Ethics, Rules of Conduct and Professionalism Flashcards

Question

Why did the rules of conduct change?

Answer 1

– Provide a simplified structure with clear example behaviours. – Focus on respect, diversity and inclusion. – Respond to evolving technology and supporting sustainability.

Answer 2

To promote and enforce the highest ethical standards. The rules provide a framework that we can all work to and so the client knows they are getting a set level of service. The rules of conduct are an important tool for the Institution providing professional guidance.

Answer 3

Ethics are a set of moral values. Rules of conduct are a framework that all members and firms must work to.

Answer 4

The RICS promotes and enforces the highest professional qualifications and standards in the built and natural environment.

Answer 5

– Becoming a member would give me wider industry recognition. – Enhanced personal development /career opportunities. – I feel the RICS provides a sense of community sharing the latest professional insights, guidance, and technologies.

Answer 6

- Founded in 1868 - Granted Royal Charter in 1881 by the Privy Council. - RICS Regulations & Bye Laws governs the institution.

Answer 7

Privy Council: Grants and awards the Royal Charter. Governing Council: Manage and agree the strategy for the RICS. The RICS Board & Standard and Regulation Board: Execute the strategy set by the Governing Council.

Answer 8

The Governing Council are the RICS’s governing body under the Royal Charter. Responsible for approving the RICS strategy and vision as well as standards and regulations. Governing council is supported by the RICS board and the Standards & Regulation Board. Made up of: - President (Tina Paillet) - President elect - Senior vice president - 6 professional group seats (building surveying, building control, valuation etc.) - 13 global seats (UK, America, Asia etc.)

Answer 9

The Board is comprised of members and non-members (independent). - Oversee the day to day operations. - Implement strategies set by the governing council. Various seats on the RICS Board, this includes: - Membership services committee - Audit, risk assurance and finance committee - Knowledge and practice committee - Professional group panels

Answer 10

- Oversee RICS’ professional standards - Develop the technical and ethical competence of the profession. - Entry to the profession - Education and qualification standards. They are accountable to the governing council but are not directed by them Made up of members and independent non-members to ensure the RICS’s regulatory function is in the public interest.

Answer 11

Lord Bischard published an independent report in 2022. This was commissioned by the Governing Council to review the Institution’s: - Purpose - Governance - Strategy This followed recommendations in the Levvitt review to review the purpose, strategy and weather the Governance system is fit for purpose. Levitt review: Articles in the press that the RICS tried to suppress internal reporting of finances.

Answer 12

I am aware there were 36 recommendations appended to the report in Appendix 2. These were: - Younger members of the RICS Matrix to have a stronger voice in the insititution allowing a representivie to sit on Governing Council. - Diversity and Inclusion panel to be established to asvise the RICS Board & Standard and Regulation Board. - To put the public interest at the heart of its work (Public Interest Panel to be established /advise the GC) - Improved technology to be updated annually with the business planning process. - RICS Board to be formed to oversee the day to day operations and delivery of the business plan agreed by the Govenring Council.

Answer 13

Alison Levitt carried out an independent review of issues raised of the RICS following problems with the Governance Process. In December 2018 the management board held quarterly meeting which discussed extending overdraft for inaccurate forecasting. No assurance for the design of financial controls. Lead to concerns of a lack of transparency.

Answer 14

- Proportionality. - Accountability. - Consistency. - Targeting. - Transparency.

Answer 15

I verify the facts and confront him reminding him of his duties as a member of the RICS. I’d inform the RICS of any corrective action which I believe my brother-in-law is committed to put in place.

Answer 16

First stage includes a formal investigation by the Head of Regulation of the RICS. RICS can request information to support the investigation and members must cooperate fully with all enquiries. Note: Not every shortcoming will necessarily give rise to proceedings.

Answer 17

Complaints or allegations made to the RICS. Information received or established by the RICS.

Answer 18

1. Fixed penalty. (fine) 2. Consent order. (written agreement for corrective actions) 3. Disciplinary panel. (serios breaches, held in public)

Answer 19

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.

Answer 20

- They are used for more serious breaches of conduct. - The panel will usually be held in public. - The burden of proof is on the RICS. - A balance of probabilities approach will be adopted.

Answer 21

Gross or persistent failure to comply with an RICS rule of conduct. - Fraud - Dishonesty - Conviction of a serious criminal offence - Gross incompetence - Deliberate discrimination - Misappropriation of a client’s money.

Answer 22

Negligence is a failure to provide the duty of care that is owed to the client.

Answer 23

This case dates back to 2001 and highlights the importance of having run-off cover in place. A surveyor was sued for negligence by a former client. Because the surveying firm was no longer in existence the individual surveyor was pursued for damages successfully. This caused a big shock in the industry and highlighted the need to ensure that run-off cover is in place for all previous employees.

Answer 24

If the scope of services has increased, then I would go back to client and request additional fee’s outlined in the fee proposal. If the scope of works had remained the same, this would highlight a mistake within our fee proposal and the work would need to be carried out without reducing the level of service being offered and without requesting additional fees from the client.

