Ethics, Rules of Conduct and Professionalism Flashcards
How do the RICS ensure the standards of professional conduct are upheld?
The RICS has Rules of Conduct, Global, October 2021, effective February 2022
The rules apply to all members and firms regulated by the RICS
Rule 1
Members and firms must be honest and act with integrity and must comply with their professional obligations including those to the RICS.
Informed consent - Chris representing tenant
Rule 2
Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
Willowbrook - client requested a planning appraisal, referred to a colleague within P&D
Rule 3
Members and Firms must provide a good quality and diligent service
When obtaining comparable evidence for valuation purposes, I will always call agents involved in the deal to verify information and make a record of all details obtained.
Rule 4
Members and firms must treat others with respect and encourage diversity and inclusion
Member of EDI network, undertake CPD and address any unconscious bias. Encourage everyone to provide their opinion
Rule 5
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.
Stonehenge – careful of actions and what was said to ensure no reputational damage
Can you provide 5 example behaviours that comply with rule 1?
M & F do not mislead other by their actions or omissions, or by being complicit in the actions or omissions of others
Firms have effective processes to identify actual and potential conflicts of interest, to enable appropriate decisions to be made whether to accept work and keep records of decisions made about actual and potential conflicts of interest.
M & F are open and transparent with clients about their fees and services
Members and firms do not take unfair advantage of others
M & F do not facilitate any financial crime including money laundering, tax evasion, bribery or corruption. Firm have effective processes to prevent directors, partners or employees from doing so.
Can you provide 5 example behaviours that comply with rule 2?
Members must only undertake work they have the knowledge, skills and resources to carry out competently.
M & F supervise any employees undertaking work for them and ensure that these employees have the necessary knowledge, skills and resources to do their tasks competently.
M & F reflect on the work they have undertaken and its impacts and consider how they might apply what they have learned to their future work.
Members maintain and develop their knowledge and skills throughout their careers. They identify development needs, plan and undertake CPD activities to address them and are able to demonstrate they have done so.
M & F stay up to date and comply with relevant legislation, codes of practice and other professional and relevant technical standards. Firms ensure their director, partners and employees do so.
Can you provide 5 example behaviours that comply with rule 3?
M & F must understand clients needs and objectives before accepting any professional work.
M & F agree with clients scope of service to be provided and its limitations and timescales for the work.
M & F communicate with clients and others clearly and in a way, they can understand
M & F understand the risks and benefits of using relevant technology
Firms have effective quality assurance processes for their work
Can you provide 5 example behaviours that comply with rule 4?
M & F respect the rights of others and treat others with courtesy
M & F do not bully, victimise or harass anyone
Firms check their supply chains do not involve modern slavery or other abuses of the workforce
M & F work co-operatively with others
M & F develop an inclusive culture in their workplaces, support equal access and opportunity for all and identify and address unconscious bias
What are the professional obligations for RICS members in Appendix A of the Rules of Conduct?
- Members must comply with CPD requirements set by the RICS
- Must cooperate with the RICS
- Members must promptly provide all information reasonably requested by the Standards and Regulation Board or those exercising delegated authority on its behalf
What are the professional obligations for RICS regulated firms in Appendix A of the Rules of Conduct?
- CHP Firms must publish a complaints-handling procedure, which includes an ADR provider approved by RICS, and maintain a complaints log.
- PII Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by the RICS
- SOLE PRINCIPAL Firms with a sole principle must take appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work
- COOPERATE Firms must cooperate with the RICS
- SRB Firms must promptly provide all information reasonably requested by the Standards and Regulation Board or those exercising delegated authority on its behalf
- REGULATED BY RICS Firms must display on the business literature, in accordance with RICS published policy on designation, a designation to denote that they are regulated by RICS.
- REPORT TO RICS Firms must report to the RICS any matter that they are required to report under the Rules for the Registration for Firms
Can you explain how you act with integrity?
Being trustworthy in all that I do
Being open and transparent in the way that I work
Respecting confidential information
Not taking advantage
Not allowing bias, conflict of interest or the undue influence of others override my decision
Not offering or accepting gifts, hospitality or services which might suggest an improper obligation.
