Ethics, Rules Of Conduct And Professionalism L3 Flashcards
(251 cards)
1
Q
What is a bribe?
A
A payment, gift or favour given to someone to influence their actions or decisions in favour of the person offering the bribe.
2
Q
What should you avoid when negotiating a Fee?
A
- price fixing
- aggressive fee cutting
- collusion with competitors
- Undercutting another firm
3
Q
What are your companies fees based on?
A
They are based on an hourly rate, recent experience of time taken to do similar jobs, market forces.
4
Q
What are the steps to follow before accepting a job?
A
1) Check professionally competent
2) No conflict of interest / personal interest
3) Confirm terms of engagement and get written approval from Client
5
Q
What are the reasonings for declining an instruction?
A
-Not competent / outside your limitations
-Do not have sufficient facts
-Client not signed ToE / AML checks
-Conflict of interest
-PII liability cap cannot be agreed
-Advice for friend and not covered by PII
6
Q
What is a conflict of interest?
A
Arises when a firm’s independence and impartiality is threatened due to conflict between two Clients.
7
Q
Give me an example of a Conflict?
A
Entering in to a promotion agreement on competing sites in the same LPA
8
Q
What are the three types of conflict of interest?
A
1)Party conflict – same or related instruction
2)Own interest conflict – personal interest
3)Confidential information conflict
9
Q
What is informed consent?
A
-Given in writing
-Transparent about all material factors / party understands what they are doing
-All relevant parties best served
10
Q
How do you handle a conflict?
A
Be open and transparent.
11
Q
What is the three steps process to handling a conflict?
A
1) Conflict avoidance
-Get all the facts
-Consider whether conflict is irresolvable or whether it can be properly managed
-Decide whether to accept or decline instruction
2) Written advice to both parties (accept instruction)
-Disclose nature of the conflict, circumstances around it, any other relevant facts and proposals for how firm proposes to deal with the conflict
-Clear as possible: both parties make own decision (informed advice)
-Request written confirmation from both parties
3) Conflict Management (information/ethical barriers)
- Information barrier set up in accordance with provisions agreed with both clients
- Barrier must be ensure no information passed between two parties
- Surveyor must be different + physically separated
- Securely stored information / communications logged
12
Q
What is your companies conflict process?
A
Before a job is entered in to I have to send a company wide email including:
- Address
- Client
- LPA
- Work to be undertaken
13
Q
What are the four offences of a bribe?
A
Four Offences:
1) Bribing
2) Receiving a bribe
3) Bribing a foreign public official
4) Preventing bribery
14
Q
Should you accept gift/hospitality from a third party supplier or contactor?
A
No
15
Q
What do you do if you receive a reasonable/proportionate gift?
A
Log within the gift register
16
Q
What are the penalties of accepting or giving a bribe?
A
Policed by Serious Fraud Office, max penalty 10-year prison, unlimited fine
17
Q
What is your companies policy on bribes?
A
Our company strictly prohibits bribery in any form. We adhere to the Bribery Act (2010) and have clear policies and procedures in place to prevent bribery, including training for employees and regular compliance audits
18
Q
What is bribery, and how does the Bribery Act (2010) define it?
A
Bribery involves offering, giving, receiving, or soliciting something of value to influence the actions of an individual in a position of authority or trust. The Bribery Act defines bribery as the offering, promising, or giving of a financial or other advantage with the intention of inducing someone to perform their functions improperly or to reward them for doing so.
19
Q
What are the key offenses outlined in the Bribery Act (2010)?
A
The Bribery Act establishes four main offenses: offering, promising, or giving a bribe; requesting, agreeing to receive, or accepting a bribe; bribing a foreign public official; and failure of commercial organizations to prevent bribery.
20
Q
How does the Bribery Act (2010) impact businesses and individuals?
A
It applies to both individuals and businesses, imposing criminal liability for bribery-related offenses. It requires businesses to implement adequate procedures to prevent bribery and holds individuals accountable for their involvement in bribery schemes.
21
Q
Can you provide examples of situations that could constitute bribery under the Bribery Act (2010)?
A
Example: providing lavish gifts or hospitality to influence a decision-maker
Any form of inducement or reward aimed at improperly influencing someone’s actions could be considered bribery.
22
Q
What are the consequences of violating the Bribery Act (2010) for individuals and businesses?
A
Individuals: Imprisonment, fines, and damage to their reputation.
For businesses: Unlimited fines, confiscation of assets, and reputational damage, as well as potential civil liability for failing to prevent bribery.
23
Q
How can businesses ensure compliance with the Bribery Act (2010) and prevent bribery within their organizations?
A
Businesses should implement robust anti-bribery policies and procedures, provide training to employees on bribery prevention, conduct due diligence on third-party partners and suppliers, and maintain accurate records of hospitality and gifts. Regular monitoring and review of compliance measures are also essential.
24
Q
What are the requirements for firms (bribery)?
A
1) Prepare a written policy + risk assessment
2) Appropriate governance and systems in place
3) Encourage transparency i.e. gift register
4) Clear guidance for staff: price fixing
5) Appoint contactable person within company
6) Code of behaviour for staff
7) Due diligence checks
25
What are the requirements for members (bribery)?
1) Declare items in risk register
2) Attend training provided by firm
3) Be familiar with employer’s policy
26
What is money laundering?
Process of disguising proceeds of crime to make them appear legitimate within the financial system.
27
What are the requirements for firms to highlight money laundering?
- Staff training
- Conduct written risk assessment for firm
- Comply with due diligence requirements
- Comply with PEP requirements
- Keep records
28
What are the levels of due diligence for money laundering?
1) Customer Due Diligence:
2) Enhanced Due Diligence:
3) Simple Due Diligence
29
What is the penalties for money laundering?