Answer 25

Yes, the RICS have introduced 2 new definitions these are: - Professional Standards - Practice Information

Answer 26

Principle based focused on outcomes and good practice - Mandatory requirements where the word ‘must’ is used. - Recommended best practice when the word 'should’ is used. (RICS Professional Standard: Complaints Handling - changed from a guidance note to a standard)

Answer 27

- Provide advice or practice support to RICS members and firms. - Sets out good practice for members and firms. - Not mandatory. RICS Practice Information: Risk, Liability and Insurance

Answer 28

Giving someone a financial or other advantage in return for an award.

Answer 29

The Bribery Act 2010 is an Act of Parliament in the UK that covers criminal law. This enforces legal compliance against bribery and corruption in business practices.

Answer 30

1. Proportionate Procedures. 2. Top Level Commitment. 3. Risk Assessments. 4. Due Diligence. 5. Communication. 6. Monitoring & Review.

Answer 31

- Making a bribe. - Receiving a bribe. - Bribery of a foreign public official. - Failure of a corporate entity to prevent bribery on its behalf.

Answer 32

The only circumstance in which it is OK to make a facilitation payment is when you are under duress. For example: - If there is a real and present risk or danger to "life, limb or liberty". - If you or your companions are under immediate physical threat. You should put safety first, make the payment and report the matter immediately. Or as soon as is practicable to your manager or your ethics compliance contact.

Answer 33

I would be extremely uncomfortable accepting the prize in this scenario. The prize is of a significant value and could be interpreted as a bribe. Furthermore due to working on a project with the Main Contractor at the time of this scenario, accepting the prize would have been highly inappropriate and could be interpreted as having an affect on my business conduct during the project. I would respectfully decline the prize and suggest that this is made as a charitable donation to a charity of the Main Contractor’s choice. I am aware that bribes are commonly distributed as random prizes and due to the seriousness of this incident I would report this to my line manager.

Answer 34

In the first instance I would declare this hospitality on my companies’ gifts and hospitality register. Assuming the invite was approved and I was authorised to attend, I would need to decline the invite due to the Project Team dropping out. Since they won't be present, this will not be a genuine business event. Consequently, I would decline this hospitality at the Project Team's expense.

Answer 35

Going to what sounds like a lavish lunch paid for by a bidder in the middle of a tender process is against Company policy and could be an offence under the UK Bribery Act. If this were the first time, it would be OK just to decline and explain that such an invitation is inappropriate. However, if this supplier is persistent, there is a red flag in that he wants to discuss things that he cannot put in writing, so we should report this infringement.

Answer 36

- Inform the RICS and register for regulation. - Appoint a contact officer for all RICS communication. - Prepare a complaint handling procedure. - Obtain Professional indemnity insurance cover. - Abide by the Rules of Conduct for Firms. - Use the designation ‘Regulated by RICS’ on all practice material.

Answer 37

- 50% of the principles who provide surveying services are RICS members then the firm must be regulated. - If at least 25% the firm can apply to be regulated.

Answer 38

Yes, as long as it is in a trustful and responsible manner in line with the Rules of Conduct for Firms.

Answer 39

- Professional Indemnity Insurance. - Employer’s Liability. - Public Liability. - Building’s insurance of an office premises.

Answer 40

The firm’s annual return (failure to do so leads to a fixed penalty). Annual Returns include: - Type of business. - Nature of clients. - Training provision. - Complaints handling procedures details and records. - PI insurance details. - Whether the firm holds clients’ money.

Answer 41

Preserve the security of clients' money which does not belong wholly to the company. RICS regulated firms that operate a client account must:- - Client account must be separate and clearly identifiable. - The word ‘Client’ is on the bank account. - Clients must always have access to funds. - The account must not be overdrawn. - Payment of interest agreed. - Annual audit and reporting obligations.

Answer 42

RICS Professional Standard: Client Money Handling 1st Edition 2019

Answer 43

General accounts hold money for more than one client. Discrete accounts reference a single named client.

Answer 44

Professional Indemnity Insurance.

Answer 45

To provide financial cover TO THE CLIENT in the event of financial loss due to a breach of professional duty (e.g. neglect or errors).

Answer 46

The professional is protected from financial losses. The firm does not have to meet the claim from their own assets and resources.

Answer 47

They are able to recover their financial losses due to a breach of professional duty.

Answer 48

On a claim made basis.

Answer 49

The insurance policy that is in place at the time of the claim is responsible for providing the indemnity. Not the insurance policy that was in place when the breach was made.

Answer 50

- The policy cover must be made on an ‘each and every’ claim basis. - The RICS sets out the minimum levels of indemnity. - The RICS sets out the maximum levels of uninsured excess. - Run off cover must be in place for at least 6 years. - The policy should include cover for past and present employees, directors and partners.

Answer 51

This provides cover following a firm ceasing to trade. (Protecting firms, members and clients from financial detriment) RICS requires firms to obtain fully retroactive run-off cover. The minimum policy requirements are: - Limit of £1,000.00 for a period of 6 years from the expiry date of the policy. - Run off claims to be on an ‘each and every claims’ basis.

Answer 52

The minimum levels of indemnity are based on a firm's annual turnover in the previous year: £100k or less = £250k minimum limit of indemnity £100k - £200k = £500k £200k and above = £1m

Answer 53

Up to and including £500k = The greater of 2.5% of the sum insured or £10k Over £500k = 2.5% of the sum insured

Answer 54

- Keep detailed records of meetings and conversations. - Record recommendations and advice given. - Use proper letters of engagement, scope of services and terms of engagement. - Don’t advise on a specialism outside your field of experience. - Use RICS guidelines. - Avoid poor management and excessive workloads.

