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APC JB > Rules of Conduct, Ethics and Professionalism > Flashcards

Rules of Conduct, Ethics and Professionalism Flashcards

1
Q

What are the principles of better regulation?

A

– PACTT. Proportionality (RICS assigns penalties proportionate to the breach);
Accountability (RICS is accountable to its members and to the public);
Consistency (RICS deals with breaches in the same way for all members and across different areas of practice);
Targeting (RICS uses available resources to target all breaches);
Transparency (RICS is transparent with its members and with the public).

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2
Q

What are the 9 RICS rules for members?

A

Interpretation – the rules apply to all members including student/trainee members;
Communication – RICS will use all necessary methods of communication;
Ethical Behaviour – RICS members are to behave and act in accordance with the 5 Global Ethical Standards, treating others fairly and avoiding conflicts of interest;
Competence – RICS members are to act with due competence and skill and with regard to technical standards.;
Service – members are to provide good service and customer care;
CPD – RICS members are to undertake CPD (24 hours annually (split 50/50 informal/formal) with an ethical area 3 yearly);
Solvency – RICS members are to be personally and professionally solvent;
Information to RICS – members are to provide required information to RICS in a timely manner;
Co-Operation – members are to co-operate with RICS.

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3
Q

What are the 5 Global Ethical and Professional Standards?

A

Act with Integrity (nothing that impedes professional objectivity; COI & bribes);
Always Provide a High Standard of Service (fulfill TOE, act within area of competence, communicate decision making with client well);
Act in a way that promotes trust in the profession (personal/professional behaviour, fulfil RICS obligations, meet the spirit of the professional standards rather than the letter);
Treat others with respect (be polite and considerate personally and professionally);
Take responsibility (respond promptly and correctly to complaints)

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4
Q

What is the RICS guidance on Professional Indemnity Insurance?

A
  • PII protects consumers as well as the firm
  • must be on an ‘each and every claim’ basis
  • RICS has wording that must be used in the policy
  • the cover must be retroactive (cover previous work and previous employees)
  • run off cover - cover must be maintained for 6 years from the firm stopping trading
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5
Q

What is the level of PII must a firm have?

A

It depends on the firm’s turnover.
Turnover of less than £100k - min. cover of £250k
Turnover of £100-£200k - min. cover of £500k
Turnover over £200k - min. cover of £1m

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6
Q

What are the RICS rules on CPD?

A

Members must undertake 20 hours per annum, half must be formal (have a verifiable learning outcome). Every third year, CPD must be undertaken that has relation to RICS rules and ethics.

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7
Q

Which rule makes Red Book compliance mandatory?

A

Rule 4 - competence

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8
Q

What is the difference between formal and informal CPD?

A

Formal CPD must have a clear learning outcome.

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9
Q

What should you do on first receipt of a negligence claim?

A

Inform your PI provider; refer the party with the complaint to the firm’s CHP.

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10
Q

What does integrity mean?

A

Being honest and trustworthy in all that I do.

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11
Q

What do you know about the PS Conflicts of Interest?

A
  • 2017
  • 3 parts - PS, guidance, supplementary guidance
  • 3 kinds of COI
  • do not proceed unless in your prof. judgement, prior informed consent is appropriate and has been given/documented
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12
Q

What does competence mean?

A

Acting within limits of skill, with due care and dilligence and in accordance with technical standards

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13
Q

What are your obligations in your personal life?

A

Act in a way that promotes the profession (with integrity); maintain personal solvency

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14
Q

When does a firm have to become registered by RICS?

A

When 50% or more of the principals are members/fellows.

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15
Q

Can a firm register before 50% of the principals are members/fellows?

A

Yes - if 25% are and the firm provides surveying services to the public.

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16
Q

What is a contact officer?

A

The liason between the firm and RICS; submits the annual return.

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17
Q

What rule deals with complaints handling?

A

Rule 7 - a firm must maintain a complaints handling log and have a CHP. It must include ADR mechanism approved by the Regulatory Board.

