Flashcards in Mandatory Professional Statements e.g. Conflicts of Interest, Bribery etc. Deck (37)
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1
What is a Mandatory Professional Statement?
A professional / personal standard that must be followed and sets professional, behavioural, competence or technical requirements
2
What are the THREE types of Conflict of Interest?
1. Party Conflict
2. Own Interest Conflict
3. Confidential Information Conflict
3
What is a PARTY COI?
Where a member acting in the interests of a client/other party conflicts with a duty owed to another client/other party
E.G. advising both a landlord and a tenant when negotiating terms of a lease
4
What is an OWN INTEREST COI?
Where a member acting in the interests of a client/other party conflicts with the own interests of the member
E.G. including a contractor on a tender list for a client
where the member has an interest in the contractor’s company i.e. family or an investment
5
What is a CONFIDENTIAL INFORMATION COI?
Where a member providing information to one client
conflicts with a duty to another client to keep that same information confidential
E.G. telling one client about the feedback from a pre-app on another client’s scheme
6
What does the ROC recommend with COI?
Both members and firms have an obligation to avoid COI
Vital to foster trust and demonstrate professionalism
Members must record all COI and when informed consent has been obtained
Members must maintain confidentiality of confidential information
7
If a COI has been identified, how can a member proceed in advising a client?
Only if informed consent has been obtained from both parties
Only if the conflict will not prevent a member from providing competent and diligent advice
8
What is a Conflict of Interest (COI)?
Anything that impedes / might be perceived to impede an individual's / firm's ability to act impartially and in the best interest of a client
Where your ability to act in the best interest of your client could be impaired by:
- Financial Interest
- Personal Relationship
- Commercial Relationship
- Interest of your firm
9
What RICS documents are you aware of relating to COI?
RICS Professional Statement - Conflicts of Interest (2017) = effective in January 2018
RICS Professional Statement - Conflicts of Interest - UK Commercial Property Market Investment Agency (2017)
10
What does the RICS Professional Statement - Conflicts of Interest (2017) state?
This is a mandatory RICS document
PS states that RICS Members must not advise or represent a client if there is a COI (or significant risk of one), except when all parties affected or that may be
affected have given their informed consent
11
What does the RICS Professional Statement - Conflicts of Interest - UK Commercial Property Market Investment Agency (2017) state?
This is a mandatory RICS document
Covers Dual Agency, Multiple Introductions and Incremental Advice
Covers personal interest conflicts
12
How would you identify a COI?
Database checks, advisory emails to staff to enquire about any individual involvement, existing record searches, etc.
Some firms might request staff declare any personal interests in property at time of joining organisation, and to update the register on an ongoing basis
Proper consideration of business and ownership structures (such as separate legal entities, any common directors, any fee sharing, etc)
The embarrassment test – would the issue be embarrassing if reported in the news?
Continue to refer to the PS
13
What are the steps to dealing with a COI?
Openness and transparency = key
o Step 1: Inform parties
o Step 2: Inform parties you can’t act
o Step 3: Offer to Stand down
o Step 4: Obtain written confirmation that you can /cannot act
14
What is Informed Consent?
Can only be given in writing when parties have been provided with all the information relating to the conflict
Where the party affected understands what they are doing
15
Can informed consent always be sought by RICS members to counteract a COI?
No, only if the RICS member is confident that proceeding despite the COI is in the interest of all parties affected and is not prohibited by law
16
What is conflict avoidance?
Decide at this stage whether to accept or decline the instruction
When you do not accept the instruction
17
When writing to both parties regarding a COI, what would you say?
1. Disclose the nature and background to COI and how you plan to manage it (information barrier)
2. Request written confirmation from both clients of their informed consent for firm to act in accordance with the conflict management procedures
3. Suggest they see independent advice
18
What is Conflict Management?
For example, setting up an information barrier in a way agreed with both clients.
19
How should information barriers be operated?
Robust barrier
Surveyors must be physically separated - preferably different floors or buildings with different supper teams
Information securely stored in different folders
20
What is dual agency?
It is where an agent acts for the seller AND purchaser on a transaction
21
Are there any circumstances where an agent can act for a purchaser and a seller at the same time?
No, under no circumstances, which was ended January 2018
22
What is multiple introductions, are they allowed?
PS deals with multiple introductions = where an agent has competing contractual relationships simultaneously with several buyers for a commercial real estate investment opportunity
These are not outlawed by the PS but = limited by specific requirements
The TOE between client and agent must state whether the appointment is exclusive or non-exclusive
If exclusive, agent must inform any other prospective buyers that he/she has had contact with about the opportunity and that the agent may no longer advise them
If non-exclusive, informed consent must be obtained from the clients, subject to necessary information barriers in place
23
What is incremental advice?
Where an agent is approached by a party to provide services (e.g. surveying, valuation) related to a purchase / disposal that is ‘incremental’ to an existing instruction from another party
E.G. agent is acting for the seller in relation to a disposal but is approached separately by the buyer, or its lender, to provide a valuation
24
Can incremental advice be provided?
Must have information barriers in place at the firm between teams to maintain strict confidentiality;
Must first obtain informed consent from client before agreeing to provide incremental advice to another prospective buyer; and
Where agent has a sale instruction, they must notify their client before agreeing to provide incremental advice to a prospective buyer, although he does not have to obtain
informed consent from his client
25
What is the relevant RICS PS relating to bribery?
RICS professional standards and guidance, global
Countering bribery and corruption, money laundering
and terrorist financing 1st edition, February 2019
26
What is a bribe?
Persuade (someone) to act in one's favour, typically illegally or dishonestly, by a gift of money or other inducement
27
Are companies responsible for their employees corrupt acts?
Yes, unless they can show that they have put adequate policies and procedures in place to combat bribery
28
Give me some examples of the types of policies / procedures companies could put in place to combat bribery
o Staff training
o Provision of policies
o Regular reviews
29
What would you do if a Client offered you cash?
Don’t accept it as it could be proceeds of crime.
30
