Ethics Flashcards
(100 cards)
1
Q
What are ethics?
A
The moral principles that govern a persons behaviour or the conducting of an activity
One way to assess whether you are acting with ethics is to consider whether you would be happy for your actions to be publicly known and whether you could justify your actions if they are being challenged
2
Q
What is the difference between RICS ethics and rules?
A
Ethics are a set of moral values while rules of conduct are a framework that we work to.
3
Q
Tell me what you understand about conflicts of interest
A
When a person of trust has competing personal or professional interests.
When impartiality is removed/ difficult.
4
Q
How could the conflict of interest be managed internally if two separate departments were working for the same client?
A
Separate offices
Make client aware of potential conflicts
Monitor conflict
Sign confidentiality agreements
5
Q
Assuming you became chartered, how would you deal with a situation such as a friend asking for valuation/ advice?
A
I could not offer advice on my own with out PI insurance
If I did have PI insurance, I would ensure that the information given was subject to through checking process regardless who it was too.
If not comfortable I would advise them to find a surveyor scheme.
Adhere to rules of conduct.
6
Q
What would you do if invited to an event by client?
A
Accept as long as not too high a cost and declare it of hospitality form.
7
Q
What steps should be taken if there is a conflict of 2 clients represented by the same firm?
A
Separate offices
Make client aware of potential conflicts
Monitor conflict
Sign confidentiality agreements
8
Q
How do you deal with a personal conflict of interest?
A
Disclose the relevant facts promptly in writing, including if you are receiving any remuneration over and above your fee.
9
Q
What are the minimum levels of indemnity? How do you determine the level of PI cover?
A
100k or less = 250k
100-200k = 500k
200k+ = 1mil
PI cover is based on the firms annual turnover.
10
Q
What sort of insurances do chartered surveyors need to have?
A
Professional indemnity cover
Building insurance
Contents insurance
Employers liability insurance
Run off cover
11
Q
What are the maximum levels of uninsured excess?
A
Upto 10 mil = the greater of 2.5% or £10,000
Over 10 mil = 2.5% of insured sum
12
Q
What sort of insurances do chartered surveyors need to have?
A
Professional indemnity cover
Building insurance
Contents insurance
Employers liability insurance
Run off cover
13
Q
What are the requirements regarding PI by the RICS?
A
Each and every claim basis
Gives min wording
Sets out minimum levels of indemnity
Sets out maximum levels of uninsured excess
Run off cover 6 years
Should include cover for past and present employees.
14
Q
What if the loss exceeds the cover provided by the PI insurance?
A
The professional/firm will pay the difference – in assets etc.
15
Q
What measures should be taken to try and avoid PI claims?
A
Keep full and detailed records of meetings, conversations etc.
Record recommendations and advice given
Use proper letter of engagement, scope of service and terms of engagement
use RICS guidelines
Avoid poor management and excessive workloads
16
Q
Are you familiar with the term limit of liability and where would it be used?
A
Limit of liability is used to place a cap on the level of exposure a business signs up to
In the aggregate means as a maximum after many different claims
If cover is for each and every claim, it is that level for each claim
Anything not covered by PI insurance can be gone after so assets could be at risk.
17
Q
What does PII stand for?
A
Professional indemnity insurance
18
Q
What benefits does PII provide the professional?
A
The professional is protected from financial loss.
Does not have to meet the claim from their own assets and resources.
19
Q
What benefits does PII provide for client?
A
Can recover their financial loss
20
Q
On what basis is PII underwritten in the uk?
A
On a claim made basis
21
Q
What does PII in underwriting mean?
A
That it is the insurance policy that is in place at the time the breach is discovered that is claimed under NOT the insurance policy in place when the breach was made.
22
Q
How many rules of conduct are there for members? What are they?
A
5
1- Member and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
2- Member and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
3- Members and firms must provide good quality and diligent service.
4- Members and firms must treat others with respect and encourage diversity and inclusion.
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.
23
Q
Why does RICS have rules of conduct?
A
To provide a framework that we can all work to and so the client knows they are getting a set level of service
Also useful professional guide for individual institution members
24
Q
When were rules introduced?
A
2nd feb 2022
25
Your brother in law is a chartered surveyor. You find out that he is working outside the RICS rules of conduct. What do you do?
I verify the facts and confront him reminding him of his duties as a member of the RICS.
I inform the RICS specifying my relationship to the person and any corrective action which I believe my brother in law is committed to put in place.
26
What must a complaints handling procedure include?
