Ethics Flashcards
(87 cards)
1
Q
What are the 3 main roles of the RICS
A
- To maintain high standards of education and training
- To protect consumers through strict regulations of professional standards
- To be a leading source of information and independent advice on land, property construction and associated environment issues.
2
Q
How is the RICS Structured? What are their roles?
A
- Governing Council
- Oversee decision making of the RICS - Regulatory Board
- Ensure ethical and professional standards are upheld - Executive Team
- Led by Nick MacLean (CEO), responsible for implementing RICS policies
3
Q
What is the Bichard Review
A
Dated June 2022. The review was a review of the RICS, governance and purpose.
4
Q
How many recommendations were there in the Bichard review?
A
36 recommendations in 7 key areas.
5
Q
What are the seven key areas of recommendations within the Bichard Review?
A
- Increased focus on public interest
- Maintaining self-regulation
- Increased focus on D & I.
- Members engagement, younger/regional members.
- Independent review of public interest every five years.
- New / more simple governance structure.
- Leadership in areas such as climate change.
6
Q
Why would a firm wish to be registered?
A
- Being registered gives a “gold standard” stamp to clients
- Give the public greater confidence
7
Q
What annual confirmation must registered firms give to the RICS?
A
Registered firms must confirm compliance of the obligations and annually.
8
Q
What types of registered firm are there?
A
Corporate body, partnership, LLP, sole practitioner.
9
Q
If X percent of principles in a firm provide surveying practices, and they must be regulated. What percentage is X?
A
50%
10
Q
If X percent of principles in a firm provide surveying practices, they can apply to be registered. What percentage is X?
A
25%
11
Q
What are the seven pieces of information are required to be registered firm?
A
- Type of business and staffing details.
- Name of the “responsible principal”.
- Statutory regulated activities.
- Nature of the clients.
- Complaints handling, procedure
details and records. - Professional indemnity insurance details.
- Whether the firm holds client money.
12
Q
What year were the new RICS rules of conduct published?
A
October 2021
13
Q
What is the RICS Rules of Conduct?
A
- Members and firms must be honest an act with integrity and comply with the professional obligations.
- Members and firms must maintain their professional competence.
- Members and firms must provide a good quality and diligent service.
- Members and firms must treat others with respect and encouraged D&I.
- Members and firms must act in the public interest.
14
Q
What are the 3 Levels of Disciplinary Action?
A
- Action by the Head of Regulation
- Disciplinary Tribunal
- Appeal Panel
15
Q
What are the 4 actions that the head of regulation can do after completion of an investigation?
A
- Serve a fixed penalty notice.
- Make a regulatory compliance order.
- Referral to regulatory tribunal.
- Referral to disciplinary panel
16
Q
What does a regulatory compliance order cover?
How would an issue be corrected?
A
Low-level breaches of compliance e.g. failure to log CPD.
Agreement to pay a fine with terms a member or firm must follow to correct the issue .
17
Q
What issue would a disciplinary panel cover?
Who would make up a Disciplinary Panel?
A
More serious breaches of conduct.
Both members and non-members (Lay members)
18
Q
Name three of the seven penalties available to disciplinary panel?
A
- Issue a regulatory compliance order.
- Caution - a warning
- Issue a fine - unlimited, that must be proportional.
19
Q
Firms must avoid what when setting fees?
A
Price-fixing or cutting.
Fees should be market based, healthy competition is encouraged.
20
Q
What is the definition of a Bribe?
A
‘The offering or accepting of an advantage as an inducement for action which is illegal, unethical or a breach of trust’.
21
Q
What penalties are there for individuals under the Bribery Act 2010?
A
10 years imprisonment / and unlimited fine
22
Q
What penalties are there for non complience for individuals under the Bribery Act 2010?
A
10 year in prison or an unlimited fine
23
Q
What must terms of engagement state?
