Ethics, Rules of Conduct and Professionalism Flashcards
(124 cards)
1
Q
When was the RICS founded?
A
1868
2
Q
what is the meaning of the RICS moto
A
moto is “Est Modus in Rebus” - the measure in all things
3
Q
what are the 4 levels of membership
A
- FRICS
- MRICS
- AssocRICS
- Trainee/student
4
Q
How can you become a Fellow
A
provide the Fellowship assessor:
- evidence of achievement of 4 Fellowship characteristics, which include 5 or more years at MRICS, a leadership role, professional/technical achievement, academic achievement or raising the profile of RICS
- a portfolio of professional achievement to support CPD record
5
Q
How is the RICS structured
A
- currently governed by the Royal Charter being granted by the Privy Council n 1881.
- Governing council (20 members) runs the RICS
- The Standards and Regulation Board and Management Board report to governing council
- there 17 specialist professional groups each with a board outlining standards of competence and practice
6
Q
Who is the current Chief Executive Officer
A
Justin Young
7
Q
Who is the current President and when did they become effective
A
Tina Paillet FRICS - 1st January 2024
8
Q
What does RICS stand for
A
Royal Institution of Chartered Surveyors
9
Q
What are the 3 main roles of the RICS
A
M 1. to maintain the highest standards of education and training
P 2. to protect consumers through strict regulation of professional standards
S 3. To be the leading source of information and independent advice on land, property, construction and associated environmental issues.
10
Q
What was the Bichard Review
A
- due to governance failings, the RICS commissioned Lord Bichard to undertake a review.
- recruited a new Management Board and Standards and Regulations Board
-want to deliver a member-led public interest focused RICS
11
Q
What are the 5 future foundations published in November 2023 after the Bichard Review
A
- Vision - a natural and built environment that us sustainable, resilient and inclusive for all
- Mission - inspire members, advance knowledge and uphold standards
- Strategic Goals -
Lead and influence on sustainability
Attract a diverse next generation
Strengthen trust in the profession
Enhance member value and engagement - Values - professional, collaborative, inclusive, ambitious
- World Class organisation - an efficient, effective and inspiring professional body that is easy to do business with.
12
Q
what are the 5 benefits of being an RICS member?
A
- status - client confidence
- recognition - professional excellence to gov. and market
- Market advantage - status and standards gives competitive advantage
- knowledge - international practiced standards
- network - professionals worldwide
13
Q
What is the RICS publication that talks about regulation of firms
A
‘Rules for regulation of firms’ 2022
14
Q
When should a firm register to be regulated
A
Firms providing surveying services
if 50% of the firms Principals are RICS members then it has to be regulated
if at least 25% are then it CAN apply to be regulated
15
Q
What is a principal in a firm
A
sole practitioners, partners, board members or directors (or anyone with equivalent status or someone who is able to act without supervision)
16
Q
what is the benefit of being a regulated firm
A
it ensures that there is a recognised quality benchmark for all firms
Therefore it provides a good standard of quality control for clients
17
Q
What information is needed by the RICS for Registration
A
1.Type of business and staffing details
2. Name of Responsible Principal
3. Statutory regulated activities - such as for financial services
4. Nature of clients
5. Complaints handling procedure and records
6. Professional indemnity
7. Whether the firm holds clients’ money
18
Q
What is the difference between RICS ethics and rules
A
ethics are a set of moral values
rules of conduct are a framework we work to
19
Q
When did Rules of Conduct 2021 get published and when did they get changed
A
published october 2021
changed in February 2022
20
Q
What were the changes to the Rules of Conduct
A
a single set of 5 rules of conduct now apply to both members and firms on a global basis
Replaced previous documents:
Rules of Conduct for Members
Rules of Conduct for Firms
Global Professional and Ethical Standards
21
Q
What are the 5 Rules of Conduct
A
Members and firms must:
H 1. Act with honesty and integrity and comply with their professional obligations, including obligations to the RICS.
