Ethics, Rules of Conduct & Professionalism Flashcards
(93 cards)
1
Q
What are the RICS 5 Rules of Conduct?
A
- Act with honesty and integrity.
- Maintain professional competence.
- Good quality and diligent service
- Respect others and encourage diversity & inclusion.
- Act in the public’s interest
2
Q
Provide an example of honesty & integrity
A
Was asked to provide details of a sale by an agent. Details had not been released to shareholders so informed them that I couldn’t share the info.
3
Q
Provide example of professional competence
A
Roof leak in warehouse - advised client to contact building surveyor.
4
Q
Provide example of good quality and diligent service.
A
Understand client’s objectives by having regular catch ups.
5
Q
Provide example of respect and encouraging diversity & inclusion.
A
I work with lots of different agents, colleagues, contractors, board, tenants and ensure I always treat everyone with respect and fairly.
6
Q
Provide an example of acting in the public interest and taking responsibility.
A
When in lease negotiations, I always advise unrepresented parties that they should seek professional advice and read the Code of Leasing Business Premises 2020.
7
Q
Who is the CEO?
A
Justin Young
8
Q
Who is the President of the RICS?
A
Acting - Nick Maclean
Elected - Justin Sullivan
9
Q
What chairs the Governing Council?
A
President of RICS
10
Q
What are the 4 levels of RICS Membership?
A
FRICS
MRICS
AssocRICS
Student/Trainee
11
Q
How do you become a FRICS?
A
At least 4 of below:
1. Five or more years at MRICS level
2. Leadership role.
3. Professional role/technical achievement.
4. Raising profile of RICS.
5. Portfolio of professional achievement, inc CPD, is required.
12
Q
When was the RICS founded?
A
1868
13
Q
When did it receive Royal Charter?
A
1881
14
Q
What are the benefits of being an RICS member / why do you want to become a member?
A
Status
Recognition
Market advantage
Knowledge
Network
15
Q
What is the role of the Governing Council?
A
To provide strategic direction and governance to ensure that RICS fulfills its purpose and serves the public interest.
16
Q
What are the RICS Bye Laws?
A
The rules and regulations that govern the functioning and operations of the RICS.
They set out the legal framework within which RICS operates and outline the rights, responsibilities, and obligations of its members.
17
Q
What is the role of the RICS?
A
Maintain highest standards of education & training.
Protect consumers
Leading source of info and independent advice.
18
Q
What are the 6 ethical principles that the Rules of Conduct are based on?
A
Competence
Honesty
Respect
Responsibility
Integrity
Service
19
Q
What sets out the regulatory approach for the RICS?
A
RICS Regulatory Decision Making, 2022
20
Q
How long should you keep anti money laundering records for? What records should be kept?
A
5 years
Client Due Diligence (CDD) Records
Internal and External Reports
Transaction Records
Training Records
21
Q
What is Professional Indemnity Insurance (PII)?
A
To protect clients, surveyors & third parties against negligence claim
22
Q
Can you tell me about the RICS requirements in relation to PII?
A
Minimum indemnity:
£100,000 or less turnover: £250k min indemnity
£100,001 - £200,000: £500,000
£201,000 +: £1m
Maximum level of uninsured risk:
Turnover up to £10m – greater of 2.5% sum insured or £10,000
Over £10m – no set limit.
Must be underwritten by an RICS approver insurer.
23
Q
What is a PII aggregation clause?
A
Determines how multiple related claims are treated under the insurance coverage.
Single claim or multiple claim
24
Q
Is a PII excess usually paid for per claim?
A
Yes - every time a separate claim is made, the insured party must pay the excess before the insurer covers the remaining costs, up to the policy limit.
25
In a negligence claim, what would help to show that you acted with consideration and due process?
Demonstrate that you followed the RICS standards and guidance.
Maintain comprehensive records of all work undertaken.
Demonstrating Competence and CPD
Have written evidence that you received clear and specific instructions from the client.
Demonstrate that you performed a risk assessment and took reasonable steps to mitigate any identified risks.
Demonstrate that you followed a robust complaints-handling procedure, in line with RICS requirements.
26
If you were providing services outside of your usual scope to a client, what might you
need to do in relation to your PII cover?
Firstly ensure client is fully aware that it is outside usual scope and obtain consent to continue.