Include a redress mechanism
Details of terms of business to client
Clear, quick, transparent, impartial and free
Names and contact details of nominating person must be stated
Investigated within 28 days
All complaints, progress and recordings must be recorded
Advise PI insurers of complaint
2 stages minimum – 1 senior member of staff , 2 independent redress scheme
27
What is your employers complaints procedure?
a. 3 stage process
b. Stage 1 - Complaint comes in to the relevant office. Office acknowledges the complain within 7 days and provides a response within 28 days.
c. Stage 2 – If unresolved; complaint to be made in writing to Calum Campbell, Kevin Murchie or Les McAndrew. Complaint will be acknowledged within 7 days and responded to within 28 days.
d. Stage 3 – If unreseolved; complaint taken to an independent redress provider, as approved by the RICS regulatory board
28
What is an independent redress scheme?
It is a consumer scheme designed to handle small issues that would be disproportionally expensive to take to court. Each scheme has a financial limit.
If the scheme judges in favour of the complainant, it is binding. If it judges in favour of the firm, the complainant can take it to court.
RICS firms must specify which redress scheme they want to use, it could be an ombudsman, arbitration or sometimes adjudication.
Small claims court deals with £5,000 or below.
29
What do you do if you get a letter of complaint?
I acknowledge reception and I forward it to our designated complaint handler, as per our complaint handling procedure, providing additional information as required. If I am a sole practitioner, I inform the RICS if it warranted my complaint handling procedure and I notify my PI insurer.
30
In case of a breach of a rule of conduct what is the procedure?
New procedures were put into place in June 2007
Not every shortcoming wil necessarily give rise to proceedings
A formal investigation by the Head of Regulation of the RICS is the first step in the process
The RICS can request information and/or visit and inspect to investigate compliance
Members must co operate fully with all enquiries
31
How can disciplinary proceeding be triggered?
Someone complaining to the RICS
An allegation by a client or third party
Information received or established by the RICS
32
What 3 actions can be imposed after the end of the investigation stage?
Fixed penalty
Consent order
Disciplinary panel
33
What are fixed Penalties?
A fine by the RICS
34
When are fixed penalties applicable?
It is used for minor breaches , failure to provide the RICS with required information ( annual returns, CPD records)
For continued non compliance a further notice may be issued and the fine increased
Appeals can be made against them within 28 days
35
What are consent orders?
It is a written agreement between the RICS and a member or firm concerning a disciplinary issue on a breach of the RICS rules.
It can require the member to take certain corrective actions, or restrain them from taking certain actions for a specified period of time and may require them to pay a fine or costs.
36
When are consent orders applicable?
For low level breaches of the rules that can easily be corrected
Can be applied for the breach of any of the rules
Fines applied may be £2,000 per breach.
37
When is a disciplinary panel applicable?
Used for more serious breaches of conduct
The panel will usually be held in public
The burden of proof is on the RICS
Balance of probabilities
38
What penalties can a disciplinary panel apply?
Caution
Reprimand
Undertakings as to future conduct
Fines (unlimited)
Condition of continued membership or registration
Member expulsion or removal of firms registration
39
What sort of breaches would expulsion be suitable for?
Gross, persistent or wilful failure to comply with an RICS rule of conduct e.g fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of clients money.
How are they published-
Disciplinary panel hearings are posted on the website 14 days before the decision is published in RICS business, on the website and in local newspapers. A list of number of fixed penalties and consent orders issued during the previous quarter is placed on the RICS website for 12 months, doesn’t name individuals or firms.
40
What are the main principles of the bribery act?
6
Proportionate procedures – procedures that match the size of the firms risk
Top level commitment – high level management foster a culture within firm that bribery is never acceptable.
Risk assessment – Assesses the nature and extent of its exposure to potential external and internal risks of bribery.
Due Diligence – investigation procedures, taking a proportionate and risk based approach, in respect to persons who will perform services on behalf of the organisation.
Communication -bribery policies and procedures are embedded and understood throughout internal and external communication including training.
Monitoring and review – monitors and reviews procedures in place by the firm and makes improvements where necessary.
41
Under the bribary Act, under what circumstance is a facilitation payment permitted?
Under duress
When present risk to life, limb or liberty.
Safety first, make payment then report immediately.
42
Winner of a I pad as a prize ( good value prize) how would you act ?
Turn down the prize given its value but ask it given to charity instead as the high value can be seen as a bribe.
43
Theatre with clients but they cancel do you still go?
No as it is a business expense which it will no longer be a business event as would be going solo on companies costs.
Any client entertainment must be declared on gift and hospitality register.
44
A client lunch but cost comes to £200 what should you do?