A
A client written agreement to:
1. Fee basis.
2. Payment of expenses
3. A copy of the firms complaints handling procedure (available upon request)
24
Q
What are the three steps for setting terms of engagement?
A
- Check professional competence.
- No conflicts of interest or personal interests.
- Confirming terms of engagement in writing before work has started
25
What acts must be complied with for agency work when drafting terms of engagement?
Section 18 of the estate agents act 1979
Money laundering regulations, 2017
26
On what grounds would you turn down an instruction?
1. Not competent to act
2. There is a conflict of interest.
3. Time to make agement cannot be agreed / not signed by the client
27
What are the three types of conflict?
1. A party conflict - 2 different parties on the same instruction
2. Own interest conflict - personal interest
3. Confidential information conflict - relates to work between two parties that is confidential.
28
What is the threshold for a conflict where a surveyor has had previous business dealings with a party?
2 years from previous business dealings
29
What is the difference between conflict avoidance and conflict management?
Conflict avoidance - when you do not accept an instruction
Conflict management - when instructing is accepted, all parties are aware, steps were taken to manage e.g. an information barrier Written agreement is required for all parties.
30
Why do you want to be an RICS Member?
I would like to become an RICS member as it would:
- increase my credibility in the eyes of my clients.
- further and maintain professional competency
- give me access network of 134,000 professionals
31
What is the RICS Professional Standard regarding Conflicts of Interest?
What date was it effective from?
RICS Global Professional Standard: Conflict of Interest, 2017.
1st January 2018.
32
What does the RICS Global Professional Standard: Conflict of Interest, 2017 cover?
That a member cannot advise or represent a client when a conflict is present or if there is a risk of one.
Unless when parties have given their 'informed consent' in writing.
33
What is informed consent?
When a party is satisfied that they representative is acting in all parties 'best interest' when a conflict of interest is or may be present
34
What is the 3 step process to handle a Conflict of Interest effectively?
1. Conflict Avoidance (if required)
2. Written advice to both parties.
A). Disclosing the conflict and all the relevant facts + how the conflict will be managed.
B). Be a clear as you can - allow both parties to decide
C). Written confirmation of 'informed consent' can then be provided.
3. Conflict Management if all parties provide written 'informed consent'.
35
If both parties provide their 'informed consent', how would you create barriers?
'Reasonable Steps' must be taken.
Barriers include:
- Virtual / IT Barriers. store information relevant to the instruction securely.
- Having the surveyor seated separately in the office or preferably in a different office.
36
What Professional Standard covers dual agency in regarding to conflict of interest?
RICS Professional Standard: Conflict of Interest - UK Commercial Property Market Investment Agency, 2017.
37
What does the RICS Professional Standard: Conflict of Interest - UK Commercial Property Market investment Agency, 2017 cover?
Dual Agency within investment agency.
- Where an agent has a contractual relationship with both the vendor & buyer.
Multiple introductions:
- Where an agent has several contractual relationships at the same time.
38
1. What is a Personal / 'Own Interest Conflict'?
2. How can such a conflict be mitigated?
3. What section of the Estate Agents Act 1979 would this relate to?
1. Where an agent act on behalf of a family member or a person they have a personal or financial interest with e.g. a 'connected person'.
2. Facts must be declared before instruction is accepted
3. Section 21 - 'Declaration required for agency work'
39
If a 3rd Party wishes to access your files you must get your clients approval unless...
They are a statutory body such as HMRC or the Police.
40
How long should files be stored for as a minimum before they are destroyed?
6 years
41
What are the 2 stages if a Complaints Handling Procedure?
Stage 1:
-The written complaint must be acknowledged within 7 days. Investigated within 28 days.
Stage 2: 3rd Party Resolution:
- Where a complainant isn't happy with the review, the case is outsourced.
42
What are the 4 key case laws for Negligence?
