Ethics Rules of Conduct and Professionalism (Level 2 and Level 3)

Question 1

What is equality?

Answer 1

Equality refers to the state of being treated the same, with fairness and impartiality, regardless of factors like race, gender, age, or disability. It ensures everyone has equal opportunities and access to resources.

Question 2

What is equity?

Answer 2

Equity involves providing fair treatment by considering individual needs and circumstances, ensuring everyone has the resources or opportunities they need to succeed, even if it means different support for different people.

Question 3

What is your company’s gift policy?

Answer 3

No gifts - proportionality - we donate to charity

Question 4

Would you review accounts personally?

Answer 4

No - I would always recommend that these are checked by a qualified accountant.

Question 5

How would you set up a new business with the RICS?

Answer 5

Inform RICS of practice by completing a Firm Details Form

Appoint a Responsible Principal for all RICS communication

Register with RICS for regulation of firm

Arrange Professional Indemnity Insurance and send details to RICS

Set up procedures for client money handling, including protection scheme

Register for the RICS Valuer Registration Scheme (VRS)

Obtain RICS approval for Complaints Handling Procedure

Set up complaints log

Appoint a Complaints Handling Officer (or elect a surveyor in another practice if a sole practitioner)

Use a logo kit from the RICS for all practice material

Plan for succession/future running of the business if a sole practitioner

Ensure CPD logged online on the RICS CPD Management System

Ensure completion of an online RICS Annual Return at the end of each year

Question 6

If a client said they had just won on the horses and wanted to pay money into client account what would you do?

Answer 6

Refuse

RICS Professional Standard : Countering bribery, corruption, money laundering and terrorist financing 2019

Proceeds of Crime Act 2002

Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 - accept up to 10,000 euros in cash. Penalties - max 14 years in prison and/or unlimited fine for assisting with money laundering. max 5 years in prison for tipping off a person

Bribery Act 2010 - Policed by SFO - maximum 10 years imprisonment

limit on 10,000 for acceptance of cash

MLRO must report any suspicious activity to the NCA (National Crime Agency)

Customer Due Diligence, Enhanced Due Diligence

Question 7

Why do you want to be a member of the RICS?

Answer 7

Status

Recognition

Market advantage

Knowledge

Network

Question 8

6 Principles of the Bribery Act 2010

Answer 8

Proportionality

Top Level Commitment

Risk Assessment

Due Diligence

Communication

Monitoring and review

Question 9

6 Principles of the Bribery Act 2010

Answer 9

Proportionality

Top Level Commitment

Risk Assessment

Due Diligence

Communication

Monitoring and review

Question 10

Four types of bribery offences

Answer 10

Bribing

Receiving a bribe

Bribing a foreign official

Failing to prevent a bribery

Question 11

Penalties for bribery?

Who is it policed by?

Answer 11

Policed by the SFO

maximum penalty of 10 years imprisonment / unlimited fine

Question 12

Key legislation on money laundering?

Answer 12

Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017

Question 13

RICS guidance on handling clients money?

And 6 areas of good practice?

Answer 13

RICS Professional Statement Client Money Handling 2019

1 Holding Client Money

2 Providing information to clients

3 Receipts of clients money

4 Payments from clients accounts

5 Accounting records and controls

6 Compliance

Question 14

What is the RICS legislation for COI?

Answer 14

RICS Professional Standard Conflicts of Interest 2017

Question 15

What are the 3 types of conflicts?

Answer 15

Party Conflict

Own Interest Conflict

Confidential Information Conflict

Question 16

What money laundering regulations are you aware of?

Answer 16

RICS Professional Standard: Countering bribery, corruption, money laundering and terrorist financing 2019

Money laundering Regulations (updated 2023) - EDD and PEPs

Question 17

How would you ensure compliance with the RICS PS on Client Money Handling 2019

Answer 17

Client accounts must be separate

The bank account must be named ‘client’

Client must be able to have their money on demand

The RICS also runs a Clients Money Protection Scheme

Question 18

What steps do you need to undertake when setting up your own practice?