14 years in prison
30
What is the procedure for suspicion of money laundering?
any suspicions reported through compliance officer to the National Crime Agency
31
What is money laundering?
Money laundering is the process of concealing the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.
32
How does RICS address money laundering?
RICS has regulations and guidelines in place to prevent money laundering, including thorough due diligence on clients, reporting suspicious transactions, and complying with anti-money laundering laws.
33
What are the key provisions of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2017)?
The regulations require regulated firms to carry out risk assessments, implement customer due diligence measures, maintain records of transactions, and report suspicious activities to authorities.
34
What is customer due diligence (CDD)?
Customer due diligence involves verifying the identity of clients, assessing the nature of their business, and understanding the purpose of the intended transactions to mitigate the risk of money laundering or terrorist financing.
35
How does RICS ensure compliance with anti-money laundering regulations?
RICS provides guidance and training to its members on anti-money laundering measures, conducts regular reviews of compliance procedures, and collaborates with regulatory authorities to uphold standards.
36
How does RICS ensure ongoing compliance with anti-money laundering regulations?
RICS regularly updates its guidelines and regulations in line with changes in legislation, provides continuing professional development (CPD) opportunities for members to stay updated on best practices, and conducts audits to assess compliance with anti-money laundering measures.
37
What is the purpose of the RICS Professional Statement on Countering Bribery, Corruption, Money Laundering, and Terrorist Financing?
The purpose of the statement is to outline RICS members' obligations to prevent and counter bribery, corruption, money laundering, and terrorist financing in their professional activities.
38
What are the key principles outlined in the RICS Professional Statement?
The key principles include maintaining integrity, avoiding conflicts of interest, ensuring transparency in financial transactions, conducting thorough due diligence on clients, and reporting suspicious activities.
39
How does the Professional Statement define bribery?
Bribery is defined as the offering, giving, receiving, or soliciting of something of value as a way to influence the actions of an individual or organization in a professional or business context.
40
What actions are required of RICS professionals to counter bribery and corruption?
RICS professionals are required to conduct business with honesty and integrity, avoid offering or accepting improper inducements, and report any instances of bribery or corruption to the appropriate authorities.
41
How does the Professional Statement address money laundering and terrorist financing?
The statement requires RICS professionals to implement due diligence procedures to prevent money laundering and terrorist financing, including verifying the identity of clients, monitoring financial transactions, and reporting suspicious activities.
42
Can you provide examples of situations that may constitute bribery, corruption, money laundering, or terrorist financing?
Examples may include offering or accepting cash bribes, providing gifts or hospitality to improperly influence decision-making, engaging in transactions with politically exposed persons without proper due diligence, or knowingly facilitating financial transactions for illicit purposes.
43
What are some key points for confidentiality?
- Includes historic information
- Client approval if third party wants info
- Old files kept for min 6 years before disposal
- If overhear info should be kept confidential, not to be used. Let client know
- Confidential info received in error should be disposed of securely
44
What is the purpose of the RICS Complaints Handling Procedure?
The purpose is to provide a transparent and fair process for handling complaints made against RICS professionals or firms regarding their conduct or services.
45
Who can file a complaint under the RICS Complaints Handling Procedure?
clients, other professionals, or members of the public who have concerns about the conduct or services of an RICS professional or firm.
46
What types of issues can be addressed through the Complaints Handling Procedure?
professional misconduct, negligence, breaches of ethical standards, or failure to meet professional obligations.
47
what is your companies complaints handling procedure?
Initial issues raised with member client is working with, who will discuss concerns, and aim to resolve them. Formal complaint procedure below:
Stage 1)
- In writing to designated director
- Acknowledged within 7 days / response provided within 28 days
- Recorded in complaints log
Stage 2)
- If unable to agree then taken to Independent Redress Provider: Centre for Dispute Resolution (CEDR)
Sole practitioner must nominate a surveyor in another form to act as complaints handling officer
48
What is negligence?
Negligence is a failure to take reasonable care to avoid loss to another person.
49
What is Duty of Care?
Duty of Care exists to clients and third parties, using ‘reasonable care and skill’. When breaches, and there is a loss, a claim for damages arises.
50
How do you avoid / reduce negligence?
- Understand client objectives / confirm ToE
- Competent to undertake work
- Undertake work in accordance with RICS guidance
- Up to date market knowledge
- Cap PII in ToE
51
what is Personal Indemnity Insurance?
PII is designed to protect professionals and their businesses from claims arising to errors, omissions, negligence or malpractice in the services they provide.
52
What are the minimum requirements for PII?
£100k or less: £250k
£100k - £200k: £500k
£200k+: £1m
53
What is the Max Uninsured Excess for PII?
Liability up to £500k: 2.5% or £10k (highest)
Liability over £500k: 2.5% of sum
54
What is Retroactive?
policy covers claims regardless of when negligent act occurred
55
What is Run off Cover?
Consumer Claims: £1m aggregate over min 6 years
Commercial Claims: decide what is adequate. Min 6 years. Claims can be made up to 15 years
56
What is a contract?
Agreement between two parties that will be recognised and enforced by the courts. Contract can be oral
57
What is there to be understood by a contract?
Parties should understand:
1) The are creating a contract
2) Can be enforced by the law
58
How do you form a contract?
3) Offer
4) Acceptance
5) Consideration
59
All firms holding client money in the UK need to publish client money handling procedure.
What are the key factors for handling clients money?
1. Keep accounts separate / identifiable (use word “client”)
2. Client must be able to have monies on demand
3. Agree interest payment procedures
4. Keep accurate records
5. Properly trained staff
6. Accounts not overdrawn
7. Three-way reconciliation
60
What can clients monies include?
Deposits, rent collection, service charges
61
If you was to set up your own RICS firm, what steps would you have to take?
