Mandatory - Ethics, Rule of Conduct & Professionalism Flashcards
(98 cards)
1
Q
What is the RICS Motto?
A
Est Modus in Rebus (There is measure in all things)
2
Q
What is the mission statement of the RICS?
A
- To qualify and equip their members to offer the highest standards of professional service.
- To promote and enforce standards
- To lead solutions to the major challenges facing the built environment through professional expertise.
3
Q
When was the RICS founded?
A
1868
4
Q
What are the RICS’s 5 Principles of better regulation?
A
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
5
Q
What is the difference between RICS ethics and rules?
A
Ethics are a set of moral values
Rules of conduct are a framework that we work to
6
Q
How many Global Professional and Ethical Standards are there?
A
Up until 1st February 2022 there were 5 global professional & ethical standards
From the 2nd February 2022 onwards the Global Professional & Ethical Standards have been consolidated within the New Rules of Conduct 2022
7
Q
What are the New Rules of Conduct?
A
Rule 1: Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
Rule 2: Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
Rule 3: Members and firms must provide good-quality and diligent service.
Rule 4: Members and firms must treat others with respect and encourage diversity and inclusion
Rule 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.
8
Q
Why did the previous Rules of Conduct change?
A
The previous rules had been in place since 2007
Following research and consultation with RICS members and the public majority voted in favour of replacement
This was to provide a single document to enable greater clarity for RICS members and firms
There is now a greater focus on clearer example behaviors, understanding evolving technology and tackling climate change
9
Q
Talk us through your understanding of the Rules of Conduct changes?
A
Appendix A of the new Rules of Conduct now contains the professional obligations of Members and Firms
The Rules of Conduct October 2021 Global Practice Statement will overhaul the previous separate documents:
- Rules of conduct for Members
- Rules of conduct for Firms
- Global Professional and Ethical Standards
10
Q
What are the professional obligations of members?
A
- Members must comply with the CPD requirements set by the RICS with requires 20 hours of CPD for each calendar year, 10 hours of which must be formal
- Members must cooperate with RICS
- Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegate authority on its behalf
11
Q
What are the professional obligations of firms?
A
- Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
- 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
- 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.
- Firms must cooperate with RICS
- Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf
- Firms must display or their business literate, in accordance with RICS published policy on designations, a designation to denote that they are regulated by RICS.
- Firms must report to RICS any matter that they are required to report under the Rules of the Registration of Firms
12
Q
Why does the RICS have Rules of Conduct?
A
- To provide a framework that we can all work to and so the client knows he is getting a set level of ser
13
Q
What is the role of the RICS?
A
Promotes and enforces the highest professional qualifications and standards in the developments and management of land, real estate, construction and infrastructure.
14
Q
What does RICS stand for?
A
Royal Institue of Chartered Surveyors
15
Q
Who founded the RICS?
A
John Clutton
16
Q
What year was the RICS founded?
A
1868
17
Q
When was the RICS granted Royal Charter?
A
1881 – granted by the Privy Council
18
Q
Who is the current president of the RICS?
A
Ann Gray
19
Q
Who is the president elect / next years President and there manifesto?
A
Tina Paillet
Sustainability and Technology
20
Q
What is the current membership of the RICS?
A
160,000
21
Q
What are the levels of membership?
A
Trainee, AssocRICS, MRICS, FRICS
22
Q
How do you become a Fellow?
A
5+ years MRICS, professional / technical achievement, a leadership role, raising the profile of the RICS
23
Q
What is the governance structure of the RICS?
A
RICS is self-governed under the terms of its Royal Charter. The Bye-Laws and Regulations, which are approved by the Privy Council through the Governing council, set out the governance of the institution.
24
Q
What is the organizational structure of the RICS?
A
- Privy Council
- Governing Council (25 members)
- Regulatory Board
- Audit Committee
- Management Board
25
What are the Regulations as approved by the Governing Council?
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
26
Are you aware of some of the aims within current RICS Business Plan?
Incorporation of the Levitt Report Recommendations
- Be more open and transparent with members and public about institution decision making and finances.
