Ethics Flashcards
Learn (119 cards)
1
Q
What is the role of RICS?
A
- Global leading professional body promoting the highest standards in the property industry.
- Gold standard of professional regulation.
2
Q
Why do you want to become a member of RICS?
A
“1. Professional recognition
- Quality Assurance
- International Voice
- Career Development
- Competitive Advantage”
3
Q
What is a Royal Charter?
A
A Royal Charter is an instrument of incorporation, granted by the Queen, which confers independent legal personality on an organisation and defines its objectives, constitution and powers to govern its own affairs.
4
Q
What are the key functions of SCSI?
A
1) ADVOCATE
Representing the profession in the public interest. This means promoting, defending and representing the interests of members of SCSI. Producing high quality research and surveys on key market issues. Providing market analysis and commentary. Providing independent, impartial professional advice to government departments, policy makers, state agencies etc is a key function.
2) EDUCATE Supporting a highly skilled surveying profession
Accredits undergrad & postgrad degrees, sets standards for new surveyors, manages APC’s. Delivers CPD programmes to ensure professionalism and high competence.
3) REGULATE Enforcing the highest professional standards for the benefit of the public, consumers and SCSI members.
The SCSI & RICS, through its professional groups, develops professional standards, guidance and information to ensure that it meets its core objective of protecting the public interest. SCSI monitors, guides and assists members to comply with rules, regulations and ethical standards. Investigates complaints and takes disciplinary action.
Consumer protection Influence policy Set standards Accredit professionals Quality assurance
5
Q
Who is the current SCSI president?
A
President TJ Cronin
6
Q
Who is the current SCSI CEO?
A
Shirley Coulter
7
Q
What do you understand by the term self-regulation?
A
RICS self-regulates, meaning that it operates within it’s own published regulatory framework, rather than being legislated by Government. RICS regulation is led by an independently-chaired Regulatory Board and regional sub-boards.
8
Q
What is the SCSI structure?
A
Board -Board of Directors
Council – Committee of the Board
Standing committees
Registration Body
9
Q
Can you tell me what you understand by the principles of better regulation?
A
(PACTT)
- Proportionality – regulators should only intervene when necessary. Remedies should be appropriate to the risk
- Accountability – Regulators must be able to justify their decisions and be subject to public scrutiny to promote complete fairness.
- Consistency – Regulators must adopt a common sense approach and that rules and standards must be joined up and implemented fairly. Regulation should be predictable in order to give stability and certainty to those being regulated.
- Targeting – Regulators should be focused on the problem and minimise side effects and that regulations should focus on the problem and avoid a scattergun approach.
- Transparency – Regulators should be open and keep regulations simple and user-friendly.
10
Q
What is a Bye-Law?
A
Is a rule or law made by an organisation to control the actions of its members
11
Q
Give an example of one of the RICS Bye-Laws.
A
B2.1 Classes
B2.1.1 – The Members of RICS shall consist of the following classes:
(a) Chartered members, comprising:
(i) Fellows;
(ii) Professional Members;
(b) Non-Chartered members; and
(c) Honorary Members
B4.3 Payment – A person shall be liable for the payment of his fees, subscription, levy or other sums payable while he is or was in membership
12
Q
Tell me what are the 5 professional & ethical standards.
A
(RRIST)
- Take responsibility
- Treat other with respect
- Act with integrity
- Always provide a high standard of service
- Act in a way that promotes trust in the profession
13
Q
How many years after an instruction has been completed can a Professional Indemnity Insurance claim be made?
A
15 years
14
Q
What type of cover would you need to cover a claim brought after a firm or member ceases to trade?
A
Run off cover
15
Q
Explain to me the new RICS Rules of Conduct - what do they replace/ When do they take effect?
A
Rules Changing February 2022.
Rules of Conduct 2021 replace 1) Rules of conduct for members 2) rules of conduct for firms and 3) global professional and ethical standards.
16
Q
Why did the rules of conduct change?
A
- Simpler structure
- Clear examples
- Focus on respect, diversity and inclusion.
- Understanding evolving technology
- Tackling global challenges
17
Q
Who do the new rules of conduct relate to? What are the 5 Rules?
A
Rule 1
- Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
Rule 2
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
Rule 3
- Members and firms must provide good-quality and diligent service.
Rule 4
- Members and firms must treat others with respect and encourage diversity and inclusion.
Rule 5
Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
18
Q
Give an example behaviour for each.
A
Rule 1
- Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS. Example behaviours include not being improperly influenced by others and being transparent with clients about fees and services.