1. Inform RICS
2. Contact officer for all RICS communications
3. PII + send details to RICS
4. Details on handling client money
5. RICS valuer registration scheme
6. Complaints handling procedure
7. Complaints log
8. Complaints handling officer
9. Logo kit
10. Ensure CPD
11. Staff training plan
12. RICS annual return
62
What are the steps for Statutory Compliance?
1) Requirement to disclose business name
2) Disability discrimination compliance (Equality Act 2010)
3) Bribery Act 2010 (compliance)
4) Appoint money laundering officer
5) Health and safety compliance
6) Fire safety compliance
7) Inform HMRC for tax reasons
8) Ensure have EMPLOYERS LIABILITY INSURANCE (employee injured on premises) and PUBLIC LIABILITY INSURANCE (third party injured on premises)
63
what are the steps for closing a practice?
1) Inform RICS
2) Ensure Clients are informed + hand over to new firm
3) Return any client money
4) Inform insurer
5) PII insurance for min of 6 years from expiry of current policy
6) Retain client files for minimum 6 years.
64
Give me an example of when you have acted with integrity?
For all new instructions, before accepting, I issue a conflict check out to the wider company.
65
Tell me about when you have provided a high standard of service?
Example
66
Tell me about how you have promoted trust in the profession.
By fulfilling my obligations. Doing what I say I would do.
67
Explain how you have taken responsibility in your current role.
Case Study - found a solution to the viability issue of the planning
68
Tell me about how you treat clients with respect.
By speaking to them in a timely and respectable manner no matter of the issue in hand.
69
Tell me about how you treat other surveyors with respect.
The same way as how you would treat a client, within a respectable manner.
70
Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying.
Under the Rules for the Registration of Firms 2022.
- Inform the RICS
- Obtain Adequate Insurances
- Measures in place to preserve the security of clients’ money
- Put a complaints handling procedure in place
- Ensure training, including CPD opportunities
71
If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.
I would decline the offer immediately and inform my director.
72
What would you do if you became suspicious that a client was involved in money laundering?
I'd follow company policy on reporting concerns to the designated Money Laundering Reporting Officer while also maintaining confidentiality.
73
What would you do if you became suspicious that a client was involved in terrorist activities?
I would immediately report my concerns to the appropriate authorities, such as the National Crime Agency or the police. I would follow our firm's internal procedures for reporting suspicions of terrorist financing and cooperate fully with any investigations.
74
If you were to set up in practice on your own, tell me about the types of insurance you would need.
- Professional indemnity insurance (PII)
- Public liability insurance
- Employer's liability insurance
75
What are the three pillars of dispute resolution?
1. Negotiation
2. Mediation
3. Adjudication
76
What is the RICS motto & what does it mean?
'Est Modus in rebus' which means 'There is measure in all things
77
What is the mission statement of the RICS?
-To equip their members to offer the highest standard of proffessional service
-To promote and enforce standards
-To lead solutions to major challenges faced by the industry
78
When was the RICS founded?
1868
79
How is the RICS structured?
1. Privy council -awards grants & royal charter
2. Governing council - manage the strategy for the rics
3-Regulatory board, management board & audit commitee- execute strategy
80
What are the RICS 5 principles of better regulation?
-proportionality
-Accountability
- Consistency
-Targeting
Transparency
81
What are ethics?
Moral values
82
What is rule 1 of the New rules of conduct?
Members and firms are to be honest and act with integrity, and comply with their professional obligations, including obligations to the RICS.
83
What is rule 2 of the New rules of conduct?
Members and firms are to maintain thei professional competence and ensure that services are provided by competent individuals who have the knowledge and experience.
84
What is rule 3 of the New rules of conduct?
Members and firms must provide a good quality and diligent service
85
What is rule 4 of the New rules of conduct?
Members and firms must treat others with respect and encourage diversity and inclusion
86
What is rule 5 of the New rules of conduct?
Members and firms must act in the public interest and take responsibility for their actions. They must act to prevent harm and maintain public confidence in the profession.
87
When did the rules of conduct change?
2nd February 2022
88
Why did the rules change?
They had been in place since 2007, Members voted to create one single document, now a greater focus on evolving technology and tackling climate change.
89
What are the professional obligations of members?
Comply with CPD requirements (20 hours, 10 to be formal) Must cooperate with RICS, Must provide all information reasonably requested by the standards and regulation board.
90
What are the professional obligations of firms?
-Must publish a complaints handling procedure, which includes and alternative dispute resolution provider approved by RICS and maintain a complaints log.
-All previous and current professional work is covered by professional indemnity policy
-Firms witha sole principal must make arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
-Must cooperate with RICS
-Must provide any inforamtion reasonably requested by the standard adn regulations board
-Must display they are regulated by the RICS
-Must report any matter as required by the rules for the registration of firms
91
What are the steps of the ethics decision tree?
- Do you have sufficient facts
-Is it legal
-Does it comply with the rules of conduct?
Have you condulted the appropriate people?
Do you have clear reasoning?
Would you be content for your actions to be made public?
92
Why does the RICS have rules of conduct?
To provide a frameworkthat we can all work toand 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.
93
In the case of a breach of a rule of conduct what is the procedure?
-Not every shortcoming will neccesarily give rise to proceedings
-A formal investigation by the Head of regulation
-RICS can request information and nvestigate compliance
-members must cooperate fully with any enquireies
94
How can a disciplinary proceeding be triggered?
Someone complaining to the RICS
An allegation by a client or third party
Information recieved or established by the RICS
95
What are the three actions that can be imposed after the investigation stage?
-fixed penalty
-consent order
-Disciplinary panel
96
What are fixed penalties?
A fine set by the RICS
97
What are consent orders?
A written agreement between the RICS and a memeber containing corrective actions and restrictions from taking certain actions.
98
When is a disciplinary panel applicable?