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18
Q

What rule covers the incapacity or death of a sole practitioner?

A

Rule 12 - a locum must continue the business or legally wind it down. RICS must be notified.

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19
Q

What does taking responsibility mean?

A

Being accountable for all actions, not blaming others and being prepared to do something if something isn’t right.

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20
Q

What does the RICS say about handling client money?

A

That members and firms should preserve the security of monies entrusted to their care, and keep it in a separately named account which is clearly linked to the client.

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21
Q

Which rule deals with Complaints Handling Procedures and what does it say?

A

Firms must operate CHP with ADR mechanism approved by the Regulatory Board.

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22
Q

What is a complaint?

A

Any expression of dissatisfaction.

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23
Q

How would you deal with a complaint?

A

I would refer the party with the complaint to my firm’s CHP and follow that process. I would notify the firm’s complaints officer and notify the PI insurer.

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24
Q

How does the RICS regulate the profession?

A

Using the Principles of Better Regulation (PACTT).

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25
Q

Who is the patron of the RICS?

A

The Queen.

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26
Q

What is the function of the RICS?

A

To maintain and promote the usefulness of the profession for the public advantage.

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27
Q

What are the benefits of RICS membership?

A

Market advantage, client confidence, network, recognition.

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28
Q

Who is the President of the RICS?

A

Kath Fontana

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29
Q

Who i the President Elect?

A

Clement Lau.

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30
Q

What is the International Ethics Coalition?

A

Group of organisations including RICS who promote ethical standards and consistency.

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31
Q

Which Rule deals with PI Insurance?

A

Rule 9

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32
Q

What does Rule 9 for firms say?

A

That PI insurance needs to be adequate and appropriate, meeting standards approved by the Regulatory Board.

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33
Q

What does fully retroactive insurance mean?

A

All former work is covered.

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34
Q

On what basis is PI insurance required?

A

Each and every claim.

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35
Q

What legislation covers bribery?

A

The Bribery Act 2010.

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36
Q

What are the five offences under the Bribery Act?

A

Accepting a bribe, giving a bribe, bribing an official, bribing a foreign official, not having systems in place to prevent bribery.

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37
Q

What are the penalties for non-compliance with the Bribery Act?

A

Up to 10 years in prison for an individual; an unlimited fine for a company.

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38
Q

What are the 6 prevention principles of the Bribery Act?

A

Due dilligence, risk assessment, proportionality, top down, monitoring and review, communication and training.

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39
Q

What is a bribe?

A

offering/accepting an advantage as an inducement for an illegal/unethical act.

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40
Q

What should you do if offered a gift?

A

Take a risk based approach, and politely decline if at all possible. Record on the company gift/hospitality register.

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41
Q

What do RICS members need to do in relation to bribes?

A

Not offer or accept bribes, comply with the RICS PS, report suspicious activity or a breach to the relevant authorities.

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42
Q

What do RICS firms need to do in relation to bribes?

A

Not offer/accept bribes, have procedures in place to confirm with the Bribery Act, report any breaches, carry out DD to identify and document risks to the firm, retain info as to how the firm met the PS requirements.

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43
Q

What legislation applies to money laundering?

A

The Money Laundering Regulations 2019 / EU 6th AML Directive.

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44
Q

What should surveyors do to minimise risk of money laundering?

A

Client / Customer Due Dilligence - stringent ID checks.

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45
Q

What is money laundering?

A

Concealing the source of proceeds of illegal activity.

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46
Q

When is Enhanced Due Dilligence necessary?

A

If more checking / monitoring is required. For example, if a transaction is at a unusually high price.

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47
Q

What do RICS members need to do in relation to money laundering?

A

No facilitate money laundering; report suspicions to authorities.

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48
Q

What do RICS firms need to do in relation to money laundering?

A

No facilitate money laundering; report suspicions to authorities; have systems in place to comply with the law; evaluate/review risk and respond to it; verify client identity; understand the nature of transactions; document compliance with the law / RICS PS.