- Development more effective whistleblowing arrangement
Financial
Support the profession as economy recovers, minimize subscription cost increases
27
What was the Levitt review?
Independent commissioned report following a Treasury management audit in 2018 due to inaccurate cash flow forecasting.
The report illuded to power issues with the two-board structure of a management board and executive. It provided recommendations that the RICS governing council to have more oversight of processes and called for greater transparency.
28
Are you aware of any key updated following the Levitt report?
- Appointed a new leadership team
- New President (Clement Lau)
29
What is the Bichard Review?
A review of the RICS purpose, governance and strategy as called for by the Levitt Review and approved by the RICS Governing Council.
30
What were the findings of the Bichard review?
36 recommendations in total.
* A renewed and increased focus on the public interest remit of RICS, including amending the Royal Charter and creating a public interest panel to advise Governing Council
* Maintaining self-regulation, through greater independence for regulatory functions
* Increased focus on Diversity and Inclusion across the profession and within RICS governance
* Empowering and enabling members through greater support for regional boards, alongside increased member engagement, with renewed focus on younger members
* Undertaking an independent review of RICS’ governance and effectiveness at delivering against its Charter for the public advantage once every five years
* A new simplified, clear, accountable governance structure
* Showing greater leadership on the issues that matter most to society, such as sustainability and climate change
Five working groups will be established to progress the recommendations.
31
What are some major challenges currently facing the RICS?
Loss of institutional trust (Levitt / Bichard Review)
Rapid urbanisation
Climate change
Impact of big data and artificial intelligence
32
What is the purpose of the RICS?
To promote and enforce the highest professional standards in the development in the built environment.
33
Why do you want to be a member of RICS?
1. Status – client confidence
2. Recognition – professional excellence
3. Market advantage – competitive
4. Knowledge – practice standards, professional guidance, CPD
5. Network – access to professionals worldwide
34
What are the benefits for firms to be regulated by RICS?
1. Confidence – client confidence
2. Professionalism – must provide impartial expert advice
3. Security – access to free independent redress and PII cover
35
What are the steps that must be taken if you qualify and want to start your own firm?
1. Inform the RICS
2. Register for regulation
3. Obtain appropriate Professional Indemnity Insurance
4. Put a Complaints Handling Procedure in place
5. Health & Safety policy (if more than 5 employees)
6. Set up procedures for handling clients’ money
7. Set up appropriate staff training
8. Appoint a ‘responsible principal’
36
What about from a statutory perspective to open your own firm?
* Disclose business name
* Inform HMRC of VAT and tax registration
* Insurances (employer and public liability)
* Register for data protection
* Financial legislation:
o Appoint a Money Laundering Reporting Officer
o Bribery Act Compliance
o Financial Services Compliance
* Employment Legislation:
o Employment Law Compliance
o Equality Act Compliance
o H&S at Work Act Compliance
* Building Legislation:
o Fire Safety Order Compliance
o Asbestos register
37
What must you do if you want to close down your practice?
1. Inform the RICS
2. Inform clients at earliest opportunity and make handover arrangements to another firm
3. Return any clients’ money being handled
4. Inform insurers and obtain PII run-off cover for a minimum of 6 years
5. Retain copies of client files and records for 6 years minimum
38
What are International Standards?
Mandatory high-level, principle-based standards.
E.g., International Property Measurement Standards (IPMS)
39
What are Professional Statements?
Mandatory standards.
E.g., Conflicts of Interest 2017
40
What are Practice Statements?
Mandatory standards in practice.
E.g., Surveyors Acting as Expert Witnesses 2014
41
What are Guidance Notes?
Voluntary best practice standards.
E.g., Surveying Safely 2018
42
Are there any planned updates to the Guidance, Professional Statements etc.
Yes, I am aware there are plans to update the previous categories from:
Prof. Statement -> Prof. Standards
Guidance Note -> Practice Information
43
What does the RICS say about fee negotiations?
Fees should be market-based and agreed on an ad-hoc basis with clients.
