Mock Flashcards
What is a technical due diligence survey?
- Technical due diligence of property, when carried out by an RICS member or RICS registered firm, consists of the systematic review, analysis, discovery and gathering of information about the physical characteristics of a property and/or land (the property).
- The RICS member or RICS registered firm then undertakes an impartial and professional assessment of the property and provides a balanced and professional opinion of the condition of the property in the form of a technical due diligence report.
- This enables a prospective purchaser, occupier or financier of the property to make an informed assessment of the risks associated with the transaction from a technical perspective.
What are the main stages in a property life cycle when a TDD survey may be instructed by a client?
- For acquisition - a purchaser’s survey.
- Occupation and operation.
- Disposal - vendors’ survey.
- For refurbishment and development.
What is section 18(1) of the Landlord and Tenant Act 1927?
- Section 18(1) of the Landlord and Tenant Act 1927 is often referred to as the “statutory cap on damages” as it places a statutory cap on the amount of damages a landlord can recover from a tenant for breach of their repairing covenants in a lease.
- Section 18(1) essentially has two limbs:
1. Damages from a tenant for a breach of their repair covenant cannot be more than the reduction in value of the property as a result of the breach (the diminution valuation).
2. No damages are to be paid for breach of repair covenant for works that will be superseded by a landlord’s intended structural alterations.
Why are the RICS Rules of conduct in place? What are the RICS Rules of Conduct
- They support positive change in the built and natural environments, through promoting and enforcing the highest ethical standards.
- The rules of conduct are based on ethical principles of honesty, integrity, competence, service, respect and responsibility.
- The rules of conduct set out five rules which provide a structure for making ethical decisions about how to behave as a professional.
- The rules apply to ALL RICS members and firms who are regulated by RICS no matter where they work, although firms and members must consider geographical legal obligations that apply to them.
What are the 5 rules that make up the RICS Rules of Conduct?
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.
What are some example behaviours of Rule 1 of the RICS Rules of conduct?
Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
Example behaviours:
- Members and firms do not mislead others by their actions or omissions, or by being complicit in the actions or omissions of others.
- Members and firms do not allow themselves to be influenced improperly by others (as a result of, for example, giving or receiving work referrals, gifts, hospitality or payments) or by their own self interest.
- Members and firms identify actual and potential conflicts of interest throughout a professional assignment and do not provide advice or services where a conflict of interest or a significant risk of one arises, unless they do so in accordance with the current edition of Conflicts of interest, RICS professional statement.
- Firms have effective processes to identify actual and potential conflicts of interest, to enable appropriate decisions to be made on whether to accept work, and to keep records of decisions made about actual and potential conflicts of interest.
- Members and firms providing advice and opinion in a professional context do so honestly and objectively based on relevant and reliable evidence, and firms have processes to ensure that directors, partners and employees do so.
- Members and firms are open and transparent with clients about their fees and services.
- Members and firms act to prevent others being misled about their professional opinion.
- Members and firms do not take unfair advantage of others.
- Members and firms protect confidential information and only use or disclose it for the purposes for which it was provided, where they have the necessary consent to do so or where required or permitted by law.
- Firms keep client money safe and have appropriate accounting controls.
- Members do not misuse client money and comply with controls intended to keep it safe.
What are some example behaviours of Rule 2 of the RICS Rules of conduct?
Rule 2 - Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
Examples:
Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.
Members and firms supervise any employees undertaking work for them and ensure that these employees have the necessary knowledge, skills and resources to do their tasks competently.
Members and firms check that subcontractors have the necessary knowledge, skills and resources to do their tasks competently.
Members and firms reflect on the work they have undertaken and its impacts, and consider how they might apply what they have learned to their future work.
Members maintain and develop their knowledge and skills throughout their careers. They identify development needs, plan and undertake continuing professional development (CPD) activities to address them and are able to demonstrate they have done so.
Firms encourage and support directors, partners and employees to maintain and develop their knowledge and skills, and check that they are complying with CPD requirements set by RICS.
Members and firms stay up to date and comply with relevant legislation, codes of practice and other professional and relevant technical standards. Firms ensure that their directors, partners and employees do so.
What are some example behaviours of Rule 3 of the RICS Rules of conduct?
Rule 3 - Members and firms must provide good-quality and diligent service.
Examples:
Members and firms understand clients’ needs and objectives before accepting any professional work.
Members and firms agree with clients the scope of the service to be provided and its limitations, and timescales for the work.
Firms inform clients that they are regulated by RICS and that they may need to disclose records to RICS where required for regulatory purposes.
Members and firms inform clients promptly and seek their agreement if it is proposed that any of the terms of engagement or estimated fees or costs be changed.
Members and firms undertake their work in a timely manner; with due care, skill and diligence, and in accordance with RICS technical standards.