Answer 55

For you to notify them and comply with any conditions & procedures set out in the insurance policy.

Answer 56

An estimate that is incorrect will not provide the client with a right of redress. The client must demonstrate that the accuracy of the estimate or that it was incorrect due to a lack of reasonable skill and care.

Answer 57

It is advisable to request a clause limiting the appointment to reasonable skill and care only. (Not fit for purpose which is more onerous) Run off cover must be in place. Execution of the appointment under hand will result in a reduced liability period of 6 years instead of 12.

Answer 58

Where a duty to act for a client may be compromised by a competing interest.

Answer 59

- Party conflict - Own interest conflict - Confidentiality of information.

Answer 60

When the duty owed to one client conflicts with the duty owed to another client in relation to the same assignment. For example, being instructed by both the landlord and the tenant for a dilapidation’s instruction.

Answer 61

Where someone in the firm is involved directly or indirectly in that assignment. For example, if I was selling my house and my firm was instructed to undertake the survey on behalf of the purchaser – this would be declared as an own interest conflict.

Answer 62

Where the confidential information of one client could be disclosed to another client. The relevant party must consent to this disclosure before it was made. For example, the RICS member or firm may have to share clients confidential information with third party insurers or legal advisors. This can be avoided by defining clearly in the scope what information may need to be disclosed.

Answer 63

To act with integrity and prevent anything getting in the way of your duty to advise and represent the client independently.

Answer 64

- By inputting the clients data into my firms software which flags up any potential conflict of interest. - An email also goes out to all members of staff for new instructions then individuals declare any conflict.

Answer 65

Informed Consent is where the party who might be affected by a Conflict of Interest acknowledges the existence of that risk, but instructs a regulated firm or individual RICS member to proceed despite that risk.

Answer 66

This is served in a letter which will generally include: - The facts known by the individual /firm that relate to the Conflict of Interest - What that Conflict of Interest is or may be - That a Conflict of Interest may affect the ability to advise or act fully in the interests of a client. - Options available to the client - Finally, signed consent.

Answer 67

Providing the risk could be managed through measures such as information barriers and prior informed consent was obtained from all affected parties. I would then review the risk and make an informed decision to act.

Answer 68

This is a physical /or electronic separation of individuals within the same firm that prevents confidential information passing between them.

Answer 69

RICS Conflict of Interest Professional Standard 1st Edition March 2017

Answer 70

The professional statement prohibits you from proceeding with an appointment where there is a risk of a conflict of interest, unless you obtain prior Informed Consent from all affected parties.

Answer 71

RICS Professional Standard: Complaints Handling, effective July 2016 Formerly a guidance note, now a professional standard. – Expectations are set within the Terms of Engagement – to avoid complaints, – Complaints Handling Procedure must be approved by RICS. – Notify PII insurers ASAP if there is a complaint that could give rise to a claim. – CHP should be issued at the same time as Terms of Business. Firm must include an RICS Alternative Dispute mechanism e.g. Ombudsman Services: Property (consumers).

Answer 72

Stage 1 - Issue details of the CHP. - Details of the nominated person who will handle the complaint. - Complaint acknowledged within 7 days. - Investigated within 28 days. Stage 2 If the complainant is not happy with the review, then second stage of the CHP involves the independent redress scheme.

Answer 73

The RICS is NOT involved with complaints and can only get involved when it is an issue relating to service or professionalism such as: - Failure to utilise a complaint handling procedure. - Failure to disclose a conflict of interest. - Misuse of clients' money. RICS have an approved list of ADR providers. (RICS Dispute Resolution Services).

Answer 74

Provides a framework of questions that members should relate to when they are unsure if their actions are potentially unethical Questions include: * Sufficient facts? * Legal? * In line with RICS global professional and ethical standards? * Clear reasoning in reaching a decision? * Content if actions were made public?

Answer 75

* Not competent to do the work * Insufficient facts on the issue * Unsigned Terms of Engagement or uncomplete AML checks * Conflict of interest or personal interest * PII cap cannot be agreed * Advice is for a friend or free of charge for a charity and PII will not cover works carried out on a personal basis * Potential client is included in the UK Government sanctions list * Would you be content if your actions were made public?

Answer 76

When you do not accept the instruction

Answer 77

When the instruction is accepted (informed consent) and steps are agreed. Such as an information barrier.

Answer 78

* Inform the RICS * Ensure the clients are informed at the earliest opportunity and hand over arrangements made to the new firm * Return any monies held by clients to their own accounts * Inform your insurers and procure professional indemnity run off cover for a minimum of 6 years * Retain a copy of files and record for a minimum of 6 years

Answer 79

1) Offering a bribe 2) Receiving a bribe 3) Bribing a foreign public official 4) Failing to prevent bribing (company policies, training etc.)