More serious breaches of conduct, usually held in public, a balance of probabilities is used.
99
What breaches would explusion be suitbale for?
persistent failure to comply with RICS rules of conduct, Fraud, Dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, missappropriation of a clients money.
100
What procedures should you follow if you are starting up a new practice?
-Contact the RICS and register for regulation
-Appoint a contact office for all rics communication
-Prepare a complaints handling procedure
-Obtain professional indemnity insurance
-Use 'regulated by RICS' on all material
101
Can you advertise your new company in the press?
Yes in a responsible manner
102
What insurances would you need to set your own firm up?
-Professional indemnity
-Employers liability
-Public liability
-Buildings insurance of the office premises
103
What information do registered firms have to send to the RICS anually?
Annual return including:
-type of business and staff levels
-nature of clients
training provisions
Complaints handling procedure
PI insurance details
whether the firm holds clients money
104
What processes are required when handling clients money?
-Secure accounting systems
-Client money to be kept seperate
-client must always have access to funds
-Must maintain a client ledger and be able to provide a running balance
-only competent and knowledgeable staff are to process clients money
105
What are the different types of clients money accounts?
-General accounts hold money for more than one cient
-Discrete accounts reference a single named client
106
What is meant by the term negligence?
Failure to provide duty of care
107
What was the MERITT V BABB case?
-2001
-surveyor sued for negligence by former client
-Highlights the importance of having run off cover
-surveying firm was no longer in existence so the individual survyeyor was pursued for damages succesfully
108
What limitation periods are associated with underhand and deed forms of contract?
6 years when executed under hand
12 years when executed as a deed
109
What must a complaints handling procedure include?
-RICS provide a model form
-must include a redress mechanism
-details of the policy should be issued with the terms of business
-must be clear, quick and transparent
-Complaint must be investigated within 28 years
- Whole process must be recorded
-PI insurers must be informed of any complaints
-Must have 2 stages
110
What is an independent redress scheme?
-consumer scheme designed to handle small issues that would be expensive to take to court
-RICS firms must specify which redress scheme they want to use e.g. ombudsmon or arbritation
111
What is the clients money protection scheme?
-Money protection sceheme operated by rics
-contains provision for any member of the public to be reimbursed for their direct loss of funds when using an RICS regulated firm
-Provided through an RICS insurance policy
112
What is the purpose of joint names on a client account?
For dual authorisation
113
What are the CPD requirements?
-Members must undertake and record lifelong learning
-On request they must provide evidence they have carried out CPD to maintain and improve their levels of professional competence
114
How many CPD hours must you do?
A minimum of 20 hours, 10 must be formal
-members must undertake learning on the standards expected around RICS ethics on a rolling 3 year period
- All CPD must be recorded via the RICS on line management system
115
What activities are included within CPD?
-must have a clear learning objective
-Formal training must have a structured assesment, formal seminar or providing training to others
116
What does PII stand for?
Professional indemnity insurance
117
What is the purpose of Professional indemnity insurance?
To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty
118
What benefits does PII provide to a professional?
The professional is protected from financial losses
The firm does not have to meet the claim from their own assets
119
What benefits does PII provide the client?
They are able to recover their financial losses
120
On what basis is PII underwritten in the uk?
On a claims made basis
121
What does claims made basis mean?
The insurance policy that is in place at the time the breach is discovered is responsible for providing the indemnity, not the insurance policy in place when the breach was made
122
What are the requirement for professional indemnity set by the RICS?
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 exess
Run off cover must be in place for at least 6 years
The policy should include cover for past and rpesent employees, director and partners
123
What are the new RICS minimum levels of indemnity
Turnover up to £100k- £250k minimum indemnity
£100k to £200k- £500k minimum limit
£200k+ minimum limit of £1 million
124
What are the RICS new levels of maximum level of uninsured excess?
Turnover £10 million or less- greater of 2.5% of insured sum or 10k- £10 million and aboce no limit set
125
How do you differentiate between the different categories of CPD?
You can use the RICS CPD decision tree
126
What articles do you read?
Examples
127
What recent articles have you read from the RICS?
Example
128
How do you keep up to date with topical issues?
Follow updates on the RICS modus and journals, Conversation within the workplace with colleagues, Undertake research on topics that interest me or directly impact my line of work
129
What is your CPD strategy?
-Continue with my diary entries/ planning as I did for preperation for my APC
- Quarterly reviews with my line manager to discuss progress & objectives- training required to achieve these objectives
-Offer support and training to apprentices within my office on their job role and APC
-Continue with personal research to develop my competence and knowledge
-Continue education with a masters degree
130
What measures should be taken to try and avoid PI claims?
Keep detailed records of any meeting and conversations, recors all reccomendations and advice given, Use letters of engagement, scope of services, terms of engagemnt, Dont advise on a specialism outside your field of experience, Use RUCS guidelines, Avoid poor management and excessive workloads
131
How can you limit your liability when agreeing terms of appointment with a client?
Run offcover must be in place, execution of the appointment underhand will resut in a reduced liability period of 6 year instead of 12
132
What are the main elements included within a fee proposal?
Terms and conditions, scope of services, exclusions, assumptions
133
If you put together a fee proposal, but a couple months into the job you realise you have under forecasted your resources, would you go back to the client and ask for more money?
If project requirement have increased then a fee increase would be applicable; If the cope of works remains the same then this highlight a mistake and the works would ahve to be completed without reducing the level of service and without increasing the fee
134
Once you and your client agree the services that are to be provided verbally what should you do next?
Follow up with a formal letter with the terms and conditions, fess and scope of works to be provided.
135
What is a conflict of interest?
Where someone s in a position of trust has competing personal or professional interest so they cant fulfill their duties impartially
- An existing relationship is an example
136
How could the conflict of interest be managed internally if two departments were working for the same client?