Rule 2
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise. Example behaviours include only undertaking work where a Member has the relevant knowledge, skills and resources and undertaking sufficient CPD each year.
Rule 3
- Members and firms must provide good-quality and diligent service. Example behaviours include understanding clients’ needs and objectives before accepting work and communicating clearly with clients.
Rule 4
- Members and firms must treat others with respect and encourage diversity and inclusion. Example behaviours include treating others courteously and respectfully and developing an inclusive workplace culture.
Rule 5
Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession. Example behaviours include managing professional finances responsibly and responding to complaints promptly, openly and professionally.
19
Q
What are the core professional obligations of firms and members to RICS?
A
Members:
1) Comply with CPD requirements
2) cooperate with RICS
3) promtly provide info requested by standards and regulation board.
Firms:
1) Publish CPH procedure including ADR approved by RICS and maintain complaints log.
2) Ensure PII is in place and approved by RICS
3) Sole trader must appoint a locum
4) Cooperate with RICS
5) promtly provide info requested by standards and regulation board.
6) Display logos etc in accordance with RICS designations
7) must report any matter required to report under Rules for Registration.
20
Q
What disciplinary procedures can the RICS impose?
A
Disciplinary options range from cautions to expulsions or the deregistration of Regulated Members.
• When an allegation is received, the RICS Head of Regulation will:
o Make further enquiries.
o Inform the person the allegation is made against in writing, who can write a response within 28 days.
o Decide whether there are grounds for the complaint.
If there is, they will either: A) Issue Compliance order (low level breaches where member admits wrongdoing) or B) Refer to Regulatory Tribunal and then most serios goes to the Disciplinary Panel.
21
Q
In what circumstances can disciplinary measures be imposed?
A
RICS can only take disciplinary action if they conclude that there is a realistic prospect that a Disciplinary Panel, will most likely find the facts of an allegation proven, and that misconduct/serious professional incompetence will be established.
22
Q
When did RICS last update their disciplinary panel rules?
A
October 2019, RICS revised ‘Disciplinary, Registration and Appeal Panel Rules’.
March 2020, the Conduct and Appeal Committee was renamed the Regulatory Tribunal.
23
Q
What are the different levels of RICS disciplinary action?
A
Three levels of disciplinary action:
- Regulatory Compliance Order
- Regulatory Tribunal
- Disciplinary panel (serious breaches) 50% of panel are lay members
24
Q
What do you understand by the term professional practice
A
Professional practice refers to the knowledge, conduct and work from someone in a particular profession
25
What bribery legislation are you aware of?
Legislation - Criminal Justice (Corruption Offences) Act 2018.
Regulation - RICS Professional Statement Countering bribery and corruption, money laundering and terrorist financing. (1st edition 2019)
26
What is a bribe?
Bribery - the offer, promise, giving, demanding or acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust.
27
What are the penalties for accepting a bribe?
Under the Criminal Justice (Corruption Offences) Act 2018, penalties range from a fine of up to €5,000 to imprisonment for up to 12 months and/or forfeiture of property of the value of the gift or benefit obtained in connection with the offence.
28
What are the penalties for being involved in money laundering?
Maximum penalty of 14 years imprisonment and or an unlimited fine.
29
What is money laundering?
Money Laundering occurs when criminals, use the proceeds of crime for legitimate purposes (e.g. to buy property) in a bid to hide its illegal origins.
30
What money laundering regulations or legislation are you aware of?
Regulation - RICS Professional Statement Countering bribery and corruption, money laundering and terrorist financing. (1st edition 2019)
Legislation - The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 - 2021
31
What constitutes an offence under relevant money laundering regulations
Money laundering is where the proceeds of criminal activities are converted into legitimate assets
1) Tipping someone off who is under suspicion
2) Providing advice or assistance to anyone engaged in money laundering.
3) Assisting a criminal to obtain, hide or invest funds
4) Failing to report knowledge or suspicion
32
What are PSP’s Key AML Responsibilities?
1. Internal Policies, Procedures and Training
2. Business Risk Assessment
3. Client Risk Assessment
4. Customer Due Diligence
5. Suspicious Transaction Reporting
6. Record Keeping
33
What is Professional Indemnity Insurance (PII)?
Professional Indemnity Insurance
Purpose
To protect firms from financial loss in the event of a negligence claim and consequences to pay third party damages
To protect clients from financial losses which the firm cannot meet
34
Can you tell me about the RICS requirements in relation to PII?
Firms must have adequate PII cover under Professional Obligations to RICS.
The minimum level of Professional Indemnity Insurance as required by SCSI = €375,000 for each and every claim. My firm maintain a high level of Professional Indemnity Insurance currently in the sum of €3 million.
