Ethics, rules of conduct and professionalism (lvl 1) Flashcards
(131 cards)
1
Q
Why do you want to become a member of RICS?
A
RSMNK
1. Recognition
2. Status
3. Market Advantage
4. Network
5. Knowledge
2
Q
What is the role of RICS?
A
- Education and training standards
- Protect consumers through regulations and standards.
- Leading source of information and advice for the sector.
3
Q
What is a Royal Charter?
A
Method of incorporation of the RICS granted by the Queens Privy Council and highlights the requirement for the RICS to act into the public interest.
4
Q
Who is the current RICS president?
A
Tina Paillet
(Justin Sullivan - President Elect)
5
Q
What do you understand by the term self-regulation?
A
6
Q
Can you tell me what you understand by the principles of better regulation?
A
7
Q
What is a Byelaw? (+ Example)
A
Laws approved by the members and made under the Royal Charter to allow the RICS to self regulate.
Bye law 3 = designations (MRICS & FRICS)
8
Q
Explain to me the new RICS Rules of Conduct - what do they replace? When do they take effect? Who do they relate to?
A
9
Q
What are the 5 Rules?
A
- Members and firms must be HONEST, act with INTEGRITY and comply with their professional obligations, including obligations to RICS.
- Members and firms must maintain their professional COMPETENCE and ensure that services are provided by competent individuals who have the necessary expertise.
- Members and firms must provide good-quality and diligent SERVICE.
- Members and firms must treat others with RESPECT and encourage diversity and inclusion.
- 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.
10
Q
What are the core professional obligations of firms and members to RICS?
A
- Publish CHP and maintain a complaints log
- Ensure all work is covered by adequate PII cover
- If a sole principal = make appropriate arrangements for professional work to continue in the event of their inability to work.
- Cooperate with RICS
- Display ‘regulated by RICS’ on business literature
11
Q
What disciplinary procedures can the RICS impose? In what circumstances can these be imposed?
A
- Action by Head of Regulation
- Disciplinary Panel (where the head has referred a matter)
- Appeal Panel
On more serious breaches of conduct.
Regulatory Compliance Order
Unlimited fine per breach
Conditions on future RICS registration
Expulsion
Publication of results in Modus/website/newspaper
12
Q
When did RICS last update their disciplinary panel rules? What are the different levels of action within these procedures?
A
13
Q
What do you understand by the term professional practice?
A
14
Q
What money laundering regulations or legislation are you aware of?
A
Money Laundering, Terrorist Financing, and Transfer of Funds Regulations (2019)
It covers estate agency.
15
Q
What is a red flag of money laundering?
A
- Unwillingness to provide documents
- Unusual patterns of transaction i.e. undue urgency, potential loss-making
- Changing currencies/ unusual currency
- Changes to parties involved
16
Q
What bribery legislation are you aware of?
A
Bribery Act 2010
17
Q
What is a bribe?
A
The giving or receiving of an advantage such as payment for an action - which is illegal.
18
Q
What are the penalties for accepting a bribe?
A
Maximum 10 years in prison and /or unlimited fine.
19
Q
What are the penalties for being involved in money laundering?
A
Assisting with ML = MAX 14 YEARS imprisonment and/or unlimited fine
Tipping off someone if you know they are under investigation = MAX 5 YEARS imprisonment and/or unlimited fine
20
Q
What constitutes an offence under the Bribery Act 2010?
A
- Bribing
- Receiving a bribe
- Bribing a foreign public official
- Failure to prevent bribery
21
Q
What constitutes an offence under the current money laundering regulations?
A
22
Q
How long should you keep anti money laundering records for?
A
5 years
23
Q
What is Professional Indemnity Insurance (PII)?
A
Insurance to protect clients, surveyors and third parties against negligence claims for damages after a Duty of Care is breached.
24
Q
Can you tell me about the RICS requirements in relation to PII?
A
Must be made on an each and every claim basis;
Sets out the minimum levels of indemnity required;
Sets out maximum levels of uninsured excess;
Sets out run-off cover requirements
25
What is a PII aggregation clause?
Clause in a PI policy that allows or requires a number of similar or linked claims to be treated as a single claim.
26
What does 'claims made' mean in terms of PII
This means that the policy covers claims that are first made against the insured during the period of insurance regardless of when the negligent act occurred.
27
Is a PII excess usually paid for per claim?
28
In a negligence claim, what would help to show that you acted with consideration and due process?
Good record keeping/file notes
29
If you were providing services outside of your usual scope to a client, what might you need to do in relation to your PII cover?
30
What is run off cover?
Cover required following cessation of trading. It is split for consumer & commercial claims.
31
What RICS requirements are there relating to run off cover?
For consumer claims = min £1,000,000 of aggregate cover for min of 6 years.
For commercial claims = firm must consider what is adequate for min 6 years.
32
What changes did RICS recently make to the Minimum Approved PII Wording?
A
In-line with the RICS “Professional Indemnity Insurance Requirements” April 2022 they are based on firm preceding years turnover as follows:
Less than £100k = £250k min
£100,001 to £200k = £500k min
> £200,001 = £1,000,000
33
What precedent has caselaw set in terms of keeping adequate site notes (and therefore providing a defence in a PII claim)? Would a dictated report avoid the need to have any written site notes?
34
Explain PII requirements relating to fire safety cover and cyber cover.
35
How long can a PII claim arise after the work is undertaken?
PII claims can be made up to 15 years after work was undertaken.
36
What is the Assigned Risks Pool (ARP)?
PII for members not able to arrange cover.
37
Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance (1st Edition).
38
Explain when you might agree a liability cap.
39
How would set out third party reliance in Terms of Engagement?
40
What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?
41
What is an annual return?
42
Tell me what you understand about Complaints Handling Procedures (CHP).
43
When and how can the RICS be involved in a complaint about a firm or member?
44
Can you tell me about the CPD requirements for members of RICS?
(Once chartered)
20 hours minimum.
50% formal.
Ethics CPD every 3 years
45
Why is CPD important?
To continually update skills and knowledge in order to remain professionally competent.
46
Tell me about the RICS' guidance on dealing with Conflicts of Interest.
Conflicts of interest - Global, 2018. Reissued 2023 as a professional standard
47
What is double dipping (dual agency)?
When an agent has a relationship with both the seller & buyer at the same time. MUST NOT HAPPEN!
48
Why is double dipping (dual agency) an unacceptable practice?
Conflict of interest
49
How would you close down a regulated firm?
1. Inform RICS
2. Inform Clients
3. Return any money held
4. Inform PI insurers
5. Get PII run-off cover for a minimum of 6 years with minimum of £1,000,000 aggregate cover
6. Retain files for a minimum of 6 years
50
What can you tell me about RICS guidance relating to bribery, corruption or money laundering? What status does it hold? What are some of the key principles of this guidance? What must/should firms/members do to comply with the guidance?
51
What are the current RICS rules for registration of firms?
When did these last change?
What were the key changes?
RICS ‘Rules for Registration of Firms’ (2022)
Registering for regulation is to ensure a quality benchmark for all firms.
- if no RICS members = cannot register.
- 25% of principles are RICS members = it can apply to be regulated.
- 50% of principles are RICS members = has to be regulated.
Each firm also has to nominate a ‘Responsible Principal’ to ensure all systems are in place to comply with RICS requirements.
52
Who is a 'qualified member' of RICS?
A qualified member of RICS is a Chartered Surveyor, who is a professional member of the Royal Institution of Chartered Surveyors (RICS)
53
When must a firm register for regulation?
firms that offer surveying services to the public and have 50% or more RICS-qualified principals.
54
What are the registration eligibility criteria?
55
Who is a Responsible Principal?
Someone who can act without supervision e.g. Board members
They ensure all compliance with regulation and report to the RICS.
56
What happens if a firm cannot comply with the eligibility criteria?
57
What are the rules around use of the RICS logo and 'Regulated by RICS' designation?
Only for us by RICS members and registered firms
58
Tell me about the restrictions to the use of the designation 'Chartered Surveyors' by firms.
59
What must be included in ToE relating to firm regulation?
Must state in writing:
- clients agreement to the proposed fee basis
- payment of expenses (and how calculated)
- a copy of the firm’s complaints handling procedure, is available upon request.
60
What is a locum and who might need one?
Rule 12 of the RICS Rules of Conduct for Firms, relates to arrangements to cover the incapacity or death of a sole practitioner.
61
How could a sole trader set up their CHP using a locum?
62
What RICS guidance relates to handling client money? When was this last updated?
RICS Guidance Note on Complaints Handling 2016.
A firm’s written CHP must be approved by the RICS.
Notify PII insurers as soon as possible if a complaint arises.
Details of CHP issued same time as ToE.
Complaints log must be maintained showing details, status and outcomes of a complaint.
CHP must include an RICS-approved Alternative Dispute Resolution.
63
What do the RICS Rules of Conduct say about client money?
64
Explain your understanding of the RICS Scheme Rules relating to client
money protection.
This scheme provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client's money, up to the limits and exceptions set out in the scheme rules.
65
What are the main schemes available to firms? When were these last updated? What is the current compensation limit?
66
What does the annual regulatory review fee relate to?
67
What might client money include? How does this differ to office money?
68
What are some of the key principles of the RICS Professional Statement
relating to client money protection?
69
Explain the key themes from the RICS Futures 2020 Report.
70
Explain the potential implications of the Hart v Large case.
71
Explain your understanding of precedent set in Burgess v Lejonvarn.
72
What is the new maxim of RICS in relation to compliance?
73
What do RICS set out as good practice for the use of social media in their Regulation document (June 2021)?
High standards of professional behaviour expected of RICS members and protect the interests of members and the profession as a whole.
74
Explain your understanding of the RICS Levitt review.
RICS’ current governance arrangements are under review following The Levitt Review’s (2021) of very public exposure of the lack of clarity, structure and purpose of RICS governance arrangements.
Levitt called for a full independent review of the “purpose, governance and strategy” of RICS = RICS commissioned Lord Michael Bichard to review.
75
What is whistleblowing?
76
What does good governance mean to you?
77
Explain what you understand by the RICS Bichard Review.
Report by Lord Michael Bichard on the purpose and governance of RICS
78
Explain some of the recommendations of the Bichard Review.
* For increased focus on the public interest remit of RICS, including creating a public interest panel to advise the Governing Council.
* Increased focus on diversity & inclusion across the profession.
* Increased member engagement with renewed focus on young members.
79
How do professional integrity and professional ethics differ?
80
What is modern slavery and how would you identify red flags of it?
81
Explain the implications of the Sanctions and Anti-Money Laundering
Act 2018.
82
What is the Sanctions List and why should you be aware of it?
83
Why was the Register of Overseas Entities introduced?
84
What are the six RICS values published as a result of the Levitt review?
85
Explain the impact of the Economic Crime (Transparency and Enforcement) Act 2022.
86
When did the RICS receive Royal Charter?
1881
87
What are the 4 levels of membership?
MRICS
FRICS
AssocRICS
Trainee
88
How do you become a fellow?
5+ years as MRICS
Leadership role
Professional/technical achievement
Raised the profile of the RICS
89
How is the RICS governed?
Under the terms of its Royal Charter and by internal councils & boards
90
What is the Governance Structure of the RICS?
Privy Council - grants Royal Charter
Governing Council
Management Board
Standards & Regulatory Board
91
What do you mean in your submission when you say you should consider the Rules of Conduct for Members?
The rules set out the standards of professional conduct and practice expected for all members, they are mandatory, so members should consider them in all private and personal life.
92
What do you understand by the International Ethical Standards?
Work the RICS is undertaking to promote consistency and clarity across different marketplaces
93
Why have the Rules of Conduct been updated?
The old rules were quite outdated now, from 2007.
To help the global professions respond to new risks and opportunities.
To incorporate:
- increased focus on diversity and inclusion;
- increased focus on technology;
- increased focus on sustainability.
94
What information is required by the RICS for registration/ within an annual return?
Need to include the following in an annual return:
Type of business and staffing details
Name of responsible principle
Statutory regulated services
Nature of clients
CHP details and records
PII details
Whether the firm handle’s client’s money
95
What are the mandatory professional obligations of RICS regulated firms?
Publish CHP and maintain a complaints log
Ensure all work is covered by adequate PII cover
If a sole principal = make appropriate arrangements for professional work to continue in the event of their inability to work.
Cooperate with RICS
Display ‘regulated by RICS’ on business literature
96
What are the mandatory professional obligations of RICS members?
Comply with RICS CPD requirements
Cooperate with RICS
Promptly provide all info reasonably requested by the Standards and Regulation Board
97
What is the RICS Ethical Decision Tree and tell us three aspects?
The decision tree provides a framework of questions that members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner.
Is it legal?
Is it in line with the RICS ethical standards?
Happy for it to be made public?
98
How does the RICS regulate itself?
Self-regulation
99
What would you need to do if you were starting a new practice from RICS point of view?
Inform RICS by completing a Firm Details Form
Appoint Responsible Principle for RICS communication
Register for regulation
Arrange PII and send details to RICS
Set up how you will handle client’s money
Register for the RICS Valuer Registration System
Seek RICS approval for CHP
Set up a complaints log
Appoint Complaints Handling Officer
100
What info are firms required to send the RICS annually?
Type of business and staffing
Nature of clients
Training procedures
CHP details
PI insurance details
Whether firm holds Client Money
101
What RICS compliance do you need to follow to close a practice?
Inform RICS
Inform Clients
Return any money held
Inform PI insurers
Get PII run-off cover for a minimum of 6 years with minimum of £1,000,000 aggregate cover
Retain files for a minimum of 6 years
102
Who is the RICS ultimately accountable to?
The Public
103
What are some of the UK statutory compliance steps for starting a new practice?
Disclose business name
Disability discrimination compliance (Equality Act 2010)
Bribery Act 2010 compliance
Appoint a Money Laundering Officer
Ensure compliance with employment law e.g. working hours compliance
Inform HMRC of Tax and VAT registration
Comply with GDPR
104
What are some of the RICS considerations for fee negotiations for consultants?
Firms need to avoid price fixing, aggressive fee cutting or collusion with competitors.
Healthy competition is encouraged.
Consultants can enter further fee negotiations once the initial fee has been submitted, as long as they act professionally.
Not to undercut other firms.
To be transparent e.g. informing the client if they are in receipt of a referral fee.
105
What must you do prior to starting an instruction?
CIT
Check COMPETENCE
Confirm no conflicts of INTEREST
Confirm TERMS of Engagement in writing
106
What do you understand by a Conflict of Interest?
When an someone in a position of trust has a competing professional/ personal interest meaning they cannot fulfil their duties IMPARTIALLY. Chartered Surveyor must make clients aware of this.
107
Difference between conflict avoidance and conflict management?
Conflict avoidance = not accepting an instruction
Conflict management = instruction is accepted and steps are agreed to manage the conflict
108
Name the different types of COI?
Conflict avoidance - decide whether you can accept the work or if you impartiality has been compromised.
Written advice to both parties to disclose nature of conflict, be as clear as possible and request INFORMED CONSENT from both parties.
Conflict management - set up an information barrier in accordance with the provisions agreed with both parties. Can ask both teams to sign NDA agreements.
109
What would you do prior to acting for a client for agency purposes?
Assess competence
No COIs or personal interest
Issue ToE
Get signed ToE
Conduct AML checks
110
What does the Consumer Rights Act 2015 allow?
A 14-day cooling-off period upon the signing of Agency Instruction Agreements.
111
What is a cooling-off period?
Period of time following a purchase when the purchaser may choose to cancel a purchase, and return goods which have been supplied
112
What are the RICS minimum timing procedures for CHP?