C 2. Maintain their professional competence and ensure services are provided by competent individuals who have necessary expertise
Q 3. provide a good quality and diligent service
R 4. treat others with respect and encourage diversity and inclusion
R 5. act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
22
Q
What is the Appendix A of the Rules of Conduct
A
sets out “professional obligations” which are to be followed by members and by regulated firms
23
Q
what must RICS members do under Appendix A of Rules of Conduct
A
- Comply with the CPD requirements
- Co-oprate with RICS
- Promptly provide all information reasonably required by the Standards and Regulation Board or those exercising delegated authority on its behalf
24
Q
what must RICS-regulated firms do under Appendix A of Rules of Conduct
A
- Publish complaints handling procedure
- have adequate professional indemnity cover
- Make alternative arrangements for professional work to continue if there is just a sole practitioner
- cooperate with the RICS
- provide all information reasonably required by the Standards and Regulations Board
- display on their business literature a designation to denote that they are regulated by the RICS
- report to the RICS any matter that they are required to report under the Rules for the Registration of Firms
25
What is the RICS Ethics Decision Tree
a framework of questions which members should ask themselves when asked to act in a potentially unethical manner or situation
- it encourages considering the legality of ones actions and their consistency with the Rules of Conduct
26
Run through the questions asked with the Ethical Decision Tree
1. do you have sufficient facts on the issue?
2. is it legal? -------- unsure ------- can you get more information or seek advice?
3. is it in line with the RICS Rules of Conduct?
4. Have you consulted with appropriate people to make an informed decision? ----- have you assessed the risks involved? have you considered what the options are?
5. do you have a clear reasoning in reaching you decision? ---- is your decision informed? ---- yes would you be content for your actions to be made public - in the newspapers or on the internet? ---- decide what action your are going to take ----- act and the reflect on the outcome - record the decision and reasoning for it
DO NOT PROCEED IF ANY OF THE ANSWERS ARE NO
27
Why does the RICS have Rules of Conduct
to provide a framework that we can all work to so the client knows they are getting a level of service
also a useful professional guide for individual institution members
28
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 would 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 he is committed to put in place
29
Where is the disciplinary process set out
RICS Regulatory Tribunal Rules, 2022
30
In the case of a breach of a rule of conduct what are the 3 levels of disciplinary action
1. Action by the Head of Regulation
2. Disciplinary Panel (drawn from the independent Regulatory Tribunal)
3. Appeal Panel
31
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.
32
What are the 4 actions upon completion of the initial investigation by the Head of Regulation RICS
1. Serve a Fixed Penalty Notice
2. make a Regulatory Compliance Order
3. refer the matter to a single member of the Regulatory Tribunal for consideration
4. refer the matter directly to a Disciplinary Panel
33
What are fixed penalties and when are they used
- fine or caution by the RICS
- used for breaches in supply of information to the RICS by members or firms
34
What are Regulatory Compliance orders and when are they used
- A written document stating the terms concerning a disciplinary issue - either agreement to pay a fine or require actions they must/must not take for a specified period of time
- used for low level breaches of the Rules eg failure to undertake appropriate CPD
34
What is the Disciplinary Panel and when is it used?
- Included lay members (not in the RICS)
- procedure used for more serious breaches of conduct
The Head of Regulation can consider that a hearing is required under the discipline rules
35
What are the penalties available to Regulatory Tribunal Disciplinary Panel
1. Issue Regulatory Compliance order
2. reprimand
3. fine
4. impose an unlimited amount of fine per breach but it must be proportionate to the offence
5. impose conditions upon future continued RICS registration
6. Expulsion from membership or remove firm
7. require publication of the results of the hearing in the RICS Modus magazine, on the RICS website and in local newspaper where a member or firm is based
36
What is the appeal panel and what can it impose?
- Lay members can consider a member or firms appeal against review of a decision
- they will have regard to evidence previously presented and any new representations
- can vary the penalty previously imposed
37
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.
38
Are you aware of any guidance that applies to RICS Members when
using Social Media and what does it document?