Firms must avoid price fixing, aggressive fee cutting or collusion with competitors.
44
What must be done before you start work on an instruction?
Check you are professionally competent.
Conflict of Interest check.
Have signed Terms of Engagement in place.
45
What is a conflict of interest and how can this be managed?
Any involvement with a party / property which may influence your impartiality in an instruction.
46
What does the RICS say about confidentiality?
* The RICS says that client confidentiality must be maintained for all client affairs, including historic information (all old files must be held for a minimum of 6 years).
* You require permission from your client to give out any third-party information unless it is overridden by statutory requirements.
* Any confidential information received in error cannot be used and must be disposed of securely.
47
What is the RICS Guidance on complaints handling procedures?
Complaints Handling 2016
CHP must be approved by RICS.
Notify professional indemnity insurers as soon as possible if there is a complaint as this could result in a claim for negligence.
Details of the CHP must be in the Terms of Business.
Complaint’s log must be maintained.
ADR mechanism must be included in CHP.
48
What is CPD and what are RICS requirements?
Continuing Professional Development.
Minimum 20 hours per year recorded online – 50% formal as a minimum.
49
What is Professional Indemnity Insurance?
Mandatory for all surveyors. Protects clients, surveyors and third parties against claims for damages.
Claims for damages can be made where negligence can be claimed if a duty of care was breached.
Certificate for PI cover must be sent to RICS annually as part of their annual return.
50
What are the minimum levels of PI cover per claim?
Dependent on a firm’s annual turnover:
* Up to £100k = £250,000
* £100-200k = £500,000
* Over £200k = £1,000,000
For a new firm:
* Estimate anticipated turnover.
51
Has there been any recent guidance from the RICS about PII?
Risk, Liability and Insurance 2021.
Insurance must provide cover for fire safety claims on properties 4 storeys or above.
As well as there is no longer any uninsured excess
52
What is negligence?
When there is a breach of duty of care owed. Duty of care is still owed in pro bono work where there is no contract.
53
What would make valid claim for negligence?
* Proof a duty was owed
* Proof that duty has been breached
* Proof that losses have been inucrred
54
What is the Limitation Act?
Imposes limits on periods for negligence – 6 years from negligent act or the date the claimant suffered the loss.
12 years if a Deed
55
What procedures must be in place when handling a client’s money?
* Keep it in a separate account
* Offer interest on the account to the client
* Provide a certificate to the RICS every 12 months with details.
* Keep the account in the client’s name
* Keep accurate records of account
* Have written consent from the client to make payments
56
What does a company like CBRE have to give to the RICS every year?
* Statement on PI
* No. of RICS employees
* Any PI Claims
57
A client is about to go on holiday where he cannot be contacted. There is an interim payment due whilst he is away. He leaves you a cheque, what do you do?
Let the client know that I personally do not deal with client's money and my firm is unable to accept cheques, cash, gift vouchers etc.
I would request the client sets up prior arrangements e.g. direct debit or arrange for a colleague to process the payment.
58
How are RICS disciplinary procedures triggered?
Someone makes a complaint to the RICS, an allegation is made by a client or third party, or information is established by the RICS.
59
What are the three levels of disciplinary action?
1. Action by Head of Regulation
2. Regulatory Tribunal
3. Appeal panel
60
What are the four actions of the Head of Regulation if they decide disciplinary action is required?
1. Fixed Penalties (where firms or members fail to supply regulatory information to RICS)
2. Regulatory Compliance Order (for minor breaches)
3. CPD Sanctions (obligation to follow CPD requirement)
4. Refer to tribunal (for serious breaches of conduct)
61
What are the five rules of conduct?
1. Be honest and act with integrity
2. Maintain professional competency and ensure services are provided by professional individuals
3. Provide good-quality and diligent service
4. Treat others with respect, diversity and inclusion
5. Act in the public interest and take responsibility for actions
62
What are the principles the rules of conduct are based on?
* Honesty
* Integrity
* Competence
* Service
* Respect
* Responsibility
63
What is the ethics decision tree?