Answer 18

Inform the RICS and register for regulations

Professional indemnity insurance

Appoint Complains Handling Officer

Set up appropriate procedures for handling clients money

Compliance with statute - DDA, H&S, Money Laundering Act

Appoint a locum

Question 19

If your client wanted to give you £10,000 euros in cash to hold what would you do?

Answer 19

Recommend that they deposited into an online bank account instead through a clear paper trail. I would be able to accept it but I would recommend this.

Question 20

Why do you want to become a member of the RICS?

Answer 20

The RICS sets the global standard for Real Estate

To be acknowledged professionally

To expand my network

To have access to resources and training (CPD)

Commitment to ethics and standards

Question 21

What must RICS members do?

Answer 21

Comply with CPD requirements

Cooperate with the RICS

Promptly provide all information requested by the standards and regulation board

Question 22

Which Part of the Building Regulations 2010 covers accessibility and access to and use of buildings?

Answer 22

Part M of the Building Regulations covers accessibility and access to and use of buildings.

Question 23

Bichard Review?

Answer 23

2022 - Followed the Levitt Review

Focussed on Governing Structure of the RICS

Focus on diversity and inclusion

Independent review of RICS governance every 5 years

Question 24

How long does a Tenant have to remedy a breach after Section 146 Notice under law of property act 1925 is served?

Answer 24

6 months

Question 25

How would you undertake conflict of interest checks?

Answer 25

Email Alert both parties of conflicts Communication Conflict avoidance vs conflict management Get informed consent

Question 26

How can you manage a conflict?

Answer 26

COI check software Information barrier Parties acting on two sides must be different and they must be physically separated Virtual IT barrier All information should be stored securely Keep a clear audit trail of the conflict check process and all written and oral communication- firms compliance officer must oversee.

Question 27

What is the adequate and appropriate run off cover following cessation of trading?

Answer 27

£1,000,000 of aggregate cover over a period of 6 years

Question 28

6 main areas of good practice as set out in the RICS PS Client Money Handling, 2019?

Answer 28

Holding client money Providing information to clients Receipts of client money Payment from client accounts Accounting records and controls Compliance

Question 29

What would you request from a new client before agreeing terms of engagement? What is the legislation/guidance from Government and RICS

Answer 29

Terrorist financing and transfer of funds (information on the payer) regulations, 2017 RICS Professional Standard: Countering bribery and corruption, money laundering and terrorist financing 2019 CDD checks - identify client and verify their identity (passport, drivers licence), person with significant control, names of directors EDD checks - high risk 3rd country, politically exposed person (PEP)

Question 30

What are some of the other requirements under money laundering regs

Answer 30

Limit of 10,000 euros for the acceptance of cash Detailed record keeping Monitor the business relationship Must be a compliance officer Must be a Money Laundering Reporting Officer who reports any suspicious activity to the NCA - National Crime Agency A firm maintains records for a minimum of 5 years and reports to Companies House any discrepencies between the information the firm holds and that held in the Companies House Register.

Question 31

What are RICS byelaws?

Answer 31

The rules that govern how the Royal Institution of Chartered Surveyors (RICS) and its members must operate. They set out the legal framework for membership, regulation, conduct, and disciplinary procedures.

Question 32

What is the information required by the RICS for Registration?

Answer 32

1. Type of business and staffing details 2. Name of the responsible principle 3. Statutory related activities - such as for financial services 4. Nature of clients 5. Complaints handling procedure 6. Professional indemnity insurance details 7. Whether the firm holds client's money

Question 33

What is modern slavery?

Answer 33

Modern slavery is the exploitation of people through force or coercion, and RICS members can face disciplinary action if they are involved or fail to address related risks in their work.

Question 34

What is the limitation Act 1980?

Answer 34

The current limitation periods for negligence are: Contract - 6 years from the date of the negligent act Tort - 6 years from the date the claimant suffered loss.

Question 35

How long should data be stored for?

Answer 35

It would depend what type of data it was. As a rule of thumb, employment and financial data should be stored for a minimum of 6 years Personal data should only be stored for as long as necessary.

Question 36

What are the fines for Money Laundering?