- Use of Social Media: Guidance for RICS Members, 2021
- the importance of social media networks and the high standards of professional behaviour expected of RICS members and that the RICS Rules of Conduct protect the interests of the members and the profession as a whole
39
When would the RICS investigate a Social Media post made by one of
its members?
if they involve:
- discrimination
- dishonesty
- abusive or threatening behaviour
- bullying, harassments or victimisation
- a pattern of frequent or large number of communications
- ignoring previous advice or warnings about concerns
40
How do you ensure you operate inline with RICS guidance on the use
of Social Media?
- always use social media in a responsible and professional manner in the same way i communicate via face to face or other forms of written communication
- use professional and respectful language
- never make a post that is dishonest
- realise that this could potentially undermine confidence and trust in the profession
41
what have professional standards replaced ?
Professional standards/the core material are replacing professional statements and guidance notes
42
what are RICS Professional Standards
- these are 'set requirements or expectations for the RICS members and regulated firms about how they provide services or the outcomes of their actions'
- they may include mandatory requirements, which use the word must and these must be complied with; and or recommended best practice which uses the word 'shoulld'
43
what are RICS practice information
- information to support practice, knowledge and performance of the RICS members and regulated firms
- include but not limited to good practice, information insights and processes
- they do not contain advise
44
What are RICS Practice alerts
- in August 2023 the RICS published a new web page to collect Practice alerts which are 'key tools for warning or alerting the profession to emerging areas of risk over which the RICS has concerns'
- eg in 2023 new legislative requirements for fire risk and management plans
45
What are the main elements included within a fee proposal
terms and conditions
scope of services
exclusions
assumptions
46
If you put together a fee proposal, but a couple of months into the job
you realise that you have under forecasted your resources, would you
go back to the client and ask for more money?
* If project requirements such as the services, scope or value of the project has increased then I would go back to client and request a fee increase.
* If the scope of works had remained the same, this highlights a mistake within our fee bid and the additional work would need to be carried out without reducing the level of service being offered and without requesting additional fees from the client.
47
Once you and your client agreed the services that are to be provided
verbally what would you do next?
* Follow up with a formal letter which includes the terms and conditions, fees and scope of services that are to be provided.
48
If the client gives you a lump sum fee before going on holiday, what
would you do?
* I would place the funds in a separately identified client account and agree a drawdown of monies
against the services being provided with the client.
49
If after you have proposed a fee to a client, and they say it is higher than another firm can you just lower the fee?
- fees should be market based and health competition is encouraged but aggressive fee cutting is not allowed
- you can enter into negotiations with the client after you have submitted an initial fee proposal but you must act in a professional manner
- you can negotiate the level of service and you can't undercut another firm
50
What would you put in terms of engagement
- proposed fee basis
- scope of works / description of assignment
- identity of the client
- identity of person carrying out the works
- conflict checks
- any limitations
- assumptions
- complaints handling procedure
51
what are the 3 steps to follow before accepting an instruction
1. check professional competence (sufficient current specialist knowledge and technical skill and do you have the right qualifications for the job)
2. no conflicts of interest or personal interests
3. confirm terms of engagement in writing and get written approval before you start the instruction
52
What extra things are required in terms of engagement for agency work
- Compliance with S. 18 of the Estate Agency Act 1979 - requires the agent to give the client written particulars of the circumstances in which the client would be liable to pay the agent for his work, before any contract was entered into
- money laundering checks (Money Laundering 2017)
53
When would it be appropriate to decline an instruction
1. you are not competent
2. you don't have sufficient facts on the issue
3. proposed client won't sign the terms of engagement and or complete AML checks
4. there is a conflict of interest
5. PI liability cap cannot be agreed
6. it is for a friend or pro bono and your PI doesn't cover this
7. potential client it included in the UK government sanctions list
8. it wouldn't be something you would want in newspapers or internet
54
when does a conflict of interest arise
it arises when a member or firm's independence or impartiality is threatened due to competing personal or professional interests
55
what is the difference between conflict avoidance and conflict management
avoidance = declining an instruction
management = accepting the instruction and steps are agreed and put in place to manage the conflict eg information/ethical barrier with written agreement from both parties
56
What is the RICS professional standard for conflicts and what does it say?