35
Why do firms need PII?
Rule 9 of the Rules of Conduct for Firms states that ‘a firm shall ensure that all previous and current professional work is covered by adequate and appropriate indemnity cover that meets standards approved by the Standards and Regulation Board.’
3 main purposes of holding PII:
1. The firm is protected from financial loss if it faces a claim that cannot be met from it’s own financial resources
2. The firm’s clients are protected from financial loss that a firm cannot meet
3. The firm or insured member is protected against the ‘consequences of its liability to pay damages to third parties for breaches of professional duty that it commits through its professional activities’
36
What would you do if you received a notice of a PII claim from a client or their solicitor?
Notify insurer immediately. Send a copy of the letter, unanswered, to my firm’s broker or insurers.
• Await further instructions before answering or entering into discussions
• It can be helpful to send your firm’s insurer a draft of what you might want to say to the client, seeking their approval.
37
What is an annual return?
RICS Regulated Firms and Registered Valuers are required to complete a regulatory annual
return to assists RICS Regulation in risk assessing our firms and practising valuers.
38
Tell me what you understand about Complaints Handling Procedures (CHP).
A CHP is A system of dealing with formal complaints against a company/person, for which there is a formal redress system.-Professional obligation for Firms requires a firm to operate a CHP and complaints log.
Guidance Note called 'Complaints handling (1st edition, 2016)'.
- CHP must include an Alternative Dispute Resolution (ADR) mechanism that is approved by 1) Regulatory Board' and 2) Professional Indemnity Insurance provider.
39
What are the key principles of an effective CHP?
(FUARR)
```
Fit for purpose
Understood
Available
Readily shared
Reviewed regularly
```
40
When and how can the RICS be involved in a complaint about a firm or member?
A client can complain to the RICS about the service or professionalism of a member or regulated firm, i.e. if the standard of a reasonable professional or firm has been breached.
They will not determine whether a professional's opinion is correct or offer a second opinion and cannot resolve issues subject to Court proceedings or where another resolution mechanism exists.
However, RICS generally only investigate matters if they are in the public interest in order to take disciplinary action to protect the public, rather than to punish the professional or firm.
The process usually takes 6 months and there is generally no right of appeal against a decision to close a case or agree a consent order.
41
What are the key stages of complaints handling?
1. Acknowledge the complaint
2. Inform the customer that you are taking action
3. Record and categorize the customer complaint in a complaints log
4. Resolve the complaint according to company policy
• Inform management
• Pass to manager if necessary
• Ask management what resolutions can be made and how can I help to resolve.
5. Follow up with the customer to make sure they are satisfied
6. If they are not satisfied, refer it to a third party for reconciliation.
42
Can you tell me about the CPD requirements for members of RICS?
1. Minimum of 20 hours each year
2. At least 10 hours must be formal CPD, i.e. any structured learning with a clear learning objective and outcome.
3. CPD activities must be recorded online by 31 January of the following year.
4. RICS Professional & Ethical Standards must be reviewed on a 3-yearly rolling basis.
43
Why is CPD important?
1) To improve your professional competence for your own benefit and that of your clients, employers and others.
2) To enable you to demonstrate how you have sought to maintain your competence in the event of a claim or allegation.
44
Tell me about the RICS’ guidance on dealing with Conflicts of Interest.
A member must not advise or represent a client where doing so would involve a conflict of interest or significant risk of a conflict of interest, other than where all those who are, or may be affected have provided their informed consent.
• RICS Professional Statement Conflicts of Interest, 2017
Defines three types of conflict:
1) Party Conflict: work on same or related instruction for two different parties.
2) Own Interest Conflict: relating to a personal interest
3) Confidential information conflict: relating to work between two parties which is confidential
45
What is double dipping (dual agency)?
Where an agent had a contractual agency relationship with both the seller and buyer at the same time – must not be undertaken in any circumstances from 1st January 2018. i.e. The agent lists a house for sale and also lands the eventual buyer. When that happens, the agent retains the entire commission, but often fails to represent the best interests of one side of the transaction or the other.
46
Why is double dipping (dual agency) an unacceptable practice?
Conflict of interest to represent both parties.
47
How would you close down a regulated firm
* Inform the RICS
* Inform your clients and arrange handover to new firm
* Return any client monies
* Inform insurance – take out run off cover of £250,000 for a minimum of 6 years
* Retain client files and records for a minimum of 6 years
48
What can you tell me about RICS guidance relating to bribery, corruption or money laundering?