Members and firms communicate to clients the material information on which their professional advice and opinion is based.
Members and firms communicate with clients and others clearly and in a way they can understand.
Members and firms ensure that any referral or introduction they make for a client is in the best interests of the client and inform clients about any financial or other benefits to the member or their firm from a referral or introduction.
Members and firms keep proper records of their work and decisions in enough detail to allow them to answer questions from clients and to allow their work to be audited for quality assurance or regulatory purposes.
Members and firms, when advising clients about projects, encourage solutions that are sustainable in that they minimise harm and deliver balanced economic, social and environmental benefits.
Members and firms understand the risks and benefits of using relevant technology.
Members and firms check that all data used is accurate and up to date, is kept securely, and that they have proper legal rights to use it and, where required, share it.
Firms have effective quality assurance processes for their work.
What are some example behaviours of Rule 4 of the RICS Rules of conduct?
Rule 4 - Members and firms must treat others with respect and encourage diversity and inclusion.
Example behaviours
Members and firms respect the rights of others and treat others with courtesy.
Members and firms treat everyone fairly and do not discriminate against anyone on any improper grounds, including age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.
Members and firms do not bully, victimise or harass anyone.
Firms check that supply chains do not involve modern slavery or other abuses of the workforce.
Members and firms report abusive labour practices to proper and recognised authorities if they become aware of, or suspect, them.
Members and firms work cooperatively with others.
Members and firms develop an inclusive culture in their workplaces, support equal access and opportunity for all, and identify and address unconscious bias.
What are some example behaviours of Rule 5 of the RICS Rules of conduct?
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.
Example behaviours
Members and firms question practices and decisions that they suspect are not right, and raise concerns with colleagues, senior management, clients, RICS or any other appropriate person, body or organisation where they believe in good faith that it is necessary to do so. Firms provide processes to allow and support individuals within the firm to raise concerns with senior management.
Members and firms support directors, partners, employees, colleagues or clients who have acted in good faith to report concerns.
Members and firms ensure that public statements made by the firm, or in which members are (or could be) identified as members of the profession, do not undermine public confidence in the profession.
Members and firms respond to complaints made against them promptly, openly and professionally.
Members and firms do not dissuade complainants from approaching an alternative dispute resolution provider, RICS or any other regulatory body.
Members and firms cooperate with investigations into complaints or concerns, and provide information where it is reasonably requested and they can do so lawfully.
Members consider the effect that any health conditions may have on their competence or ability to undertake professional work, and inform management or clients where they require reasonable adjustments or are unable to continue to undertake work competently.
Members and firms manage their professional finances responsibly.
Members and firms take appropriate action when they consider that the rules have been breached, and report suspected significant breaches of the Rules of Conduct by themselves or others to RICS.
What CPD have you attended relating the ethics?
- RICS online ethics test.
- Internal presentations at my firm.
- Private study - have familiarised myself with ethics rules of conduct.
What is a conflict of interest?
A conflict of interest occurs when an individual’s personal interests – family, friendships, financial, or social factors – could compromise his or her judgment, decisions, or actions in the workplace.
What are the three types of conflict of interest according to the RICS Conflicts of Interest Professional Statement?
- Party conflict: a situation in which the duty of an RICS member (working independently or within a nonregulated firm or within a regulated firm) or a regulated firm to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another client or party in relation to the same or a related professional assignment.
- Own Interest Conflict: a situation in which the duty of an RICS member (working independently or within a nonregulated firm or within a regulated firm) or a regulated firm to act in the interests of a client in a professional assignment conflicts with the interests of that same RICS member/ firm (or in the case of a regulated firm, the interests of any of the individuals within that regulated firm who are involved directly or indirectly in that or any related professional assignment).
- Confidential Information Conflict: a conflict between the duty of an RICS member (working independently or within a non-regulated firm or within a regulated firm) under paragraph 2.2 to provide material information to one client, and the duty of that RICS member (working independently or within a non-regulated firm) or of a regulated firm under paragraph 2.1 to another client to keep that same information confidential.
Why do you want to become chartered ?
- Gold standard in my profession
- Offers guidance and support from RICS
- Designation will help my career
- I am committed to lifelong learning
- I want to give back to the up and coming surveyors
What is the RICS ethical decision tree?
The RICS decision tree assists me in making informed decisions , confirming my actions are ethical and legal
What are ethics?
Moral principles that govern an individuals behaviour
What must a complaints handling procedure include?
- A form to fill out
- Redress mechanism
- Details should be issued to clients with the terms of business
- Clear, quick, transparent and impartial and free of charge
- Names and contact details of nominated investigating person must be stated
- Complaint must be investigated within 28 days
- All complaints and progress and outcomes must be recorded
- Advise PI insurers of a complaint
- Two stages: 1 – consideration, 2 – referral to third party
What cover do you need to open your own firm?
