Ethics Flashcards
(86 cards)
1
Q
Who is the RICS?
A
- professional body which accredits those in land, property and construction worldwide
-140000+ members worldwide, 14,000+ companies worldwide, in 146 countries
- regulated to ensure competence / quality and to enhance members’ status through continued provision of a high standard of service
2
Q
What are ethics?
A
- Ethics means conforming to accepted moral standards
- this means doing your best to ensure the clients interest, while doing the best in the public interest
3
Q
What is the role of the RICS?
A
- maintain standards for professionals and consumers
- give guidance and advice to members, and to the government
- accredit professionals
4
Q
What is the royal charter?
A
- was received from the queen in 1881
- a formal grant from the monarch which seeks to ‘maintain and promote the usefulness of the profession for public advantage in the UK and world
- RICS is a an independent legal personality under this charter, meaning it’s a separate legal entity to its members and its own responsibilities eg. To regulate its members
5
Q
Why would you want to join the RICS?
A
- recognise as a professional
- part of an organisation which promotes best practice and high standards in the field.
- CPD and networking
6
Q
What is the structure of the RICS?
A
- privy council: awards the royal charter on behalf of the monarch
- Governing council: 65 members who set the strategy and manage the royal charter obligations
- regulatory board: independent tribunal which acts separately to the RICS. Provides a body which can reach impartial decisions re disciplinary / appeal matters
- Management board: day to day management and management of the business plan
- standards / regulations board: sets overall standards and entry requirements / regulations
7
Q
What is the role of the privvy council?
A
Body which advises the monarch, any changes to by laws must be approved by them
8
Q
How is the governing council elected?
A
By all members every 2 years.
9
Q
Whos the president of the RICS?
A
Nicholas Maclean
10
Q
Who is the president elect?
A
Nicholas Maclean
11
Q
What is the role of the presidential team?
A
Acts as ambassadors for the RICS and set leadership agenda alongside CEO, addressing key issues across the sector
12
Q
Who elects the presidential team?
A
Governing council, 1 year term
13
Q
Who is the CEO?
A
Justin Young
14
Q
Who is the head of the standards and regulations board?
A
Nigel Clarke
15
Q
5 principles of RICS regulation?
A
- proportionality: resolutions of disputes and non-compliance should be equal to the risk / cost
- accountability: regulators must be able to justify their decisions
- consistency: rules should be applied consistently
- Targeting: focus on key issues when regulating
- transparency: RICS firms should be very clear when regulating firms and members
16
Q
What are the rules of conduct?
A
Sets out the standards of professional conduct which members are expected to work within
17
Q
What did the previous rules of conduct include?
A
Solvency, CPD, Complaints handling, clients’ money, indemnity
18
Q
Are rules optional?
A
No, rules are mandatory for all members and firms, and based upon the ethical standards (STIRR)
19
Q
How many rules are there?
A
There are 5 core rules enforced by the RICS.
20
Q
What are the rules?
A
- honesty and integrity
- Maintain competence
- Quality of service
- Respect and diversity
- Public interest
21
Q
What are members professional obligations to the RICS?
A
- Comply with CPD requirements
- cooperate with RICS
- provide all information requested by the standards and regulations board
22
Q
What are firms professional obligations to the RICS?
A
- Cooperate with the RICS
- Provide all information requested by the standards and regulations board
- publish complaints handling procedure
- Professional indemnity insurance
- sole practitioner arrangements if they die
- state on their literature that they are RICS regulated
- report any measure to the RICS that are required to under the standard of conduct (eg. Insolvency)
23
Q
What is the CPD policy?
A
- 48 hours for APC candidates every 12 months
- 20 hours recorded online - per year
- 10 hours must be formal (clear learning objective and assessment measure)
All members must update their understanding of professional and ethical standards every 3 years
24
Q
What are the main different types of RICS membership?
A
Associate: if you have relevant experience
Chartered: if you have relevant experience and a RICS accredited degree
25
What is a policy document?
Formal policy documents to be complied with: eg. Rules of registration for firms, disciplinary procedures.
26
What are the rules of registration for firms?
Mandatory - more than 50% are RICS members
Eligible - 25%-50% are RICS members
Ineligible - less than 25% are members
27
What are some of the rules for RICS regulated firms?
- professional indemnity insurance
- complaints handling procedure
- services provided, address, key contact
28
What is a guidance note?
