RICS Professionalism & Ethics Flashcards

Question

How long must you keep money laundering records for?

Answer 1

5 years beginning from: the date a business relationship ends the date a transaction is completed

Answer 2

- PII protects professionals from liability for losses arising from their services or advice - It covers legal fees and damages if a client sues for negligence, errors, or omissions - Without PII, professionals may be personally liable for damages, which could be financially devastating

Answer 3

Members to have PI with minimum indemnity of £250,000 The coverage must include: - Breach of professional duty negligence - errors and omissions, - must be in force at all times. - Failure to comply can result in disciplinary

Answer 4

Combines multiple claims arising from a single event, related events, or a common event Protects insurers and simplifies claims

Answer 5

Coverage provided for claims made and reported during the policy period. Policy in force when claim is made and reported provides coverage. Incident must have occurred after the policy's retroactive date.

Answer 6

Yes, a PII excess (also known as a deductible) is usually paid per claim.

Answer 7

1. Compliance with RICS standards and guidelines. 2. Detailed documentation and record-keeping. 3. Clear communication with clients. 4. Regular professional development and training. 5. Proper risk management and quality assurance procedures.

Answer 8

Yes, good record keeping can help provide a defense in a Professional Indemnity Insurance (PII) claim by showcasing adherence to professional standards, clear communication, and appropriate decision-making, which can support your case during investigation and resolution. But is not an indemnity alone.

Answer 9

First be sure you are competent - then: 1. Review your current PII policy to ensure the additional services are covered. 2. Contact your insurance provider or broker to discuss the new services and potential risks. 3. Amend or extend your PII coverage to include the additional services, if necessary. 4. Obtain written confirmation of the updated coverage from your insurer

Answer 10

Run-off Cover: 1. PII protection for claims arising after ceasing practice or retiring. 2. Covers services rendered during active policy period. 3. Ensures continued protection against late-reported claims.

Answer 11

RICS requires that its regulated firms maintain run-off cover for a minimum of six years after ceasing practice or business.

Answer 12

Secured new insurance terms, providing greater fire safety cover for PII and launched new guidance on Risk, Liability and Insurance. Under the new rules insurers are not permitted without specific dispensation to exclude fire safety claims on a property four storeys or less Fire safety coverage must be provided as a minimum on an aggregate, defence cost inclusive basis. This will allow more chartered surveying firms to obtain improved fire safety cover in their PII.

Answer 13

Hart v Large the main scholary article on topic suggests record keeping could have helped.

Answer 14

No - will be good together with site notes but not enough on it's own

Answer 15

Insurers are not permitted without specific dispensation to exclude fire safety claims on a property four storeys or less Fire safety coverage must be provided, as a minimum, on: An aggregate, defence cost inclusive basis. RICS is engaging very closely with listed insurers to improve fire safety cover

Answer 16

Cyber Cover: Traditional PII policies have limited cyber coverage for: Data breaches Cyber-attacks Security incidents Consequences: Financial losses Reputational damage Legal liabilities Consider dedicated cyber insurance policy Covers data breaches, cyber extortion, etc. Includes business interruption & regulatory costs

Answer 17

PII claims: usually within 6 years Can vary "Long-tail" claims: up to 12 years (latent defects)

Answer 18

The ARP is open to all UK RICS regulated firms that are unable to obtain PII, which meets the minimum requirements of the RICS. The ARP is collectively underwritten by all RICS Listed Insurers and managed on behalf of insurers and the RICS by Miller Insurance Services LLP.

Answer 19

Those unable to easily get PII for a variety of reasons such as high risk practice

Answer 20

1. Published April 2021 2. Assists members, clients in understanding the main risks and liabilities associated with surveying. 3. It guides members in the negotiation of equitable contracts with clients and the avoidance of major risks 4. Helps maintain professional standards to minimize the chance of negligence. 5. Requires Professional Indemnity Insurance (PII) to protect against claims arising from professional services. 6. Utilize risk management strategies 7. Consider obtaining dedicated cyber insurance policies

Answer 21

Residential mortgage valuation example Low fees, but high potential liability Surveyor charges £500 for valuation Liability cap agreed: 10 times the fee Maximum financial exposure capped at £5,000 Manages financial risks for surveyor Provides clarity on compensation limitations for client

Answer 22

Include a clear statement: Specify that the report or services provided are intended solely for the named client and not for any third parties. Limit third-party reliance: Obtain written consent: Define third-party responsibilities: Include disclaimer: Consider liability cap:

Answer 23

1. Scope of Services 2. Liability Limitations: 3. Third-Party Reliance:

Answer 24

A snapshot of certain company information at the anniversary of the limited company’s incorporation. It is a separate document from a company's annual accounts. The information is filed with Companies House and made publicly available, to allow anyone to verify the details and legitimacy of the company.