Answer 36

Maximum 14 years prison sentence and/or unlimited fine for assisting with money laundering. Maximum 5 year prison sentence and/or unlimited fine for tipping off a person

Question 37

What are the fines for Bribing somebody? Who is it policed by?

Answer 37

Maximum penalty of 10 years imprisonment or an unlimited fine Policed by the Serious Fraud Office

Question 38

What are the 4 offences under the Bribery Act 2010?

Answer 38

Bribing Receiving a bribe Bribing a foreign public official Failing to prevent a bribery

Question 39

How do you ensure that you comply with bribery legislation?

Answer 39

I ensure compliance with bribery legislation by following my firm’s anti-bribery policy, undertaking regular training, and reporting any concerns immediately.

Question 40

How do you ensure that you comply with money laundering regulations?

Answer 40

I look out for indicators of illicit activity Conduct customer due diligence Enhanced due diligence Alert my firms compliance officer/money laundering reporting officer

Question 41

How do you ensure you comply with your firms bribery and gift policy?

Answer 41

I understand what constitutes a bribe under the Bribery Act 2010 I also ensure that I receive regular training from my firm Our gift policy is that we accept no gifts

Question 42

How would you keep clients money secure and safely held?

Answer 42

In a separate bank account Labelled client Use cyber security Clear audit trail Reconciled regularly

Question 43

Tell me about how you handle a client complaint?

Answer 43

Stage 1 - In house Complaint must be made in writing Notify PII insurers as soon as possible Notify the complaints handling officer Must be acknowledged within 7 days and responded to within 28 days Keep a complaints log Stage 2 - Third Party Resolution Use an RICS approved Alternative Dispute Resolution (ADR) The RICS Dispute Resolution Service

Question 44

What is your firms process for escalating a complaint to Alternative Dispute Resolution (ADR)?

Answer 44

Our firm's process involves first attempting to resolve the issue internally by addressing the complaint promptly and professionally. If an agreement cannot be reached through direct communication or internal review, we would then provide the client with details of an appropriate ADR provider, such as an ombudsman or independent mediator, to facilitate a resolution.

Question 45

Tell me about a conflict of interest check you have carried out

Answer 45

I review the management agreements/terms of engagement to ensure there are no overlapping interests or relationships that could compromise impartiality or objectivity. This involves checking if the client or any involved parties are linked to other ongoing matters within the firm. If a potential conflict is identified, I inform the client and seek their consent to proceed or suggest alternatives.

Question 46

If you identified a potential or actual conflict of interest, how would you handle this?

Answer 46

Conflict avoidance vs conflict management Can be a party conflict, an own interest conflict and a confidential information conflict Transparency Informed consent Information barrier Data security/encryption / virtual IT barrier Keep files separate

Question 47

If the contractor took offense to the refusal of the gift, how would you manage that?

Answer 47

I would explain my firms gift policy

Question 48

Office Central London What are your company's conflict of interest guidelines? How would you describe a conflict?

Answer 48

A conflict of interest arises when personal interests, relationships, or activities could compromise, or appear to compromise, an individual’s ability to make objective and impartial decisions in their professional role. Our company's conflict of interest guidelines involve disclosing any potential conflicts to management or compliance teams, avoiding situations where personal interests could affect professional responsibilities, and ensuring transparency in decision-making processes. All employees are required to complete regular conflict-of-interest training.

Question 49

If there was a conflict, how would you mitigate this?

Answer 49

Get the full facts Conflict avoidance or conflict management Informed consent

Question 50

If a conflict was identified, could you still act for a new client?

Answer 50

Yes if they provided informed consent in writing. Use of an information barrier

Question 51

What is involved in an anti-money laundering check?

Answer 51

Verifying the identity of clients (often referred to as Know Your Customer, or KYC) through CDD and EDD. Collecting and verifying personal details such as name, address, date of birth, and potentially the source of funds, often through government-issued identification and supporting documents. Businesses are also required to report any suspicious activity to the relevant authorities, such as the National Crime Agency (NCA) in the UK Look for any indicators of illicit activities

Question 52

When have you acted with integrity?