RICS Professional Standard: Conflicts of Interest, 2017
- came into effect 2018
- '' a member must not advise or represent a client where doing so would involve a conflict of interest, other than where all those who are or may be affected have be affected have provided their informed consent'
- RICS firm must have in place effective systems and controls to ensure full compliance
- all firms must keep records to show their compliance with the Standard
57
what are the 3 conflicts of interest
1. A party conflict - work on the same or related instruction for two different parties
2. own interest conflict - person interest (financial interests ie commission based work, prospect of referrals or future work, personal relationships etc)
3. confidential information conflict - work between two parties that is confidential
58
when should you seek informed consent
There is a conflict of interest but only if you are satisfied that all relevant parties are best served by doing so
59
when asking for informed consent what must you make sure you do
-be entirely transparent about any material factors
-make sure you know that the party affected understands what they are doing, including the risks involved and any alternative options available, and is doing it willingly
-you don't have to proceed - make sure you have professional judgement
60
what are the steps to handle a conflict of interest?
1. Conflict avoidance - consider whether your impartiality is compromised and should be avoided or whether it can be managed
2. written notice to both parties - if you wish to accept the instruction set out in writing as soon as possible.
- disclose the nature of the conflict and relevant facts and set out proposals of how it will be managed ie information / ethical barrier
- be clear and ensure both parties can make their own decision
- request written confirmation from both clients on informed consent
3. conflict management - set up information barrier in accordance with the provisions agreed with the client
61
What is an information barrier
information/ethical barriers are used when two parties agree that you can manage a conflict.
- must be robust enough for no information to pass between
- must take 'reasonable' steps to operate an effective barrier
- the two surveyors must be different acting in each side and must be physically separated
- virtual IT barrier
- information secured safely
- keep clear audit trail of the conflict check and all communications
62
what is the professional statement that relates to only UK commercial investment Agency work for conflicts?
RICS Professional Statement: Conflicts if interest - UK commercial property market investment agency 2017
63
what is dual agency and can it be carried out?
where an agent has a contractual agency relationship with both the seller and the buyer at the same time
no - cannot be undertaken under any circumstances from 1st Jan 2018
64
what does the RICS Professional Statement: Conflicts if interest - UK commercial property market investment agency 2017 say about multiple introductions
multiple instructions - where an agent has a competing contractual relationships simultaneously with several buyers for commercial real estate investment opportunities
an agent can make multiple instructions
when an agent a client appoints an agent for acquisition purposes terms of engagement must be agreed in writing and the agent must make it clear whether it is on an exclusive or non-exclusive basis
exclusive - all other prospective buyers must be informed that the agent can longer act for them
non-exclusive - agent must get informed consent from the clients
65
What is incremental advice
where an agent is approached by a another part to provide advice to include vals, building surveying or planning relating to a purchase or disposal that is an existing instruction.