Answer 25

1. Complaints log 2. ADR part of process 3. Publish it 4. Never discourage escalation to ADR

Answer 26

1. Failure to utilise a complaints handling procedure 2. Failure to disclose a conflict of interest 3. Misuse of clients’ money 4. Failure to answer correspondence 5. Working with a conviction of a criminal office - - Informal resolution: The RICS may act as a mediator to help resolve the complaint informally between the parties involved. - - Regulatory action: If the complaint involves a serious breach of the RICS Rules of Conduct, the RICS may initiate regulatory action against the firm or member. This can result in disciplinary action or sanctions, such as fines or revocation of membership.

Answer 27

All members must undertake a minimum of 20 hours CPD each calendar year (January to December). Of the 20 hours at least 10 hours must be formal CPD Important for maintaining competence and trust in profession

Answer 28

1. A conflict of interest can occur when a firm or member's personal interests, loyalties, or relationships conflict with their professional duties 2. Members and firms have a duty to disclose and manage conflicts of interest. This includes identifying conflicts, assessing the risk of harm to the client 3. Members and firms should have policies and procedures in place to identify, manage, and disclose conflicts of interest. 4. Professional judgment: Members and firms should use professional judgment to determine the appropriate course 5. Independence: Members and firms should maintain their independence and objectivity when dealing with conflicts of interest. Overall, the RICS' guidance on dealing with Conflicts of Interest is intended to ensure that members and firms act with integrity and maintain the trust of their clients and the public.

Answer 29

Double dipping, also known as dual agency, is a situation in real estate where an agent represents both the buyer and the seller in the same transaction, potentially earning commissions from both sides. This can create a conflict of interest, and to avoid it, many recommend separate agents or only representing one party.

Answer 30

One agent cannot represent the material interests of both seller and buyer

Answer 31

1. Agree on a closure date 2. Seek advice if the firm is insolvent 3. Inform staff and clients 4. Deal with outstanding money in client accounts 5.Notify PI insurer for run-off cover 6. Arrange files 7. Notify former clients to return any leases or other original documents being held for them 8.Inform RICS and fill in the firm deregistration form 9. Set up a notification system for anyone trying to contact the firm after closure 10. Contact other relevant parties such as insurance providers, accountants, and the Information Commissioner.

Answer 32

RICS guidance: "Countering Bribery and Corruption, Money Laundering and Terrorist Financing" professional statement - Feb 2019 Status - Mandatory for RICS members Covers risk assessment, policies, procedures, staff training, customer due diligence, and reporting Emphasizes risk-based approach Non-compliance may result in disciplinary action or sanctions

Answer 33

According to RICS guidance members and firms must: 1. Do a suitable risk assessment of their activities 2. Put in place anti bribery, corruption and money laundering policies and processes Example: Gifts policy, ID checks for new clients 3. Carry out training of staff 4. Encourage vigilance

Answer 34

Must do: 1. Comply with RICS professional statement on countering bribery, corruption, money laundering, and terrorist financing 2. Conduct risk assessments for bribery, corruption, and money laundering 3. Implement policies and procedures to mitigate identified risks 4. Perform customer due diligence (CDD) 5. Train staff on recognizing and reporting signs of bribery, corruption, and money laundering 6. Report suspicious transactions or activities to relevant authorities Should do: 1. Appoint a compliance and ethics champion 2. Establish a code of behavior for ethical conduct 3. Regularly review and update risk assessments and policies 4. Use a risk-based approach for applying enhanced or simplified due diligence 5. Refresh customer due diligence periodically 6. Share best practices and experiences within the firm

Answer 35

RICS Registration Rules Summary - last changed: Feb 2022 1. Rules apply to firms needing or eligible for RICS regulation 2. Firms must register if providing surveying services, operating in regulated areas, and at least 50% of principals are RICS members 3. Firms are eligible to register if providing surveying services and at least 25% of principals are RICS members 4. Registration process includes providing required information, agreeing to share information, and accepting RICS' decision 5. Firms must appoint a Responsible Principal to ensure regulatory compliance 6. Registered firms must follow RICS' Rules of Conduct, Charter, and Bye-Laws, and inform RICS of disciplinary findings or material changes

Answer 36

- A company emerging from a previously dissolved or liquidated firm - Often has the same or similar management and ownership structure - Created to avoid debts or obligations of the original company - Can undermine the integrity of the profession and harm the reputation of RICS and its members

Answer 37

Summary of RICS logo and 'Regulated by RICS' designation usage rules: 1. RICS logo can be used by Members and Registered Firms only. 2. 'Regulated by RICS' designation is exclusive to Registered Firms. 3. Compliance with RICS guidelines and obligations is mandatory. 4. Logo and designation must not be altered or misused. 5. Firms must display the designation on business literature and communications. 6. Sole practitioners can use the 'chartered surveyor' designation. 7. Partnerships and companies can use the designation under specific conditions.