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49
Q

What do RICS firms need to do in relation to complaints handling?

A

Operate a complaints handling procedure; keep a complaints log.

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50
Q

How do you minimise the risk of complaints?

A

Be clear in Terms of Engagement as to the scope of work (including what the instruction does not include); only accept instructions where I am competent to do so and am able to undertake it.

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51
Q

Which of the RICS Global Ethical and Professional Standards is particularly relevant to complaints handling?

A

Take responsibility.

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52
Q

What is a conflict of interest?

A

A situation where objectivity and impartiality is called into question.

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53
Q

What kinds of conflict are there?

A

Party conflict, personal conflict, confidential information conflict.

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54
Q

What is a party conflict?

A

Where you have two clients involved in the same instruction.

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55
Q

What is a personal conflict?

A

Where you have an interest in the outcome of the situation.

56
Q

What is a confidential information conflict?

A

Where the giving of confidential information could further the instruction.

57
Q

Which of the RICS rules would cover conflicts of interest?

A

Rule 3 - professional and ethical behaviour.

58
Q

What should RICS members do in relation to conflicts of interest?

A

Identify and manage conflicts.

59
Q

How might you manage a conflict of interest where instructed to do so?

A

Password protection for information; set up an information barrier.

60
Q

What should you consider before requesting prior informed consent?

A

Is this in everyone’s interest? Is this prohibited by law? Does this prevent me from providing objective advice?

61
Q

Which legislation might apply to personal conflicts?

A

Section 21, Estate Agent’s Act 1979

62
Q

Who makes the RICS Rules of Conduct?

A

Regulatory Board, under Article 18 Supplementary Charter 1973 and Bye Law 5

63
Q

Why is the RICS consulting on new Rules of Conduct and Ethics?

A

3 principles - clarity, effectiveness and brevity.

64
Q

What are the 5 new Rules?

A

1) Act honestly, with integrity and comply with professional obligations.
2) Maintain professional competence. Services to be provided by competent individuals.
3) Provide good quality and dilligent service. Understand client needs.
4) Treat others with respect and encourage diversity and inclusion.
5) Act in the public interest, take responsibility for actions and maintain public confidence in the profession

65
Q

What are member’s obligations to RICS?

A

Comply with CPD requirements, cooperate with RICS, provide information when required.

66
Q

What are firm’s obligations to RICS?

A

Publicise CHP inc. ADR mechanism and keep complaints log; have current and previous work covered by PI meeting RICS standards; firms with sole principal to have incapacity arrangements in place; display ‘Regulated by RICS’ on literature

67
Q

What ADR mechanism do WTG have in their terms of engagement?

A

Centre for Effective Dispute Resolution (CEDR)

68
Q

How do you protect yourself from a negligence claim?

A

Act professionally and competently, undertake relevant CPD, perform your TOE, maintain detailed notes/photos

69
Q

Provide three example behaviours for acting with integrity

A

Not misleading anyone, not allowing yourself to be improperly influenced, do not proceed where you having a conflict of interest

70
Q

Provide three example behaviours for maintaining your professional competence

A

Only undertaking work that you have the skills to do, undertake relevant CPD, stay up to date with RICS best practice

71
Q

Provide three example behaviours for providing dilligent service

A

Understanding client brief before beginning work, agree TOE with scope of work, communicating with client in a way they can understand

72
Q

Provide three example behaviours for treating others with respect

A

Treating everyone fairly with no discrimination, no bullying, cooperating with others

73
Q

Provide three example behaviours for acting in the public interest/taking responsibility

A

Managing finances properly, responding to complaints professionally, acting to prevent harm to others.

74
Q

What are the three sections that divide the rules for firms?

A

General, Business Conduct, Firm Administration

75
Q

What disciplinary action might the RICS take for non-compliance?

A

Fixed penalty notice, disciplinary panel who then might might issue a consent order (restriction on firms for certain work/times), a fine or expulsion from RICS

76
Q

What is the ethical decision tree?