1. Yianni v Edwin Evans (1981)
2. Scullion v Bank of Scotland PLC (2010)
3. Burgess v Lejonvarn (2020)
4. Hope Capital Ltd v Alexander Reece Thompson LLP (2023)
43
What are the key facts if the Limitation Act 1980?
The Act sets limits for bringing legal claims to trial.
- 6 years from when the service was provided
- 6 years from when a loss was suffered
- Long-stop date of 15 years if the claimant wasn't aware of the loss / 12 years depending on the type of claim and instruction.
44
What is PII Cover?
What does it cover?
Professional Indemnity Insurance.
To protect clients, surveyors and 3rd parties against negligence claims where a duty of care was breached and a claim for damages arises.
45
What is the minimum level of PII cover for firms in each turnover bracket?
- £100,000 or less = £250,000 cover
- £100,001 to £200,000 = £500,000 cover
- £200,001 and more = £1,000,000 cover
46
What is the latest PII Professional Statement?
RICS Professional Indemnity Insurance Requirements, July 2024
47
What is the difference between a liability cap and Professional Indemnity Insurance?
- Liability caps are a contractual clause that limits liability
- Professional Indemnity Insurance gives insurance cover against claims of negligence
48
What are the 6 key areas of Handling Client's Money?
1. Holding client money
2. Providing info to clients
3. Receipts of client money
4. Payments from client accounts
5. Accounting records and controls
6. Compliance
49
Name 3 procedures when handling clients money?
1. Clients accounts must be kept separate
2. Accounts must be name 'Client' account
3. A client must be able to have their monies on demand
50
Why do you want to become a Chartered member of the RICS?
1. Status
2. Recognition
3. Market advantage
4. Knowledge
5. Increase my network
51
What is the RICS Ethical Decision Tree?
Its a tool that assists me in making informed decisions and confirming my actions are ethical and legal
52
Give 3 examples of questions on the Ethical Decision Tree?
What is the Press Test?
1. Do you have sufficient facts on the issue?
2. Is it Legal?
3. Is it in line with the RICS Rules of Conduct?
'Press Test' - Would you be comfortable with your actions being made public?
53
What does RICS stand for?
The Royal Institution of Chartered Surveyors
54
What are the 5 principles of better regulations? What are the ethical principles? (Think PACTT)
1. Proportionality
2. Accountability
3. Consistency
4. Targeting
5. Transparency
55
Who is the acting President of the RICS?
Who is the RICS CEO?
Nick MacLean on a temporary basis
Justin Young
56
Why has Justin Sullivan stepped down as the President of the RICS?
He's under review for an Expert Witness case he was participating in. The Judge was 'unimpressed' with his 'grasp of the matters in issue' he is therefore under review.
57
Are practice notes compulsory to follow?
Yes
58
Are guidance notes compulsory to follow?
No / But if a case when to court the court would consider if the guidance note was followed.
59
What 5 areas of compliance are required to start a new firm?
1. New firms must inform the RICS of the new practice
2. They must appoint a 'Responsible Principal' for RICS coms
3. Register with the RICS for regulation of the firm
4. Arrange PII cover and send details to the RICS
5. Get RICS approval for their complaints handling procedure
60
What 5 areas of statutory compliance are required to start a new firm?
1. Must disclose the businesses name
2. Bribery Act 2010 compliance
3. Disability Discrimination Compliance (Equality Act 2010)
4. Health & Safety Compliance (Health & Safety at Work Act 1974)
5. Appoint an AML Officer (Money Laundering Register 2017)
61
What are the 6 basic principle of the Bribery Act 2010?
1. Proportionality
2. Top level commitment
3. Risk Assessment
4. Due Diligence
5. Communication
6. Monitoring & Review
62
What are the 4 offences or types of bribery under the Bribery Act 2010?
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent bribery
63
1. What is the Savills gift limit?
2. What is the Savills limit on entertainment?
1. £50. Gifts over this value must me declined. Gift vouchers / cards cannot be accepted.