Answer 80

Money laundering is when proceeds of criminal activities are disguised or converted and then released as legitimate assets

Answer 81

Simplified Due Diligence (SDD) Customer Due Diligence (CDD) Enhanced Due Diligence (EDD)

Answer 82

Simplified Due Diligence (SDD) means that full Customer Due Diligence is not needed. In a situation assessed as having a low risk of money laundering, applying basic verification may be appropriate such as a check on - The local company register - The status of a company

Answer 83

Customer due diligence (CDD) involves collecting standard evidence to verify the identity of different types of clients. - Identify the client with passport or driving licence. - Identify the beneficial owners of the client - For a company, its name, company number and register address

Answer 84

Enhanced risk assessment process to gather information on high risk customers such as ‘Politically Exposed People” PEPs are high risk from a money laundering and corruption perspective because they hold positions of influence. Look for a politically exposed person database on a government or other legislative website.

Answer 85

A client would have 6 years from the date the breach. c However, this does depend on how the contract was executed between the parties. (12 years by deed /6 years under hand)

Answer 86

The Department for Education and the UK Government were made aware of sudden collapses of RAAC panels in roofs that appeared to be in good condition.

Answer 87

Reinforced Autoclaved Aerated Concrete - RAAC was widely used between 1950 and mid-1990. - RAAC is a lightweight, ‘bubbly’ form of concrete. - Unlike traditional concrete, there will not be visible stones (aggregate) in the panels. - Predominantly found as precast panels in roofs (commonly flat roofs, sometimes pitched) and occasionally in floors and walls.

Answer 88

- Following further research on RAAC and undertaking CPD I could identify RAAC. - However, the current guidelines by the DFE state that if RAAC is suspected to be present this should be confirmed by suitably qualified person who is experienced with this type of construction. - Suitably qualified professionals are detailed in the DFE guidance on RAAC requiring evidence of one-year minimum relevant RAAC project /commission works. - Therefore, I would not be suitably qualified to advise clients on the presence of RAAC.

Answer 89

An appropriately qualified building surveyor or structural engineer with experience of RAAC. Building surveyor must be a Member of the RICS. Demonstrate one year minimum relevant experience in relation to RAAC projects /commission works

Answer 90

- Typically 600mm wide concrete panels. - Distinctive V-shaped grooves at regularly spacing. - Usually white or light-grey (where they have not been painted) - I would obtain drawings of the buildings that refer to RAAC or mention any of the following suppliers Siporex, Durox, Celcon, Hebel and Ytong - RAAC panels are very soft. If you press a screwdriver, screw or nail into the surface of a RAAC panel you will be able to make an indentation in them. - However, I would not press a screwdriver in if a surface covering was present due to the risk of asbestos commonly used during this era of construction.

Answer 91

I would record my findings and seek confirmation from a suitably qualified member of staff.

Answer 92

- The client had a variety of commercial premises used for charity shops. - Some of which were built /extended between 1950 – 1990.

Answer 93

My colleague had extensive experience commissioning projects involving RAAC in a previous employment which involved the refurbishment of hospitals.

Answer 94

Rule 1: Honest / Act with integrity & comply with professional obligations. Rule 3: to provide a good quality and diligent service.

Answer 95

I considered proportionality of the offer - the cost of the track day would have been significant. The contractor was also one of my clients approved contractors so I knew I would have been inviting the contractor for further tender opportunities. If I would have accepted the offer then later awarded the contractor a tender – this could put doubt in the clients mind that I would be giving the contractor preferential treatment than I would have done otherwise. I therefore considered this offer could be constituted as a bribe and politely declined.

Answer 96

Not always. I always consider proportionality and timing. I refer to the Bribery Act, RICS decision tree and my firms policy on Gift’s & Hospitality. If I was to accept any form of gift this would be recorded in my firm’s gifts and hospitality register.

Answer 97

I personally don’t drink alcohol I do know that bottles can range between £10 and £100’s of pound and therefore would politely decline based on a lack of understanding in cost. If the client /contractor was adament I would seek advise through my senior colleague and record the gift in the register if deemed acceptable.

Answer 98

I would accept a coffee from the contractor as this could promote working relations. However, I would simply offer to by the coffee during the next site meeting.

Answer 99

The decision tree is a tool to aid decision when faced with ethical dilemmas. - Do we have sufficient facts? - Is it legal? - Is it in line with the rules of conduct? The next steps are that there must be clear reasoning and information provided to make an informed decision. Final thing to consider is would we be content for our actioning to be made public. If the answer is yes to these questions – it is important we record the action and its reasoning for it.

Answer 100

* Gifts must not include cash or cash equivalent (voucher). * Gifts must not be given in secret – must be approved by senior management and recorded in the register. * Gifts should only be accepted depending on the type and value. * Timing must be considered - for example an offer of a gift during contractual negotiations or a tender process would be seen as preferential treatment.

Answer 101

When taking a client brief I always confirm this back to them in writing listing the scope of services being provided together with professional fees. This is then agreed to in the letter of engagement.

Answer 102

The client did not request for this service. An RCA was later requested by the client who agreed to an additional fee and prepared a letter of engagement.

Answer 103

To ensure I was not acting outside my level of competence as I am not a registered valuer.