Document which provides recommendation or best practice approach, to be followed by competent practitioners. Eg. Black book is a suite of guidance notes for QS and construction professionals
29
What is the management of risk guidance note?
- defines the risk as something which can impact the outcome of the project
- risk categories (programme, political, business case risk, construction risk)
- different risks require different actions (avoid, reduce, transfer, share)
- several ways to measure impact of the risk (cost each risk in register, Monte Carlo computer simulation)
- risk identification methods (SWOT, brainstorming, checklists)
30
What is the mediation guidance note?
- 3 principles of mediation: voluntary, no prejudice, confidential
- process:
- joint opening session where state cases
- mediator then shuffles between both rooms playing ‘devils advocate’
- try to get the parties closer, finally agreement
31
What is the RICS surveying safely guidance note?
- firms are responsible for putting framework rules for h&s (risk assessment / fire safety etc)
- safe person concept - everyone is responsible for their own h&s, along with their colleagues and others
- practical measures for h&s include: risk assessments, consider site conditions, check contractors competency via insurance docs
32
What is a mandatory professional statement?
Mandatory requirements for RICS members and regulated firms eg. Conflict of Interest, Client Money Handling, Complaints Handling, Bribery & Corruption
33
What is the RICS MPS Client Money Handling professional statement?
Client money is any money held by an RICS regulated firm on behalf of a client (e.g. sale proceeds, fee money taken in advance)
34
What does the RICS MPS Client Money Handling professional statement set out?
The professional statement ensures three things:
Client money is kept safe
Client money accounts are used for appropriate purposes only
Firms have the right controls/procedures in place to protect client money
Firms that hold client money must be registered with the RICS Client Money Protection Scheme
The scheme can reimburse clients if the firm cannot account for Client Money
35
What are the practical requirements of the RICS MPS Client Money Handling professional statement?
Firms must hold Client Money in a separate account
Must be clearly marked with the client’s name
Client Money must be immediately available to the client
Client Money must only be used for the client’s matters
Firms must keep records and accounts of all dealings with Client Money
Firms must provide client with written confirmation that money is held in a dedicated account
36
What must a firm do under the RICS MPS Conflicts of Interest & Confidentiality professional statement?
RICS members and firms must not represent a client where there’s a Conflict of Interest, unless Informed Consent is given
Informed consent may be sought if:
It’s in all parties (especially your client’s) best interest
It’s legal
RICS firms and members must identify and manage Conflicts of Interest, including written records of the process to do so
RICS firms and members must maintain confidentiality of information, unless:
They are required to disclose by law
They have consent from the relevant party
37
What can conflict of interest mean?
1. Party Conflict – the duty of a member to act in the interests of a client/other party conflicts with a duty owed to another client/other party. For example, advising both a developer and a tenant when negotiating terms of a lease.
2. Own Interest Conflict - the duty of a member to act in the interests of a client/other party conflicts with the own interests of the member. For example, including a contractor on a tender list for a client when the member has an interest in the contractor’s company i.e. family or an investment.
3. Confidential Information Conflict – the duty of a member to provide information to one client conflicts with a duty to another client to keep that same information confidential. For example, telling one client about the feedback from a pre-app on another client’s scheme.
38
What must firms do under the conflict of interest?
Declare interests in property/companies etc.
The embarrassment test – would the issue be embarrassing if reported in the news?
39
What is informed consent?
A member can only proceed with advising a client despite a conflict of interest if informed consent has been obtained from both parties and the conflict will not prevent a member from providing competent and diligent advice
40
What must you do with informed consent?
Members must record all conflicts of interest and when informed consent has been obtained
Members must maintain confidentiality of confidential information
41
What is an ethical wall?
An ethical wall could be utilised to help the client give Informed Consent, an ethical wall alone will not resolve a conflict of interest.
42
Could a firm act for two competing bidders?
Yes, if each bidder provides Informed Consent and Information Barrier is in place
43
What does the RICS MPS Countering Bribery and Corruption, Money Laundering and Terrorist Financing set out?
It offers guidance on bribery and corruption, money laundering and whistleblowing.
44
What is bribery?
Bribery Definition: 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
45
What does the RICS guidance note say about bribery?
Members/firms must not accept anything that could constitute a bribe
Members/firms must report any activity which breaches anti-bribery, money laundering and corruption legislation
Perform due diligence and written evaluations of the level of risk relating to corruption and bribery
Firms must conduct appropriate checks on clients and customers to verify their identity
Firms must have anti-corruption policies and keep gift registers
46
What does the RICS guidance note say about money laundering?