Why must you act within your capabilities and competencies?
Because in the RICS rules of conduct, rule number 2 states that Members must only undertake work that they have the knowledge skills and resources to carry out. Undertaking work that I am not capable of may lead to a complaint or a claim for negligence.
Can you explain how you take responsibility?
o Be accountable for my actions
o Act will skill, care and diligence
o Ensure a proper complaint handling procedure is in place in the event someone makes a complaint about me.
o If I think that something is not right that I will respectfully challenge and try to resolve the issue
Can you explain how you treat others with respect?
o I am always courteous and polite
o Always listen to other ideas, opinions and concerns
o Ensure that others are comfortable enough to speak up feel they matter
What are the RICS’ 5 principles of better regulation?
- Proportionality.
- Accountability.
- Consistency.
- Targeting.
- Transparency.
What is the difference between RICS ethics and rules?
- Ethics are a set of moral values.
- Rules of conduct are a framework that we work to.
What were the Global Professional & Ethical Standards? (Replaced by the RICS Rules of Conduct, Global, October 2021
- Act with integrity.
- Always provide a high standard of service.
- Act in a way that promotes trust in the profession.
- Treat others with respect.
- Take responsibility.
Why did the previous Rules of Conduct change?
- The previous rules had been in place since 2007.
- Following research and consultation with RICS Members, Firms and Members of the public, the
majority voted in favour of replacing the existing Rules of Conduct and separate Global Professional
and Ethical Standards. - This was to provide a single document to enable greater clarity for RICS members and firms.
- I also understand there is now a greater focus on clearer example behaviors, understanding evolving
technology and tackling climate change.
Talk us through your understanding of the Rules of Conduct changes?
- The Rules of Conduct October 2021 Global Practice Statement will overhaul the previous separate
documents:
o Rules of conduct for Members.
o Rules of Conduct for Firms.
o Global Professional and Ethical Standards. - Appendix A of the Rules of Conduct now contains the professional obligations of Members and
Firms.
Why does the RICS have Rules of Conduct?
- To provide a framework that we can all work to and so the client knows he is getting a set level of service.
- As well as being an important tool for the Institution, the Rules of Conduct are also a useful professional guide for individual institution members.
Your brother-in-law is a chartered surveyor. You find out that he is working outside the RICS Rules of Conduct. What do you do?
- I verify the facts and confront him reminding him of his duties as a member of the RICS.
- I inform the RICS specifying my relationship to the person and any corrective action which I believe my brother-in-law is committed to put in place.
In the case of a breach of a rule of conduct what is the procedure?
- Not every shortcoming will necessarily give rise to proceedings.
- A formal investigation by the Head of Regulation of the RICS is the first step in the process.
- The RICS can request information and/or visit and inspect to investigate compliance.
- Members must cooperate fully with all enquiries.
How can a disciplinary proceeding be triggered?
- Someone complaining to the RICS.
- An allegation by a client or third party.
- Information received or established by the RICS.
What three actions can be imposed after the end of the investigation stage?
- Fixed penalty.
- Regulatory Compliance Order (Consent Order).
- Disciplinary panel.
What are fixed penalties?
A fine by the RICS.
What are Regulatory Compliance Orders (consent orders)?
- It is a 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.
When is a disciplinary panel applicable?
- 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.
What sort of breaches would expulsion be suitable for?
- Gross, persistent or willful 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.
What procedures must you follow if you are starting up a new practice?
- Contact the RICS for guidance and obtain a company start up pack.
- Inform the RICS and register for regulation.
- Appoint a contact officer for all RICS communication.
- Prepare a complaints handling procedure.
- Obtain Professional indemnity insurance cover.
- Abide by the Rules of Conduct
- Use the designation ‘Regulated by RICS’ on all practice material.
Would you advertise your new company in the press?
Yes as long as it is in a trustful and responsible manner in line with the Rules of Conduct
What insurances would you need if you were starting up your own firm?
- Professional Indemnity Insurance.
- Employer’s Liability.
- Public Liability.
- Building’s insurance of an office premises.
What sort of information do registered firms have to send to the RICS annually?