Seperate communication lines, secure data storage, sign up to non disclosure agreements
137
If the client was insistent that you worked for them despite a conflict of interest, how would you proceed?
Check the client understanding around the conflict of interest, make the client aware of th epotential for reduced impartiallity, seek a letter of instruction to continue
138
What are the main principles of the bribery act?
-making a bribe
Recieving a bribe
Bribery of a foreign public official
Failure of a coparate entity to prevent bribery on its behalf
139
What prevention should companies have in place to stop bribery?
1 proportionate procedures
2 top level commitment
3 risk assesment
4 due dilligence
5 communication
6 monitoring and review
140
Under the bribery act, under what circumstance is a facilitation payment permitted?
When you are under duress e.g. there is a risk or danger to life- make the payment and then report the matter imediately
141
You are attending a business conference where it is announced you have won an Ipad- how would you act?
- Priz eis of significant value and could be interpreted as a bribe so i would decline the prize and report it to my line manager. Bribes are commonly distributed as random prizes.
142
what year did the money laundering regulations come into place?
1994
143
What are money laundering red flags?
Cash buyers, unusual prices, Payments from multiple sources.
144
What is money laundering?
Concealing the source of criminal activity to disguise illegal origin
145
What is the status of a rics professional statement?
mandatory to all rics - members and firms, including trainees
146
What is a locum agreement?
When someone is a sole practitioner they must have appropriate arrangements in place in the event of a death or extended absence.
147
What are the different RICS documents?
Rules of conduct
professional statements
Guidance notes
Code of practice
Jurisdiction guides
148
Why do you want to become chartered?
- best standard of my profession
- guidance and support from rics
-commited to continued learning and development
-Help other surveyors become chartered
149
What status is the RICS PI requirements doc?
Regulation document
150
How many years after an instruction can a PI claim be made?
15 years
151
Why are ethics important?
Ensure consistency, clarity and ensure appropriate behaviour
152
What are the three types of due dilligence?
Simplified, enhances and New customer
153
Who is the RICS president?
Ann gray FRICS
154
When did the RICS recieve royal charter?
1881
155
What is Royal Charter?
Method of incorporation granted by the Queen.
156
What are the 4 levels of membership?
MRICS
FRICS
AssocRICS
Trainee
157
How do you become a fellow?
5+ years as MRICS
Leadership role
Professional/technical achievement
Raised the profile of the RICS
158
How is the RICS Governance Structure shaped?
Royal Charter, Bye Laws and Regulation.
159
What is the Governance Structure of the RICS?
Privy Council
Governing Council
Standards & Regulatory Board / Management Board / Audit Committee
Management Board comprises 17 professional groups
160
What is the role of the Privy Council?
Grants awards and Royal Charter
161
What is the role of the Governing Council?
Governing Council is the highest governing body, setting global strategy and ensuring RICS fulfils its Royal Charter obligations.
162
What is the role of the Standards and Regulatory Board?
They are responsible for exercising the standards and regulatory functions of the RICS.
163
What is the role of the Management Board?
To direct RICS affairs under delegated authority from Governing Council.
Comprised of non-members (independent), members of RICS, and RICS Executives.
164
What is the role of the Audit Committee?
The Audit Committee operates independently of Governing Council, the Management Board and the Standards and Regulation Board.
Each year it reports to Governing Council on how it has discharged its duties.
Comprises member and non-members.
165
What is the role of the Regulatory Tribunal?
regulates the RICS
fair and independent judicial body
consists of lay members and RICS members
166
What do you know about the RICS Guidance Note: Complaints Handling (2016)?
A firm’s written CHIP must be approved by the RICS.
Notify PII insurers as soon as possible if a compliant arises.
Details of CHP issued same time as ToB.
Complaints log must be maintained showing details and status.
CHP must include an RICS approved Alternative Dispute Resolution
167
What are the RICS minimum procedures for Complaints handling procedure?
Acknowledge a written complaint within 7 days
Respond within 28 days
Refer to independent redress provider if unresolved
Log in a complaints log
168
Are you aware of any new RICS guidance on insurance?
RICS Guidance Note: Risk, Liability and Insurance 2021
RICS has secured new insurance terms, lifting the 12 month fire safety exclusion from PII.
From May 2021, insurers must provide cover for fire safety claims on a property 4+ storeys
169
What money laundering checks do you need to do for private limited companies?
Certificate of incorporation
Full name
Registered Office
Registered number
Business address
Name of all shareholders with over 25% stake.
(report discrepancies to Companies House)
170
How many rics members are there?
134,000 +
171
Who is the RICS CEO?
Justin Young- as of 5th July 2023
172
Who is the Current President of the RICS? And when was she in power from?
Tina Paillet on 1st Jan 2024
173
**What is the Governing Structure of the RICS?**
Currently, the **Governing Council** is in charge of the management of the RICS. Consists of 21 members
Underpinned by various boards and committees. The Standards and Regulation Board is accountable to Governing Council, but not directed by them.
174
What are the major challenges currently facing the RICS and initiatives to address these?
Diversity & Inclusion: Started to collect demography data in UK & Ireland for benchmarking and target setting
Sustainability:
Granted observer status for COP28 in Dubai
Rebuilding trust in the professional for both members and public. Appointments of Tina Paillet and Justin Young recognise the importance of respecting tradition but evolving with the times.
175
What are the THREE main roles of the RICS
1. Maintain highest standards of education and training
2. Protect consumers through strict regulation and professional standards
3. To be the leading source of information and independent advice in the field
176
What do you know about The Bichard Review?
Independent Review in 2021 found internal governance failings at the RICS.
Following consultation, Bichard made seven recommendations to create a clearer and more simplified structure including creation of Management Board and Standards & Regulation Board.