Answer 38

Sole practitioners can use Regulated companies can use if board is 50% or more MRICS or above, subject to further conditions, including: Written agreement around code of conduct Can only be in trading name

Answer 39

1. Statement indicating the firm is regulated by RICS for surveying services. 2. Name, job title, and contact details of the Responsible Principal.

Answer 40

1. Statement indicating the firm is regulated by RICS for surveying services. 2.Name, job title, and contact details of the responsible principle

Answer 41

Locum: - A temporary professional who fulfills duties and responsibilities of another professional during their absence (e.g., vacation, leave) - Commonly used by sole practitioner professiinals - surveyors, doctors

Answer 42

Identify suitable locum Establish a written agreement Update CHP with locum's role Train the locum on CHP Inform clients and stakeholders Monitor and review locum's performance

Answer 43

Client Money Handling Prof. Statement Effective from 1 January 2020

Answer 44

1. Last resort protection for client money where firm can't pay. 2. General client money protection, covering money held by firms undertaking any surveying activities (Client Money Protection for Surveying Services); and 3.. residential agency activity in England protection, covering areas under the Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 (Client Money Protection for Residential Agents).

Answer 45

1. RICS Client Money Protection Scheme 2. Propertymark CMP Scheme 3. UKALA CMP Scheme

Answer 46

1. RICS Client Money Protection Scheme - 25 June 2020 £50,000 2. Propertymark CMP Scheme 3. UKALA CMP Scheme

Answer 47

1. Mandatory 2. Covers monitoring, supervision, and regulation 3. Ensures compliance with professional standards and rules

Answer 48

1. Rent payments 2. Tenancy deposits 3. Service charge funds 4. Sale proceeds 5. Purchase deposits

Answer 49

Back: Client Money: 1. Funds held on behalf of clients 2. Examples: rent payments, tenancy deposits, service charges Office Money: 1. Funds belonging to the firm 2. Examples: fees, commissions, operational expenses

Answer 50

1. Segregation of client and office money 2. Use of designated client accounts 3. Regular reconciliations and record-keeping 4. Timely distribution of funds 5. Client money protection scheme participation 6. Transparent client communication 7. Compliance and training for staff

Answer 51

1. Urbanization and demographics: With rapid urbanization and changing demographics, surveyors must adapt to 2. Climate change and resource scarcity: Surveyors play a crucial role in promoting sustainable practices 3. Technology and data revolution: Surveyors must embrace emerging technologies 4. Globalization and economic shift: Surveyors need to navigate global economic shifts 5. Evolving role of the surveyor: Surveyors must adapt their skills, expand their expertise, and engage in CPD 6. Collaboration and partnerships: Surveyors should collaborate with diverse stakeholders, form strategic partnerships 7. Regulation, ethics, and trust: Surveyors must uphold high ethical standards, maintain trust, and adhere to robust regulatory frameworks

Answer 52

1. Reinforces duty of care towards clients 2. Importance of clear scope of work and level of service 3. Diligence in identifying and reporting defects 4. Awareness of professional liability 5. Emphasis on continuous professional development (CPD) 6. More of a need to recommend further investigations

Answer 53

1. Professional duty of care can exist without a formal contract or charging a fee 2. Professionals can be held liable for negligence in their professional capacity, regardless of informality 3. Emphasizes the importance of maintaining high professional standards in all situations

Answer 54

RICS is unlikely to start investigations about social media posts that: * are critical of an organisation or its policies and performance, rather than individuals * use professional and respectful language * are removed if a member receives a request to do so Basically, uphold RICS professional standards even from a personal perspective

Answer 55

- There have been problems with RICS in terms of governance - Review et up re. concerns about lack of transparency over finances + dismissal of non execs - Concluded a power struggle had developed in governance which compromised RICS - Recommended "wide-ranging examination of purpose, governance" by external reviewer - Accepted in full by RICS - Led to Bichard review

Answer 56

- Protected by law under the Public Interest Disclosure Act 1998. - Provides legal protections for employees who disclose information about wrongdoing within their organizations. - Applies to a wide range of workers - Protects whistleblowers from retaliation or dismissal for making a protected disclosure in good faith.

