Ethics, Rules of Conduct and Professionalism Flashcards

Question

What are the key principles of the RICS Professional Standard: Client Money Handling 2019?

Answer 1

● Safe - Keeping Money Safe ● Correctly - Making sure client money is used correctly ● Controls - Making sure firms have correct controls in place

Answer 2

1) Holding - Holding client money 2) Information - Providing information to clients 3) Receipts – Receipts of client money 4) Payments – Payments from client accounts 5) Accounting – Accounting controls and records 6) Compliance

Answer 3

1) Deposits 2) Rent collections 3) Service charges

Answer 4

Client accounts must: ● Be separate and identifiable ● Have the word ‘client’ in the bank account name and cheque book ● Kept in credit and payment of interest agreed with the client A client must: ● Be able to have monies on demand Firms must: ● Keep accurate records and running balance ● Only withdraw money when properly required – two signatures by authorised staff ● RICS Firms handling client money must display procedures on website ● Pay an annual regulatory review fee

Answer 5

● RICS annual audit and reporting obligations by a certified accountant employed by RICS ● RICS Regulatory Review Inspections can be undertaken by RICS employed accountant - usually on a 3 yearly basis

Answer 6

All regulated firms who hold clients' money pay a regulatory review fee on an annual basis. The income generated from these fees covers the operational costs of the client money regulatory review visit programme. The fee is set based on the number of directors/principals in each firm, which includes both RICS members and non-member individuals.

Answer 7

● Last resort protection for claims where an RICS firm cannot repay clients money ● Schemes for surveying services, property agents, residential agents ● Limit per claim: £50,000 ● Cap on liability within a financial year: £10,300,000

Answer 8

Payments on account of costs are generally client money and must be held in a client account. A payment from a client for a fixed agreed fee after you have delivered a bill is your firm's money and should be paid into an office account.

Answer 9

To allow dual authorisation.

Answer 10

● Liability Caps - recommends firms use liability caps to manage risks. ● Third party reliance - firms make clear that their advice may only be relied upon by the named client in their terms of engagement. T & Cs - 3 key terms considered from a risk perspective ● The scope of the work ● The basis on which the fee will be calculated ● The liability cap

Answer 11

The Bribery Act 2010

Answer 12

1) B - Bribing 2) R - Receiving a bribe 3) B - Bribing a foreign public official (FPO) 4) F - Failing to prevent bribery

Answer 13

Giving, offering, promising or receiving an advantage (e.g payment, gift or service) for an illegal action or breach of trust.

Answer 14

The Bribery Act is policed by Serious Fraud Office. If the Act is breached there is a maximum sentence of 10 years imprisonment and/or unlimited fine for individuals or unlimited fine for companies.

Answer 15

1) Proportionality 2) Top-Level Commitment 3) Risk Assessment 4) Due Diligence 5) Communication 6) Monitoring and Review

Answer 16

● Bribery Act 2010 ● RICS Rules of Conduct (Professional objectivity, openness and transparency) ● RICS Professional Standard : Countering bribery and corruption, money laundering and terrorist financing 2019 ● Firms’ procedures compliance ● Proportionality ● Sanctions ● Tax implications ● Use of Gifts / Hospitality registers ● Openness and transparency

Answer 17

● Allows normal and appropriate hospitality (must be proportionate) ● Allows giving or receiving of gifts of a reasonable value (£20) – where no business advantage is sought ● Approval from line manager ● Must record gifts / hospitality in the gift register

Answer 18

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

Answer 19

I would not be comfortable accepting the prize as it is expensive (not proportional) and could be interpreted as a bribe. I would decline the prize and suggest it is given as a charitable donation. I would inform my line manager and record in the gift / hospitality register. I am aware that bribes are commonly distributed as random prizes.