177
**Why do you want to become a Chartered Surveyor?**
I would like to become a member of the Royal Institution of Chartered Surveyors because it would provide me with increased credibility in the eyes of my clients, help me maintain and further my professional competency, and provide me with access to a network of 140,000 property professionals worldwide
178
**What’s the Role of the RICS, according to the RICS Rules of Conduct (2022)?**
Under its Royal Charter, RICS is required to maintain the usefulness of the profession for the public advantage, and the practice of surveying is defined as including ‘securing the optimal use of land and its associated resources to meet social and economic needs’.
179
What are the 5 benefits of being an RICS member?
1. Status
2. Recognition
3. Market Advantage
4. Knowledge
5. Network
180
What must you include in the Terms of Engagement prior to starting work on an instruction?
There must be a written agreement with the client on:
* The fee due
* How expenses are to be treated, including how they are to be calculated
* A copy of the firm's complaint handling procedure will be available on request.
181
**Where would it be stated the level of Professional Indemnity Cover that you intend to offer your client?**
In the terms of business, that are to be agreed before the instruction is undertaken.
182
**What did the RICS publish on Conflicts of Interest?**
The RICS published a global professional statement: “RICS Professional Statement on Conflicts of Interest (2017)”
183
# Mentioned in summary of experience
**In what circumstances might a conflict of interest _not_ cause you to decline an instruction?**
If you identify a conflict but believe that despite the conflict it is in the _best interests_ of all those involved for you to proceed with the instruction and you have the _informed consent_ of your client, then you may proceed despite the conflict
184
**According to the RICS Global Professional Statement on Conflicts of Interest, 2017, what three types of conflict might arise?**
1. Party Conflict – work on same or related instruction between two parties
2. Own Interest Conflict or Personal Conflict
3. Confidential Information Conflict relating to work between two parties which is confidential
185
**Who enforces the bribery charges?**
Serious Fraud Office
186
**How might a conflict of interest be managed, should you receive written consent and proceed with an instruction?**
If you receive written consent from all parties involved to proceed with the instruction despite the identified conflict, information barriers should be put in place, including keeping all related information securely, ensuring physical separation of the two professionals involved, and keeping an adequate audit trail of the acceptance of written consent.
187
**What does “RICS Professional Statement Conflicts of Interest – UK Commercial Property Market Investment Agency, 2017,” say about dual agency?**
It should not happen under any circumstances for RICS members, as of the 1st January 2018.
188
**What does “RICS Professional Statement Conflicts of Interest – UK Commercial Property Market Investment Agency, 2017” say about incremental advice?**
The statement says that in such instances, advice can only be provided in circumstances where there is written informed consent and information barriers are created internally.
Incremental advice example: agent acting for the seller in relation to a disposal is approached by the buyer, or its lender, to provide a valuation.
189
**How long should you retain a client’s files prior to securely destroying them?**
6 years
190
# Mentioned in submission
**How many Hours of CPD must an RICS member do each year?**
20 hours, 10 of which must be formal
191
**Are there any Rules Concerning CPD and Professional Ethical Standards?**
Yes, every member of the RICS must undertake 20 hours of CPD each calendar year, with at least 10 hours of that being formal CPD.
Additionally, members are required to undertake CPD related to the Global Professional and Ethical Standards every three years.
192
# Mentioned in submission
What RICS Professional Statement recently got Produced on the topic of Money Laundering? And from when is it Effective?
RICS Professional Statement – Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019). Effective from 01 September 2019
193
Briefly outline the contents of RICS Professional Statement – Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)
Part 1: Requirements
Part 2: Guidance
Part 3: Supplementary guidance (enhanced/simplified due diligence), PEPs
Appendices: Template due diligence, draft compliance checks, AML checklist
194
# Mentioned in submission
What is the penalty for bribery?
Up to 10 years in prison.
195
**What legislation allows authorities to recover the proceeds of crime in the UK?**
The Proceeds of Crime Act (2002)
196
**What are the penalties for assisting with Money Laundering under Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) 2017?**
If you are found to be assisting in the laundering of money you can face up to 14 years in prison and an unlimited fine. If you fail to report money laundering, and or tip someone off that they are under investigation for money laundering you can also face up to 5 years in prison and an unlimited fine.
197
**What report would a firm’s money laundering reporting officer produce should they suspect suspicious activity and where would they send it?**
They would produce a Suspicious Activity Report (SAS) and would send it to the National Crime Agency.
198
**What position/role must each firm have in place under Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) 2017?**
Money Laundering Reporting Officer
199
What is a PEP, and what are you required to carry out when working with one?
A politically exposed person. You are required to undertake further checks or “Enhanced Due Diligence” EDD when working with one. They present a higher risk of being involved in bribery or corruption due to the nature of their position.
200
What piece of UK legislation covers money laundering in relation to estate agency work and ‘relevant financial business work’?
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
201
# Mentioned in submission PTRDCM
What are the 6 Key Principles of the Bribery Act (2010)
1) Proportionality
2) Top Level Commitment
3) Risk Assessment
4) Due Diligence
5) Communication
6) Monitoring
202
# Mentioned in submission
**What are the Four Offences Under the Bribery Act (2010)?**
The four offences are: Bribing, receiving a Bribe, Bribing a foreign public official, and failing to prevent bribery.
203
**What are the Gender Pay Gap Reporting Regulations?**
Firms with over 250 employees are required to complete an annual report to ACAS and the Government Equalities Office, stating the difference in pay between their male and female employees.
204
**What are the requirements for a client account?**
* Must have client money in the name
* Funds must be readily available for the client upon request
* All interest to be paid to the client
* Only client monies are held unless receipt of mixed monies, in which case office monies are to be released promptly
* If the client wants access to the account too, then the account is set up by the client, not the RICS firm
205
What is the RICS documentation on handling client money?