RICS Professional Statement – Countering bribery, corruption, money laundering and terrorist financing, 2019 (effective 1st September 2019)
Divided into 3 parts:
Part 1 - Mandatory for all firms and members
Part 2 - Recommended guidance for all firms and members
Part 3 - Supporting guidance to Part 1 & 2, lots of templates.
49
What status does this hold? Countering bribery, corruption, money laundering and terrorist financing, 2019 (effective 1st September 2019)
Professional Statement
50
What must/should firms/members do to comply with the guidance? Countering bribery, corruption, money laundering and terrorist financing, 2019 (effective 1st September 2019)
Mandatory (Part 1 of PS on Countering Bribery and corruption, money laundering and terrorist financing).
- Not offer or accept, directly or indirectly, anything that could constitute a bribe.
- Have plans in place to comply with Criminal Justice (Corruption Offences) Act 2018.
-Report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities.
- Act with due diligence to perform periodic written evaluations of the risks that face the firm.
- Retain information detailing how the firm has met the requirements of this professional statement'
- Ensure staff have adequate knowledge of bribery and corruption to be able to comply with the requirements.
Report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities (The Anti-Corruption Unit based within the Garda National Economic Crime Bureau deals with the more serious allegations of bribery and corruption including allegations).
Good practice (Part 2 of PS on Countering Bribery and corruption, money laundering and terrorist financing).
- Prepare anti bribery and corruption policy, including risk assessment.
- Encourage transparency, for example a gift register.
- Provide training to staff on bribery prevention.
- Appoint a compliance and ethics champion.
- Publish code of behaviour.
- Staff should declare all gifts, hospitality etc to employer.
51
What Anti-Money Laundering Policy & Processes do you carry out?
Procedures (under the Act) require firms to:
Conduct a risk assessment profile on all relevant clients
Conduct client due diligence
− Photo ID
− Proof of Address (Utility bill)
− Memorandum & Articles of Association (If a company)
Maintain client identification and transaction records
Apply on-going monitoring to business relationships
Report suspicions of money laundering and criminal terrorist financing
Educate and train employees
52
How would you deal with a deposit/rental payment of €15,000 in cash?
Any cash transaction of €15,000+ should be reported to the firm’s Money Laundering
Reporting Officer
53
How do you ensure that you comply with bribery legislation?
Mandatory (Part 1 of PS on Countering Bribery and corruption, money laundering and terrorist financing).
- Not offer or accept, directly or indirectly, anything that could constitute a bribe.
- Have plans in place to comply with Criminal Justice (Corruption Offences) Act 2018.
-Report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities.
- Act with due diligence to perform periodic written evaluations of the risks that face the firm.
- Retain information detailing how the firm has met the requirements of this professional statement'
- Ensure staff have adequate knowledge of bribery and corruption to be able to comply with the requirements.
Report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities (The Anti-Corruption Unit based within the Garda National Economic Crime Bureau deals with the more serious allegations of bribery and corruption including allegations).
Good practice (Part 2 of PS on Countering Bribery and corruption, money laundering and terrorist financing).
- Prepare anti bribery and corruption policy, including risk assessment.
- Encourage transparency, for example a gift register.
- Provide training to staff on bribery prevention.
- Appoint a compliance and ethics champion.
- Publish code of behaviour.
- Staff should declare all gifts, hospitality etc to employer.
54
How do you ensure you comply with money laundering regulations?
Mandatory (Part 1 of PS on Countering Bribery and corruption, money laundering and terrorist financing).
- 'Not facilitate or be complicit in money laundering or terrorist financing activities.
- Have plans in place to comply with 'Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 - 2021'.
- Report any suspicions of money laundering or terrorist financing activities to 1) An Garda Síochána (the Financial Intelligence Unit) and 2) Revenue Commissioners.
- Evaluate and review periodically the risks that prospective and existing business relationships present in terms of money laundering or terrorist financing offences taking place.
- Ensure that their responses to the risks identified are appropriate, including conducting appropriate checks on clients and customers.
- Use reliance only where there is an appropriate level of confidence in the quality of the information provided by the third party – ultimate responsibility for the assessment of risk and actions taken based on this remain with the member or regulated firm.
- Take appropriate measures to understand the client and the purpose of the transaction.
- Undertake basic identity checks.
- Record and retain information detailing how the firm has met the requirements of this professional statement'
Comply with PSP's responsibilities by:
1. Internal Policies, Procedures and Training
2. Business Risk Assessment
3. Client Risk Assessment
4. Customer Due Diligence
5. Suspicious Transaction Reporting
6. Record Keeping
55
What would you do if you became suspicious that a client was involved in money laundering?
