Ethics Flashcards
(77 cards)
1
Q
What is the RICS motto?
A
Modus est Rebus – there is measure in all things
2
Q
Why do you want to become a member of the Royal Institution of Chartered Surveyors?
A
Having the status and recognition of the MRICS credentials will provide a considerable market advantage and cement confidence in clients.
3
Q
How is the RICS structured?
A
Founded in 1868 with a Royal Charter since 1881. 130,000 qualified members and 4 levels of membership governed by a Governing Council.
4
Q
What are the 3 main roles of the RICS?
A
- Maintain highest standards of education and training
- Protect consumers through strict regulation of professional standards
- Be the leading source of info and independent advice on land, property, construction
5
Q
How many specialist groups make up the RICS?
A
17 specialist groups covering property, land, and construction
6
Q
Have the RICS bye-laws ever been updated?
A
Yes, changes were voted on in November 2018 and further resolutions are underway.
7
Q
Name the 5 key principles of the RICS Global Professional and Ethical Standards (2015)
A
- Service
- Trust
- Integrity
- Respect
- Responsibility
8
Q
What is the direct link between the Ethical Standards and the Bye Laws?
A
RICS Bye-Law 5.2.1 requires all members to conduct themselves in a manner benefitting membership of the RICS.
9
Q
What are the Principles of RICS Regulation for Members and Firms?
A
Provides a framework for members and firms to meet requirements for Rules of Conduct. Principles include PACTT:
* Proportionality
* Accountability
* Consistency
* Targeting
* Transparency
10
Q
What happens if a member deviates from the Ethical Standards?
A
May lead to RICS disciplinary action
11
Q
If a member is unsure how to act, what can they do?
A
Refer to the RICS Professional and Ethical Standards Decision Tree.
12
Q
What are the International Ethics Standards 2016?
A
- Accountability
- Confidentiality
- Conflict of interests
- Financial responsibility
- Integrity
- Lawfulness
- Reflection
- Service
- Transparency
- Trust
13
Q
What are the Rules of Conduct 2007?
A
Set out standards of professional conduct and practice expected of members and firms.
14
Q
What are the 7 Rules of Conduct for RICS members?
A
- Interpretation
- Communication
- Ethical behaviour
- Competence
- Service
- CPD
- Solvency
- Information to the RICS
- Co-operation
15
Q
What are the benefits of RICS regulation for a firm?
A
- Confidence (monitored by RICS)
- Professionalism (clear advice expected)
- Security (must have recognized CHP & PII cover)
16
Q
What are the requirements for registering to become a regulated firm?
A
Requires 25% or more principals to be RICS members; must have a designated contact officer.
17
Q
What information is required by RICS for registration?
A
- Type of business & staffing details
- Any statutory regulated services?
- Nature of clients
- Complaints Handling Procedure details
- Professional Indemnity Insurance details
- Does firm hold client’s money?
18
Q
What are the 13 Rules of Conduct for Firms 2007 as amended 2017?
A
- Professional behaviour
- Competence
- Service
- CPD & Training
- Complaints handling
- Client’s money
- Indemnity
- Advertising
- Solvency
- Arrangements for incapacity
- Use of designations
- Information to the RICS
- Co-operation
19
Q
What is RICS’s approach to disciplinary procedures?
A
RICS self-regulates its members, and not every shortcoming results in disciplinary proceedings.
20
Q
What are the levels of disciplinary action?
A
- Action by Head of Regulation
- Disciplinary Panel
- Appeal Panel
21
Q
What are the most common firm breaches?
A
Breaches related to Professional Behaviour, CPD, and Handling Client’s money.
22
Q
What are the stages of a disciplinary investigation?
A
- Formal investigation by Head of Regulation
- Service fixed penalty notice
- Make a consent order
- CPD sanctions
- Refer to Disciplinary Panel
23
Q
What penalties can the Disciplinary Panel impose?
A
- Issue a consent order
- Impose unlimited fine
- Impose conditions on future registration
- Expulsion from membership
- Require publication of results
24
Q
What is the role of the Appeal Panel?