RICS Professional Statement on Client Money Handling 2019
206
**What happens if you have surplus client money in a Client Account?**
If after at least 6 years no claimant has come forward for the money and every effort has been made to identify that person then it can be donated to a registered charity.
The RICS has a registered charity, **LionHeart**, to which you can donate to. Ideally, the charity will provide an indemnity, so that if a claimant comes forward at a later date then they can be paid.
207
**What’s the difference between a claim in contract and a claim in negligence?**
A contractual claim can only be brought by a party to the contract (i.e the client). A claim of negligence can be brought by a third party, to whom the surveyor owed a duty of care.
The Limitations Act 1980 limits claims in contract to six years from the omission, error, breach of contract, and limits claims in negligence to 15 years from the negligent act.
208
**What does the RICS say about Pro-Bono Work for Charities or Friends?**
You are still required to draw up terms of business, and you still need Professional Indemnity Insurance, which would be stated therein.
209
What is the RICS Requirement for Run-Off Cover once a firm closes?
The RICS requires that for consumer cover, a firm maintains at least £1,000,000 of cover for 6 years. For commercial firms, the firm should decide what level of cover is appropriate for 6 years after. The RICS recommends that you have cover in place for longer, as you are liable for negligent acts for up to 15 years under section 14A of the Limitations Act (1980).
210
**What else does the RICS say about Professional Indemnity Insurance, other than the level of cover required?**
The RICS states that a chartered surveying practice must:
1. Seek cover from an RICS approved insurer.
2. Have a Retroactive Policy.
Provide details of their cover as part of a regulated firm’s annual return to the RICS
211
**How might you avoid claims of negligence made against you?**
Follow RICS guidance during practice, make sure you have a clear understanding of you clients requirements and clearly state and outline these in your scope of works and terms of engagement, and ensuring that I am competent to undertake the instruction prior to proceeding.
212
**Where would it be stated the level of Professional Indemnity Cover that you intend to offer your client?**
In the terms of business, that are to be agreed before the instruction is undertaken.
213
**What is the new RICS Professional Statement on Clients Money called and what does it do?**
The statement is called “Client Money Handling”, published October 2019. Effective from January 2020. It provides advice for the RICS members in relation to the holding of client monies.
214
What are the Three Objectives of Client Money Handling (2019)?
1. Keep Client’s Money Safe
2. Client accounts are used appropriately
3. RICS – regulated firms have appropriate procedures in place to ensure best practice
215
**What are the 8 Mandatory Requirements of Client Money Handling (2019)?**
RICS Regulated firms must provide the following to clients in writing:
* Confirm that client’s money is to be held in a client account (including bank account details), which the firm has exclusive control over.
* “client” in the name of the bank account
* Not to hold office money in the account, unless it is in receipt of mixed monies
* Only withdraw out of high interest (penalty-bearing account) with written consent from the client.
* client's money account contains no other funds, and funds withdrawn in error are replaced.
* money held in a client account is immediately available even at the sacrifice of interest.
* Confirm account operating conditions with bank (No set-off for other firm accounts, no mixing of funds)
* Ensure that when a client requests it, money is held in an account that the firm and client have access to. (Has to be an account established by the client, not the firm).
216
What would you consider if you were invited to a sporting event?
I would consider the value of the gift, the situation in which I was being entertained (not alone) and the scope of ongoing and future works with that client. I would consider whether it was appropriate for me to attend and whether it would impact on my integrity as a practitioner. I would ensure that any gift accepted would not be during a current instruction and any fees payable would already made.
217
If you had valued the site next door would you be conflicted?
No, not necessarily. You would in fact be well placed to inform on the value of that property.
218
**What should you include in the Terms of Business?**
You must include in the Terms of Business, the fee involved, the scope of work to be carried out, the time in which the instruction is to be completed, the level of professional indemnity cover, and details on the company’s complaints handling procedure.
219
When starting a new practice what would you do in regard to VAT?
You must inform HMRC for VAT and Tax registration – current threshold is £90,000 p.a. in turnover.
220
# Mentioned in submission
**What are the key elements of the RICS Professional Statement on Countering Bribery and Corruption, Money Laundering and Terrorist Financing, 2019?**
NHRPR
Mandatory requirements are:
- Not to offer or accept anything that could constitute a bribe.
- Having procedures in place to comply with the law.
- Report suspicion to the relevant authority.
- Perform periodic written evaluations of the risks the firm faces.
- Retain records to show the firm has met the requirements of the Professional Statement.
221
What are the 5 exceptions from Red Book Global valuations?
In VPS 1 – Compliance with standards and practice statements where a written valuation is provided.
**E-A-S-I-N**
(1) Expert Witness work.
(2) Agency and Brokerage work.
(3) Statutory work – e.g. for a tax return.
(4) Internal Purposes – no third party reliance.
(5) Negotiations or Litigation
222
**What is the RICS professional statement regarding conflicts of interest?**
RICS Global Professional Statement on Conflicts of Interest, 2017
223
**What are the three types of conflicts of interest?**
(1) ‘Party Conflict’ – relating to work on the same or related instruction.
(2) ‘Own Interest Conflict’ – relating to a personal interest.
(3) ‘Confidential Information Conflict’ – relating to work between two parties which is confidential.
224
# Mentioned in summary of experience
**What is ‘informed consent’?**
Consent to carry on with an instruction that involves a conflict of interest. Can only be given in writing by the party if it is entirely transparent about any material factors. Party must understand what they are doing. Surveyors should only seek informed consent if satisfied that all parties are best served by doing so.
225
**What are the different types of documents the RICS publish?**
1. RICS Rules of Conduct for Members and Rules
of Conduct for Firms
2. International Standard
3. RICS Professional Statement
4. RICS Guidance Note
5. RICS Code of Practice
6. RICS Jurisdiction Guide
226
What are the 3 benefits to being a regulated firm?