A framework of questions that should be asked when a member is being asked to act in a potentially unethical manner.
1. Do you have sufficient facts?
2. Is it legal?
3. Is it in line with RICS Rules of Conduct?
4. Have you consulted with the appropriate people to make an informed decision?
5. Do you have clear reasoning in your decision?
6. Would you be content for your actions to be made public?
64
Can you give an example of when you have implemented each of the five rules of conduct?
1. Act with integrity – impartiality as contract administrator
2. Maintain professional competency – CPD
3. Provide good quality service – use consultants where something is beyond my competence e.g. M&E
4. Treat others with respect – day-to-day interactions with contractors, clients and colleagues
5. Act in public interest –observe anything practice/material defect which is not safe and could cause harm to the public I have entered the premises and notified the building management.
65
What is the definition of a bribe?
The act of giving a gift or hospitality with the intention of gaining favour.
66
What is the Bribery Act 2010?
Key legislation regarding gifts and hospitality in business with aims to reduce bribery.
67
What are the six principles it is based on?
1. Proportionality
2. Top-level commitment
3. Risk assessment
4. Due Diligence
5. Communication
6. Monitoring and review
68
What are the four offences under the Bribery Act?
1. Bribery
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent bribery
69
What is the penalty for breaching the Bribery Act?
10 years imprisonment and unlimited fines.
70
What are the RICS’ views on bribery?
There is a place for hospitality and gifts in the workplace, but it needs to be proportional. The Bribery Act should be followed and if in doubt do not accept.
71
What are your company’s rules for gifts and hospitality?
Gifts can be accepted if they are less than £100 in value and are not intended to sway any appointment decisions. Declare on register.
Hospitality must be proportionate to the service offered and must be declared to the head of department, compliance officer and on a register if over £250 in value.
72
What is Money Laundering?
When money from criminal activities is converted via legitimate assets.
73
What is the key legislation for Money Laundering?
Money Laundering, Terrorist Financing and Transfer of Funds 2017
74
What are the key requirements of the Money Laundering, Terrorist Financing and Transfer of Funds 2017?
* Have a written risk assessment
* Implement policies, systems and controls to address ML
* Provide staff training
* Comply with requirements relating to Politically Exposed Persons (PEPs)
* Keep records
* Anti-Money Laundering checks
* Additional due diligence for high-risk factors
75
What are the different levels of due diligence checks? Relating to Money Laundering
1. Customer Due Diligence (CDD) – new clients
a. Identify the client and verify their identity (passport)
b. Identify beneficial owners
c. Registered office for company
d. Names of the directors
e. Obtain information on nature of their relationship
2. Enhanced Due Diligence (EDD) – additional checks for high risk third world countries or PEPs.
a. Additional evidence and monitoring required
76
What are the typical requirements for money laundering checks?
* Public LC – London Stock Exchange listing
* Public body – Government ownership
* Private LC – Full company details, certificate of incorporation, details of owners and shareholders
* Private individual – valid photo ID and validation of address
77
What is the penalty for failure to comply with Money Laundering Act?
14 years imprisonment for participation or 5 years imprisonment for failing to report suspicion.
78
What are some things that would make you suspicious of money laundering?
* Want deal done quickly or deal doesn’t make sense
* Small payments from different accounts
* Large payments in cash (>€10k must be registered with HMRC)
* Not forthcoming with information
79
What is the RICS guidance on Money Laundering/Bribery?
Countering bribery, corruption, money laundering and terrorist financing 2019
80
What does the Countering bribery, corruption, money laundering and terrorist financing 2019 guidance note set out?
Have written policies and procedures in place.
* Bribery and Corruption:
o Do not offer or accept anything that could constitute a bribe and comply with the law.
* Money Laundering and Terrorist Financing:
o Do not facilitate or be complicit in ML or TF and comply with the law.
81
What does your firm do with regards to Money Laundering?
We have an Anti-Money Laundering Officer who reviews and checks companies.