A
Considers appeals against disciplinary action and reviews decisions based on evidence previously presented.
25
What is the format of RICS core material?
Divided into 5 categories: International Standards, Professional Statements, Practice Statements, Guidance Notes, Codes of Practice.
26
What guidance does RICS provide in relation to fees?
Firms should avoid price fixing, aggressive fee cutting, and must be transparent with clients.
27
What must Terms of Engagement state?
* Client’s agreement to fee basis
* Payment of expenses
* Scope of instruction
* Copy of Firm’s CHP
28
What are the steps to take before starting work on an instruction?
* Check professionally competent
* Check for conflicts of interest
* Confirm Terms of Engagement in writing
29
What is a cooling off period?
Consumer Rights Act 2015 allows a cooling off period of 14 days from the date of agreement.
30
When would it be appropriate to decline an instruction?
* Not competent to undertake the work
* Proposed client will not sign TOE
* Conflict of interest
* Professional indemnity insurance cap cannot be agreed
31
What is a Conflict of Interest?
Arises when a firm’s/individual’s independence is threatened by a conflict between two clients.
32
How does your firm check for Conflict of Interest?
Input high-level details of instruction on the CBRE intranet to check for existing jobs with the same address.
33
What has RICS published in relation to Conflicts of Interest?
RICS Global Professional Statement on Conflicts of Interest, 2017, mandates management of conflicts with informed consent.
34
What are the different types of conflicts of interest?
* Party conflict
* Own interest conflict
* Confidential information conflict
35
What is informed consent?
Consent given in writing when parties understand the implications of proceeding despite a conflict.
36
What do we mean by conflict avoidance vs management?
Avoidance is not accepting the instruction; management is accepting it with steps to manage the conflict.
37
What are the steps for handling a conflict if one arises?
* Conflict avoidance
* Written advice to both parties
* Conflict management
38
What is an information / ethical barrier?
A barrier to prevent information passing between parties where a conflict of interest exists.
39
What is an info barrier?
A barrier between parties where a conflict of interest exists to prevent information sharing
## Footnote
It must be robust, involve different surveyors, and securely store all information.
40
What does the RICS say about conflicts of interest in investment agency?
CANNOT work on both sides of an investment transaction
## Footnote
RICS Professional Statement Conflicts of Interest – UK Commercial Property Market Investment Agency 2017.
41
What is dual agency?
An agent has a contractual relationship with both buyer and seller
## Footnote
This practice is prohibited for RICS members from 1st Jan 2018.
42
What are the principles of multiple introductions according to RICS?
Acceptable if terms of engagement are agreed
## Footnote
Clear communication of exclusive or non-exclusive basis is required.
43
What is incremental advice?
Advice related to a purchase or disposal that is incremental to an existing instruction
## Footnote
Requires informed consent in writing from all parties.
44
What is a personal interest conflict?
Conflict when acting for a family member or someone with a personal financial interest
## Footnote
Full transparency is required.
45
What is a bribe?
Offering or receiving an advantage for an illegal action or breach of trust
## Footnote
Key legislation includes Bribery Act 2010 and Proceeds of Crime Act 2002.
46
What are the key principles of the Bribery Act 2010?
Six key principles:
* Proportionality
* Top level commitment
* Risk assessment
* Due diligence
* Communication
* Monitoring and review
47
What are the four offences under the Bribery Act 2010?
Bribing, receiving a bribe, bribing a foreign public official, failing to prevent bribery
48
What penalties exist for offences under the Bribery Act 2010?
Max. 10 years imprisonment and/or unlimited fine for individuals; unlimited fine for companies
## Footnote
Example: Swett Group fined £1.4m in 2016.
49
What is CBRE's policy on bribes?
Completely unacceptable; zero tolerance
## Footnote
Gifts over £100 must be reported to compliance.
50
What is money laundering?
Disguising or converting proceeds of illegal activities into legitimate assets
## Footnote
Often referred to as making money 'clean'.
51
What is the main legislation relating to money laundering?
Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
52
What are the levels of due diligence (DD) checks?
Three levels:
* Customer DD (CDD)
* Enhanced DD (EDD)
* Simplified DD (SDD)
53
What is required under the ML regulations?