Answer 52

As a property manager, I acted with integrity by ensuring transparency and accuracy when preparing and presenting service charge accounts, ensuring that all costs were fair, clearly communicated to tenants, and in line with the lease terms.

Question 53

When have you taken responsibility in your current role?

Answer 53

Ensuring that budgets and reconciliations are issued in a timely manner to tenants.

Question 54

What would the steps be if you decided to set up in practice as a sole trader after qualifying?

Answer 54

Register with the RICS Register with HMRC as a sole practitioner Responsible principle Professional Indemnity Insurance Complaints handling procedure Plans in place for holding client money Locum in place CPD

Question 55

What would you do if you were asked by a client to reduce a fee proposal to win new work?

Answer 55

My firms fees are fixed as per our fee matrix. Depends how much by and what the context was.

Question 56

What would you do if you became suspicious that a client was involved in money laundering?

Answer 56

Follow the Firm's Procedures: Report the suspicion internally to the designated Money Laundering Reporting Officer (MLRO). Gather Information: Ensure that I have all relevant details and context of the transaction or behaviour that raised suspicion, without alerting the client. Do Not Continue the Transaction: If the suspicion is strong, I would avoid continuing with any transactions or actions related to the suspicious activity until further guidance is received. Make a Suspicious Activity Report (SAR): The MLRO would assess the situation and, if deemed necessary, file a Suspicious Activity Report (SAR) with the National Crime Agency (NCA). Cooperate with Authorities: If the NCA or any relevant authorities request information, I would cooperate fully while maintaining confidentiality.

Question 57

What would you do if you became suspicious that a client was involved in terrorist activities?

Answer 57

Report the suspicion to the designated Money Laundering Reporting Officer (MLRO) in line with the firm's anti-money laundering (AML) policy. Gather Relevant Information. Cease Involvement with the Client: If appropriate. File a Suspicious Activity Report (SAR): The MLRO would assess the situation and, if deemed necessary, file a SAR with the National Crime Agency (NCA) or the relevant authorities. Cooperate with Authorities.

Question 58

If you were to set up in practice on your own, what types of insurance would you need?

Answer 58

Professional Indemnity Insurance (PII): To protect against claims of negligence, errors, or omissions in the professional services I provide to clients. Public Liability Insurance: To cover claims made by third parties for injury, property damage, or accidents that occur on my business premises or due to my work. Employers' Liability Insurance (if employing staff): To cover legal costs and compensation claims if an employee is injured or becomes ill due to their work.

Question 59

Office Central London What part of the transaction were you unable to advise on? What did the lease say about alienation?

Answer 59

I had concerns about some of the financial figures on the balance sheet. They passed the profits test but I had reservations about the future so I recommended that my client sought professional advice from their accountant. The lease said that assignment was permitted with landlord consent (not to be unreasonably withheld or delayed). Fully qualified covenant.

Question 60

Office Central London - assignment Did you offer advice to the client on risk?

Answer 60

Yes I recommended to consider an AGA Rent Deposit I also advised to consult an accountant

Question 61

Office Central London - Assignment If the matter is delayed, what are the implications? If the Landlord does not respond in a reasonable time (typically 28 days)

Answer 61

Under the Landlord and Tenant Act 1988 (if applicable)/Code for leasing business premises 2020 if a landlord does not respond to an assignment request within a reasonable time (typically 28 days), they may be deemed to have given consent, unless the lease specifically states otherwise. Breach of lease: Failing to respond within the time frame stipulated in the lease can be considered a breach of the landlord's obligations under the lease. Potential legal action: The tenant may seek legal action if the landlord unreasonably withholds or delays consent, especially if it results in the tenant being unable to assign the lease. Compensation claims: If the tenant can prove that the lack of response has caused them financial loss, they may seek compensation.

Question 62

If the assignee didn't meet the satisfactory review, what would you advise?

Answer 62

Not proceeding with the assignment. Investigating the current covenant strength of the tenant Looking at the market rent

Question 63

How do you work out what a rent deposit would be?