Know Your Client (KYC) is key, to stop people laundering through front companies
47
What does the RICS guidance note say about whistleblowing?
Policy which covers how and when employees report concerns
Important part of healthy business culture and in line with Rule of Conduct 5 – Act in public interest
Depending on the size of the company, it might be appropriate for RICS regulated firms to have a whistleblowing policy. Large firms will need to explain why they don’t have one
48
What is your companies view on whistleblowing?
M3 policy = Encourages whistleblowing, discuss with manager, confidential and no threat of losing job
49
What is a practice statement?
Mandatory requirement, same as professional statement
For example, Expert Witness Practice Statement
50
What is the code of practice?
Document created in collab with other professional bodies, which can either have the same status as a professional statement or guidance note
It will state in the document whether it mandatory or note.
Example Code of Practice = Residential Service Charge (best practice, not mandatory)
51
What is a jurisdiction guide?
Provides the relevant market info pertinent to that market, for information only eg. Valuation on red book
52
What is the role of professional groups?
18 professional groups / boards which cover specific aspects of the profession and provide technical advice to that sector
Examples include: Dispute Resolution, Project Management groups.
Each has an elected board and sets standards.
53
What are the sources of UK law?
Statutory legislation – Acts of parliament, regulations (created by ministers without parliamentary act) or byelaws (rules by an organisation to govern itself)
Common Law – Laws from prior court decisions, not formal legislation
Criminal Law – Offence against wider society, prosecuted by the Crown Prosecution Service
Civil Law – Offence against a private citizen eg. Contracts, employment, family matters.
Case Law – Prior legal cases which set legal precedent
54
What is the legislation relevant to your area of practice?
H&S at Work Act 1974 – Duty of employer to protect H&S of their employees eg. Lunch breaks, holidays etc
Equality Act 2010 – Illegal to discriminate against others due to a protected characteristic within either the workplace or society eg. Not hiring due to age, ensuring buildings are accessible to disabled people
Bribery Act 2010 – Illegal to induce someone to act in a certain way
GDPR 2018 – Law governing the use of personal data
Relevant regulation?
CDM Regs 2015 – REVIEW PRIOR NOTES
COSH – Controlled Substances, governs how to behave around certain substances eg. Tagging corrosive liquids etc
Building Regs – REVIEW PRIOR NOTES
55
What are the RICS byelaws 2008?
Laws and regulations formed by the RICS which regulate membership, fees and behaviour of members.
10 byelaws eg. Membership & Registration, Contribution to Funds
56
What disciplinary action could be taken against a member?
Caution
Fine
Expulsion
57
What is the 2010 bribery act?
A bribe is giving someone an advantage (financial or otherwise) to influence them to perform their function improperly.
Applies to all UK entities and offences include:
Making or receiving a bribe
Bribing a public official
Company failing to prevent bribery
Firms must have ‘adequate procedures’ in place to prevent bribery
6 principles used to prevent bribery: top-level commitment, proportionality, risk assessment, due diligence etc
Practical measures include: due diligence on clients’ money.
58
What is a facilitation payment?
Payments made to ‘grease’ or speed up processes, which under some cultures and laws are not bribes
UK Bribery Act considers them to be bribes
59
Can you name me any RICS challenges?
2021 Levitt Review, a report on a 2018 RICS treasury audit
The report concluded that 4 board members had been dismissed unfairly from the non-exec board after raising legitimate concerns about the audit
60
What does the RICS say about confidentiality?
MPS for Conflicts of Interest states that members must maintain confidential information unless:
Required to divulge it by law
Express consent from the relevant party
Rule 1 of Rules of Conduct states must not dis
61
When was the RICS established?
1868
62
How do you prevent conflicts of interest?
Tell employer about all business interests
Informed consent
Information wall
63
Can you name some relevant case law?
Hart vs Large, in which Mr Large was a RICS surveyor who failed to identify damp issues at a property before the Hart’s bought it.
Damages were awarded to the value of difference between Mr Large’s valuation and true value of the house
64
Can you name some recent RICS initiatives?
2020 initiative to promote black professionals
65
What are some groups within the RICS?
LionHeart - charity to support members i.e. financial support, counselling etc.
66
What is the RICS complaints handling procedure?