A

Flowchat that assists users to make ethical decisions

77
Q

When do you need to do CDD on a transaction?

A

Residential and commercial letting agents must now carry out Customer Due Diligence (CDD) checks when a property is let for a term of a month or more, and at a rent, which, during at least part of the term is, or is equivalent to, a monthly rent of over EUR 10,000. CDD must be undertaken on both the lessor and the lessee, i.e. both parties to the transaction

78
Q

Talk about RICS Professional Statement, Countering Bribery and Corruption, Money Laundering and Terrorist Financing.

A

3 parts - mandatory requirements, best practice and supplementary guidance. Obligations for members and firms, include being aware of risks, taking precautions and reporting suspicions.

79
Q

What is the structure of the RICS?

A

Privy council, then governing council then a number of boards beneath inc. management board and standards/regulatory board.

80
Q

When would it be appropriate to decline an instruction?

A

Not competent / cannot provide high level of service / COI / client would not sign TOE / client won’t comply with AML checks

81
Q

Should you cut your fee to compete with another firm?

A

Firms should avoid price fixing / undercutting. You could enter into fee negotiations by changing the scope of work?

82
Q

What are the main rules for handling client money?

A

Hold in a discrete account which contains only client money. Have balances and cash flow statement available for client. Only retain interest with written permission. Hold appropriate insurance

83
Q

Why did you decline the instruction to carry out the rent review at Haigh Park?

A

I was already acting for the seller and so would not necessarily be able to objectively advise both parties. The property also still belonged to the seller, so the buyer had no right to exercise a rent review and even if they had, it may have delayed the sale which was what I had been instructed to do.

84
Q

Are you competent to undertake a ground rent review?

A

Yes – L&T level 3.

85
Q

In what year was the RICS founded/

A

1868

86
Q

Who awarded the RICS its royal charter?

A

Privy council

87
Q

Who runs the RICS??

A

The Members. Specifically governing council, which management and regulatory board and audit committee report to

88
Q

What is the RICS motto?

A

There is measure in all things.

89
Q

Who is the current president?

A

Clement Lau (Sept 21). Director and Head of Development and Valuations for Commercial Property at Hongkong Land Ltd.

90
Q

Tell me something topical at the RICS?

A

Levitt Report.

91
Q

Tell me an issue at the RICS?

A

Lack of women and ethical representation

92
Q

What do the RICS do about diversity?

A

RICS Inclusive Employer Quality Marks. Pledge for firms to be diverse in recruitment and representation. Gender pay gap report.

93
Q

What are the different types of RICS membership?

A

MRICS, FRICS, AssocRICS, Trainee

94
Q

How do you become FRICS?

A

5 years MRICS, leadership role, promote status of RICS, academic qualification

95
Q

What have you read in Modus recently?

A

Clement Lau first column.

96
Q

What is the role of the RICS?

A

High standards of education and training
Protect consumers through strict regulation
Leading source of info on land, property and construction

97
Q

Why do you want to be a chartered surveyor?

A 
Status
Market advantage
Recongition
Knowledge
Network
98
Q

Provide an example where you have met each ethical standard.

A

Service – case study met client objective
Integrity – asked to reveal offers and didn’t
Trust – asked to reveal offers and didn’t
Respect –
Responsibly –

99
Q

What is a bye-law?

A

Rules to regulate members

100
Q

Give an example of a bye-law.

A

Professional member can use ‘MRICS’ or ‘Chartered Surveyor’

101
Q

Why is it important to undertake CPD?

A

Rule of conduct. Maintain competence.

102
Q

Why is it important to remain solvent?

A

Rule of conduct. Potentially less liable to bribe.

103
Q

Why is it important to take out PII?

A

Rule of conduct. Protects consumer and firm from impact of negligence.

104
Q

Why is it important to sign terms of engagement before an instruction?

A

Ensure competence, understand objectives, part of service, protects negligence, confirms fees to client (EAA 1979)

105
Q

When would you decline an instruction?