Answer 104

RICS-regulated firms that hold client money must be registered with the appropriate RICS scheme. This scheme provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client's money. This is up to the limits and exceptions set out in the scheme rules. (£50,000 per claim). I would refer to the RICS Client Protection Money Scheme Regulation document 2019

Answer 105

A Responsible Principal will have primary responsibility for ensuring that RICS' professional, technical and ethical standards are applied, upheld and supported by an appropriate assurance framework within a regulated firm.

Answer 106

The individual designated by the Firm to be the main liaison point between the Firm and RICS and the person authorised by the Firm to submit the Firm's Annual Return.

Answer 107

Loccum Agreemant

Answer 108

Another trusted professional who is appointed to ‘stand in’ for the surveyor if they are unable to work. e.g. in the event of an accident/illness, unforeseen circumstances, prolonged absence (e.g. holiday or a sabbatical) or death.

Answer 109

From an RICS approved broker found on the website.

Answer 110

Enables the professional body with the right to regulate its own members. Royal Charter guarantees the public that RICS members will operate in accordance with ethical standards.

Answer 111

- To promote and enforce the highest international standards within the built environment. - Setting and regulating standards. - Promoting and enforcing professional qualifications. - Protecting consumers.

Answer 112

The Bye Laws set foundational rules and regulations which govern the institution and its members.

Answer 113

- Confidence - Professionalism - Security (complaints handling procedure /PII requirements)

Answer 114

My firm has a no cash policy, but I understand the limit of 10,000 euros for money laundering regulations. Classed as a high value dealer under money laundering regulations – must register the firm as a high value dealer with the HMRC.

Answer 115

A payment made to induce govermnet officials with the purpose to speed up a routine action.

Answer 116

Individuals who are entrusted with prominent public functions such as: - Government - Senior politicians - Military officials All of who are listed on a PEP database on the government's website.

Answer 117

Common characteristics to suspect money laundering such as: - If the client is secretive about who they are /source of their funds. - Politically Exposed Person or subject to sanctions. - Size, nature and frequency of transactions - Use of multiple /foreign accounts. - If the client is not local and there is no explanation as to why your locality has been chosen.

Answer 118

First step is to knowing your client /Customer Due-Diligence Verify the identity of the client by undertaking basic identity checks. Take appropriate measures to understand the client and the purpose of the transaction. Be aware of any red flag indicators.

Answer 119

I would report this discreetly to my firms nominated person, who will then advise on the next steps. This could be: * the National Crime Agency (NCA) * HMRC Fraud Hotline.

Answer 120

- Action Fraud. - The national reporting centre for England, Wales and Northern Ireland.

Answer 121

In the first instance I would inform a senior colleague and the matter would be recorded. The matter will then be escalated to the National Crime Agency.

Answer 122

Tina Paillet

Answer 123

Nigel Clarke Nigel Clarke was appointed as the permanent Chair of RICS' Standards and Regulation Board (SRB).

Answer 124

GLAA: Gangmasters and Labour Abuse Authority. GLAA is a national enforcement agency who investigate worker exploitation across the UK.

Answer 125

Any company doing business in the UK with an annual turnover of £36 million or more need to publish an annual modern slavery statement.

Answer 126

RICS are committed to acting ethically and with integrity and transparency in all business dealings. This includes putting effective systems and controls in place such as: - Anti Slavery Policy - Recruitment Policy - Raising Concerns /Whistleblowing policy - Procuremnt Policy (preferred supplyers /due diligence undertaken on suppliers) I am aware of the RICS’s Modern Slavery Statement which is published annualy within 6 months of the financial year end. The government have a Modern Slavery Statement register.

Answer 127

If all of the below criteria apply: * Any company doing business in the UK * it supplies goods or services * it has an annual turnover of £36 million or more

Answer 128

- Workers generally unkept. - Workers appear isolated /trapped. - Workers arriving /leaving site all together under the control of the supervisor. - Workers having very little belongings (mobile phone /ID).

Answer 129

The limitation period will expire 6 years from the date which the member carried out the services. If professional services are provided under a deed the limitation period would be 12 years. The period for a negligence claim can be extended if there was a delay in the claimant spotting a defect. They will have three years from the date when they found out or should have found out. This extended period is subject to a ‘long stop’ period of 15 years from the date of the negligent act regardless of when the claimant found out about their claim. This will usually mean 15 years from the date of the survey report. I am aware of the ‘Long stop period’ of 15 years under the Limitations Act for which claims can be brought the claim is then ‘extinguished’. However, this can be complex in relation to financial loss or property damage. Seek legal advise to determine when the claimant suffered a loss.

Answer 130

15 years. This is to respond to any legal claims considering the long-stop period under the Limitaitons Act.

Answer 131

- Through a liability cap – a contractural agreement where the client can only make a claim up to the amount agreed even if the law would otheriwse award a greater sum in damages. This must be set at a reasonable level. - Contract under hand (6 years) rather than by deed (12 years).

Answer 132

This would be dependant on the level of: - Risk (scope and complexity) - Fees (cap less than the fee would not be reasonable) - Professional Indemnity Insurance limit (unwise to cap in excess of insurance limit)

Answer 133

To promote and enforce the highest ethical standards based on principles of: - Honesty - Integrity - Competence - Service - Respect - Responsibility The rules provide a framework to set the standards of the institution which promotes public confidence in the profession.

Answer 134

This will provide both immediate and future benefits in terms of career progression. This will also be a huge personal achievement that I would be extremely proud of.