eg agent acting for the seller but is approached by the buyer or its lender to provide a valuation
can only give this advice if consent is give and information barrier is out in place before providing any incremental advice to the prospective buyer
66
can you act under the RICS Professional Statement: Conflicts if interest - UK commercial property market investment agency 2017 if there is a personal/own interest conflict
- must not let a personal interest interfere with or influence your professional judgement - full transparency required
- declare the facts in writing before accepting the instruction
- remember Section 21 of the Estate Agents Act 1979
67
How long should files be held for
minimum of 6 years before disposal and destroyed securely
68
what must a complaints handling procedure include
2 stages minimum
1. In house
- details of the CHP should be issued whenever a firm receives a complaint from someone they owe duty of care
- the procedure must be quick, clear, transparent and impartiality implemented
- details of the nominated person will investigate the complaint ( The Complainants Heading Officer) must be stated as the person to be contacted in the first instance
- the complaint must be made in writing
- procedures and strict timescales for the investigation should be recorded
a complaint should be acknowledged within 7 days and investigated within 28 days
2. ADR - third party
- if complainant is not happy with the review you can use an independent redress mechanism that the firm has chosen to use
- the system used must be provided to the complainant such as The Centre for effective dispute resolution (CEDR), The Property Redress Scheme, and the RICS Dispute Resolution Service
69
what happens if a member fails to respond to a complaint
the RICS will get involved
70
if you are a sole practitioner who is your Complaints Handling Officer
RICS suggests them to nominate a surveyor from another firm
71
What do you do if you receive a letter of complaint
- acknowledge the receipt and forward it to my firms complaint handler as per our complaint handling procedure
- i would also highlight the importance of informing out Professional Indemnity insurance providers immediately
72
what are the CPD requirements
- minimum 20 hours per year
- at least half is formal
- all members must maintain a relevant and current understanding of RICS Rules of Conduct during a rolling 3 year period
- all members must record their CPD activity using the CPD Management System by the 31st January each year
73
what is the difference between formal and informal CPD
Formal = structured learning that has clear learning objectives and outcomes eg online training, professional courses / seminars
informal = self managed learning that is relevant to your professional role eg private study, on job training and informal seminars and events
74
How do you keep up to date with topical issues
I am on the mailing list for several CPD providers
I exchange industry articles and relevant information with colleagues
I follow updated on the RICS website
75
when a claim for negligence be made?
duty of care exists to clients and third parties using 'reasonable care and skill'. When breached and there is a loss, a claim for damages arises
76
what are the limitation periods for negligence? and where are these found
Limitation Act 1980
- contract - 6 years from the date of the negligent act, breach of contract or omission. Also, section 14A provides an alternative limitation period of 3 years from the date of knowledge of the damage
- tort - 6 years from the date the claimant suffered loss
77
How can you avoid or reduce negligence claims
- clearly understand the clients objectives and confirm precise instructions
- ensure you are competent
- undertake work in accordance with the relevant RICS advice
- make detailed file notes + take photographs
- keep up to date with market knowledge and legislation and record CPD
- cap the professional liability excess on your PI policy in the terms of engagement
78
What is the purpose of Professional Indemnity Insurance
to provide financial cover in the event a client suffers from financial loss as a result of a breach of duty of care - found in the Professional Indemnity Insurance requirements April 2022
79
What are the requirements regarding PII insurance set by the RICS
- policy must be made on each and every claim basis
- sets out minimum levels of indemnity
- maximum levels of uninsured excess
- run off cover must be in place for 6 years
- policy should include cover for past and present employees
-PII certificate to be sent to the RICS on an annual basis
80
what is the minimum levels of indemnity and maximum levels of excess
Turnover of the firm minimum level
£100,000 or less £250,000
£100,001-200,000 £500,000
£200,001 and more £1,000,000
Turnover of the firm maximum uninsured excess
up to £10 million the greater of 2.5% of the sum insured or £10,000
over 10 million no set limit
81
if you cant arrange run off cover what can you do?