I would report it to my line manager and compile the evidence - I would then report to A) Revenue Commissioner and B) An Garda
56
What would you do if you became suspicious that a client was involved in terrorist activities?
Report suspicions of money laundering and criminal terrorist financing to 1) An Garda (Go AML on Garda website), 2) Revenue
57
How do you ensure you comply with your firm’s bribery and gifts policy
I declare all gifts, donations etc to my employer. I attend training addressing bribery and corruption. I am familiar and act in compliance with the employers policy, process and code of behaviour in relation to bribery and corruption.
58
Tell me about an instance of when you have been offered a gift or hospitality by a client.
One Christmas, I was sent a small bottle of Jo Malone perfume by one of my key clients who was a developer. They sent a gift to each team member that worked on their schemes. After determining the gift was not to be considered a bribe together with being both genuine and proportionate to the work carried out I accepted the gift and recorded it on my company’s gift register.
59
What are the current RICS rules for registration of firms
Eligible to register if 1-50% of the firms principals are MRICS
Must register if 50% or more
60
When did the rules for registration of firms last change?
Apr-20
61
Who is a ‘qualified member’ of RICS?
Under the requirements, a qualified member is defined as being AssocRICS, MRICS or FRICS. It doesn’t include student members or other non-qualified designations.
62
When must a firm register for regulation?
Firms must register for regulation if they provide surveying services to the public, operate in Regulated Area A (UK) and at least 50% of the Firm’s Principals are RICS Members
63
What are the registration eligibility criteria?
Registration eligibility criteria are amended so firms have to have at least 25% of RICS qualified Principals.
Firms who cannot meet this can implement a plan to secure compliance or be supervised by another RICS Regulated Firm
64
Who is a Responsible Principal?
Firms must designate a Responsible Principal who provides oversight, accountability and engagement with RICS standards and regulation.
65
What is a phoenix firm?
A firm which close in a disorderly way and then rapidly re-establish themselves as a new trading entity. We use the term “phoenix firms” to describe these companies. These are high risk firms.
When a regulated firm closes there is a requirement on the principals of the firm to inform RICS of the closure and provide information to demonstrate that the firm has closed in an orderly way. We appreciate that firms can close for many reasons and that some closures are the result of difficult personal circumstances. However, firms that close in a disorderly manner may pose a risk to their former clients, employees, creditors and to the reputation of chartered surveyors and regulatory action is, therefore, needed to protect the public interest.
66
What are the rules around use of the RICS logo and ‘Regulated by RICS’ designation?
The Rules for the use of the RICS logos are:
1. Use of the RICS logo is restricted to Regulated Firms only
2. Use of the designation 'Chartered Surveyors' is restricted to trading names only of firms
3. Regulated Firms must include prescribed text in their terms of engagement to explain what being regulated by RICS means to clients
67
What happens if a firm cannot comply with the eligibility criteria?
Firms who cannot meet this can implement a plan to secure compliance or be supervised by another RICS Regulated Firm
68
When did the rules about the RICS logo last change? What changes were made?
April 2019. Rules: 1) Firm registered for regulation must display logo/ wording. 2) Must be visible on letterhead, website, TOE and CHP. 3) Only regulated firms are able to use the “Regulated by RICS” designation, not individual members. 4) If a division, department, or practice area is registered for regulation then only that dept area is able to use the “Regulated by RICS” designation. 5) specific instruction on the positioning, sizing etc provided.
69
Tell me about the restrictions to the use of the designation ‘Chartered Surveyors’ by firms.
A partnership or a company can use the designation ‘chartered surveyor(s)’ in a trading name only.
70
What must be included in ToE relating to firm regulation
A 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
71
What is a locum and who might need one?
A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work, e.g. in the event of an accident/illness, unforeseen circumstances, prolonged absence (e.g. holiday or a sabbatical) or death.
72
How could a sole trader set up their CHP using a locum?
In the usual course of business, a locum may be appointed by a sole practitioner as their complaints handling officer to ensure that their Complaints Handling Procedure can be run fairly and impartially
73
What RICS guidance relates to handling client money
RICS Professional Statement Client money handling (1st edition) 24th October 2019 - Effective 1st January 2020
74
When was RICS Client Money Handling last updated?
Oct-19
75
What do the RICS Rules of Conduct say about client money?
The key principle is to ensure that clients' money (not solely belonging to the firm holding it) is kept safely, securely and can be clearly linked to the client at all times.
- Hold all money in a client account
- Ensure the word client is on the account name
- Confirm the bank operating conditions in writing
- Unidentified funds are promptly identified. If the owner is not identified within 3 years then they must be paid to a registered charity
76
Explain your understanding of the RICS Scheme Rules relating to client money protection?