Okay to accept it as it had legitimate business purpose, declare it on hospitality register immediately and tell manager.
45
Tell me about the Merrett v Babb case law?
2001
Babb carried out a valuation as employee of a company for a house purchased by Merratt.
Valuation was found to be negligent at the time when the company np longer existed, court ruled that Babb is liable as an individual. Big shock to the industry.
46
What is the significance of Merrett v Babb?
It considered if employees were vulnerable to claims brought by clients directly against them for advice given on behalf of their employees.
Highlights importance of run off cover
Run off cover in place after they leave the firm or firm ceases trading
Individuals should ensure that their ex company keeps cover on their behalf
47
How long should run off cover be in place?
6 years if contract executed under hand – 12 years if executed as a deed
48
Can you tell me the 5 Global professional & Ethical standards?
Act with integrity
Treat others with respect
Always provide the highest standard of service
Act to promote trust
Take responsibility
49
Can you tell me which 2 professional & ethical standards resonates with you the most?
Other with respect – everyone deserves the same standard of service and treated the same
Promote trust – as a professional people should have the confidence to trust the work I provide, I am passionate about what I do and what any clients to know and have the trust.
50
Tell me how you have demonstrated 2 of the 5 global ethic standards on your case study?
High standard
Responsibility
Integrity
Respect
Trust
51
What was the Carsberg Report 2005?
This was a thorough internal and external review of the regulation of the RICS
A response to members general dissatisfaction with aspects of the RICS regulations.
52
What were some of the key recommendations of the carsberg report?
A conduct board should be established to operate the disciplinary structures
RICS Should regulate firms as well as members
A review of existing CPD requirements and compliance should be initiated
53
What are the 5 principles of regulation?
Proportionality
Accountability
Consistency
Targeting
Transparency
54
What is the purpose of the 5 principle regulations?
RICS is a self regulated professional body that has a duty to the public interest
Set out how the RICS regulates itself internally to maintain the highest standards of professionalism and integrity in the benefit of public interest.
55
Pick 2 principle regulations and explain what they mean to you?
Accountability – be responsible, justify your actions
Consistency – Everyone gets the same high service
56
Name some topics on which the RICS publishes help sheets and policy documents?
CPD
Handling clients money
PI insurance requirements
Complaints handling procedures
Maintaining professional and ethical standards
Cashflow forecast
57
What steps must you take for handling of clients money?
Clients must always have access to funds
Kept separate and clearly identifiable
Client name in account
Interest on account
58
What is the clients money protection scheme?
Run by RICS
Provides for any member of the public to be reimbursed their direct loss of funds
Provided through RICS insurance policy
59
If a client was prepared to pay in advance of services, how would you ensure this was dealt with?
Set up separate client account this is properly named and clearly identifiable
Provide the client with a statement of account
Inform and agree drawdowns
Prior to drawing monies send a statement of how much will be withdrawn and what services and associated fees are made up of, send updated statements at account.
Complete and transparent
60
59- Types of client account?
General account – holds money for more than one client
Discrete account – single named client
61
What are the RICS bye laws?
1- Application and definitions
2- Memberships and registration
3- Designations
4- Contributions to funds
5- Conduct
6- Governing council, offices and staff
7- Subordinate boards, committees and groups
8- Procedure for general meetings
9- Accounts and audit
10- General
62
What is GDPR?
General data protection regulation
To protect personally identifiable information
63
How will GDPR affect surveying practices?
Data held to serve clients
Data in systems
Home report Data
Email and correspondence
64
How do firms comply with GDPR?
Must have knowledge of data you store and process
Provide information on how the data is used and on the rights of individuals data
Prove managing personal data in a manner compliant with regulations
On request how you use data stored.
65
RICS Motto?
Est Modus in Rebus – There is a measure in all things.
66
RICS Mission Statement?
To qualify and equip our professionals to the highest level
To promote and enforce standards
To lead solutions to the major challenges facing the built environment through professional expertise.
67
RICS Founded?
1868
68
How is RICS Structured?
The present structure was created by the agenda for change 1998 – th need to evolve to meet the needs of its international member base.
Royal charter was granted by the Privy council – the RICS is self regulated, internally monitored and inspected and not regulated by the government. The Bye laws determine how they are regulated.
69
What are CPD requirements?
Members must undertake and record appropriate lifelong learning and on request, provide evidence that they have done so to maintain and improve levels of professional competence.
70
How many hours CPD?
20 hours – at least 10 of which are formal
71
70- What sort of activities are included for CPD?
Must have clear learning objective relevant to my role to count as CPD.