- It is called annual return and carried out on-line.
- Failure to do so leads to a fixed penalty.
- It includes:-
o Type of business and staffing.
o Nature of clients.
o Training provision.
o Complaints handling procedures details and records.
o PI insurance details.
o Whether the firm holds clients’ money.
What processes do regulated firms need to put in place when handling Clients’ Money?
- Preserve the security of clients’ money which does not belong wholly to the company.
- RICS regulated firms that operate a client account must:-
o Set clear segregation of duties for employees.
o A Principal oversees the client money accounting functions.
o Principles cannot override controls.
o Competent and knowledgeable staff are to process clients’ money with cover provided for long term absence.
o Accounting systems and data must be secure.
o Client money must be kept separate and clearly identifiable with the word ‘client’ included in the bank account name.
o Clients must always have access to funds.
o We must agree the terms and advise the client on bank details.
o The account must not be overdrawn.
o We must maintain client ledgers and provide a running balance.
What are the different types of client money accounts?
- General accounts that hold money for more than one client.
- Discrete accounts reference a single named client.
What is meant by the term Negligence?
- A duty of care is owed to all clients and 3rd parties using reasonable skill and care.
- If it is breached due to Negligence a claim may arise resulting in damages being paid or a Professional Indemnity Insurance claim.
- Negligence is a failure to provide the duty of care that is owed to the client.
Tell us about the Merrit V Babb case law?
- 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 therefore 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.
What limitation periods are associated with underhand and deed forms of contract?
- 6 years when executed under hand (one person)
- 12 years when executed as a deed.
What must a complaints handling procedure include?
- The RICS provides a model form.
- The process must include a redress mechanism.
- Details of the policy should be issued to the client with the Terms of Business.
- It must be clear, quick, transparent and impartial and free of charge within the first stage.
- Names and contact details of the nominated investigating person must be stated.
- The complaint must be investigated within 28 days.
- All complaints, their progress and outcomes must be recorded.
- We must note the need to advise PI insurers of a complaint immediately.
- The process must have two stages as a minimum:-
o Stage 1 is where there needs to be consideration of the complaint by a senior member of the
firm or the complaints handling officer.
o Stage 2 if the issue is not resolved, the complaint is referred to an independent third party with
the authority to award redress. The complainant may be expected to contribute towards costs
at this stage.
What is an independent redress scheme?
- It is a consumer scheme designed to handle small issues that would be disproportionally expensive to take to court.
- If the scheme judges in favour of the complainant, it is binding.
- If it judges in favour of the firm, the complainant can escalate the matter to court.
- RICS firms must specify which redress scheme they want to use, it could be an ombudsman, arbitration or sometimes adjudication.
- If the complaint relates to a large amount of money or if the complainant wishes so, he can take the matter to court.
What do you do if you receive a letter of complaint?
- I would acknowledge receipt and I would forward it to my firms designated complaint handler, as per our complaint handling procedure, providing additional information as required.
- I would also highlight the importance of informing our Professional Indemnity insurance providers immediately.
What is the ‘Clients’ Money Protection Scheme’?
- This is a money protection scheme operated by the RICS.
- It contains provision for any member of the public to be reimbursed their direct loss of funds when using an RICS regulated firm.
- This is provided through an RICS insurance policy.
What is the purpose of the joint names on a client account?
For the purpose of dual authorisation.
What are the continuous professional development (CPD) requirements?
- Members must undertake and record appropriate lifelong learning.
- On request by the RICS they must provide evidence that they have carried out the CPD to maintain and improve their levels of professional competence.
How many hours CPD must you do?
- A minimum of 20 hours CPD must be achieved per calendar year, of which a minimum 10 hours must be formal.
- Members must undertake learning on the standards expected around RICS Ethics on a rolling 3-year period.
- All CPD’s must be recorded via the RICS on-line management system.
What sorts of activities are included as CPD?
- It must have a clear learning objective relevant to my role to count as CPD.
- Formal CPD can be classed as web based training with structured assessments, formal seminars, providing training to others where research and preparation is required.
- Informal CPD is classed as private reading, internal CPD’s and on the job shadowing.