1st Stage – Senior member of firm reviews, acknowledge receipt within 7 days, respond formally within 28 days
2nd Stage – If no resolution then 3rd party must resolve who is RICS approved eg. RICS DRS, CEDR, Ombudsman
67
What is your companies complaints handling procedure?
Inform your manager and PD for excellence
Acknowledge within 5 days
Formally respond within 14-18 days
Record and investigate whole process
Internal lessons learnt session
There is no right to redress under our system, if not resolved then it goes straight to litigation
68
What is PI insurance?
Professional indemnity insurance covers a firm against claims of negligence in their work
Protects the firm from financial loss which they could otherwise not cover and ensures clients don’t suffer loss as a result
Each and every basis means that you’re covered up to that amount for each claim, rather than an aggregate limit
69
What is the RICS guidance on PI insurance?
Must use RICS approved insurer
Covers professional work
Each and every claim basis
Claims made basis
Run-off cover for 6 years
Minimum levels of cover are dictated by a firm’s turnover:
Less £100k = £250k PI
£100-200k = 500kPI
£200+ = £1m+ PI
Since Apr-2021, fire safety cover can be excluded but only on buildings above 4 storeys, cyber cover required also.
April ’22 = excess requirements for large firms removed. Firms with turnover below £10m can have a maximum of 2.5% excess of their policy amount. £10m + has no excess limit
70
What is the assigned risk pool (ARP)?
Essentially a PI insurance pot for RICS firms can’t get PII cover
71
Who is the beneficiary of PII?
Clients and general public
72
What is claims made basis policy?
Insurance policy which provides coverage when claims are made, irrespective of when the claim is made
73
What is run off cover?
Covers liabilities after the firm has stopped trading
74
What is net contribution cause?
Limits the amount of £ one party can be liable for under a claim, with the rest required to be claimed against another party eg. Architect or contractor
75
How to act if a client gives a large sum of money?
Audit the money, where did it come from etc
Track in a separate client account with client name clearly stated
Be aware of money laundering
Consider the Bribery Act 2010
76
Is it appropriate to give professional advice to friends?
Not unless formally appointed to do so with a fee paid, as you wont be covered by insurance
77
How would you act if you were offered a gift?
Any gift should be customary, reasonable and proportionate for the relationship
Gifts should not impact your impartial judgement. If ever in doubt about accepting a gift, do not accept it!
Follow the M3 gift & hospitality policy,
Any gift accepted should be noted in the company’s gift register
Ensure it’s aligned with the RICS guidance under Rule 1 of Rules of Conduct = Honesty
Members shouldn’t allow themselves to be ‘influenced improperly’ by a gift
78
What is your companies hospitality policy?
If the gift / hospitality is over the value of £50 per person, prior approval is required from your line manager
MD approval required over £1,000
Strictly prohibited from gifts / hospitality from a government body
79
What are the requirements if you were starting a company?
Inform RICS you’re starting a business
Register to regulate the firm
Obtain relevant insurances (PII and public liability)
Put in place a complaints procedure
Subscribe to RICS Client money handling scheme
Meet Rules of Conduct requirements for Firms
H&S policy, equal opportunities policy
Arrangements for death of sole practioner, ie. Put in place a sole practioner
Register with companies house
80
What are the requirements of a firm if ceasing trading?
Inform the RICS and deregister
Inform clients
Notify your PI insurers and arrange run-off cover
Arrange for safe storage of files and information, as long as you are required to hold them
81
How does the RICS monitor a firm?
Request relevant materials and information eg. PI certificate
Visit the business to ensure compliance with the Rules of Conduct
82
How to act if you accidentally issue confidential information?
Report to manager & data protection officer
Contact the recipient and ask them to delete the information
Potentially inform the regulator and RICS, depending on severity of breach
Review how happened and ways to prevent happening again
83
What would you do if you passed today?
Take part in CPD eg. Ransom strips
Networking
Help others with their APC
84
What is MODUS?
RICS journal which issues content relative to the profession.
85
What are some recent issues on MODUS?
How Bichard review can be a force for good
Use of drones on construction sites
86
What are the biggest challenges facing the RICS?
The Bichard RICS review, an independent review into the purpose, governance and strategy of the RICS
Connected to recent bad publicity relating to sacking of 4 non-exec board members due to audit being suppressed
Growing use of data in property which could replace more traditional sources of knowledge ie. RICS firms
For example, Matter Port system which allows people to collect survey data etc