Conduct risk assessment, implement controls, staff training, compliance with customer DD, and record keeping
54
What are some penalties for non-compliance with money laundering regulations?
Max. 14 years prison and/or unlimited fine for assisting money laundering
## Footnote
Max. 5 years prison and/or unlimited fine for tipping off.
55
What is the Proceeds of Crime Act 2002?
Gives authorities powers to recover money/assets from crime
## Footnote
Creates criminal offences to combat money laundering.
56
What is the RICS view on bribery and money laundering?
Firms/members must not accept bribes, have procedures in place, and report suspicions
## Footnote
Mandatory requirements set out in RICS Professional Statement.
57
What is CPD?
Continuing Professional Development
## Footnote
Requires 20 hours per annum, with at least 10 being formal.
58
What do RICS bye-laws say about confidentiality?
Client confidentiality must be maintained for all client affairs
## Footnote
Includes historic info and third-party access requires client approval.
59
What is the RICS guidance for handling a complaint?
Written Complaints Handling Procedure (CHP) must be approved by RICS and include ADR mechanisms
## Footnote
Complaints must be acknowledged within 7 days.
60
What is the role of the CHO in handling complaints?
The CHO acknowledges the complaint within 7 days and promises a response in 28 days unless more time is requested.
## Footnote
If more time is requested, it must be backed up by evidence.
61
What are the three questions considered when investigating a complaint?
i) What was the root cause? ii) Can we stop it? iii) Does someone need more education on the matter?
62
What is the purpose of the ADR mechanism provided?
To offer resolution options when complaints are not resolved locally.
## Footnote
The Centre for Effective Dispute Resolution (CEDR) for commercial and the Property Redress Scheme (PRS) for residential.
63
What is negligence?
Breach of duty of care which results in damage(s).
64
What established the duty of care to a mortgage purchaser in the case of Yianni v Edwin Evans (1981)?
A residential valuer instructed by a mortgage lending institution could owe a duty of care in tort to the mortgage purchaser.
65
What does 'margin of error' refer to in relation to negligence?
The permissible range allowed by courts for valuations.
66
What was held in the case of Singer & Friedlander Ltd v J.D. Wood (1977) regarding margin of error?
The usual margin of error can vary; it is narrower for straightforward valuations and wider for complex ones.
67
What are the current limitation periods for negligence claims according to the Limitation Act 1980?
Contract – 6 years from the date of negligent act; Tort – 6 years from the date claimant suffered loss.
68
How can firms avoid negligence claims?
By understanding client’s objectives, confirming instructions in writing, ensuring competence, and adhering to RICS standards.
69
What is Professional Indemnity insurance?
Insurance that protects surveyors, clients, and third parties against negligence claims.
70
What are the minimum requirements for PII cover based on turnover?
* £100,000 turnover or less = £250,000 min. level of cover per claim
* £100,001 - £200,000 = £500,000 min. level cover per claim
* £200,001 and above = £1,000,000 min. level cover per claim
71
What does 'claims made' basis mean in relation to PII policies?
Covers claims first made against the insured during the period of insurance regardless of when the negligent act occurred.
72
What should firms do if they are unable to obtain run-off cover?
RICS has a run-off pool for firms unable to obtain run-off cover.
73
What constitutes 'clients' money'?
Holding deposits, rent, service charges, and retentions on behalf of the client.
74
What are the obligations outlined in RICS Client’s Money: General Advice for Firms, 2011?
* Keep accounts separate
* Accurate records
* Regular bank reconciliation
* Annual audit by certified accountant
* Money can only be withdrawn if properly required
75
What is the first step to take when starting your own firm after qualifying?
Inform RICS of the new practice by completing a Firm Detail Form.
76
What is required for statutory compliance when starting a new practice?
* Disclosure of business name
* Compliance with Equality Act 2010
* Compliance with Financial Services and Markets Act 2000
* Compliance with Bribery Act 2010
77
What should be done when closing a practice?
* Inform RICS of retirement/closure
* Ensure clients are informed
* Handover arrangements made to new firm
* Return client money