Answer 63

3-6 months - depending on the covenant strength

Question 64

Office Central London Talk to me about the pitch you were working on

Answer 64

It was a pitch for the management of a new property with a new client

Question 65

Office Central London What was the tender process for?

Answer 65

For the management of a new property with a new client

Question 66

Office Central London - COI If you were only assisting, is it a big deal?

Answer 66

Yes it was still a conflict

Question 67

Office Central London If your director didn't have a problem with the conflict, would you continue?

Answer 67

All parties would have to be happy - informed consent

Question 68

Office Central London Did you offer advice on how you could be kept apart from the matter?

Answer 68

Yes - information barrier etc In the end separate team and different floor.

Question 69

Who polices money laundering? Who polices bribery?

Answer 69

Money laundering - National Crime Agency Bribery - Serious Fraud Office

Question 70

What are the requirements/levels for PII in practice?

Answer 70

Turnover of business £100,000 or less - £250,000 cover £100,000 - £200,000 = £500,000 cover £200,000 + = £1,000,000

Question 71

Sanctions for not maintaining Professional Indemnity Insurance Cover?

Answer 71

It breaches the RICS’ Rules of Conduct. Fines, loss of regulation status, or referral to a disciplinary panel. Fixed penalty notice Regulatory compliance order Regulatory tribunal Disciplinary panel

Question 72

Setting up a new firm. What would you provide to RICS?

Answer 72

Register with RICS PII and Complaints Handling Procedure Client money handling details Succession plan / Locum Complaints handling log and complaints handling officer Money laundering reporting officer CPD

Question 73

What are the fines for Data Breaches?

Answer 73

£17.5 million or 4% of the global annual turnover. Whichever the greater.

Question 74

What must Landlord provide for grounds F and G under Section 30?

Answer 74

For F (Demolition/reconstruction) the Landlord must provide firm intention, prove funding and planning, substantial work, necessity to gain vacant possession and to redevelop For G (Owner occupation) - Landlord must have owned property for FIVE years and prove intention to occupy and run business

Question 75

What are the 3 levels of disciplinary action?

Answer 75

Action by head of regulation of RICS Disciplinary Panel (drawn from independent Regulatory Tribunal) Appeal Panel

Question 76

What disciplinary procedures can be completed by the RICS

Answer 76

Fixed Penalty Notice Regulatory Compliance Order Refer the matter to member of regulatory tribunal Refer to disciplinary panel Reprimand Fine - unlimited amount but must be proportional to offence Expulsion from membership Publication of results of hearing in RICS Modus magazine/newspaper/RICS website

Question 77

What is an inclusive environment?

Answer 77

An environment where all individuals feel valued, respected, and supported, regardless of their background, identity, or differences.

Question 78

What is the word for gifts - that they should be in relation to the work carried out.

Answer 78

Proportionality

Question 79

What was the legislation that was brought in to help tenants during Covid 19?

Answer 79

The Commercial Rent (Coronavirus) Act 2022 - Rent - Sets out specific arbitration process - Only refers to rent due in actual 'lockdowns' - March 2020-July 2021 Aimed for Landlords and Tenants to discuss and come to a conclusion. Relief from payment in regard to ringfenced arrears Writing off debt in whole or part Additional time for payment instalments, monthly rent etc Reduce/remove interest on unpaid rent

Question 80

Who is a responsible principle?

Answer 80

A Responsible Principal is an individual within a regulated RICS firm who is accountable for ensuring the firm complies with RICS rules, standards, and regulations.

Question 81

What are the 3 main roles of the RICS

Answer 81

To be the leading source of information and independent advice on land, property and construction To protect consumers through strict regulation of the professional standards To maintain the highest standards of education and training

Question 82

What are BPR's and CPR's

Answer 82

Business Property Regulations (BPRs) RICS guidance regulating firms: covers client money handling, PII, terms of engagement, conflicts of interest, and complaints handling. Ensures professional conduct and protection of client interests. Conduct and Practice Regulations (CPRs) RICS rules for individual members: sets out ethical obligations, including acting with integrity, competence, and transparency. Applies regardless of role or firm – governs personal professional behaviour.