Formal – web based training with structured assessment, formal seminars, providing training to others where research and preparation is required.
Informal – private reading, internal CPD’s, shadowing/ mentoring trainee.
72
How can you record CPD learning?
Must record type, date, subject area, number of hours, learning objective and outcome.
The RICS provides an online recording facility.
73
What types of articles do you read?
Savills – research documents
ESPC monthly reports
I also read the RICS journals and reading various topics on RICS website.
74
What recent RICS article have you read?
Look at site closer to the time
75
How do you keep up to date with topical issues?
I am on the mailing list for several CPD providers
Exchange of information with colleagues
My employers research & development team send us weekly digests of the relevant press and I request copies of articles of interest.
76
What is your CPD strategy?
I meet with my manager twice a year to review my career development plan and objectives.
I build my CPD strategy around these objectives, current topics and personal interests.
My main objectives this year are…..
77
What procedures must you follow if you are starting up a new practise?
Inform RICS
Appoint a contact officer
Register with RICS for regulation
Arrange professional indemnity insurance
Set up client account for handling client money
Set up complaints handling procedure
Set up staff training + CPD
78
Would you advertise your new company in the press?
Yes as long as it is in a trustful and responsible manner (rules of conduct)
79
What insurances would you need if you were starting up your own firm?
PI
Employers liability
Public liability
Building insurance of own office
80
Which firms are regulated by the RICS?
Those with 50% or over partners/directors that are members of the RICS or those with less that have applied.
81
What sort of information do registered firms have to send to the RICS annually?
Annual return
Type of business and staffing
Nature of clients
Training provision
Complaints handling procedures defects and records
PI insurance details
If a firm has clients money
82
Money Laundering Regulations 2017?
26 June 2017
Money laundering means exchanging money or assests that were obtained criminally for other money/assets that are ‘clean’. Also means money to fund terrorism. Money laundering regulations apply to all regulated sectors.
Requirements-
Undertake customer due diligence
Keep records e.g of due diligence
Maintain internal procedures to identify & prevent laundering
Report suspicious activity (SAR = suspicious authority report)
Internally to nominated money laundering reporting officer
Externally – strange transactions must be reported to the serious organised crime agency.
Train employees on internal procedures & legislative obligations
Cash payments over 15k euros and 10k pounds, disreputable firms
Suspicion can be speculation or based on strange behaviours – uneconomic decisions.
83
Proceeds of crime at 2000?
Applies to everyone & facilitates money laundering regulations making it illegal to be involved in concealing or transferring criminal property.
84
Terrorism act 2000?
Makes it an offence if you have reasonable cause to suspect to be involved in financial activity involved in financing terrorism.
Penalty up to 14 years.
85
What are the five principles of better regulation?
(PACTT)
Proportionality
Accountability
Consistency
Targeting
Transparency
86
What steps do you need to take to start a Firm RICS?
RICS Requirements –
a) Inform RICS
b) Professional Indemnity Insurance in place
c) Fees for registering for regulation
d) Clients’ money obligations
e) Complaints handling procedure in place
f) Staff development and training processes in place
g) If 50% or more of partners/directors then Firm must be regulated by RICS
87
What steps do you need to take to start a Firm Statutory?
* Business Names Act 1985 – If you practice under a name other than your own you must display-:
a) Sole principal – your name; or
b) Partnership – all partners; or
c) Company – its corporate name on business stationary and premises, together with an address that documents can be served on the sole principal, on the partners or the company; or
d) A partnership of more than 20 partners – need not have the names and addresses shown on business stationary provided that it maintains at its principal place of business, a list of the names of all the partners.
* Employment Legislation
* Money laundering Legislation
* Consumer Credit Act 1974
* GDPR
88
What steps do you need to take to close a Firm?
RICS Requirements –
a) Inform RICS
b) Ensure clients are informed at the earliest opportunity and hand over arrangements made to the new Firm.
c) Return any client monies to their own accounts
d) Inform insurers and procure professional indemnity run off cover for a minimum of 6 years and £250,000 cover. Claims can arise for up to 15 years.
e) Retain a copy of the client files for a minimum of 6 years
89
Give an example of when you have used the 5 global standards?
* Situation referred to in my case study
* Discussing the HR those who have never used it before, and what it means.
* A client requesting that I change a category 2 to a category 1 because it “looks bad”
90
What are the 5 Global Standards?
1) Act with Integrity
2) Act in a way that promotes trust in the profession
3) Always provide a high standard of service
4) Take responsibility
5) Treat others with respect
91
What are your obligations to maintain your RICS accreditation once qualified?