RICS Arranged Risk Pool is available at a cost for members who cannot arrange cover
82
What does the RICS Practice information - Risk, Liability and Insurance 2021 advise
- recommends the use of liability caps to manage risks associated with professional work
- be aware of third party reliance and make it clear that advice can only be relied upon by the client named in their terms of engagement
83
if an estimate prepared by QS is incorrect can the client claim damages
- an estimate that is incorrect in itself will not provide the client with a right of redress
- the client must demonstrate that QS warranted the accuracy of the estimate or that it was incorrect due to a lack of reasonable skill and care
- it could have been incorrect due to reasons outside their control eg market conditions
84
What are the 6 main areas of good practice as set out in the RICS Professional Standard: 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. compliance
85
What are some of the procedures when handling clients money
- client accounts must be kept separately & clearly identifiable
- the word client is to be on the bank account & cheque book
- a client must be able to have their monies on demand
- payment of interest is agreed with a client and accounts must be kept in credit
- regular bank reconciliation checking that payments received are transferred to the bank account and expenditure records are checked at least monthly
- Accurate records are kept with running balance available
- annual audit and reporting obligations by certified accountant
- records to show any cash transactions
- signatories must be agreed with authorized staff and two signatures should e required
- a discrete account is for single named client account only
-RICS Regulatory Review Visits of inspection can be undertaken by RICS usually on 3 yearly basis
- a firms handling client money needs to display their procedures document on their website
86
What procedures must you follow if you are starting up a new practice
1. inform RICS of the new practice by completing a Firm Details form
2. Appoint a Responsible Principal
3. register for regulation
4. arrange PII and send details to RICS
5. set up procedures for the requirements for client money handling, including a protection scheme
6. register for the RICS Valuer Registration Scheme (VRS) if undertaking Red Book Valuations
7. Obtain RICS approval for the complaints handling procedure
8. set up a complaints log
9. appoint Complaints Handling Officer
10. Use logo kit from RICS for all practice material to comply with designation 'Regulated by RICS'
11. plan for succession running of the business if sole practitioner
12. ensure CPD logged online
13. Ensure completion of an online RICS Annual Return at the end of each year
87
What statutory compliance do you need when setting up a new practice
1. requirement to disclose the business name
2. disability discrimination compliance (Equality Act 2010)
3. financial services compliance (Financial Services an Markets Act 2000, Financial Services 2012)
4. Bribery Act 2010
5. Appoint money laundering reporting officer (Money Laundering Regulations 2017)
6. Health and Safety compliance (Health and Safety Act 1974)
7. Asbestos register (Control of Asbestos Regulations 2012)
8. Fire safety compliance (Fire Safety Act 2021)
9. register for data protection (GDPA and Data protection Act 2018)
10. Estate agency compliance (Estate Agency Act 1979, Consumer Protection Regulations 2008, Misrepresentation Act 1967)
11. Inform HMRC for VAT and Tax registration (VAT registration threshold is currently £90,000 p.a turnover
12. compliance with current employment law eg national living wage, working hours etc
13. insurance compliance for employer and public liability
88
what insurances would you need if you were starting up your own firm?
- PII
- employers liability
- public liability
- building insurance of an office premises
89
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 for Firms
90
what procedures must you follow when closing a practice
1. inform the RICS of your retirement/closure and deregister
2. ensure clients are informed and handover arrangements to a new firm are made
3. return any client monies
4. inform insurers and procure professional indemnity insurance run off cover for a minim of 6 years from the expiry of the policy
5. retain a copy of the client files and records for a minimum of 6 years
91
what is the act relating to bribery and gifts and what's its aim and 6 principles
Bribery Act 2010 - to reduce bribery in business in UK and abroad
1. Proportionality
2. Top level commitment
3. risk assessment
4. due diligence
5. communication
6. monitoring and review
92
what are the 4 offences in the Bribery Act 2010
1. bribing
2. receiving a bribe
3. bribing a foreign public official
4. failing to prevent bribery
93
is corporate entertainment classified as bribery
government guidance states that hospitality is not prohibited by the Act
it states that offering a reasonable and proportionate hospitality will not constitute an offence such as tickets to major sporting event and taking a client to a meal as lon as it is accurately recorded in the gift/hospitality register
94
what are the penalties for Bribery