Inform insurer, increase cover.
27
What is run off cover?
Insurance that provides protection after a business has ceased trading or a professional has retired
28
What are the RICS requirements for run off cover?
Must maintain for at least 6 years after business ceases trading / you retire.
29
What changes did RICS recently make to the Minimum Approved PII Wording?
1 July 2024
Enhanced Fire Safety Coverage
Removal of RICS Cyber Exclusion Clause - use international clause to ensure consistent approach to cyber risk coverage.
30
What is the Assigned Risks Pool (ARP)?
Mechanism established by the RICS to provide PII coverage for RICS-regulated firms that are unable to obtain insurance from the open market.
31
Who might need access to ARP?
Firms that are high risk or have already had claims made against them.
32
How long can you have ARP for?
Max 12 months - gives time to find another provider.
33
Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance
(1st Edition)
Provides guidance to members/firms on how to manage primary risks.
Recommends use of liability caps.
Limiting third-party reliance
Importance of clearly outlining the scope of work, limitations, and responsibilities in engagement terms to manage client expectations and reduce potential liabilities.
34
Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying.
a. Firstly, register as a sole trader with HMRC and register for VAT.
b. Inform RICS of new practice by completing Firm Details Form.
c. Appoint myself as a Responsible Principle
d. Register with the RICS for regulation.
e. Arrange PII and send to RICS
f. Client money procedure
g. CHP – obtain approval from RICS.
h. Set up complaints log.
i. Elect a surveyor in another practice to be CHO.
j. Succession plan for future running of business.
k. CPD logged.
l. Complete online RICS annual return at end of each year.
m. Ensure I have complied with Stat requirements – AML, Bribery, H&S, etc.
35
If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.
Reject and inform compliance officer.
36
What would you do if you were asked by a client to reduce a fee proposal to win new work?
I would check if the new proposed fee aligned with industry standards and competitors.
If it did, I would then review if reducing the fee would still allow me to deliver a service at a high standard and aligns with the RICS ethical standards.
If not, I would decline the instruction.
37
What would you do if you became suspicious that a client was involved in money laundering?
a. I would assess the red flags, check our DD records (KYC and CDD) are complete, and also try and verify the source of the funds with the client.
b. Report the suspicion internally following our AML policy and complete an internal suspicious activity report (SAR).
c. If required, submit the SAR to the UK National Crime Agency.
d. Considering withdrawing from the transaction – seek legal advice on how to do this appropriately.
e. Maintain records for at least 5 years.
38
What would you do if you became suspicious that a client was involved in terrorist activities?
a. Similar to the AML– but file under the Terrorism Act 2000.
b. Consider a Defence Against Terrorist Financing Request.
39
If you were to set up in practice on your own, tell me about the types of insurance you'd need.
a. Professional Indemnity Insurance
b. Employers Liability Insurance – minimum cover £5 million but usually £10 million.
c. Public Liability Insurance - £1 million to £5 million
d. Office & Business Insurance
e. Cyber Insurance
40
What steps should you follow when closing a firm?
Inform client, RICS & insurer
Return client money
Set up 'run off' cover
Hold accounts and client info for 6 years.
41
What do you understand by the term self-regulation?
When a professional body establishes and enforces its own rules and standards for its members.
42
What is a Bye-Law?
Rules and regulations that govern the RICS.
They set out the legal framework
43
Explain to me the new RICS Rules of Conduct and why were they replaced?
5 rules of conduct which replaced the Rules of Conduct for Members and Firms in 2020.
Provide a simpler structure with clear examples and a focus on respect, diversity and inclusion.
44
What are some examples of professional obligations members must adhere to?
CPD requirements
Cooperate with the RICS.
Promptly provide information reasonably requested by the Standards and Regulation Board.
45
What are some examples of professional obligations firms must adhere to?
CHP - including APR provider and complaints log.
PII
Sole principal must make appropriate arrangements for professional work to continue if they die/inability to work.
Cooperate with RICS
Promptly provide information reasonably requested by the Standards and Regulation Board.
Display on business literature, in accordance with RICS published policy, that they are regulated by RICS.
Report to RICS any matter required under Rules for the Registration of Firms.
46
What is the Bribery Act 2010?