Answer 135

Breaching the duty of care owed to the client. Resulting in harm, loss or damage. This could include: - Giving incorrect advise - Not adhering to the RICS standards and regulations

Answer 136

The Bribery Act 2010 covers criminal law relating to bribery. Its purpose is to stop corruption in business practices. The legislation makes it an offiecne to pay or receive a bribe, either directly or indirectly.

Answer 137

Practice Note: Mandatory Guidance Note /Code of Practice: Guidance Note

Answer 138

RICS Dispute Resolution Services (business to business) Ombudsman Services: Property (consumers).

Answer 139

This is determined on a case basis for what is fair and reasonable. This could be; A multiple of the agreed fee (the greater of four times of the fee) Or a defined sum (£1,000,000) Liability is capped at 6 years with specific exclusions for personal injury or death cause by negligence

Answer 140

No this could cause a misunderstanding which could lead to dispute - No terms and conditions set. - No limit on liability. - Complaints process not submitted. - Scope of services not defined and agreed. - Fee’s not defined and agreed.

Answer 141

I like to keep professional relations with contract separate to personal relations. This could be mis interpreted as providing an advantage to the contractor. I would review the RICS decision tree if in doubt when faced with ethical dilemmas

Answer 142

There are 5 world regional boards; these are - Americas - Asia Pacific - Europe - Middle East & Africa - Uk & Ireland

Answer 143

Agreement between two or more parties to mislead or deceive others. This could be sharing sensitive information that could lead to an unfair advantage. With tenders; a non-collusion certificate is signed as part of the submission for written confirmation that the bid was developed independently.

Answer 144

1868 1881: Granted Royal Charter by the Privy Council.

Answer 145

Indpendant charity to support; current, former and retired members and APC candidate and their families.

Answer 146

- Register with the RICS - Professional Indemnity Insurance - Complaints handling procedure - Appointment: Responsible Principal - Client Money Account (if holding client money) - Loccum Agreement (if sole principal) - Annual return at the end of each year - Comply with RICS Logo Rules.

Answer 147

Justin Young CEO is a non-member /President is a member.

Answer 148

The CPD requirements is currently under review with a survey running until 16th July 2024. Review of CPD frameworks for comparison that the current 20 hours isn’t enough. Proposals include: - 30 hours minimum (20 hours must be structured learning) - 20 hours must be structured learning to include Ethics, Sustainability, DEI and law /regulations. - Take effect no sooner than January 2026

Answer 149

Sets out the objectives of the institution which is to: ‘maintain and promote the usefulness of the profession for the public advantage’

Answer 150

- Approved by Privy Council (group of individuals of the UK Government) - Classified as a ‘Gold Standard’ - Supported by regulations - Structure of how an institution who has a royal charter should be run (regulations on how to achieve this)

Answer 151

Governing Council

Answer 152

Logo to be used only by Members / Registered Firms (registered for regulation) Comply with the RICS branding guidelines listed in the RICS Regulation Document for use of the logo.

Answer 153

Bye-Law 5 ‘Conduct’

Answer 154

To make sure there is nothing in the way to act for clients objectively This maintains integrity and public confidence in the profession. Without negatively impacting on our duties to act for another client.

Answer 155

* Offering /bribing another person * Agreeing to /being bribed) * Bribery of a foreign public official * When an organisation fails to prevent bribery.

Answer 156

* Up to 10 years imprisonment (individuals) * Unlimited fines for commercial organisations failing to prevent bribery. * Statutory maximum fine up to £5,000 (individuals in England, Wales & Northern Ireland) (£10k in Scotland)

Answer 157

The act modernised the law on bribery to prevent unethical conduct.

Answer 158

Genuine hospitality that is reasonable and proportionate would not be covered by the act.

Answer 159

If the host does not attend this would be considered a gift rather than hospitality.

Answer 160

I would first ensure the charity was legitimate by: * check if the charity is registered for the purpose of the donation * ensure the money is donated to the organisation directly and not to an individual. I would act with caution and run this by the company director.

Answer 161

Bribes are: * Illegal * Unethical * Breach of trust.

Answer 162

Any advantage given to influence a person to carry out a function improperly.

Answer 163

- At least 50% of the firm's principals provide surveying services to the public. If 25% of the firm's principals are providing surveying services they are eligible to register. Or, the head of regulation is satisfied that the firm has an appropriate plan to comply.

Answer 164

- Application to register with the RICS: (head of regulation will grant or refuse) - Appoint a Responsible Person: (Ensure the firm complies with regulatory and statutory obligations) - Appropriate Professional Indemnity cover in place to comply with RICS requirements. - Complaints Handling Procedure - Client Money Handling accounts if required - CPD log - RICS Annual return each year - RICS Logo rules.

Answer 165

- Publish a Complaints Handling Procedure (to include ADR provider) - Professional Indemnity Cover to meet the standards approved by RICS - Sole Principal arrangements (Loccum) - Cooperate with the RICS - Provide information as requested by the Standards & Regulations board - Must display on business literature they are Regulated by the RICS - Report any matter required under the Rules for Registration of firms. (material change /insolvency etc.)