the Briber Act 2010 is policed by the Serious Fraud Office - if breached there is a max penalty of 10 years imprisonment and /or an unlimited fine for firms and individuals
94
what is money laundering
when proceeds of criminal activities are hidden or converted and then realised as legitimate assets
95
what are the key provisions of the regulations set out in the Terrorist Financing and Transfer of Funds Regulations (2017) amended 2023
1. requirement to have a written money laundering and terrorist risk assessment
2. implement systems policies and controls and procedures to address the risks
3. adopt appropriate internal controls
4. provide staff training
5. comply with new customer, enhanced, and simplified due diligence requirements
6. comply with requirements relating to politically exposed persons (PEPs)
7. ensure appropriate record keeping, policies and procedures
8. AML checks to confirm identity of proposed purchaser and check the purchaser's source of funds before contracts exchanged
9. include additional high risk factors when assessing the need for enhanced due diligence and seek additional information and monitoring in certain cases eg where parties are based in high-risk third countries
96
What are the legal obligations for estate agents in relation to money laundering
- lettings agents must register with HMRC if they let individual properties for more than the equivalent of 10000 euros a month
- government guidance 'Estate agency business guidance for money laundering supervision' was updated jun 2021 which also includes requirements for sales agents as well
- individuals and businesses need to be approved and registered by HMRC in order to trade
- CDD checks on vendors, purchasers, landlords and tenants will have to be undertaken on new sales and any letting or reletting
- EDD checks will need to be undertaken if red flags occur (eg high risk countries or non fact to face business relationships)
- firms must have policies to identify transactions which are complex or unusually large, contain unusual patterns of transactions, are without apparent economic or legal purpose
- firms must have groupwide procedures to share relevant information and to train anyone capable of identifying or preventing money laundering or terrorist financing
97
What are the different levels of due diligence checks for money laundering
1. Customer due diligence
- identify the client and verify identity (ie passport)
- identify the beneficial owners of the client
- for a company - its name, company number, and address of registered office
- names of the directors unless the company is listed on a regulated market eg london stock exchange
- information on the purpose and intended nature of the business relationship and proposed funding arrangements as appropriate
2. Enhanced due diligence
- additional procedures required for any business relationships
98
what is EDD and explain the checks
- additional procedures required for any transaction or business relationship in a high risk third country or politically exposed person (PEP)
- a PEP is someone who has been entrusted with a prominent public function
- generally a higher risk for potential involvement in bribery and corruption by virtue of the influence they hold
99
what are the penalties for money laundering
- maximum jail sentence 14 years
- unlimited fine
100
what are the penalties for tipping off money laundering or failing to report suspicion
- maximum 5 years
- unlimited fine
101
what is the typical evidence of constitution requirement for different organisations CDD checks
PLC - London stock exchange
Publicly accountable body - Government ownership / control
Private Limited company - certificate of Incorporation - full name registered number & office, names of directors and names of shareholders with 25% or more
private individual - copy of passport & driving licence, copy of bank statement, credit bill, council tax statement not more than 3 months old
102
what are the red flags for money laundering
- unwillingness to provide identity documents
- changes to parties involved in transactions
- unusual transation features such as unexpected urgency, potential loss making or unusual transaction for a client
- payment of fees, purchase or rental monies in unusual currencies
103
what constitutes an offence under the Proceeds of Crime Act 2002
1. Concealing criminal property
2. Arrangements - if a person enters into or becomes concerned in an arrangement which they suspect facilitates the acquisition, retention or use of criminal property
3. Acquisition use and possession - if a person acquires, uses or has possession of criminal property
104
What is in the RICS Professional standard Countering Bribery, corruption, money laundering, and terrorist financing 2019
divided into 3 parts
- mandatory requirements for anti bribery, corruption, anti money laundering and terrorist financing
- guidance setting out supporting good practice
- supplementary guidance on some of the concepts
105
106
what does the RICS Professional standard Countering Bribery, corruption, money laundering, and terrorist financing 2019 say regulated firms must do in regards to bribery and corruption
* Not offer or accept anything that could constitute a bribe.