Came into effect July 2011 and aims to combat bribery both within the UK and abroad and applies to individuals and companies.
47
What are the six key principles of the Bribery Act 2010?
1. Proportionality
2. Top-level commitment
3. Risk assessment
4. Communication
5. Monitor and review
6. Due diligence
48
What are the four offences of the Bribery Act 2010?
Bribing
Receiving a bribe
Bribing a foreign public official
Not preventing bribery
49
What are the penalties for the Bribery Act 2010?
Max 10 years in prison or an unlimited fine.
Policed by Serious Fraud Office.
50
What is a bribe?
Giving/receiving a gift/payment/service in exchange of an action which is illegal / breach of trust.
e.g. Being offered hospitality or money in exchange for appointing an agent on a sale/letting.
51
What is the RICS CPD policy?
20 hours - MRICS
48 hours - APC
At least 50% formal
Submit by 31st Jan
52
What is the requirement for registration with the RICS?
50% of Principals are RICS members.
53
What is the Misrepresentation Act 1967?
Provides remedies to individuals who have entered into a contract based on a misrepresentation.
54
How do you comply with the Misrepresentation Act 1967?
Take proactive steps to ensure that all statements and information I provide are accurate, honest, and not misleading.
Include a disclaimer in marketing particulars that states that brochure have been produced in good faith and are believed to be correct.
INCLUDE DATE IN BROCHURE
55
What was the specification of the industrial unit in Dartford?
30,000 sq ft. industrial unit.
Steel portal frame - low level brick and high level cladding.
5.5m eaves
50% site cover
1960s build
56
What was the specification of the industrial unit in Braintree?
80,000 sq ft industrial unit
Steel portal frame - metal cladding.
14m eaves height
40% site cover
10 dock level doors and 2 level access doors
2006 build
57
Talk me through the property management inspection at Braintree.
1. Ensured I was competent to inspect the building.
2. Obtained lease docs and property details.
3. Contacted site manager to request access and confirm PPE requirements.
4. Informed colleague of my whereabouts.
5. Checked in with site manager on site.
6. Completed an internal and external inspection of the building.
7. To the rear west of the unit, I noticed some cracking along the concrete floor slabs.
8. Took photos and noted location.
9. Informed the client and recommended a structural engineer was appointed to investigate the cracking and provide a solution.
Was due to subsidence - a special resin was injected into the cracking to restrengthen the foundations below ground.
58
What was the Bichard Review?
Following independent review from Alison Levitt, Lord Bichard was commissioned to clarify the purpose of the RICS and make recommendations on the governing structure.
59
What are the RICS 5 Future Foundations?
Vision - sustainable and inclusive environment for all.
Mission - inspire, advance knowledge, uphold standards.
Strategic Goals - lead & influence on sustainability, attract diverse next gen, trust, enhance member value.
Values - professional, inclusive, collaborative, ambitious
World class organisation - efficient, effective & inspiring pro body.
60
What is the RICS Ethics Decision Tree?
Provides framework of questions members should ask themselves when facing a situation that could be unethical.
61
What are the three levels of disciplinary action?
1. Action by Head of Regulation
2. Disciplinary Panel (drawn from the independent Regulatory Tribunal).
3. Appeal Panel
62
What four actions can the Head of Regulation follow after initial investigation?
1. Serve Fixed Penalty Notice
2. Make a Regulatory Compliance Order
3. Refer matter to single member of Regulatory Tribunal
4. Refer matter to Disciplinary Panel
63
When would a fixed penalty be issued?
Failure to supply info the RICS - fine or caution
64
When would a Regulatory Compliance Order be issued?
Low level breaches - e.g. not complying with CPD requirements.
65
When would a breach be actioned by a Disciplinary Panel?
Serious breaches of conduct
RCO
Fine
Reprimand
Unlimited fine
Expulsion
Publication of results
66
What is the Appeal Panel?
Consider a member/firm's appeal against review of a decision.
Can allow the appeal and vary the penalty previously imposed.
67
Guidance on use of social media?
Use of social media: Guidance for RICS members, 2021
Concerns over posts regarding discrimination, racism, bullying, harassment etc.
