**f **H**olly **R**uns **P**lease **C**ontact **A**uthorities
76
What procedures should be undertaken when handling client money?
1. Client accounts kept separate
2. ‘CLIENT’ must be written on the bank account
3. Client must be able to have their monies on demand
4. Payment of interest agreed and account kept in credit
5. Accurate records kept with a running balance available
77
How does the RICS aid in protecting client money?
RICS runs a client money protection scheme for claims from clients which provides last resort protection if a RICS regulated firm is unable to repay a clients money
78
How would you start a new practice?
RICS compliance:
* Fill in a firm detail form
* Appoint a responsible principle who will be used for all RICS communication
* Register with RICS for regulation of the firm by the regulatory board
* Put together a CHP with ADR procedures and gain approval from RICS
* Appoint a CHO
* Start and maintain a complaints Handling log
* Estimate the annual global turnover and ensure you have the minimum level of PII in line with RICS requirements
* If a sole practitioner, make arrangements so that your work can continue even in the event of your incapacitation or death
* Register for VRS if undertaking Red Book Valuation work
* Ensure CPD is logged online and set up a staff training plan
* Ensure completion of RICS annual return each year
Statutory Compliance
* Disclose Business name
* appoint MLRO
* comply with the Bribery Act
* Comply with the Health and Safety Act
* Disability Discrimination compliance
* Ensure compliance with current employment law:
* National Living Wage
* Working Hours
* Pensions etc.
79
How would you close a practice?
* Inform the RICS of retirement or closure
* Inform clients and hand over to new firm
* Inform insurers and ensure at least 6 years run off cover
* Keep records for 6 years
* Return client monies to their own accounts