Answer 166

All previous and current professional work is covered by appropriate cover that meets the standards approved by the RICS (S&R Board). - Each and every claim basis - Minimum levels of indemnity based on the firms turnover from the previous year or estimated for new firm. - Claims made basis: Policy covers claims regardless of when the claim event occurred (retro-active covering former work) - Underwritten by an RICS listed insurer - Fully retroactive Run off Cover: Minimum period of 6 years & £1million limit - RICS minimum policy wording: Full civil liability basis.

Answer 167

Based on a firms turnover from the previous year or estimated for a new firm this is: £100k or less: £250k £100,001 - £200,000: £500k £200,001 or above: £1 million

Answer 168

- To protect the client from financial loss due to professional negligence. - Ensure that if the firm is protected from financial loss that it cannot meet from its own resources.

Answer 169

This is the part of each claim the firm must pay itself. Limit of indemnity: Up to and including £500k: The greater of 2.5% or £10k Over £500k: 2.5% of the sum insured.

Answer 170

Register with the Financial Conduct Authority (FCA)

Answer 171

A liability cap can be included in the appointment letter to a proportional limit of the instruction. This may be a multiple of the fee or for instance up to £1million.

Answer 172

Have appropriate controls and procedures to keep client money safe in compliance with RICS Professional Standard: Cline Money Handling. The firm must register with the RICS Client Money Protection Scheme for Surveying Services Hold client money in a client account. Client account to include: - The word ‘Client’ and the name of the firm in the title of the account. - Ensure money is immediately available. - Not go overdrawn. - Must only contain the clients money (no office money) - RICS Firm must have exclusive control over the account. - If the client requests they have access to the account the account must be set up by the client. - Ensure compliance with all anti-money laundering legislation and mandatory requirements of the latest edition of RICS’ Countering bribery and corruption, money laundering and terrorist financing.

Answer 173

Inform a senior colleague and take action to identify the owner of client money. Report this to the RICS. Keep a record of the investigation. Where the owner cannot be identified after three years - the money will be paid to a registered charity. Obtain a receipt and indemnity from the registered charity that they would reimburse payment if a beneficiary was identified.

Answer 174

Money the firm holds or receives on behalf of another person which is not immediately due.

Answer 175

This would not be considered client money if the professional work is agreed to be performed. If the fees are for work undertaken as a property agent – this would be considered client money (property management work or letting agent.)

Answer 176

The firm must provide information in writing to include: - Written Procedures for handling client money - Confirm Bank Details that the RICS-regulated firm has exclusive control of. - Disclosure of any Commissions earned. - How Unidentified Funds are dealt with.

Answer 177

This scheme provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client's money. Limit per claim: £50,000 Cap on liability of the Scheme as a whole in respect of any single Financial Year: £10,300,000.

Answer 178

- Face RICS Disciplinary Actions: Including fines, suspension, or even termination of membership. - Legal and Financial Consequences: Legal actions resulting in financial penalties. - Reputational Damage: public confidence to provide high-quality services.

Answer 179

- The advance sum becomes client money on payment into the client account. - This can only be repaid to the firm when funds are received from the client for repayment.

Answer 180

- Records of all payments relating to a client in chronological order. - Ledgers provide a running balance that shows the amount of money held by the firm on behalf of that client at all times. - Client ledgers are necessary where general client bank accounts are in use.

Answer 181

Yes, providing the firm complies with the requirements of the Direct Debit Guarantee scheme. This should only apply to General Accounts.

Answer 182

Money held by the firm on behalf of the client that is due to be paid to contractors.

Answer 183

Money paid in advance for an agreed fee for surveying services.

Answer 184

RICS professional standards: Set mandatory requirements and expectations for RICS members and regulated firms RICS practice information: Information to support RICS members and regulated firms (check lists, toolkits and industry insights)

Answer 185

- They set the **standards of professional conduct expected of RICS Members**. - There are 5 rules for both members and firms together with obligation for members and firms in Appendix A. The RICS Rules of Conduct are approved by the Standards and Regulation Board.

Answer 186

The would be a breach of the RICS Rules of Conduct as part of professional obligations. Failure to comply will be treated in the same way as any other rule. The range of sanctions includes: - First breach: Fixed Penalty (caution) - Second breach: Fixed Penalty (caution and fine). - Third or subsequent breaches occurring during the10 year period: Disciplinary Panel with may lead to expulsion. Note: Members must complete their CPD by 31 December each year and log it online by 31 January the following year.

Answer 187

The Technology and Construction Court (“TCC”) is a specialist court, which deals with technology and construction disputes. Cases up to £250,000 can be dealt with in a local county court, but cases will be heard in the High Court if it involves: * more than £250,000 * very complex issues * an international dispute * adjudication or arbitration

Answer 188

Provides insurance cover for injury /damage caused to a third party which could be members of the public or independent sub-contractors. - personal injury or death - loss or damage to property

Answer 189

* Not if there wasn’t signed terms of engagement - agreed scope, fee and liability. - I would make contact with the client representative. * I would see if it would be possible to postpone the inspection until the brief was confirmed and clear. * If urgent and pushing; I would confirm my understanding of the brief and scope in writing and inspect.

Answer 190

- Be honest and Inform all parties - Deduct from the next payment. - Review Lessons learnt (why were they un-supervised) - Issue Complaint Handling Procedure if required.