The new Scheme Rules became effective from 1 April 2019, entitled Client Money Protection. The aim of the Scheme rules are
1) To keep client money safe
2) To ensure client money is used only for appropriate purposes
3) To ensure RICS-regulated firms have appropriate controls and procedures in place to safeguard client money
77
What are the main schemes available to firms? When were these last updated?
April 2019 Scheme Rules for the RICS Client Money Protection Schemes for Surveying Services and Property Agents
RICS Professional Statement, Client Money Handling (1st Edition, October 2019)
78
What is the current RICS compensation limit?
£50,000 per claim
79
What does the annual regulatory review fee relate to?
All regulated firms who hold clients' money pay a regulatory review fee on an annual basis. The income generated from these fees covers the operational costs of the client money regulatory review visit programme.
80
What might client money include?
Examples of client money include:
Payment on account of general costs, Rent, Service charges, Interest credited to a client account, Arbitration fees, Client money held but due to be paid to contractors.
81
How does client differ to office money?
Office money includes:
1) Interest on general client accounts which the client agrees will not accrue to them
2) Fees
3) Disbursements
4) Money paid in advance in respect of an agreed fee for surveying services, but not property agent work in England
82
What are some of the key principles of the RICS Professional Statement relating to client money protection?
When holding client money, RICS-regulated firms must:
- Hold all client money in an exclusively controlled client money account.
- Ensure that the account only contains client money paid into it.
- Not hold office money in a client money account.
- Ensure that the account name includes the word ‘client’ and the name of the firm.
- Confirm the bank operating conditions in writing, including confirmation that the bank will not set-off or counterclaim against the client money account for any sum owed to it by another account held by the firm
When client money is received, RICS-regulated firms must ensure that:
- Account for interest or other benefits, unless agreed in writing with the client
- Unidentified funds are promptly identified. If the owner is not identified within 3 years then they must be paid to a registered charity
For payments OUT of client account, RICS firm must:
- Use the money only for the client’s matters and with the client’s written consent
- Ensure that client money is returned as soon as there is no longer a need for it to be retained
- Send an invoice for any fees due and payable, unless the client has given written consent for deduction without prior notification
RICS-regulated firms must keep accurate accounting records and have appropriate systems, procedures and controls in place.
83
Explain the key themes from the RICS Futures 2020 Report.
The RICS Future 2020 report key themes are population growth, urbanisation and sustainability are common across all 8 geographic regions. To enable these markets to prosper, surveying professionals have a critical role to play in helping them to manage development and to provide appropriate infrastructure.
84
Explain your understanding of precedent set in Burgess v Lejonvarn. What is the new maxim of RICS in relation to compliance?
In this claim, it was alleged that an architect had acted negligently in the provision of professional services for which there had been no payment. Whilst there was no contract between the parties, the Defendant did owe the Claimants a duty of care. The case was sent to the High Court to assess whether the Defendant had breached this duty of care. Case was dismissed.
Professionals who provide professional services free of charge and without a contract owe a duty of care in tort to act with reasonable care and skill in respect of services they provide. But they are under no duty to advise or give warnings, and they will not be liable for work they do not do.
85
What do RICS set out as good practice for the use of social media in their Regulation document (June 2021)?
The RICS Professional & Ethical Standards require Members to promote trust in the profession and to treat others with respect. This applies to our online presence and communications.
This doesn’t mean, however, that surveyors should not have an online presence and use this to express their own opinions, message and values. However, we need to take responsibility for our online presence and ensure that we remain professional and respectful in what we post.
86
Explain your understanding of the RICS Levitt review.
Q4 2018 - RICS Management Board Meeting
Meeting papers noted a £3m extension requirement over 45 days because of inaccurate cash flow forecasting.
Feb 2019 - Internal Treaury Audit
Concluded, "no assurance" of internal RICS Financial Controls.
Nov 2019 - Letter to President
4 Non-Executive Directors of Management Board document concerns of a lack of transparency.
Nov 2019 - Subsequent dismissal of said 4 Non-Executive Directors.
Levitt Report - Notes, an avoidable internal power struggle, rather than a cover-up. Recommendations:
1. More oversight from Governing Council and they should be briefed by management council rather than CEO
2. Consideration of Executive Bonuses
3. Whistleblowing procedure should be followed - Information should be given to RICS, not individuals.
Moral of the story: if you spot an issue - be transparent! You may achieve a better solution
87
What is whistleblowing?