- PII insurance - Professional indemnity insurance covers financial loss, personal injury and property damage resulting from your negligent act or error while you’re working for a client.
- PLI insurance - Public liability insurance is there to protect you if a member of the public is injured (or their property is damaged) and your business is faced with a compensation claim as a result. It can cover you when you’re working at client sites or in public.
- Employers Liability Insurance - Employers’ liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you. It’s legally required of all businesses with one or more employees.
- Building Insurance (if you own your own premises)
What parts are there to the RICS ?
- Governing Council
- Regulatory Board
- Management Board
- Executive Team
- President Team
How would you proceed if a client was insistent that you continued to work for them despite a conflict of interest?
- Check their understanding of reduced impartiality
- Seek letter of instruction to continue
- Agree working procedures to manage the conflict
- Keep them updated of any risks
- Seek informed consent
How can a disciplinary proceeding be triggered?
- Someone complains to RICS.
- An allegation by client or third party.
- Information received or established by RICS.
Which firms are regulated by RICS?
- Those firms with 50% or more of their partners / directors that are members of RICS.
What insurances would you need if you were starting up your own firm?
- Professional Indemnity
- Employer’s Liability
- Public Liability
- Building insurance of own office
What does informed consent mean?
Consent given willingly by a party who may be affected by a Conflict of Interest, that party having demonstrated to the RICS member working independently or within a non-regulated firm or regulated firm concerned that the party understands:
- There is a Conflict of Interest or a significant risk of a Conflict of Interest and;
- The facts known by the RICS member (working independently or within a non-regulated firm or within a regulated firm) or the regulated firm that are material to the Conflict of Interest.
- What that Conflict of Interest is or may be and d that a Conflict of Interest may affect the ability of the RICS member (working independently or within a non-regulated firm or within a regulated firm) or a regulated firm to advise or act fully in the interests of a client.
How many different types of RICS document statuses are there ?
There are a number of document types. This includes (can be found within the first few pages of many RICS documents) :
• Rules of conduct for members and firms, updated Feb 2022
• International standards - High-level standard developed in collaboration with other relevant bodies
• RICS professional statements (PS) - Mandatory requirements for RICS members and regulated firms
• RICS guidance note (GN) - A document that provides users with recommendations or an approach for accepted good practice as followed by competent and conscientious practitioners
• RICS code of practice (CoP) - A document developed in collaboration with other professional bodies and stakeholders that will have the status of a professional statement or guidance note
• RICS jurisdiction guide - This provides relevant local market information associated with an RICS international standard or RICS professional statement. This will include local legislation, associations and professional bodies as well as any other useful information that will help a user understand the local requirements connected with the standard or statement. This is not guidance or best practice material, but rather information to support adoption and implementation of the standard or statement locally
If faced with a situation that you felt was unethical, how would you proceed?
Using the decision tree:
• Do I have sufficient facts?
• Is the matter legal?
• Is it in line with RICS Professional and Ethical Standards?
• Have I consulted with appropriate people?
• Do I have clear reasoning in reaching my decision?
• Would I be content for my actions to be made public?
If answered no to any of the above, I would not proceed with the situation alone and would consult senior staff with direction on how to proceed.
Why did the RICS implement the new Rules of Conduct?
- A simpler structure. We have made it easier for RICS members and firms to understand our rules, providing more confidence for clients and the public.
- Clear examples. To help support members’ professional judgement, each Rule is illustrated with examples of how members and firms can behave to comply with the Rule. There are also 12 case studies showing real-life application of the Rules.
- Focusing on respect, diversity and inclusion. Whether it’s encouraging diversity and inclusion, or tackling modern slavery, respect and courtesy underpin all our professional ethics.
- Understanding evolving technology. The Rules highlight the importance of understanding the evolving use of data and technology, and the associated benefits and risks.
- Tackling global challenges. The Rules show that ethical practice by RICS members and firms has an important role when it comes to global challenges, including creating sustainable development and tackling climate change.
Why are ethics important?
- Prevents any issues with consistent behaviour
- Sets a standard of expertise and professionalism
- Promotes trust in the company and industry
What is a framework agreement?
Allows a client to invite tenders from suppliers of goods and services to be carried out over a period of time on a call-off basis as and when required.
What is client care?
The process of identifying clients and their behaviours to build a rapport. Including analysing the needs of the client.
Why is client care important?
- Promotes trust in the industry and company
- Maintains client relationships to help build business
- Maintain a reputation in the industry
What are the different types of clients?
- One off clients
- House refurbs/Residential
- Private sector
- Public sector
- Commercial clients
- Developers
What needs to be considered when preparing a fee quotation?
- Scope of service
- Terms of payment
- Complaints handling procedure
- Property details
- Client details
- Limitations
- Exclusions