Answer 57

Good governance, to me, means that those conducting the management and leadership of an organisation should lead by example. In RICS context: Uphold and be seen to uphold the RICS Rules of conduct

Answer 58

- Massive leak of financial documents revealing offshore holdings of wealthy individuals - Raises ethical issues around tax avoidance, conflicts of interest, transparency, accountability, and professional ethics - Highlights need for greater transparency and accountability in global financial system - Sparks debate about role of wealthy and powerful in shaping global economy and pressure on governments to address financial wrongdoing.

Answer 59

- External review conducted as an outcome of the Levitt Review - Set up to review the purpose and governance of RICS - March 2021 - RICS endorses recommendations - 36 recommendations made, including

Answer 60

1. Renewed focus on public interest remit 2. Maintaining self-regulation through greater independence of regulatory function 3. Increased focus on diversity

Answer 61

3 phases 1. Transitioning responsibilities from chair of governing council to president + new chair of board + consultation on changes made 2. Phase 2 would focus on creating a new RICS board 3. Phase 3 the establishment of 5 key committees

Answer 62

Professional Integrity: - Quality of being honest, trustworthy, and reliable - Essential for maintaining trust and confidence Professional Ethics: - Set of moral principles and values - Provide framework for decision-making - Essential for maintaining public trust - Defined by RICS' code of conduct

Answer 63

- Coercion or control used to exploit individuals for labour, services, or commercial sex. - Human rights violation and a crime - Businesses have a responsibility to prevent modern slavery Red flags include: - Below-market level tender prices - Poor reputational visibility - Lack of trade body membership - Poor living conditions

Answer 64

Gives UK authorities more power to impose sanctions and target money laundering. - It imposes stricter requirements on financial institutions. - Requires greater transparency around beneficial ownership. - Allows UK to impose its own sanctions. - Businesses must comply with the new obligations imposed by the Act.

Answer 65

The Sanctions List is a list of individuals, groups, and entities subject to sanctions or restrictions. Being aware of the Sanctions List is important as failure to comply can result in legal and reputational risks, and engaging with sanctioned individuals or entities can negatively impact future business.

Answer 66

- improve transparency around ownership of UK property by overseas entities. - combat money laundering

Answer 67

1.Honesty 2. Integrity 3. Competence 4. Service 5. Respect 6. Responsibility

Answer 68

-Includes a beneficial ownership register, - strengthened unexplained wealth orders - Made changes to UK sanctions. - Companies House to undergo reforms to improve the quality of info - Solicitors must declare in public records who ultimately benefits from property ownership.

Answer 69

1. anti-bribery policy. 2. due diligence on individuals and organizations. 3. Provide training and awareness. 4. Implement internal controls to prevent bribery. 5. Regularly review and assess effectiveness. 6. Encourage reporting

Answer 70

1. Anti-money laundering policy. 2. Conduct customer due diligence. 3. Monitor for suspicious activity. 4. Provide training and awareness. 5. Implement internal controls to prevent money laundering. 6. Maintain records of due diligence, monitoring, and reports.

Answer 71

Common occurrence for service charge disputes Firm open to mediation and see this as sensible step when working with debt recovery firms - will naturally happen pre-court - senior manager and PM always present

Answer 72

Freeholder wished to invite us to tender - we consulted portfolio list and noted there was a conflict with a client in dispute with them Politely declined the request to tender

Answer 73

1. Own Interest Conflict: Exists when personal interests of individuals involved in a matter create conflicts, such as commission or success-based remuneration. 2. Party Conflict: Occurs when duties owed to different clients or parties conflict, such as in expert witness roles or impartiality in appointments. 3. Firm Party Conflict: Arises when a single regulated firm accepts multiple professional assignments with conflicting clients' interests. 4. Multi-disciplinary Firm Conflict: Involves a regulated firm providing different services with conflicting duties in related transactions.

Answer 74

We already have set up: 1. Professional Indemnity Insurance (PII): 2. Public Liability Insurance: Covers injury or damage claims from third parties. 3. Employers' Liability Insurance: Required if hiring employees, covers work-related injuries/illnesses. 4. Office Insurance: Safeguards office premises, equipment, and contents. 5. Cyber Liability Insurance: Shields against data breaches and cyber-attacks. 6. Directors and Officers Insurance (D&O): Protects directors/officers from personal liability claims.

RICS Professionalism & Ethics Flashcards

(99 cards)