A whistleblower is a person, who could be an employee of a company, or a government agency, disclosing information to the public or some higher authority about any wrongdoing, which could be in the form of fraud, corruption, etc.
88
What does good governance mean to you?
Good governance is at the heart of any successful business. It is essential for a company or organisation to achieve its objectives and drive improvement, as well as maintain legal and ethical standing in the eyes of shareholders, regulators and the wider community.
89
What are the key values of the interim Governing Council statement relating to ethics, behaviour and culture?
The interim governing council claim to value culture and behaviours such as openness, transparency, ethical conduct (including fairness to all members, whether employees or non-Executives), accountability, collegiality, cooperation, and openness to change.
90
Explain what the Pandora Papers are and the ethical issues raised within them.
The Pandora Papers are the most expansive leak of tax haven files in history, with nearly 12 million documents detailing the hidden assets and deals of over 330 public officials and politicians in more than 90 countries, including 35 country leaders. While off shore accounts are not illegal, the lack of transparency of these structures open the door to irregularities such as money laundering or money concealment.
91
Tell me about what you would do if you felt that an instruction was outside your scope of experience or knowledge.
I would either decline the instruction. Or, with the client’s permission introduce them to a colleague/another surveyor with the required experience and knowledge. If I didn’t know of one I would refer the client to the SCSI find a surveyor service.
92
Tell me about an instance of when you have handled client’s money. How would you keep client’s money securely and safely held?
Booking deposits. Our firm does not accept cash as part of our anti money laundering policy. Instead, we accept EFT (preferred) and cheque. The purchaser transfers the deposit which is held in our client account. The client account and current account are entirely separate bank accounts. The client money is clearly labelled and logged on their file. I sent a deposit receipt letter to acknowledge receipt of funds. The deposit was only released to the vendor when countracts were signed and returned.
93
Tell me about how you would handle a client complaint.
Listen to the complaint. Record all details. Get all the facts. Discuss options for fixing problem. Act quickly. Keep promise. Follow up. If serious, pass to manager.
I would log this via the Customer Relationship Management System (CRM). This would then be formally logged on our CHP. Notify PII as complaint could lead to a case of negligence.
94
Tell me about your understanding of your firm's process for escalating a complaint to Alternative Dispute Resolution (ADR).
When an unresolved complaint becomes the subject of ongoing negotiations, there is an opportunity to use claim-handling services offered by the PII broker.
95
Why is it important to have a complaints procedure?
So that all complaints are dealt with fairly, consistently to hopefully resolved to the claimants satisfaction.
96
Tell me about a conflict of interest check you have carried out.
When I was instructed for property management of 19 The Garnish. I first asked within my firm - I send around an email to the entire firm, all over the country, which states the full name of the client, the full address of the building and the service to be provided. I ask them to reply within a certain time frame as to whether they have any reason to believe there may be a conflict with providing this service. We also have a CRM system where every job is logged and every client recorded, so I also check this online system to see whether there would be a conflict – however it’s only 2 years old so that’s why we also send out the email. I then also considered my own interests, personal and financial. Referred to the bribery act – considered whether it was a bribe, which it was not. Proceeded with the instruction.
97
If you identified a potential or actual conflict of interest, how could you handle this?
1) Decline the instruction
2) Write to the client gaining informed consent in writing.
- May need to set up information barrier/move to another part of the office if client agrees and still in the client’s best interest to proceed.
98
Kilcock – how did you deal with the deposit that you could not return initially?
It was held in the client account until the first purchaser provided the bank details for the deposit refund. It was refunded to the same bank account that the deposit was paid out of in order to comply with anti money laundering policy.
99
Kilcock deposit - How did you act ethically in agreeing the new sale and returning the former deposit?
If the first purchaser changed their mind and decided that they do indeed want to go ahead with the property, then they could argue that we are holding their deposit so they are entitled to proceed with the sale. It avoids an ethical dilemma and potential conflict to not hold two deposits on one property.
100
Gazumping – how did you avoid gazumping?
Once an offer of the asking price is received and the vendor accepts the offer, the property is immediately taken off the availability list and no further viewings of that property will be booked into the diary.
101
Why was gazumping an issue?
Gazumpting is not unlawful, but it is considered unethical. It does not promote trust in the professional so it breaks to RICS ethical standards.
102
Gazumping - How did you ensure that you acted ethically.
I acted ethically by not gazumping the original buyer, despite the higher offer received.
103
Gazumping - Did you have to do what your client instructed, even if it was unethical?
I would have reported to my manager. I would lay out the facts to the client and explain how to behavior would be unethical and go against my responsibility as a surveyor. I would encourage the client to make the right decision. I do have to follow lawful client instructions.