Answer 20

RICS regulated firm must: ● Not offer or accept a bribe ● Have procedures in place to comply with the law ● Report suspicion to the relevant authority – Serious Fraud Office ● Retain records of how the firm has met the requirements of the professional statement RICS Members must: ● Not offer or accept a bribe ● Training ● Report any activity to the relevant authorities

Answer 21

RICS Firms must: ● Not allow ML or TF ● Have procedures in place to comply with law ● Report suspicion to relevant authority – National Crime Agency ● Retain records of how the firm has met the requirements of the professional statement ● Evaluate and review risks presented by the firm ● Understand the client and purpose of the instruction ● Use third party reliance for checks when confident in the quality of third party information ● Basic ID checks on clients

Answer 22

When money from criminal activities is disguised or converted as legitimate assets.

Answer 23

The supply of finance for terrorist activities.

Answer 24

1) C - Concealing criminal property 2) A – Arrangement - entering into an arrangement which facilitates the acquisition or use of criminal property 3) A - Acquiring - acquiring or using criminal property

Answer 25

No, but RICS regulated firms do. The MLRO reports to the National Crime Agency.

Answer 26

Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (amended 2023)

Answer 27

● Max 14 years in prison and/or unlimited fine for assisting with money laundering ● Max 5 years prison and/or unlimited fine for tipping off OR not reporting money laundering

Answer 28

Customer (CDD) Verify the identity of the client: ● for a private individual - Proof of ID (passport), Proof of address ● for a company Certificate, registration number, office address, directors, London stock exchange listing Enhanced (EDD) More detailed examination of background and transition purpose for: ● Politically exposed person (PEP) ● Those in a high-risk third country Simplified (SDD) When low risk of money laundering or terrorist financing - not appropriate for property transaction.

Answer 29

Common Characteristics which might indicate money laundering or terrorist financing: 1) Inability or unwillingness to provide identity documents 2) Changes to parties involved in transactions 3) Unusual transaction features 4) Payment in unusual currencies

Answer 30

1) Cash limit of €10,000 of payments 2) Monitoring of the ongoing business relationship 3) Detailed record keeping of procedures undertaken 4) Must check purchaser AND vendor 5) Must have evidence of funds 6) Maintain records for at least 5 years and report any discrepancies to Companies House

Answer 31

● Allows the UK to issue Sanctions ● The sanctions list is a list of individuals or companies subject to legal restrictions ● Must check sanctions list when checking clients and transactions

Answer 32

Part 1 ● Mandatory Requirements for Bribery and Corruption ● Mandatory requirements for money laundering and terrorist financing Part 2 - Practical guidance Part 3 - Supplementary Guidance

Answer 33

The reporting of wrongdoing. ● Employees can report certain types of wrongdoing ● Large firms should have a policy in place

Answer 34

When an individual's personal interests – family, friendships, financial, or social factors – could compromise their judgment, decisions, or actions in the workplace.

Answer 35

When independence and impartiality is threatened.

Answer 36

RICS Professional Standard: Conflicts of Interest 2017.

Answer 37

● Avoidance = do not accept the instruction. ● Management = instruction is accepted, but steps are agreed to manage the conflict, with written agreement of both parties.

Answer 38

1) Party conflict – working on same instruction for two different parties 2) Own interest conflict – a personal interest 3) Confidential information conflict – work between two parties which is confidential

Answer 39

1) Avoidance – decline the instruction unless the conflict can be properly managed maintaining transparency and openness. 2) Written advice to both parties – nature of the conflict and proposals (be clear so parties can make their decision), request written informed consent from clients. 3) Conflict management – upon written consent, set up Information / ethical barriers as agreed

Answer 40

● Must be robust so information cannot pass between the two parties ● Surveyors must be different and physically separated ● Information securely stored ● Keep a clear audit trail ● Overseen by compliance officer

Answer 41

Members: ● Member must avoid conflicts of interest ● BUT only allowed if you have “informed consent” ● Must be in the best interest of all parties and not unlawful Firms: ● All conflict must be managed in accordance with the Professional Standard (effective systems and controls in place) ● Keep records to show compliance with the standard

Answer 42

Relates specifically the UK commercial investment agency work. ● Dual agency (agent has contractual relationship with the seller and buyer) prohibited from 1st January 2018. ● Multiple introductions allowed if on “non-exclusive basis” – informed consent given from all clients ● Incremental advice allowed, information barrier must be in place ● When acting for a 'connected person' (family member / close business associate), personal interests must be declared - must comply with s21 of the Estate Agents Act 1979 - declare agency work.

Answer 43

RICS Professional Standard: Complaints Handling 2016.

Answer 44

● RICS regulated firms must have a published CHP that meets the requirements of the RICS ● Must include Alternative Dispute Resolution (ADR) mechanism ● A complaints log must be maintained ● Firms must have a nominated complaints handling officer ● When issuing TOE a firm should make it clear to the client they operate a CHP ● Notify PII insurers as soon as a complaint is made

Answer 45

2 stages: 1) In House – following complaint: CHP issued, complaint made in writing (to nominated Complaints Handling Officer), acknowledged in 7 days, investigated and response within 28 days. 2) ADR / Third Party Resolution – if the complainant is not happy with the response then the name of the redress mechanism must be provided e.g. Centre for Effective Dispute Resolution (CEDR), the Property Redress Scheme or RICS Dispute Resolution Service.

Answer 46

A scheme designed to handle small issues without going to court (disproportional). ● If the scheme judges in favour of the complainant it is binding. ● If the scheme judges in favour of the firm, the complainant can escalate it to court. ● RICS firms must specify the redress scheme within their CHP.

Answer 47

● Every RICS-regulated firm must have named an ADR provider in their complaints handling procedure. ● RICS maintains a list of ADR providers that have been approved by SRB for firms to choose from. ● The Centre for Effective Dispute Resolution (CEDR) has acted as this default provider since 2018 and RICS has entered into a new contract with CEDR to provide this service until 2026.

Answer 48

● Complaint in writing to a director (our complaint handling officer) ● 7 days for acknowledgement ● 28 days for investigation and response ● If not resolved escalated to Managing Director ● If still not resolved then referred to the ICE dispute service

Answer 49

1) Acknowledge receipt and forward to our complaints handling officer 2) Suggest that PII provider is informed immediately.

Answer 50

Limitation Act 1980.

Answer 51

Legislation which places limitations on the period for claims can be made for breaches of the law.

Answer 52

Limitation Act 1980: 1) Primary limitation period = 6 years from date of negligent act 2) Secondary limitation period = 3 years from date of knowledge (if after the 6 years) 3) Longstop limitation period = 15 years from date of negligent act ● Tort = 6 years from the date the claimant suffered the loss Contract executed underhand – 6 years Contract executed as a deed – 12 years

Answer 53

Failure to provide a duty of cared owed to a client: ● Surveyors have a duty of care to clients and parties ● Must use “reasonable care and skill” ● Negligence = breach of duty of care, and a claim for damages may arise

Answer 54

Royal Institution of Chartered Surveyors

Answer 55

RICS Regulations and Bye-laws set out the governance for RICS.

Answer 56

A Royal Charter is document that is signed by the monarch of a country on the advice of the Privy Council, and that gives an organisation independent legal standing and particular rights. RICS was granted a Royal Charter in 1881.

Answer 57

Est Modus in Rebus (Latin) = there is measure in all things

Answer 58

Over 130,000 members and candidates in over 140 countries.

Answer 59

FRICS, MRICS, AssocRICS, Trainee / Student

Answer 60

Assessor to consider evidence of achievement of 4 characteristics: 1) 5 or more years MRICS 2) Leadership role 3) Professional / technical achievement 4) Academic achievement 5) Raised profile of RICS Portfolio of professional achievement and CPD record required.

Answer 61

1) Market advantage - RICS status and standards gives a competitive advantage 2) Recognition - promotion of your professional excellence to governments and markets 3) Knowledge - international practice standards, professional guidance, CPD and knowledge sharing 4) Status - will provide client confidence 5) Network - access to professionals worldwide

Answer 62

● Since starting in the profession as an apprentice I have always had the ambition to become MRICS ● I want to be part of a prestigious organisation which allows me to progress my career in an industry I am passionate about. ● It will give me the recognition and status which is greatly valued by clients.

Answer 63

● Maintain highest standards of education and training ● Protect consumers through strict regulation ● To be the leading source of information and independent advice

Answer 64

Presidential Team President: Justin Sullivan - currently stepped aside whilst regulatory process takes place. He has referred himself to the Standards and Regulation Board due to his involvement as an expert witness in High Court proceedings. Acting President / President Elect: Nicholas Maclean (acting chair of governing council) Acting President Elect / Senior Vice president: Maureen Ehrenberg Executive Team Chief Executive Officer: Justin Young

Answer 65

● Governing Council - provides management and strategic direction ● Standards and Regulation Board reports to the Governing Council and regulates the profession ● RICS Board reports to the Governing Council and directs RIC affairs (lay members and members)

Answer 66

Regulations as approved by Governing Council (Updated June 2024) ● Rules, procedures and processes for members and firms ● Add further detail to the bye-laws ● Set out the different classes of membership and details of when fees are payable etc. 1) Definitions 2) Membership and registration 3) Designations 4) Contribution to funds 5) Conduct 6) Governing Council, officers and staff 7) Subordinate boards, committees and groups 8) Procedure for General Meetings and voting 9) Accounts and audit 10) General

Answer 67

RICS Bye-Laws 2020 ● Set out how RICS is regulated in accordance with the Royal Charter 1) Definitions 2) Membership and registration 3) Designations 4) Contribution to funds 5) Conduct 6) Governing Council, officers and staff 7) Subordinate boards, committees and groups 8) Procedure for General Meetings and voting 9) Accounts and audit 10) General

Answer 68

● Ethics = set of moral values ● Rules of conduct = a framework that we work to

Answer 69

1) Verify the facts 2) Confront the individual and remind them of their duties as an RICS member. 3) Inform the RICS specifying my relationship to the individual and any corrective action which I believe the individual is committed to put in place.

Answer 70

Provide a framework that we can all work to and so the client knows they are getting a set level of service.

Answer 71

Not every shortcoming gives rise to proceedings. 1) Formal investigations by Head of Regulation of the RICS 2) RICS may request further information and / or visit and inspect to investigate compliance 3) Member must fully vooperate

Answer 72

● Previous rules of conduct were in place from 2007 until 1st February 2022 ● The new Rules of Conduct came into effect on 2nd February 2022. The change was made due to the following: 1) Research with RICS members, firms and members of public = majority voted to replace 2) To provide a single document and a simpler structure providing greater clarity for RICS members and firms 3) Each rule has examples so they can be understood. There is also 12 case studies showing real-life application of the rules. 4) Incorporates the evolving use of technology. 5) Emphasises tackling global change such as sustainable development and climate change. 6) Focuses on respect, diversity and inclusion.

Answer 73

1) Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS. 2) Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise. 3) Members and firms must provide good-quality and diligent service. 4) Members and firms must treat others with respect and encourage diversity and inclusion. 5) Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession. ● Appendix A contains the professional obligations of members and firms

Answer 74

Appendix A contains the professional obligations of members and firms: Members must: 1) Comply with the CPD requirements set by RICS. 2) Cooperate with RICS. 3) Promptly provide all information reasonably requested by the Standards and Regulation Board. Firms must: 1) Publish a complaints handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log. 2) Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS. 3) Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work. 4) Cooperate with RICS. 5) Promptly provide all information reasonably requested by the Standards and Regulation Board. 6) Display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS. 7) Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.

Answer 75

Provides a framework of questions which members should ask themselves when facing situations.

Answer 76

Contains 5 initial questions: 1) Do you have sufficient facts on the issue? 2) Is it legal? 3) Is it in line with the RICS Rules of Conduct? 4) Have you consulted with appropriate people to make an informed decision? 5) Do you have clear reasoning in reaching your decision? ● If the answer is no to any of these then do not proceed. ● If the answer to all is yes then - would you be content for your actions to be made public? No = do not proceed. Yes = act and record the decision and reasoning.

Answer 77

According to the RICS Rules for the registration of firms 2022 firms must register when: A) The firm provides surveying services to the public B) Is operating in the UK C) At least 50% firms principals (e.g. sole practitioner / directors / partner / board member) are RICS Members

Answer 78

According to the RICS Rules for the registration of firms 2022 firms are eligible to register when: A) The firm provides surveying services to the public B) At least 25% of the firms principals (e.g. sole practitioner / directors / partner / board member) are RICS members

Answer 79

● All RICS registered firms have to appoint a Responsible Principal ● They ensure reasonable steps are taken to ensure compliance with Regulatory and RICS requirements, including reporting to RICS

Answer 80

● PII ● Employers liability ● Public Liability ● Building insurance

Answer 81

To protect clients, surveyors and third parties against negligence claims when there is a duty of care breached and a claim for damages arises. Benefits for the professional / firm: ● Provides protection to a professional from financial losses ● The firm does not have to pay for the claim from their own assets and resources Benefits for the client: ● Clients are able to recover their financial losses

Answer 82

● On a claims made basis = (covers claims which are first made during the insurance period regardless of when the negligent act occurred) ● If retroactive date is stated as 'none' then the policy is fully retroactive and all former work carried out by the firm is covered

Answer 83

RICS Regulation - Professional indemnity insurance requirements (July 2024).

Answer 84

Nature and extent of insurance must be adequate and appropriate with particular regard to: 1) Should be on an ‘each and every’ claim basis (the limit of indemnity is available to every claim) OR aggregate plus unlimited round the clock reinstatement basis (once the full limit has been eroded it will be reinstated an unlimited amount of times) 2) Cover the minimum limit of indemnity based on the firm's turnover in the preceding year. 3) Meet the RICS' minimum wording policy or more comprehensive 4) Defence costs in addition to limit of indemnity 5) Should cover past and present employees 6) Should be fully retroactive 7) Underwritten by a listed insurer 8) Include run-off cover

Answer 85

When an RICS regulated firm closes in a disorderly way and re-registers quickly as a new trading entity - goes against code of conduct.

Answer 86

● Allows or requires a number of similar or linked claims to be treated as a single claim ● Important to know in regard to the excess applied to any claim (could be reduced if grouped) and available limit of cover (could result in one limit of indemnity payable which may be insufficient for multiple claims)

Answer 87

Duty of care exists to clients and third parties, using a 'reasonable care and skill'. When breached, and there is a loss, a claim for damages arises

Answer 88

A type of insurance that provides protection against claims made against a business or individual after they have ceased trading. RICS requirement: ● Fully retroactive ● For consumer claims - minimum £1m of aggregate cover for 6 years ● For commercial claims - adequate and appropriate for 6 years

Answer 89

If you find yourself being sued personally and have no access to PII protection, the Member Support Service can provide defence and advisory services in the UK.

Answer 90

RICS Regulation: Rules for the use of RICS Logo and Designation by firms 2022

Answer 91

● Logo can only be used by a member or registered firm (cannot be altered) ● ‘RICS Registered Firm’ designation (‘Regulated by RICS’) may only used by an RICS Registered Firm and is mandatory on all business literature (letterhead, website, TOE, information on complaint handling) ● Must include mandatory text in all TOEs ● ‘Chartered surveyors’ designation for firms - sole practitioner can use if chartered. ● ‘Chartered surveyors’ designation for firms - Partnership and company can use if 50% or more of directors are chartered and certain other requirements.

Answer 92

1) Undertake a minimum of 20 hours a year 2) At least 10 hours formal 3) Maintain a relevant and current understanding of RICS Rules of Conduct during a 3 year rolling period 4) Record CPD online by 31st January each year

Answer 93

An RICS document which includes questions to ascertain whether CPD is formal or informal. Generally: ● Formal – structured learning with clear learning objectives and outcomes e.g. structured online training, professional courses / seminars ● Informal – self managed learning relevant to your professional role e.g. private study, on the job training, informal events

Answer 94

● Continually updating your skills and knowledge in order to remain professionally competent ● We work in a constantly changing industry - essential to keeping informed of current guidance, best practice, laws etc

Answer 95

● I have a quarterly professional development review with my line manager to review my careers development plan ● My current targets include broadening my form of contract experience (lots of NEC Option A) ● I have developed a skill matrix to be filled out by all employees to highlight weakness and drive development plans.

Answer 96

Futures project launched in 2015, focusing on three broad areas of activity: ● Talent and skills (developing standards and talent to deliver to these) ● Data and technology (Shape best practice in the use of data and technology) ● Sustainability (ensure the profession operates in way that is ethical and sustainable) Key challenges facing the industry: ● Urbanisation ● The disruption of bid data and technology on the sector ● The climate crisis

Answer 97

RICS Regulation: Use of Social Media 2024

Answer 98

Factors that may be relevant to whether social media use is in breach of the Rules of Conduct: 1) Whether the content is dishonest or misleading (untrue information may damage public trust in the profession) 2) Whether the content is discriminatory (may damage public trust in the profession) 3) How closely connected the content is to professional life (content in which you are identified as a professional is more likely to be relevant for regulatory purposes) 4) The way in which the content is expressed (Rules of Conduct 4 - treat others with respect and encourage diversity and inclusion) 5) Whether the content is confidential or private (Sharing confidential data may damage public confidence in the profession and may demonstrate a lack of integrity)

Answer 99

● Outline factors that may be relevant to whether social media use is in breach of the Rules of Conduct. ● Includes illustrative case studies to demonstrate how social media posts may be investigated.

Answer 100

● RICS commissioned a treasury management audit in 2018 ● Four non-Executive Board members of RICS raised concerns that the audit had been suppressed and were subsequently dismissed from the Management Board. ● Independent review by Alison Levitt, commissioned by RICS in January 2021, published September 2021. Conclusions: ● Non-Executive Board members’ concerns were legitimate and that they were wrongly dismissed. ● Report eluded to an internal power struggle due to lack of clarity on responsibilities of the various RICS Boards, senior leadership and management. ● Review included 18 recommendations e.g greater transparency, governing council to have more oversight over internal dealings, all of which were accepted by RICS.

Answer 101

An independent review commissioned by RICS in 2021 following Levitt Review. ● The purpose of the review was to clarify the purpose of the RICS and make recommendations on its governing structure. ● Included consultation with members and external stakeholders. ● Published in June 2022 including 36 recommendations in 7 key areas 1) Focus on public interest including amendment to the Royal Charter and creating a public interest panel 2) Maintain self-regulation through greater independence of regulatory functions 3) Focus on diversity and inclusion 4) Increased member engagement and focus on younger members 5) Independent review of governance every 5 years 6) Simplified and accountable governance structure 7) Greater leadership on important society matters such as sustainability and climate change

Answer 102

● Integrity - the practice of maintaining appropriate ethical behavior (a choice) ● Ethics - principles that govern the behaviour of a person or group in a business environment. Ethics can be imposed and not a choice

Answer 103

When a duty of care has been breached and it results in a loss, then a damages claim arises.

Answer 104

● Clearly understand the clients objectives and use robust term of engagement with a clear scope of services ● Ensure you are competent to undertake the work ● Keep full and detailed records of meetings and conversations, site notes ● Record recommendations and advise given ● Use RICS Standards and guidance

Answer 105

● Base appointment on reasonable care and skill rather than fitness for purpose (more onerous) ● Ensure run off cover is in place ● Execution of the appointment under hand will result in a reduced liability period of 6 years (instead of 12) ● Use of liability cap in terms of engagement

Answer 106

● Yes, often policies will have excess on a 'per claim' basis ● But depends on policy ● However, in the event of an aggregation clause the excess could only be payable for all the grouped items not individually

Answer 107

● Full and detailed record of meetings and conversations, site notes ● Record of recommendations and advice given ● Use proper letters of engagement, scope of services and term of engagement

Answer 108

● Yes, Important to maintain adequate records and site notes to give evidence of the way a surveyor came to their findings in a negligence claim ● Without them insurers have little to no chance of making successful defence

Answer 109

● The nature and extent of your insurance must be adequate and appropriate for your business ● Need to check the PII are still appropriate for the risks of the work undertaking ● May need to secure alternative or additional PII cover

Answer 110

● An RICS market facility that ensures the availability of PII ● Open to all RICS regulated firms that are unable to obtain PII which meets the minimum requirements of the RICS in the insurance market

Answer 111

Insurance for claims made after a firm has stopped doing business.

Answer 112

● RICS Assigned Risk Pool (ARP) available at a cost for members that cannot arrange appropriate PII. ● Firms that are unable to obtain run-off from their incumbent insurer or on the open market will be able to apply for coverage from RICS’ Run-off Pool (ROP), which is a separate market facility that operates similarly to the ARP.

Answer 113

Highlighted the importance of having run-off cover for all previous employees ● Surveyor sued for negligence by former client over valuation report ● Firm no longer in existence therefore the individual surveyor was pursued for damages

Answer 114

● Important to maintain adequate records and site notes to give evidence of the way they came to their findings in a negligence claim ● Without them insurers have little to no chance of making successful defence

Answer 115

● Listed insures may now impose exclusions for claims relating to fire safety ● However, from May 2021 Insurers not permitted to exclude fire safety claims on property 4 storeys or less and must provide fire safety cover ● In 2021, RICS incorporated a clause in its Minimum Policy Wording to allow for exclusions due to losses, costs or expenses resulting from a "cyber act"

Answer 116

● When you enter into an engagement for professional services with a client to limit risk ● Should use them where legally permissible ● The less the surveyor is paid the lower they want the liability cap

Answer 117

● Include a clause in ToE that prevents third party reliance ● Clause should be repeated in prominent position in the body of any report also

Answer 118

A Level 2 HomeBuyer Report was provided by Mr Large for a house in Devon, stating minor issues relating to drainage, gutters and pipework. The High Court held that Mr Large was negligent because his inspection and report failed to identify significant issues relating to damp. Mr Large also failed to advise, both within his report and during subsequent correspondence, that Mr & Mrs Hart obtained a Professional Consultant’s Certificate (PCC) prior to purchase. Enphasises the importance for surveyors to: 1) Being clear and advising clients on the survey level and scope of inspection, limitations and caveats 2) Recommending justifiable further investigation 3) Considering whether any new information provided after inspecting or reporting affects their original advice, and updating their advice if it is justified to do so

Answer 119

Lejonvarn was an American architect who provided architectural and PM services to a friend (Burgess) for a garden landscaping project. There was no contract and Lejonvarn was not paid. Burgess brought a claim for negligence and the court found that despite there being no contract, a duty of care was owed therefore Lejonvarn was liable for negligence. Therefore: You have a duty to use reasonable skill and care in providing services even if you are not being paid (pro bono) or if there is not contract in place

Answer 120

Changes following the Bichard Review: 1) Professional Standard Documents ● Set out the requirements for competent and ethical practice ● Mandatory where ‘must’ is used ● Best practice where ‘should’ is used 2) Practice Information Documents ● Not mandatory ● Supplementary guidance 3. RICS Practice Alerts ● New web page alerting professionals to areas of risk

Answer 121

1) Members and firms are open and transparent with clients about their fees and services. 2) Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently. 3) Members and firms understand clients’ needs and objectives before accepting any professional work. 4) Members and firms respect the rights of others and treat others with courtesy. 5) Members and firms respond to complaints made against them promptly, openly and professionally.

Answer 122

1) APM magazines 2) RICS Modus journals 3) RICS newsletter 4) RICS LinkedIn posts 5) RICS practice alerts (via email)

Answer 123

Construction journal on skills gap and recruitment (Ruth Jakeman). Summarised the recruitment drive at Clarke and Watt and challenges faced: 1) Few responses to ad for senior surveyor 2) Non-charted professional expect high salaries (£45k+) 3) Good candidates go quick (i.e. 4 - 6 weeks after graduating) therefore you have to interview regularly and make an offer straight away 4) High recruiter fees 5) Graduate often do have building pathology knowledge Z Clauses in NEC Contracts 1) NEC suggest Z clauses should only be added when necessary 2) Common Z clauses include a hierarchy of contract documents in case their is inconsistencies 3) Dispute resolution procedure (W option) can be unclear without Z clauses 4) Risk of amending the core elements of NEC e.g. role of the PM and Supervisor, opening risk of responsibility gaps etc. 5) Risk of amending the core elements of NEC e.g. becomign much more onerous for the contractor which aren't obvious, leading to dispute.

Answer 124

1) APM magazines 2) RICS Modus journals 3) RICS newsletter 4) RICS LinkedIn posts 5) RICS practice alerts (via email) 6) Attend CPD events e.g. Hugh James often do construction related webinars

Answer 125

Notify them and comply with any conditions set out in the insurance policy.

Answer 126

Only if the client can demonstrate that warranted the accuracy of the estimate or that it was incorrect due to a lack of reasonable skill and care. It could be incorrect due to reasons outside of their control e.g. market conditions or an excluded item.

Answer 127

● Maintain highest standards of education and training ● Protect consumers through strict regulation ● To be the leading source of information and independent advice

Answer 128

In the context of RICS, RICS is self-regulated and internally monitored meaning that it is not regulated by the government or extenral parties.

Answer 129

The standards, ethics, and conduct expected of individuals within a specific profession

Answer 130

In 2021, RICS incorporated a clause in its Minimum Policy Wording to allow for exclusions due to losses, costs or expenses resulting from a "cyber act"

Answer 131

Another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work, e.g. in the event of an accident/illness, unforeseen circumstances, prolonged absence (e.g. holiday or a sabbatical) or death. Normally a locum is another chartered surveyor. A sole practitioner should appoint a locum within their succession plan.

Answer 132

1) Firms keep client money safe and have appropriate accounting controls. 2) Members do not misuse client money and comply with controls intended to keep it safe.

Answer 133

The leak of over 12 million documents that uncovered a complex web of tax havens, shell corporations and offshore accounts that hide the true ownership of high value assets. It raises the ethical issue of tax avoidance - The UK government says tax avoidance "involves operating within the letter, but not the spirit, of the law".

Answer 134

Modern slavery encompasses slavery, servitude, human trafficking and forced labour.

Answer 135

RICS has a zerotolerance approach to any form of modern slavery. RICS released a Modern Slavery Statement in 2023, in accordance with section 54 (1) of the Modern Slavery Act 2015. Rule 4 includes an example behaviour of: Firms check that supply chains do not involve modern slavery or other abuses of the workforce.

Answer 136

The Register of Overseas Entities (ROE) was introduced primarily to enhance transparency and combat economic crime, particularly money laundering, by requiring foreign owners of UK property to reveal their true identities. This measure aims to prevent criminals from using shell companies to hide their wealth and financial dealings in the UK.

Ethics, Rules of Conduct and Professionalism Flashcards

(162 cards)