Confidence - clients and firm are monitored by RICS Regulation
Professionalism - firms are obligated to provide clear, impartial, expert advice
Security - firms have to have a complaints procedure, access to free independent redress and PII cover
227
What 7 bits of information are needed in an RICS annual return?
1. **T**ype of business and staffing details
2. **N**ame of the Responsible Principal
3. **S**tatutory regulated activities e.g. financial services
4. **N**ature of clients
5. **C**omplaints handling procedure details and records
6.**P**rofessional indemnity insurance details
7.**W**hether the firm holds client money
228
What are the THREE professional obligations of RICS members
1. Comply with CPD requirements (20 hours inc. 10 hours formal)
2. Cooperate with RICS
3. Promptly provide information reasonably requested by Standards and Regulations Board
229
What are the SEVEN professional obligations of RICS firms?
1. Publish a CHP
2. PII Cover
3. Have adequate cover for a sole principal
4. Cooperate with RICS
5. Promptly cooperate with Standards and Regulations Board
6. Display 'regulated by RICS' on all literature
7. Report to RICS under the Rules for the Registration of Firms
230
What are the SIX ethical principles on which the Rules of Conduct are based?
Honesty
Integrity
Competence
Service
Respect
Responsibility
231
What is the Ethics Decision Tree?
It is a decision making tool to help members make reasoned ethical decisions.
Decisions need to be based on the facts, legal and in line with Rules of Conduct
232
What are the disciplinary procedures available to the RICS?
Head of Regulation to formally review which can lead to:
i. Fixed penalty (low level breaches)
ii. Regulatory compliance order (low level breaches)
iii. Refer to Regulatory Tribunal for consideration (potentially serious breach)
iv. Refer directly to Disciplinary Panel (serious breaches)
Firms and members have the right to an appeal hearing if they disagree with action above.
233
What disciplinary outcomes are you aware of?
In Jan 2024, a member was charged with failing to record 20 hours of CPD.
This contravened Bye Law 5 (Conduct) and Rule of Conduct 2 (Competency) which resulted in expulsion from RICS.
234
Tell me about Use of social media (2021) guidance note.
RICS will investigate social media posts that contravene Rules of Conduct e.g. discrimination, dishonesty, harassment
But unlikely to investigate matter of opinion that doesn't contravene Rules of Conduct. e.g. critical of a firm's performance.
235
What THREE things must you consider before you accept an instruction
1. Check that you are competent to do the work required
2. Check there are no conflicts of interest
3. Agree terms of engagement in writing before starting work
236
Can you outline what you include in your terms of engagement?
The Client name
The Property name
The purpose of the valuation
Date of valuation
Bases of valuation
Tenure
Conflicts
Relevant PII cover
How expenses are treated
Fee value
Information on CHP
237
Can you outline how you calculate fees
Size and complexity of the job dictates fee level.
Market Appraisal fixed fee which gets taken from percentage of sale price.
238
What document covers conflicts of interest?
Global Professional Statement Conflicts of Interest 2018
239
What is the difference between conflict avoidance and conflict management
Conflict Avoidance: not accepting an instruction
Conflict Management: identifying conflict and putting steps in place to manage it e.g. information barrier
240
What are the THREE types of conflict?
Party Conflict
Own Interest Conflict
Confidential Information Conflict
241
Can you talk about THREE RICS bye-laws?
I know there are 10. Examples include:
2. Membership and registration - to be eligible as a chartered member, a non chartered member must demonstrate appropriate professional competence
4. Contribution to funds - a person is liable to payment of their fees whilst in membership
5. Conduct - all members shall comply with the rules and regulations laid out by the RICS
242
What is a complaint?
An expression of dissatisfaction
243
# Mentioned in summary of experience
How would you handle a complaint?
Send a copy of the CHP to the complainant advising that
1. Complaint will be acknowledged by the Compliance Officer within 7 days and responded to within 28 days. Notify PII insurers of the complaint
2. If not resolved at this stage, it can be escalated to our Global Managing Director for further review
3. If this is still not satisfactory, referral to our third party ADR
244
# Mentioned in summary of experience
What is a duty of care?
A moral or legal obligation to someone
245
What are the maximum levels of uninsured PII excess?
Up to £10m turnover: the greater of 2.5% of sum insured or £10k
Over £10 turnover: no limit
246
What is negligence?
When a surveyor fails in their duty of care which results in a loss to a client or third party
247
How do you avoid negligence?
- Ensure you are competent
- Act in accordance with RICS standards and guidance notes
- keep detailed records
- confirm client objectives in terms of engagement
248
What are the SIX areas of good practice set out in RICS Client Money Handling (2019)?
1. Holding client money
2. Providing information to clients
3. Receipts of client money
4. Payments from client accounts
5. Accounting records and controls
6. Clients
249
If you are successful in the APC and decide to set up your own business, identify the matters that must be addressed
- Must create a business plan
- If limited company then register with companies house
- Get PI cover
- Open a business bank account and a client account
- Lay out a complaints handling procedure
- Register with RICS
- Devise a CPD plan
- Set up a system to counteract bribery and corruption
250
If you want to retire from running your own business, what must you do?
- inform RICS
- inform clients and hand over to a new firm
- return any monies held back to clients
- inform insurers and arrange run off over for 6 years
- keep a copy of files for at least 6 years
251
What is your company policy on accepting gifts, entertainment and hospitality?
Gifts up to £100 and Entertainment/Hospitality up to £250 are OK to accept.
Anything above this must be recorded on the gift register.
Gifts exceeding £200 and Entertainment/Hospitality exceeding £500 need prior authorisation before they can be accepted
Any gift above £500 must be auctioned off for charity
