RICS Ethics

Question 1

What are the RICS Rules of Conduct?

Answer 1

1. Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
2. Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
3. Members and firms must provide good-quality and diligent service.
4. Members and firms must treat others with respect and encourage diversity and inclusion
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.

Question 2

What behaviours would you relate to Rule 1?

Answer 2

Honesty and transparency. Covers conflicts of interest, client money handling and avoiding money laundering or bribery.

Question 3

What behaviours would you relate to Rule 2?

Answer 3

Maintaining my own level of professionalism, having a specific CPD plan and carrying it out. Firms to ensure training provided to staff and to make sure CPD is fulfilled.

Question 4

What behaviours would you relate to Rule 3?

Answer 4

Understanding clients requirements through a clear brief. Clear appointment documents detailing fees and scope of services. Handle data carefully.

Question 5

What behaviours would you relate to Rule 4?

Answer 5

Respect everyone not just in the workplace. Never discriminate and carry out due diligence in checking the supply chain is free from modern slavery or unfair labour.

Question 6

What behaviours would you relate to Rule 5?

Answer 6

Speaking up when I see wrong doing. Being conscious of statements made on social media so to maintain public confidence. To take responsibility would be to own up to any mistakes made and act to resolve them.

Question 7

What are the principles for better regulation?

Answer 7

• Proportionality
• Accountability
• Consistency
• Targeting
• Transparency

Question 8

What ethical principles define the new rules of conduct?

Answer 8

Honesty, Integrity, Competence, Service, Respect, Responsibility.

Question 9

How would you register for regulation as a firm?

Answer 9

• Contact the RICS for an info pack
• Inform the RICS and register for regulation
• Appoint a contact officer for RICS communications
• Take out professional indemnity insurance and run off cover
• Prepare an appropriate complaints handling procedure
• Abide by the RICS rules of conduct
• Use the designation ‘Regulated by the RICS’ on all practice material

Question 10

What are the requirements for a firm to become regulated?

Answer 10

If 50% of principals are members of the RICS and the firm provides surveying services to the public in regulated area A (UK) regulation is compulsory.
If at least 25% of principals are members then a firm can apply to be be regulated.

Question 11

What does a compliant complaints handling procedure look like?

Answer 11

Client should be made aware in terms of business. Complaints log should be maintained. Response to complaints given within 28 days (acknowledgement within 7)

Must have two stages:

1. Review by senior member of the firm/complaints handler…. if it cannot be resolved then.
2. Redress system / ADR procedure with an independent third party.

Question 12

What are your obligations when handling client money?

Answer 12

• Make sure it is kept safe
• used only for appropriate purposes
• have controls to safeguard it

Question 13

What are the requirements of a client money account?

Answer 13

• Firm has exclusive use
• Account only includes the client money paid into it
• Account has words client and name of firm in title
• money is immediately available

Question 14

What are the RICS disciplinary procedures?

Answer 14

Only serious offences will lead to disciplinary procedures (Rules of Conduct 2022)

Set out by the regulatory tribunal who are granted powers by the bye laws.

Disciplinary action will be determined by the nature of the offence.

1. Investigation by the RICS (Investigate accusation or apparent non compliance)
2. Regulatory Compliance order (agreement - failure to comply will lead to disciplinary hearing)
3. Fixed Penalties (only for CPD and firms fees)
4. Disciplinary Panel hearing (most sever punishment would be expulsion for very serious offences)

Question 15

What types of conflict of interest are there?

Answer 15

• Own interest conflict
• Party conflict
• Confidential Information conflict

Question 16

What are the six principles of the Bribery Act 2010?

Answer 16

• Top Level Commitment
• Monitoring and review
• Communication
• Proportionality
• Risk Assessment
• Due Diligence

Question 17

What are the four offences under the Bribery Act 2010?

Answer 17

• Bribing another person
• Receiving a Bribe
• Bribing a foreign public official
• Failure of a commercial organisation to prevent bribery

Question 18

What are the potential punishments of breaching the Bribery Act 2010? Who enforces it?

Answer 18

Unlimited fines or up to 10 years in prison.

The Serious Fraud Office investigate and enforce this.

Question 19

What are the requirements of firms under the money laundering regulations?

Answer 19

• Take steps to identify and risk assess, keeping records of this.
• Provide training to employees.
• Have policies, controls and procedures established to manage the risks.
• Regularly review and update policies.

Question 20

What is the punishment for failing to comply with money laundering regulations? What is the max cash payment?

Answer 20

Failing to comply with regulations risk a fine, imprisonment of up to 2 years or both.

Maximum amount for cash transactions is equivalent to 10k euros.

Question 21

What is PI and what are the requirements of Professional Indemnity Insurance?

Answer 21

PI covers professionals for any claims of negligence brought against them in their professional capacity.

Requirements of PI:

• Any one claim or in aggregate with round the clock reinstatement.
• RICS minimum wording or more comprehensive.
• Based on firms turnover the previous year.
• Must be fully retroactive (insurer at time of claim being made covers the claim)
• Run off cover for past and present employees for a minimum of 6 years (12 years if contract under deed)

Question 22

What are the minimum levels of PI cover?

Answer 22

Based on firms turnover the preceding year:
£100k or less = £250k cover
£100-200k = £500k cover
£200k or more = £1million cover

Firms may wish to hold more than the minimum to adequately cover risks.

Question 23

What is the maximum level of uninsured excess in PI cover?

Answer 23

Based on turnover preceding year:
£10 million or less = Greater of 2.5% insured sum OR £10k
£10 million plus = No limit on uninsured excess

Question 24

What is the longstop for professional negligence claims?

Answer 24

15 years as set out in the Limitations Act 1980.

May be useful to obtain run off cover to match this.

Question 25

You are offered a gift by the contractor what would you do?

Answer 25

My initial response would be to decline the gift. However, if it was insisted, then I would assess the timing (e.g. not at interim assessment or final account) and proportionality of the gift and whether I could reciprocate it. I would also review how this would look to my client. I would log the gift on my firms gift register and look to see if it could be donated to charity or shared amongst the office (crate of wine etc).

Question 26

Would you accept a cash payment for work undertaken?

Answer 26

As a rule my firm do not accept cash payments so I would decline. Cash payments also raise suspicion to the legitimacy of the money and would risk falling foul of the money laundering regulations.