A

Not competent, wont sign TOE, failed conflict/ML checks, embarrassed if got in news

106
Q

What are the disciplinary procedures at the RICS?

A

Head of regulation – consent/wanring order
Disciplinary panel (50% lay)
Appeal panel

107
Q

What are the potential punishments for breaching RICS rules?

A

Unlimited fine, explusion, conditions of membership, modus

108
Q

What is a conflict of interest?

A

anything that impacts ability to be impartial

109
Q

Can you give me an example of a conflict in each line of work you have undertaken?

A

Leasing – acting on competing scheme
P&S – Team value the property
Management – Family member one of contractors

110
Q

What does RICS Conflict of Interest Professional Statement say? When did it come into effect?

A

Jan 2018 – 3 types of conflict
Party, Personal, confidential info
Only act if in BEST interest of client

111
Q

What would you do if you deemed there to be a conflict on an instruction?

A

Write to client about it with steps ot manage
Advise they seek independt advice
Request consent

112
Q

What are the barriers you could use if a conflict could be managed?

A

Info barriers, passwords, physical barriers, clear audit trail

113
Q

What does RICS Conflict of Interest for Commercial Agency say?

A

Dual agency, multiple intro, incremental advice

114
Q

If a prospective purchaser offered you a financial incentive to accept their offer, explain how you would deal with this?

A

Decline as deemed financial conflict. Tell compliance officer – considered bribery

115
Q

What would you do if you were selling a property for your sister?

A

Disclose interest under EAA 1979 s21.

116
Q

What are the rules for handling client money?

A 
Separate bank account
Name client
Always in credit
Client has access on demand
Interest goes to client
Only be withdrawn if properly required
Annually adutied by RICS accountant
117
Q

How would you keep client money safe?

A

Kept in separate and discrete account

118
Q

What would you do if you overheard confidential information?

A

Inform the person I heard it from, inform my compliance officer, delete the information, do not use for my own purpose

119
Q

What would you need to do when setting up a new company under RICS?

A 
Inform RICS
Compliance officer
Complaints handling
Client money
PII
RICS Registrations
Staff training
Logo kit
120
Q

What do you need to do when closing a practice?

A 
Tell clients
Tell RICS
Have procedures in place for client money
Take out run off cover for 6-15 years
Keep client files for 6 years
121
Q

Why do the RICS recommend 15 years run off cover?

A

Limitation Act – sue up to 15 year long stop date

122
Q

What is a bribe?

A

Gift or service leads to a breach of trust and illegal

123
Q

What bribery legislation are you aware of?

A

Bribery Act 2010

124
Q

What are the different types of bribery?

A

Giving bribe, receiving bribe, failing to report, bribing foreign official

125
Q

What the six principles of the Bribery Act?

A 
Proportionality
Risk assessment
Top level commitment
Communication
Due diligence
Monitoring
126
Q

What are the punishments under the bribery Act?

A

10 years prison, unlimited fine

127
Q

What is your company gift policy?

A

tbc

128
Q

What is money laundering?

A

Disguising illegal cash through legit assets

129
Q

What are the punishment for money laundering?

A

14 years ML, 5 years tipping off, 2 years failing to do checks

130
Q

How do you carry out money laundering checks?

A

Passport, utilities bill, bank statement, company

131
Q

How do you ensure you comply with money laundering checks?

A

Carry out CDD or EDD if appropriate

132
Q

What would you do if you became suspicious that a client was involved in money laundering or terrorist activities?

A

Report to my compliance office who might carry out suspicious activity report

133
Q

What is negligence?

A

Act which leads to breach of trust and economic loss

134
Q

What would you do if a mate asked advice in the pub?

A

Burgess v Lejonvarn - still have duty of care (silence is golden = rule of thumb)

135
Q

Is there a margin of error in valuation?

A

tbc

136
Q

How do you avoid negligence?

A

Ensure competent, sign TOE, take out PII cover

137
Q

What is Professional Indemnity Insurance?

A

Insurance to protect negligence

APC JB (17 decks)

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