2. £125 per head (£500 per head per annum) - Events over £1,000 per head must be pre-approved by the CFO or CEO.
64
What is the key Money Laundering legislation?
The Money Laundering, Terrorist Financing and Transfer of Funds Regulations, 2017 (as ammended)
65
What is the Money Laundering, Terrorist Financing and Transfer of Funds Regulations, 2017?
It covers regulations for estate agency work and 'relevant financial business work' inside and outside the UK by a firm
66
Name 5 of the 9 provisions of Money Laundering, Terrorist Financing and Transfer of Funds Regulations, 2017?
1. Requirement to have written ML & TF risk assessment
2. Implement systems and procedures to address ML and TF risks
3. Adopt appropriate internal controls
4. Provide staff training
5. Comply with new customer DD requirements
67
What rent per month would require the property to be registered with HMRC to satisfy money laundering checks?
10,000 euros per month.
68
How many levels of due diligence checks are there for money laundering?
2.
Level 1 - Customer Due Diligence
Level 2 - Enhanced Due Diligence
69
What do Level 1 (Customer) Money Laundering Due Diligence checks involve?
- Identity verification e.g. Passport
- Make 'reasonable endeavours' to identity the beneficial owners of the client.
- Names of the directors within the company
70
When would Level 2 (Enhanced) Money Laundering Due Diligence checks be required?
- Additional procedures for transactions involving a person from a 'high risk 3rd country' or political exposed person
- More detailed due diligence on background and purpose of the transaction
71
Why would a transaction involving a person from a 'high risk 3rd country' or political exposed person required further Due Diligence checks?
As a person from a 'high risk 3rd country' or political exposed person pose a higher risk of potential bribery or corruption
72
What penalties are there for failure to comply with AML Regs?
Max - 14 years in prison or an unlimited fine for assisting in Money Laundering.
Max - 5 years prison for tipping someone off who is under suspicion of ML or failing to report suspected ML
73
What is the Bribery Act 2010?
The Act is the main Bribery legislation and aims to reduce bribery in the UK and Abroad
74
How many hours of CPD does a charted member have to do per year?
20 hours in total.
At least 10 of which must be formal CPD.
75
How would you conduct a Conflict of Interest Check?
In house function that allows us to search a property or a client to find any potential conflicts.
76
What are the 4 membership levels?
1. Trainee Member
2. AssocRics
3. MRICS
4. FRICS
77
Who is the Savills Responsible Principal?
Nicola McGuinnis
78
Who is the Savills Compliance Officer?
Melissa Shaw
79
Who is your firms Complaints Handling Officer?
Charlotte Fairman
80
What would you do if a client tried to pay your fee in cash? What is your firms cash policy?
What is the RICS cash payment limit?
Turn down such payment as my firm have a 'no cash policy', we require payment of fees through certified bank transfer.
The RICS regulations state that cash payments over £10,000 are considered 'high risk' and require further checks.
81
Which RICS Rules of Conduct is the most important?
All important however, Rule 1 (acting with integrity) feeds into all of the others
82
What is the last question on the ethical decision tree?
The 'Press Test'
83
What are the difference types of document published by the RICS?
- Professional Standards
- Practice Information
84
What are the 3 main ethical obligations for agents?
- Fairness
- Transparency
- Honesty
85
If you weren't at a firm like Savills with an in house tool for 'Conflict of interest' checks how would you do the said checks?
- Send an email round to all the parties and people involved in the instruction
86
If you and a client were due to go to an Event (such as the cricket) and you weren’t able to attend last minute what would you do?
- Ask someone within my team
- Failing that I would have to cancel as the event could be taken as a bribe
87
What would you do when faced with an Ethical Decision e.g. receiving a gift? What are the steps?
- Proportionality (is it proportional to the work carried out)
- Timing (of the gift offered)
- I would consult with the Ethical Decision Tree to confirm