* Have procedures in place to meet laws
* Report suspicion
act with due diligence to perform periodic written evaluations of the risk the firm faces
* retain records to show that the firm has met the requirements
107
what does the RICS Professional standard Countering Bribery, corruption, money laundering, and terrorist financing 2019 say regulated firms must do in regards to money laundering and terrorist financing
- not facilitate or be complicit in ML and TF
- have systems to comply with the laws
- report suspicion
- evaluate and review risks
- use 3rd party reliance for checks only where there is a level of confidence for he quality of the information provided by the 3rd party
-take appropriate measures to understand the client and purpose of the instruction
- verify the client
- retain records
108
what is the practical guidance (PART 2) in the RICS Professional standard Countering Bribery, corruption, money laundering, and terrorist financing 2019
- have a written policy in place for the procedures
- publish code of behaviour for staff and provide training
- encourage transparency
- set up a gifts register
- keep up to date with the legislation
109
what is the supplementary guidance (PART 3) in the RICS Professional standard Countering Bribery, corruption, money laundering, and terrorist financing 2019
- establishing a 'risk based approach' - consider the 3 Ws
1. who you act for
2. what you are doing
3. why you are being asked to do something
- dealing with politically exposed persons - higher risk as they hold positions of influence and enhanced due diligence is required
- identify the beneficial ownership of a company, partnership or trust - such as Certificate of Incorporation or Annual return for a company
110
do you stay up to date with the RICS? what have you followed?
- Chartered Surveyors Student Bursary programme
- assists talented students from underrepresented backgrounds in entering the property industry, a key recommendation of the Bichard Review.
- in August 2024 RICS pledged assigning £90,000 to fund bursaries for new entrants into RICS across the UK
- Since its establishment the programme has raised more than £1m, which has funded around 40 students.
111
what is a piece of case law on negligence
Burgess v Lejonvarn
Pro bono services – without contract but still has duty of care in respect of the services they provide
Not under a duty to advise or give warnings, nor are they liable for work they do not do
112
what is a liability cap
contractual agreement that a client can only claim damages up to the amount agreed, even if the law would otherwise award a greater sum in damages
113
can you give me an example of a disciplinary that has happened in RICS
Arthur Liddiment
location - Shropshire
On 30 October 2023 at Telford Magistrates’ Court, Mr Andrew Liddiment was convicted of three counts of sexual assault on a female.
The Regulated Member is therefore liable to disciplinary action under Bye-law 5.2.2(c).
sanction - expulsion
114
what is the Freedom of Information Act 2000
- law that provides public access to information held by public authorities
- individuals can request information / subject to certain exemptions
115
what are the RICS requirements for setting up your own company
- notify RICS
- complaints handling procedure
- complaints log
- complaints handling Officer
- responsible principle
- PII cover
- register for VRS if doing valuations
- log CPD
- complete online Annual Return at end of each year
- use logo kit
- register for regulation
- plan for future running of business if sole practitioner
116
if you were a sole practitioner would you handle your own complaints
no i would appoint another surveyor from another firm
117
how would you handle client money
in line with Client Money Handling 2019
I would ensure that all client money was held in a separate bank account
name client on the bank account
2 signatories
ensure money can be accessed on request
do not
interest is agreed with client and kept in credit
accurate records kept
annual audit and reporting obligations are met
records show all cash transactions
118
if you were collecting rents for multiple clients how would you manage this?
ensure that direct debits were set up to the accounts
have separate accounts for each client
make sure i review and have records showing the rent payments
119
if a client dumped £25k cash on your desk for a rent payment what would you do
This would sign a red flag for money laundering
large cash payments
would flag to my line manager and suggest anti money laundering checks were undertaken - ie report to anti money laundering officer
the limit on acceptance of cash is 10,000 euros
120
if you were a sole practitioner and got asked to go on a ski trio by a client and had no gifts register what would you do?
if i was a sole practitioner i would ensure i had a gifts register
I would decline the ski trip anyways as this is an expensive trip and therefore would not be proportionate to the work i was undertaking
i would look at factors such as timing, value and proportionality in my decision
121
if you set up your own firm how would you estimate your annual turnover
business planning
run a cash flow on projected figures
122
what is the difference between equity and equality
equity recognizes that people have different needs and circumstances, while equality treats everyone the same:
