Ethics, Rules of Conduct and Professionalism (Lvl 3) Flashcards
(88 cards)
1
Q
When was RICS founded?
A
The RICS was founded in 1868.
2
Q
Does the RICS have a royal charter?
A
Yes, this was granted in 1881 the Privy Council.
3
Q
How many levels of membership are there in the RICS?
A
There are 4 levels of membership which are FRICS, MRICS, AssocRICS and Student.
4
Q
What documents set out the governance of the RICS?
A
RICS Regulations and Bye-laws
5
Q
How do you become a Fellow of the RICS?
A
Evidence of achievement of FOUR fellowship characteristics which includes 5-years or more at MRICS, a leadership role, professional / technical achievement, academic achievement or raising the profile of the RICS. Also need a portfolio of professional achievement which must include CPD.
6
Q
Who governs the RICS?
A
The RICS is governed in the UK by 4 national associations, 10 regional boards and several local associations. The Governing Council has 25 members and runs the RICS. The Regulatory Board and Management Board report to the Governing Council.
7
Q
Who is the current president of the RICS, who is the CEO and who is the Chair of the Governing Council?
A
Nicholas Maclean is the Acting President, Acting Chair of the Governing Council and Acting President Elect. Maureen Ehrenberg is the Acting President Elect.
8
Q
Who is the RICS accountable to?
A
RICS Members and Members of the Public.
9
Q
What are the 3 main roles of the RICS?
A
To maintain high standard of education, protect consumers through regulation of the professional standards and to be the leading source of information and independent advice on land, property, construction and associated environmental issues.
10
Q
How many members are there in the RICS?
A
Over 130,000 qualified members.
11
Q
What was the purpose of The Levitt Review (2021) and who carried it out?
A
It was carried out by Lord Bichard QC and Alison Levitt QC to review the purpose, governance and strategy of the RICS.
12
Q
What was the outcome of The Levitt Review (2021) and The Bichard Review?
A
Creation of a public interest panel to advise Governing Council, a simplified and clearer governance structure and increased focus on diversity and inclusion across the profession.
13
Q
What are the 5 benefits of being an RICS member / Why do you want to be and RICS member?
A
1.Status - professional credentials provide client confidence.
2. Recognition - Promotion of your professional ability to governments and markets.
3. Market advantage - RICS status and standards give you a competitive advantage.
4. Knowledge - International practice standards, professional guidance and knowledge sharing.
5. Network - Access to over 130,000 professionals worldwide.
14
Q
What are the three benefits of RICS registration for firms?
A
- Confidence - For clients as regulated firms are monitored by RICS Regulation.
- Professionalism - Firms will have to provide clear, impartial and expert advice.
- Security - Firms have to have a recognised complaints handling procedure, access to free independent redress and PII cover.
15
Q
How often must Firms confirm that they are compliant with RICS obligations?
A
Firms must make an annual return confirming their compliance.
16
Q
What does the RICS ‘Rules for the regulation of firms’ (2019) require?
A
- If 50% of Principles of a UK firm which provides Surveying services are RICS members then it has to be regulated, and if at least 25% of staff are members the firm can apply for regulation.
- Each firm must appoint a ‘Response Principle’ to ensure compliance with RICS requirements and regulatory compliance.
17
Q
Who hears disputes concerning the registration of a Firm?
A
RICS Standards and Regulation Board
18
Q
Who can use the RICS logo and ‘Chartered Surveyors’ designation?
A
‘Chartered Surveyors’ can be in a regulated firms trading name only. The logo can be used by RICS members and registered firms only.
Regulated firms must include a prescribed text in their TOEs explaining what RICS regulation means.
19
Q
What information does the RICS require in a Firm’s annual return?
A
- Type of business and staffing details
- Statutory regulated activities - such as financial services
- Nature of clients
- Complaints handling details and records
- Professional indemnity insurance (PII) details
- Whether the firm holds clients’ money
20
Q
When were the Rules of Conduct published and brought into effect?
A
Published October 2021, brought into effect February 2022.
21
Q
What type of document is the RICS Rules of Conduct?
A
This is a Professional Standard.
22
Q
What are the 5 rules in the RICS Rules of Conduct?
A
- Members and Firms must be honest, act with integrity and comply with their professional obligations, including obligations to the RICS.
- Members and Firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
- Members and Firms must provide good-quality and diligent service.
- Members and Firms must treat others with respect and encourage diversity and inclusion.
- 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.
23
Q
Give an example of a time when you acted with integrity (RICS Rules of Conduct).
A
The Blind Pig - letting to a distillery, offered me a bottle of alcohol as a gift. Or Ketley RR and conflict of interest.
24
Q
What are the 3 professional obligations for Members set out in the RICS Rules of Conduct?
A
- Members must comply with CPD requirements set by the RICS.
- Members must co-operate with the RICS.
- Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
25
What are the 7 professional obligations for Firms set out in the RICS Rules of Conduct?
1. Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by the RICS, and maintain a complaints log.
2. Firms must ensure that all previous and current professional work is covered by adequate ad appropriate professional indemnity cover that meets the standards approved by the RICS.
3. Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity.
4. Firms must co-operate with the RICS.
5. Firms must promptly provide all information reasonably requested by the Standards and Regulations board, or those exercising delegated authority.
6. Firms must display on their business literature a designation to denote they are regulated by the RICS.
7. Firms must report to the RICS any matter that they are requires to report under the Rules for the Registration of Firms.
26
What is the purpose of the Ethics Decision Tree?
To provide a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner. Would you be comfortable with your actions being made public? - ultimate test.
27
What are the 3 levels of disciplinary action?
1. Decision of Head of Regulation against Regulated Members.
2. Regulatory Tribunal (Either a panel of 3 or an individual depending on the matter).
3. Appeal Panel
28
Who undertakes an initial disciplinary investigation and what 4 actions can they take?
The Head of Regulation formally investigates disciplinary matters and can:
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.
29
What is a Fixed Penalty Notice issued by the Head of Regulation for?
Typically only for failing to supply information to the RICS by Firms and Members. May Consist of a fine and / or a caution. (CPD Obligations!)
30
What is a Regulatory Compliance Order issued by the Head of Regulation for?
This is for low level breaches of the Rules which could be easily corrected. This is a written document which states the actions which the member or firm must take or not take in a specified time period and an agreement to pay a fine. May cover non-compliance of RICS rules such as failing to undertake appropriate CPD.
31
Explain the action taken by a Regulatory Tribunal Disciplinary Panel.
This is for more serious breaches of conduct. The Head of Regulation will refer the matter to a disciplinary panel which includes non-RICS members and the penalties which can be issued include:
1. Caution
2. Reprimand
3. Require the Member / Firm to give one or more undertakings as to future conduct.
2. An unlimited amount of fine per breach but must be proportionate to the offence.
3. Impose conditions upon future continued RICS registration.
4. Expulsion from membership or remove a firm.
5. To expel the Member from the RICS or remove the Firm's registration.
The panel's decision will be published in accordance with the Sanctions Policy following the expiry of any appeal period.
32
What is the Appeal Panel and what can they do?
The Appeal Panel is a panel which includes non-RICS members and can allow an appeal and vary the penalty previously imposed, this can also be increased if the Chair of the Governing Council makes an application for review.
33
What is contained within the Use of Social Media Guidance (Sept 2024)?
This document reminds members of the standards of professional behaviour expected of RICS members and that the RICS is likely to investigate concerns about social media posts involving:
Discrimination, dishonesty, abuse, bullying or ignoring previous warnings about concerns.
However, RICS will consider freedom of expression and is unlikely to investigate posts which are critical of an organisation or which are removed if requested to do so.
34
What 4 considerations should you give before accepting an instruction?
1. Are you qualified for the work?
2. Are you competent for the work?
3. Do the services we offer meet the client's needs / will PII value cover the work?
4. Do we have any conflicts of interest?
35
What should you consider when negotiating fees?
Firms should avoid price fixing, aggressive fee cutting or collusion with competitors. Fees should be market-based and agreed on an ad-hoc basis with clients. You must be transparent about referral fees if relevant and consider these in the context of the Bribery Act 2010 / the RICS Rules of Conduct.
36
What should be included in the Terms of Engagement?
1. The proposed fee basis
2. Payment of expenses and how this is calculated.
3. That a copy of the Firm's complaints handling procedure is available upon request.
TOEs should also include the scope and nature of the service being provided and how the client's data will be used.
37
What is required to comply with The Consumer Rights Act 2015?
A 14 day cooling off period from the date of agreement.
38
What legislation is agency work required to comply with?
Section 18 of the Estate Agents Act 1979 and The Money Laundering, Terrorist Finance and Transfer of Funds Regulations 2017.
39
What reasons might you decline an instruction?
1. You are not competent to undertake the work.
2. You do not have sufficient facts on the issue.
3. The proposed client will not sign TOEs / complete an AML check.
4. There is a conflict of interest or personal interest.
5. A PII cap cannot be agreed.
6. The advice is for a friend or on a pro bono basis and your PII will not cover work carried out on a personal basis.
7. The potential client is included in the UK Government's sanctions list.
8. Would you be content for your actions to be made public?
40
What is a Conflict of Interest?
A COI arises when a member or firm's independence or impartiality is threatened due to the existence of a conflict between the two clients.
These can include a financial interest, personal interest, commercial relationship or acting on both sides of a transaction.
41
What is the difference between Conflict Avoidance and Conflict Management?
Conflict Avoidance - Not accepting the instruction.
Conflict Management - Accepting the instruction but agreeing steps to manage the conflict such as information barriers and written agreement of all parties.
42
When was the RICS Conflicts of Interest document issued?
March 2017 (Effective January 2018) as a Professional Statement but reissued in July 2023 as a Professional Standard.
43
What is the difference between a Professional Standard and RICS Practice Information?
A Professional Standard sets requirements / expectations for members and are mandatory.
Practice Information is not mandatory and is there to support the practice, knowledge and performance of members.
44
What does the RICS Conflict of Interest Professional Standard say about advising clients?
Members must not represent clients where doing so would involve a COI or a significant risk of COI other than when all those who are or may be affected have provided their informed consent.
45
What are the 3 types of COIs?
1. A party conflict is whereby the duty to your client conflicts with a duty owed to another party on the same instruction.
2. An own interest conflict is whereby the client's interest conflicts with the member's personal interest.
3. A confidential information conflict is a duty to provide information to one party whilst having a duty to another party to keep that information confidential.
46
What is informed consent?
When two parties agree to waive any conflict of interest in writing once presented with all material factors and the party(s) affected understand what they are agreeing to. This should only be done where all relevant parties are best served by doing so.
47
What three things are required by the Conflict of Interest Professional Standard?
1. All conflicts must be managed in accordance with the Professional Statement.
2. Every RICS firm must have in place effective systems and controls appropriate to the size and complexity of their business to ensure full compliance.
3. All firms must keep records to show their compliance with the Professional Statement.
48
What is the 3 step process you must undertake where a conflict arises or may arise?
1. Upon receipt of the full facts - consider whether the instruction should be managed or can be avoided.
2. If you wish to accept the instruction - Disclose the nature of the conflict and how the firm intends to deal with the conflict, ensure both parties can make their own decision, request written confirmation of their informed consent.
3. Once you have received informed consent, set up information barrier in accordance with agreement.
49
What must be required for an information barrier?
The barrier must be robust and offer no chance of information passing between the parties.
You must take 'reasonable steps' to operate an effective barrier.
The two Surveyors must be physically separated.
All information should be securely stored.
There should be a clear audit trail of the conflict check process and all written / oral communication.
50
What do the RICS Byelaws say about Confidentiality?
1. Client confidentiality must be maintained for all client affairs.
2. If a third party wants access to your files you must get client's approval unless subject to a statutory duty.
3. All files must be held for a minimum of 6 years before secure disposal.
4. If a Surveyor receives confidential information regarding someone who is not their client, they cannot use this information. The client and sender should be advised and the matter recorded in a note to the firm's compliance offer.
5. Any confidential matter received in error should be disposed of securely.
51
What document sets out guidance on complaints handling procedures?
RICS Professional Standard - Complaints Handling (2016)
52
What is the minimum procedures for handling a complaint?
1. Issuing the complaints handling procedure whenever the firm receives a complaint from a valid complainant to whom the firm owes a duty of care. This must include details of The Complaints Handling Officer (Managing Partner / DMP for FG) who will investigate the complaint, the complaint must be in writing and must be acknowledged within 7 days / investigated within 28 days (FG aim for 5 days and 15 days).
2. If the complainant is not happy with the review, the next stage is Third Party Resolution, the name of the relevant redress scheme must be provided (RICS Dispute Resolution Service is an example, FG use Property Redress / Centre for Effective Dispute Resolution and two others).
RICS will only get involved if a member fails to respond to a complaint / prevents them from redress.
A sole practitioner must nominate a surveyor in another firm to be their CHO.
53
What are the 4 CPD requirements of Members of the RICS?
1. Minimum of 20 hours CPD per year.
2. Of the 20 hours, 10 must be Formal CPD.
3. All members must maintain a current understanding of the RICS Rules of Conduct during a rolling 3-year period.
4. All members must record CPD using the RICS CPD Management System.
54
What is Formal CPD?
All forms of structured learning that has clear learning objectives and outcomes. Examples include courses and seminars.
55
What is Informal CPD?
Any self-managed learning that is relevant or related to your professional role.
56
What is the purpose of Professional Indemnity Insurance?
To protect clients, surveyors and third parties against negligence claims when there is a duty of breached and a claim for damages arises.
57
What document sets out Professional Indemnity Insurance requirements?
RICS Professional Indemnity Insurance Requirements UK: Version 10 (July 2024)
58
What are the minimum requirements for Professional Indemnity Insurance?
£100,000 or less Turnover = £250,000 per claim
£100,001 - £200,000 Turnover = £500,000 per claim
£200,001 and above Turnover = £1,000,000 per claim
59
Who must PII be underwritten by?
Must be underwritten by an RICS approved insurer.
60
What is the maximum level of uninsured excess per PII claim?
Limit of indemnity £10m or less - The greater of 2.5% or £10,000
Limit of indemnity £10,000,001 or more - No set limit
61
What does "Fully retroactive" mean with regards to PII claims?
Policies cover claims that are made during the period of the insurance regardless of when the negligent act occured.
62
How often should a firm's PII certificate be sent to the RICS?
On an annual basis within the Firm's annual return to the RICS.
63
When should insurers be notified of a PII claim?
They should be notified as soon as possible when a potential claim arises.
64
What type of PII cover is required after a firm ceases trading and what are the policy requirements?
Firm that cease trading require run-off cover.
For consumer claims, the requirement is a limit of £1m (aggregate) for a period of 6 years from the expiry of the existing PII policy.
For non-consumer claims, the requirement is "adequate and appropriate" run-off cover for a minimum period of 6 years from the cessation of practice.
65
What if a Firm is unable to obtain run-off coverage from their insurer or the open market?
They can apply for coverage to the RICS Run-off pool.
66
Do you require Professional Indemnity Insurance to undertake Pro-bono work?
Yes, this should be specifically mentioned within the policy.
67
What should you do if you personally face a claim but your firm has gone into administration?
Contact the RICS Members Support Service (MMS)
68
What is included in the Practice Information, RICS Risk, Liability and Insurance (Apr 2021, reissued Oct 2023)?
From May 2021, insurer must provide cover for fire safety claims on property of 4 storeys or less.
RICS recommends the use of liability caps to manage risks associated with professional work.
Be aware of third-party reliance and be clear that advice can only be relied upon by the client named in their TOEs.
69
What are the two main types of claims against a professional?
Breach of contract - Failing to meet the obligations of a contract - usually exclusive to professional's clients.
Negligence - Breaching a duty of care to a client or third party which, if resulting in a loss, can lead to damages (tort law).
70
Under the Limitations Act 1980 what are the current limitation periods for claims?
Breach of contract - 6 years from the date of the breach or 3 years from the date of knowledge of the damage subject to being less than 15 years after the breach.
Negligence (Tort) - 6 years from the date the claimant suffered the loss.
71
How can negligence claims be avoided / minimise?
Confirm precise instructions in TOEs
Ensure you are competent to undertake instruction
Undertake work in accordance with the relevant RICS Professional Standards and Practice Information
Make detailed file notes and take photographs
Keep up to date with market knowledge / legislation and CPD.
Cap the professional liability excess on your PII policy in the Terms of Engagement
72
What document covers handling clients' money?
RICS Professional Statement on Client Money Handling (2019) effective Jan 2020.
73
What are the six main areas of good practice set out in the Handling Client's Money Professional Standard?
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
74
What are the RICS member requirements for handling client's money?
1. Client accounts must be kept separately and clearly identifiable.
2. The word 'client' is on the bank account.
3. A client must be able to have their monies on demand.
4. Payment of interest is agreed with client and accounts must be kept in credit.
5. Regular bank reconciliation (monthly checking that payments have been transferred to the account and expenditure records).
6. Accurate records and running balance available.
7. Annual audit obligations by certified accountant employed by the RICS.
8. Money can only be withdrawn if properly required.
9. Records show all cash transactions.
10. Signatories agreed with authorised staff and two signatures required.
11. A discrete account is for a single named client account only.
12. RICS Regulatory Review Visits can be undertaken by the RICS on a 3-yearly basis.
13. Firms handling client money need to display their procedures document on their website.
75
What is the RICS Clients' Money Protection Scheme?
This is last resort protection in instances where an RICS regulated firm is unable to repay a client's money. There are two separate parts to the scheme, one for surveying services and another for residential agency.
76
What are the RICS requirements of starting a new practice?
1. Inform RICS and fill out Firm Detail Form.
2. Appoint a Responsible Person (Contact Officer).
3. Register with RICS for regulation.
4. Arrange PII and send details to RICS.
5. Set up procedures for Client Money Handling, including a Protection Scheme.
6. Register for the RICS Valuer Registration Scheme (VRS) if undertaking Red Book work.
7. Obtain RICS approval for the Complaints Handling Procedure.
8. Set up a complaints log.
9. Appoint a Complaints Handling Officer (or elect a surveyor in another practice if a sole practitioner).
10. Use RICS logo kit for all practice materials.
11. Plan for succession if a sole practitioner.
12. Ensure CPD logged on RICS CPD Management System and set up staff training plan.
13. Ensure completion of an online RICS Annual Return at the end of each year.
77
What are the legal requirements of starting a new practice?
1. Disclose business name
2. Disability discrimination compliance (Equality Act 2010)
3. Financial services compliance (Financial Services and Markets Act 2000)
4. Bribery Act 2010 compliance
5. Appoint a Money Laundering Reporting Office (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 (Regulatory Reform (Fire Safety) Order 2005)
9. Register for data protection (General Data Protection Regulation 2016 and Data Protection Act 2018).
10. Estate agency compliance (Estate Agents Act 1979, Consumer Protection Regulations 2008, Misrepresentation Act 1967).
11. Inform HMRC for VAT and Tax registration.
12. Ensure compliance with current employment law (National living wage, working hours, gender pay gap reporting etc.)
13. Ensure insurance compliance for employer and public liability.
78
What is the key legislation relating to Gifts, Bribery and Corruption?
Bribery Act 2010 and Proceeds of Crime Act 2002
79
What is the aim of the Bribery Act 2010 and what is a bribe?
To reduce bribery in business in the UK and abroad.
A bribe can be the giving, offering, promise or receipt of an advantage such as a payment, gift or service for an action which is illegal or a breach of trust.
80
What are the 6 principles of the Bribery Act 2010?
1. Proportionality
2. Top level commitment
3. Risk assessment
4. Due diligence
5. Communication
6. Monitoring and review
81
What are the 4 offences under the Bribery Act 2010?
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent a bribe - companies responsible for employees' acts. Companies must demonstrate they took steps to prevent bribery and have procedures in place.
82
Is hospitality considered bribery under the Bribery Act 2010?
Lavish corporate entertainment could be considered bribery (Proportionality). Government guidance states hospitality is a necessary part of doing business as long as it is reasonable, proportional and recorded in a gift / hospitality register.
83
Who polices the Bribery Act 2010 and what is the penalty for breaching it?
The Bribery Act is policed by the Serious Fraud Office
Max penalty for individuals is 10 years imprisonment and / or an unlimited fine for individuals.
Companies face an unlimited fine.
84
What act covers Money Laundering legislation and who does it regulate?
Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. It regulates estate agency work and 'relevant financial business work' inside and outside the UK by a firm.
85
What is Money Laundering?
Money laundering is when proceeds of criminal activities are disguised or converted and then released as legitimate assets.
86
What are the key provisions of Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017?
1. A requirement to have written money laundering risk assessment.
2. Implementing systems, policies and procedures to address money laundering risks.
3. Adopting appropriate internal controls.
4. Providing staff training.
5. Comply with new customer, enhance and simplified due diligence requirements.
6. Comply with the requirements relating to politically exposed persons (PEPs)
7. Ensure appropriate record keeping.
8. AML checks must be undertaken to confirm the identity of a proposed purchaser of a property and check the purchaser's source of funds by the vendor's agent before contracts are exchanged.
9. To include additional high-risk factors when assessing the need for enhanced due diligence and seek additional information and monitoring in certain cases.
87
What updates to the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 occurred in May 2025?
Previously there was a monetary threshold of 10,000 euros rent per month for reporting obligations to OFSI with regards to people that are suspected of being a designated person on the UK Sanctions List, there is now no threshold.
88
What are the two levels of Due Diligence Checks?
1. Customer Due Diligence
2. Enhance Due Diligence