* Record 20 hours of CPD each calendar year (10 of which must be formal)
* Relevant and current understanding of professional and ethical standards during a rolling three-year period – Online ethics certificate last 3 years.
* Record CPD hours by 31st January each year.
* Pay fees
92
What involvement with RICS will you have out with Mandatory obligations once qualified?
Hold an understanding of Guidance Notes that relate to your field of practice?
93
How would you ascertain the professional indemnity required for a RICS Firm?
The level of the Firm’s turnover in the preceding year
Turnover Minimum level of indemnity for each and every claim
£100,000 or less £250,000
£100,001 to £200,000 £500,000
£200,001 and above £1,000,000
94
What is professional indemnity and who does it protect?
It is to protect surveyors, clients and third parties against negligence claims when there is a duty of care breached and a claim for damages arises. It is mandatory for surveyors working in practice.
95
What does the Royal Charter mean to you?
Gives our clients confidence in our work in that we provide a “Gold Standard” of excellence and integrity having received the Royal Charter. This also means better regulation and the ability to apply legislation.
96
What are the principles of the Bribery Act 2010?
1. Proportionality – The action taken should be proportionate to the risk and size of the organisation.
2. Top Level Commitment – Those in senior positions are best placed to ensure the organisation conducts business without bribery.
3. Risk Assessment – Many organisations will have little or no risk of bribery but a risk assessment will show the nature or extent of exposure to bribery.
4. Due Diligence – This is about having a risk based approach to business relationships – with those you deal with or who provide services to you.
5. Communication – Employers will need to communicate their policies and procedures to staff and others who perform services, additional training may help raise awareness, and this would be proportionate to the size and type of the organisation.
6. Monitoring and Review – Risks to your organisation may change, over time you may want to carry out regular reviews and assessments.
The act does not cover genuine promotional and other business expenditure such as tickets for sporting events, promotional gifts or taking clients to dinner.
97
How does the Bribery Act 2010 affect your day to day activities?
* Conduct due diligence so we know who we are dealing with.
* Annual review training so we are aware of our policy.
* We maintain a record of gifts and hospitality and any over £100 should be discussed with senior management.
If you are a sole trader, what do you need to have in place should you be unable to perform your duties, say due to ill health, death or some or way you are incapacitated?
* Sufficient PI cover run-off
* Arrangements for succession/future running of the business.
98
Please provide two specific examples of project experience evidencing where you have applied the ethical standards?
1. I carried out a valuation for a terraced bungalow that was in poor condition. The owner required a value before and after works, subject to the specification etc. During the inspection I was provided with details of the spec on a scrap of paper and they seemed far too high for the property in question. I acted with integrity by questioning these values and re-iterated that the valuation would be on a comparable basis and not necessarily what he spent on the renovation. He then offered me all of his future work if the valuation was favourable. I re-iterated that the valuation would be based on comparable basis and his offer would have no bearing on it, thus promoting trust in the profession. I maintained a high standard of service by completing the report and issuing it after payment was received. The client complained the valuation was “wrong” and wished to speak to the surveyor. I took responsibility and discussed the rationale behind my valuation, which the client accepted in a courteous but firm manner, treating him with respect. He then withdrew his offer of giving us all his future work.
2. I carried out a home report under supervision. The client received the report prior to it being finalised, within the agreed timeframes, providing a high standard of service. They then phoned up and requested that the category 2’s within the home report be changed to a category 1 as it would not look good to potential purchasers. In a courteous manner, I reminded the client that we hold a duty of responsibility to the all potential purchasers to advise them of the condition of the property at the time of inspection, promoting trust in profession. I acted with integrity and took responsibility by stating that given the defects noted at the time of inspection, the categorisations would remain as is.
99
Provide a specific example of where you have found yourself involved in a project where you recognise you have reached the limitations of your role and your capabilities?
I was asked to carry out a scheme 1 valuation by a lender for a bed and breakfast within North Berwick. The original instruction requested a “bricks and mortar” valuation if the property was to be sold for residential purposes. The inspection took place and the report was submitted within the agreed timeframe. Upon receiving the report the bank requested further information which included a valuation of the property operating as a bed and breakfast under the same name. I advised them that this was not stipulated in the original instruction and would not be a valuation that our department could provide. I advised them we have a leisure department who specialise in such valuations and that they would have to instruct them to obtain this information. They understood and agreed to do so.
100
Why do you want to become a Chartered Surveyor?
I am passionate about the property industry and the values of the RICS. I want to be recognised as a leading professional maintaining the RICS standards gaining the respect that comes with it, the network and opportunities.