68
Example of some Bye Laws
Application & Definitions
Membership & Admission
Contribution to Funds
Conduct
Governing Council, Officers & Staff
Subordinate Boards, Committees & Groups
Procedure for General Meetings
Accounts & Audit
General
69
How should you negotiate fees?
Avoid price fixing & aggressive fee cutting.
Market based and agreed on an ad hoc basis.
70
How can an agent deal with multiple introductions?
Outline in TofE if their appointment is on an exclusive or non-exclusive basis.
71
What is incremental advice?
Where an agent is approached by another party to provide advice related to a purchase/disposal of an existing instruction.
e.g. Agent acting for seller is approached by the buyer/lender to provide a valuation.
Can only do if consent is given and an information barrier is put in place.
72
What is negligence?
Failure to exercise the level of skill, care and diligence expected of a competent surveyor.
e.g. breach of duty of care causing a loss to the client.
73
What is the Limitation Act 1980?
Provides limitation periods for negligence
Contract - 6 years from date of negligent act
Tort - 6 years from date claimant suffered the loss.
74
What are the three parts of the RICS Pro Standard: Countering bribery, corruption, money laundering and terrorist financing, 2019?
Mandatory requirements for each.
Guidance - supporting good practice for the above.
Supplementary guidance
75
What's the RICS motto?
There is measure in all things.
76
Provide power for Head of Regulation and Regulation Tribunal to make disciplinary/regulatory decisions.
77
What are some legislations relating to money laundering?
Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
Proceeds of Crime Act 2002
Sanctions & Anti-Money Laundering Act, 2018
78
What information is required by the RICS for registration?
Type of business & staffing details
Name of Responsible Principle
Stat regulated activities
Nature of clients
CHP
PII
Client money
79
What are the RICS core material categories?
Pro Standards - set requirements.
Practice information - support rather than advice
Practice Alerts - 2023 introduction - emerging risks RICS are concerned over, e.g. expert witness.
80
What are the three types of conflict?
Party - some/related instruction for two parties.
Own Interest / Personal
Confidential Information
81
Stat compliance for setting up a new practice?
Disclose business name.
Register for VAT if turnover over £90k
Bribery Act
Fire Safety
Asbestos
H&S
Money Laundering
Data protection
EA compliance
Insurance
Employment law.
82
Provisions of Money Laundering Regulations?
Written money laundering & terrorist financing risk assessment.
Systems & policies to address ML and TF.
Staff training
Record keeping
AML checks
83
Penalties for money laundering/not complying with regs?
14 years and/or unlimited fine for assisting with ML
5 years and/or unlimited for for tipping off
84
What should you avoid in fee negotiations?
Price fixing
Aggressive fee cutting
Collusion with competitors
85
What should you base fees on?
Market based
Ad-hoc basis with client
TRANSPARENCY
Time
Resources
Appropriate expertise
86
Three steps to follow when agreeing TofE?
Competence
CofI
Confirm in writing and get written approval BEFORE undertaking instruction.
87
When would you decline an instruction?
CofI
Not competent
Unable to complete AML checks
PII cap cannot be agreed
Ethical?
Pro bono basis for personal relationship - PII doesn't cover personal basis.
88
How can you avoid being negligent?
Agree TofE
Ensure competence
Written track record of comms, decisions and work.
CPD & up to date market knowledge
Cap pro liability excess on PII policy in TofE
89
What are some client money handling procedures?
Kept separate
Clearly identifiable
'Client' in bank account name
Available on demand
Account must be in credit
Payment of interest agreed with client
Accurate records of running balance
Only be withdrawn if properly required
Cash receipts of transactions
Annual audit and reporting obligations.
90
Key provisions of the Money Laundering, Terrorist Financing & Transfer of Funds Regulations 2017 (amended 2023)?
Written ML and TF risk assessment
Systems and procedures to address the issue.
Internal Controls
Staff training
New client, enhanced and simplified DD requirements
AML checks
Appropriate record keeping, policies etc.
91
What is involved in Customer DD?
Identify client
Verify ID - company name, address and company number.
Obtain info of purpose and nature of intended business relationship and funding arrangements.
92
What is involved in Enhanced DD?
High risk countries or politically exposed person
Detailed examination of background and purpose of transaction.
Increased monitoring
93
What is the importance of the RICS regulation?
Upholds confidence
Maintains professional standards
Protection of the public