Complaints Handling Officer should be notified
Acknowledge a written complaint within 7 days
Investigate within 28 days
113
What is professional indemnity insurance for?
What is the core RICS material?
Requirement for all policies?
Insurance to protect clients, surveyors and third parties against negligence claims for damages after a Duty of Care is breached.
RICS “Professional Indemnity Insurance Requirements” effective from April 2022.
All policies need to be underwritten by an RICS approved insurer.
114
What are the minimum PII level requirements?
In-line with the RICS “Professional Indemnity Insurance Requirements” April 2022 they are based on firm preceding years turnover as follows:
Less than £100k = £250k min
£100,001 to £200k = £500k min
> £200,001 = £1,000,000
115
How would you set your PII cover for your first year of trading?
Estimate it based off your first year of income assumption, then adjust it at a later date.
116
What does the RICS require in regards to PI?
Must be made on an each and every claim basis;
Sets out the minimum levels of indemnity required;
Sets out maximum levels of uninsured excess;
Sets out run-off cover requirements
117
What are the RICS rules regarding PII?
Mandatory requirement - Rules of Conduct for Firms
Need RICS approved insurer (list on website)
Need adequate and appropriate level for each instruction.
118
How should client money be held?
held separately with an authorised bank
account needs to be entitled with the client’s name and Client
money held must be immediately available
provide written communication of any money movement
accounting records need to be kept
119
Can you accept cash?
FIRSTLY MAKE SURE TO REGISTER IT/ REPORT IT TO LINE MANAGER
THEN CONSIDER THE RICS ETHICAL DECISION TREE - INEVITABLE POINT IS HOW WOULD IT LOOK IF IT WAS MADE PUBLIC
NEED TO CONSIDER IF IT COULD IT BE CONSIDERED A BRIBE?
120
How would you want a client to pay for your work and why?
Ensure payment are paid by bank transfer, allowing for a record to be kept.
121
What would you do if rejecting the gift would offend the client?
Would report it to my Head of Department and compliance team.
The Head of Department would either donate the item to charity or distribute or raffle the item among a large group of employees.
122
How can hospitality not be constituted as a bribery offence?
If it seeks to genuinely promotes the image of the firm and is REGISTERED in accordance with a firms anti-bribery procedures.
123
What is your company’s policy on gifts?
Below £50 inform my Director but no need to register
£50 or more must be registered with the teams PA
£250 or more Must be registered with the PA and approved by the Chairman
124
What are the two money laundering due diligence checks?
Customer due diligence
Enhanced due diligence
125
What are some of the UK Government requirements for firms regarding money laundering?
10,000 euros is the maximum cash payment
Must nominate a senior memeber of staff as the Money Laundering Reporting Officer to report Suspicious Activity Reports to the National Crime Agency
Detailed record keeping procedures
Keep records for min 5 years
126
How long does AML information need to be held for?
5 years
127
What is the Proceeds of Crime Act 2002?
Provides power for enforcement authorities to recover money and assets deemed to be the proceeds of crime
128
What would you do if you were offered dinner at a Michelin Restaurant?
I would need to consider if it was ‘reasonable’.
If I were invited by a client who I completed a high-value instruction for successfully I might accept.
However, if I was invited by a client during an instruction, or for a low-value fee, I wouldn’t. I would also need to gain approval in line with company policy.
129
What would you do if you were offered a gift after an instruction had been completed?
Check company gift policy.
Check reasonableness.
Accept if reasonable.
130
What would you do if you were offered a gift during an instruction?
Politely decline as the instruction is not yet complete and this could impact my impartiality.
131
How would you deal with friends asking for advice on property matters?
Duty of care is owed even if providing pro-bono advice, so in theory if advice is given without my consideration of all the factors of the case I could be liable for negligence.
I would say that to advise on this it would require agreement of terms of engagement in order to establish the scope of instruction and so they understand what can be relied on from the professional advice given.
I would also explain whether I consider myself competent enough to advise. If I was I would need to undertake a site visit/ gain a better understanding of the facts. Also whether I had sufficient PII cover.