82
In your Level 3 example , Milton Keynes you state you noticed cracking causing extensive damage to a building how did you determine the severity of the cracking and what were the operational issues?
On site I measured the size of the cracks with ruler and took photographs of the crack locations.
I referred to BRE Digest 251 which provides guidance on the size of cracking to low-rise buildings. The cracks identified at a maximum were between 15-25mm which is noted as extensive damage. Damage other than that to the elevations resulted in operational issues to windows and doors.
83
If you are successful in undertaking a project for a client and they send you a case of wine as a thank you, what should you do?
You should clearly state that you would consider whether this could introduce a future conflict of interest. You might also refer to your employer's gift register or other policies/procedures. The important point is to show that you would not accept a gift that may influence your future judgment.
84
As a qualified surveyor you are working for a surveying practice and a friend asks you to do a building survey as a favour because you are a surveyor, what should you do?
You should identify that you would not give this advice as you do not have Professional Indemnity Insurance and would encourage your friend to seek advice through your company being careful that you acknowledge any conflict of interest for yourself.
85
A party walks into the office asking to speak to you, wanting to do some business with a briefcase full of cash. You sit down to discuss their requirements and they want you to get cracking with the instruction, what do you do?
Carry out Money Laundering checks on the client in the form of Customer Due Diligence checks.
If the checks come back as legitimate then I would tell them I could not accept the cash as payment.
86
On a tender a contractor comes in significantly lower than the rest and the client is particularly keen to appoint them what would you suspect?
Bribery or Money Laundering.
87
If you see a contractor out and they offer you a drink what would you do?
Not accept.
88
Someone gives you £30,000 and asks you to use it to manage a job whilst they are away on holiday, what do you do?
Inform my line manager and our company Anti-Money Laundering Officer.
Carry out Money Laundering checks on the client in the form of Customer Due Diligence checks.
If the checks come back as legitimate then I would tell the client I could not accept money in cash or cheque.
I would ensure I am following the company procedure for handling client money and keep my line manager involved throughout.
89
You’ve recently completed a project and the site had Tenants in place. A tenant at the end of the works gives you a box of chocolates what do you do?
I would be able to accept the gift as there is no conflict of interest and the gift if reasonable an proportionate. However, I would ensure that I informed my relevant colleague and make sure it was put on a gift register.
90
When is a firm required to register with the RICS?
1. Provides surveying services to the public
2. Firm is operating in a Regulated Area A (United Kingdom)
3. At least 50% of the Firm's members are RICS members.
91
When is a firm eligible to register with the RICS?
1. Provides surveying services to the public.
2. At least 25% of the firm's members are RICS members.
92
What are the RICS five principles for better regulation?
1. Proportionality
2. Accountability
3. Consistency
4. Targeting
5. Transparency
93
What is a Bye Law?
They provide the power for the Head of Regulation and Regulatory Tribunal to make disciplinary and regulatory decisions. Which are made in accordance with the Rules and guidance created by the Standards and Regulations Board
94
What is the Royal Charter?
An instrument granted by the monarch which allows independent legal, organisational powers to govern its own affairs.
The royal charter requires RICS to “promote the usefulness of the profession for the public advantage in the UK and in other parts of the world.”
95
What are the 10no. Bye Laws?
1. Application and Definitions
2. Membership and Registration
3. Designations
4. Contributions to Funds
5. Conduct
6. Governing Council, Officers and Staff
7. Subordinate boards, committees and Groups
8. Procedure for General Meetings
9. Accounts and Audit
10. General
96
What happens if you fail to meet your CPD requirements?
1st offence – Caution
2nd offence onwards – Fine and can lead to expulsion.
97
What are ways fees are calculated?
* Time spent multiplied by an hourly rate
* % of the compensation received
* ‘fixed fee’ based on the scope of work required
* PI level required
98
What points of guidance would you think of to make sur a fee is competitive?
* Proportionate to the size and complexity in relation with time, effort and expertise
* Travelling costs incurred, including time spent travelling.
* % compensation cases. Same is followed but agreed at the outset.