104
How do you balance ethics and client requirements?
I always act in an ethical manner and thankfully my clients do too. It is important to set out protocols that adhere to ethical practices so that when a situation arises that could be an ethical dilemma, you can revert back to the protocol. i.e. Once an offer of the asking price is received and the vendor accepts the offer, the property is immediately taken off the availability list and no further viewings of that property will be booked into the diary.
105
Give me an example of when you have acted with integrity?
When I was carrying out a viewing in Lancaster Gate, a viewer noted that his friend lived in the block and he wanted to know which apartment it was. While I knew the apartment number and I also knew that the friend was viewing another trade up property with me, I did not divulge this information to the viewer as it was not appropriate to say so.
106
Tell me about when you have provided a high standard of service.
I believe whilst undertaking a market appraisal in Norwood Court, Rochestown, I provided a high standard of service. I ensured that I provided the client with the information required to make decisions. I also kept in regular communication with the client to ensure they were taking the right steps towards putting their property on the market.
107
Tell me about how you have promoted trust in the profession.
When I was negotiating the sale of an auction property in Ballinhassig, I noticed that there was a potential leak in the roof as there were signs of water ingress in the ceiling area of the main bedroom. I advised the FTB that was keen to proceed to engage an engineer so they had a clear understanding of the condition of the property. As the occupier was unsure where to find an, I provided a selection of recommended local engineers. Rather than taking advantage of the situation I believe this promoted trust in the profession.
108
Explain how you have taken responsibility in your current role.
Responsible for all aspects of managing the Cork office. Meeting deadlines.
109
Tell me about how you treat clients with respect.
I ensure that I always listen carefully to clients when they are talking. I take on board their views to help ensure they receive the best possible outcome.
110
Tell me about how you treat other surveyors with respect.
I ensure that I always listen carefully to other surveyors. I take on board their views and I am polite when conversing with them. I understand that surveyors may be acting in the best interest of the client and so if I disagree with another surveyor I ensure I am not rude in my response.
111
Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying.
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PSRA Licence (Company)
PSRA Licence (Individual)
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Organise professional indemnity insurance- pays for the cost of defending a claim for negligence against you up to your policy limit. Cover €375k if gross income of firm less than €150k/cover €750K where gross income €15k-€300k/ €1.5 million of gross income more than €300k.
Set up a client account- for rents/service charges/deposits. If allowed we can keep any interest. Don’t need separate accounts for each client.
Inform the revenue
Register for VAT
Inform the SCSI
Adhere to the RICS/SCSI rules of conduct
Have a complaints procedure in place
Get ISO approval
Set up data protection / copyright licence for OS maps and plans
Draw up a business plan
Get a copy of the red book
Put a money anti-money laundering strategy in place
Arrange finance
112
If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.
I would not accept the incentive. I would advise the potential purchaser that I would not accept the gift and that the offer accepted would be the one which best serves the clients interest. – and report this to my line manager as per my organisation’s policy.
113
What would you do if you were asked by a client to reduce a fee proposal to win new work?
I would refuse fees should be market based and shouldn’t undercut other firms. I would potentially look at the scope services provided and look to reduce this down if the client wanted a lower overall fee.
114
If you were to set up in practice on your own, tell me about the types of insurance you would need.
Professional Indemnity insurance – to cover the economic loss which you could be sued for in the case of negligence.
Employer’s liability insurance.
Building and contents insurance. (Optional)
115
Cork – how did you work within your limitations?
On the Lancaster Gate PRS valuation, I only worked on the residential inputs in the valuation. When considering the commercial factors (e.g. Net yield calculations), I passed it across to the commercial chartered surveyors in my firm.
116
How did you advise your client with the support of others in calculating the yield?
I verbally informed the client during our weekly update call.
117
How did you deal with the overwhelmed prospective purchaser? How did you avoid advising them?
I listened to the overwhelmed purchaser and I acknowledged that it can be a daunting process for a first time buyer, especially in a different country. I broke down the steps of the of the sales process and answered their questions. I was careful not to provided them with advice as they were not my client and this would require a TOE. I just pointed them in the right direction.
118
How have you treated others with respect
I always treat clients with respect regardless of their race, gender, sexual orientation, age, size, religion, country of origin or disability, level of understanding and views. After each viewing, our CRM system AQ sends out a viewing feedback email. I always receive positive feedback to say that I acted professionally, friendly and respectfully.
119
How did you deal with the purchaser whose first language was not English?
I was patient and treated the purchaser with respect. I answered their questions clearly and concisely so that they could understand me easily.