Answer 191

- Inform senior colleague in line with the gifts and hospitality policy. - Record the hospitality in the firms register.

Answer 192

* I would consider this as developing client relations. * I would not accept this in private in line with my firms gifts and hospitality policy. * I would always check over the RICS decision tree for ethical dilemas.

Answer 193

In the first instance to a senior colleague. This would then be escalated with the National Crime Agency or GLAA.

Answer 194

Gangmasters and Labour Abuse Authority

Answer 195

* Consider money laundering checks. * Set up a separate client account for managing client money.

Answer 196

I always treat people in a way that I would want to be treated. Actively listening to colleagues when they have felt upset.

Answer 197

Honesty Integrity Competence Service Respect, and responsibility.

Answer 198

RICS have a responisbilty under the Royal Charter for regulating its members and firms for the public advantage.

Answer 199

The regulatory functions of RICS are delegated from RICS’ Governing Council to the independently led Standards and Regulation Board (SRB).

Answer 200

- Operate in the public interest - Develop the technical and ethical competence of the profession - Overseeing professional standards /regulatory functions of RICS - Entry to the profession - Dispute resolution service

Answer 201

Following investigation of complaints made relating to a breach of the RoC. Decisions are made in the public interest. The disciplinary action taken depends on the seriousness of the case. For less serious cases: Regulatory Compliance Order to ensure future compliance with the standards. This may also include a fine or caution. For more serious cases: The Head of Regulation will refer a case to a Disciplinary Panel. This is a formal hearing to hear the evidence and determine the outcome. The Disciplinary Panel may impose sanctions ranging from a fine to expulsion and can determine costs against Regulated Members.

Answer 202

- A leading professional body - Working in the public interest. - RICS advance knowledge - Uphold standards - Inspire current and future professionals. Members help to create and protect built and natural environments that are sustainable, resilient and inclusive for all.

Answer 203

To be a globally recognised professional and increase confidence in my clients. This would be a huge achievement helping me achieve short term and long term career goals.

Answer 204

Future Foundations sets out the strategic goals for the RICS to prioritise in the coming years. The strategy is for a Natural and Built environment that is - Sustainable - Resilient - And Inclusive for all. RICS have a clear mission to inspire members, advance knowledge and uphold standards. Note: This was part of the transformation programme following the Bichard Review.

Answer 205

Creating change to shape a sustainable and inclusive future. Upholding /maintaining professional standards world wide.

Answer 206

RICS Professional Standard: Countering Bribery and Corruption, Money Laundering and Terrorist Financing.

Answer 207

This standard helps the profession identify and manage financial crime risks.

Answer 208

Money laundering is the conversion of illegally gained money or other assets into clean money or assets that have no obvious link to criminal activities.

Answer 209

All firms have a responsibility for money laundering risks under the Proceeds of Crime Act 2002 and RICS professional standards. Undertaking Customer Due Diligence to establish and verify the identity of customers and the nature of transaction. (who is the customer are they Politically Exposed) RICS-regulated firms must register with HMRC if they are. - Estate Agency - Letting Agency with rent exceeding 10keuro per month - High Value Dealers: Dealing with transactions of at least 10keuros in either one transaction or a series of linked transactions. - Valuation /Tax Advice - Property management

Answer 210

Firms must appoint a nominated Money Laundering Reporting Officer. Suspicious activity is reported to the Money Laundering Reporting Officer who will determine if the activity should be reported to the National Crime Agency.

Answer 211

This must be undertaken on ALL clients where there is a Business Relationship. There are 3 types of due diligence depending on the risk: - Simplified - Standard - Enhanced

Answer 212

Customers considered low risk: - Public authorities - Financial institutions

Answer 213

Generally undertaken for most customers (individuals and companies) - Identify the owner. (Companies House Check) - Verify the identity of the customer. (Photographic ID such a driving licence /passport) - Nature and purpose of transaction - Establish source of funds.

Answer 214

This is where there is a High Risk of Money Laundering: - Politically Exposed Person identified - High risk third country (South Africa /Turkey more named on government website) This requires more checks to include source of wealth and source of income. Risk Assessment for situations which presents a higher risk of money laundering or terrorist financing.

Answer 215

Proceeds of Crime Act 2002. The requires firms to submit a ‘suspicious activity report’ to the National Crime Agency. NCA will grant or deny permission to proceed with the transaction. Failure to disclose could result in a prison sentence and or a fine.

Answer 216

Private /sensitive information that must not be released to the public or any third party. This could be personal data or information on business sales (NDA to be signed)

Answer 217

* Report to the RICS board * Assist the knowledge and practice committee in advancing the profession There are 6 professional groups, these are; - Building Surveying - Commercial Property - Construction - Residential Property - Valuation - Land and Natural Resources

Answer 218

To safeguard businesses from financial crime and mitigate risk. To ensure that businesses comply with regulatory requirements and maintain the integrity of the financial system.

Answer 219

By following a check list - Customer Due Diligence. Collection of information to establish the identity of customers. Assess the potential risk they pose in terms of money laundering. Note: Financial Conduct Authority is the enforcing body in the UK

Ethics, Rules of Conduct and Professionalism Flashcards

(245 cards)