Flashcards in Rules of conduct for firms Deck (34)
What does 'firm' mean
o the whole or part of any body corporate
o a partnership
o a limited liability partnership
o an unincorporated practice of a sole practitioner concerned with the business of surveying / providing other related services, which is regulated by RICS
o an equivalent in any of the world regions to any of the above
How many RICS Rules of Conduct for Firms are there?
FIFTEEN - divided into 3 parts:
1) Part I - nominate a Contact Officer
2) Part II - conduct of business
3) Part III - firm administration
What does Part 1 of the ROC for Firms cover?
1. Part I - nominate a Contact Officer to liaise between the Firm and RICS, plus submit the Annual Return
What does Part 2 of the ROC for Firms cover?
Part II - conduct of business;
- Professional behaviour - Firm shall act with integrity and avoid COI
- Competence - carry out their work with due skill, care and proper regard for technical expectations
- Service - instructions in timely manner and to a high standard of service and customer care
- Training and CPD - Firm shall have in place necessary procedures to ensure all staff are properly trained and competent to do their work
- CHP - Firm shall operate a CHP and a complaints log. The CHP must include an Alternative Dispute Resolution (ADR) mechanism that is approved by the Standards and Regulation Board
- Clients' money - Firm shall preserve security of clients’ money
- Indemnity - firm shall ensure all previous and current professional work is covered by adequate indemnity cover meeting standards approved by the Standards
and Regulation Board.
What does Part 3 of the ROC for Firms cover?
Part III - firm administration;
- Advertise - in a truthful and responsible manner
- Solvency - ensure finances managed appropriately, ensure arrangements are in place to cover incapacity/death of a sole practitioner
- Designations - display Regulated by RICS designation in line with RICS requirements
- Information - provide information to RICS as requested
- Co-operate - with RICS as requested
What is a Complaints Handling Procedure (CHP) and how should a complaint be dealt with?
Firms must have a CHP in place to deal with client complaints / who express dissatisfaction
A complaint must be in writing
Should be acknowledged within 7 days
Should be dealt with in 28 days
Should be made available and known to all staff
Should be regularly reviewed at senior level
Should be agreed with PII brokers / providers
Should be included in the TOE with the client
When should your PII insurers be notified if there is a complaint?
As soon as possible as this could lead to a claim for negligence
What should a complaints log include?
o Outcome of the complaint
What are the two stages of handling a complaint?
o Stage 1 - In House
o Stage 2 - Alternative Dispute Resolution - 3rd Party
Who is a complaints handling officer?
Nominated person who will investigate a complaint and must be stated as the person to be contacted in the first instance
Can a complaint be made over the phone?
A complaint must be made in writing and should be acknowledged within 7 days and investigated within 28 days
What is the RICS New Arbitration Service?
Brought in due to a decline in the use of Arbitration due its slowness
Arbitrators use powers under the Arbitration Act 1996 to robustly manage costs
Faster and cheaper than courts
Better than adjudication: it will be more detailed when looking at issue, resulting in judgements that = commercially sensible
When might RICS get involved in a complaint?
Alternative method of complaining about your surveyor = go direct to RICS
If RICS considers member firm to fall short of standards, RICS will take suitable steps
- Deal with non-RICS members
- Pay compensation on behalf of a member
- Determine whether a firm has acted negligently - this is a case for the law courts
- Become involved in any court action against a Member Firm
What is the key RICS professional statement for client's money?
RICS Client's Money: General Advice for Firms (2011)
What must you do in order to regulate your firm with RICS?
Must register by completing an online registration form
Will need to update their details online on an annual basis
From a RICS compliance perspective, how do you set up your own firm?
Contract and inform the RICS of your intentions
Write appropriate policies, e.g. health & safety
Use Regulated by RICS designation appropriately
Obtain PII Cover
Prepare CHP and complaints log
Set up financial accounts
Abide by RICS rules, regulations and ethical standards for members and firms
Training and CPD in place
Notify companies house
Nominate a RICS Contact Officer
Disciplinary Rules and Sanctions Policy
Are you aware of any new changes in the Rules of Registration (effective April 2020)?
Main changes are:
Firms must register with RICS if they provide surveying services to the public, operate in UK regulated area and at least 50% of Firm’s Principals are RICS Members
Registration eligibility criteria = amended so firms have to have at least 25% of RICS qualified Principals
Firms must designate Responsible Principal to provide oversight, accountability and engagement with RICS standards and regulation
Rules for using RICS logo and designation by firms = restructured to provide simplicity and readability, key changes:
- Use of the RICS logo = restricted to Regulated Firms only
- Use of designation 'Chartered Surveyors' = restricted to trading names only of firms
- Regulated Firms must include in their TOE what being Regulated by RICS means to clients
What are the statutory regulations for new RICS firms and their supporting Acts?
Statutory requirement to disclose business names (Business Names Act 1985; Companies Act 1985)
Consumer credit licences and advertising provision of credit facilities (Consumer Credit Act 1974)
Anyone engaging in 'investment business' (real property = not an investment under the act) may need authorisation (Financial Services and Markets Act 2000)
If you hold info on individuals = General Data Protection Regulation (which also forms part of UK law) (Data Protection Act 2018)
The 4th Anti-Money Laundering EU Directive came into force in June 2015 (UK money laundering regulations)
What are the statutory employment legislations for new RICS firms and their supporting Acts?
Prevent discrimination (Equality Act 2010)
Make your workplace accessible for employees with disabilities or health conditions (Equality Act 2010)
Keep employee information and data safe (Data Protection Act 2018)
Fire safety (Fire Safety Order 2005)
Health and safety (Health and Safety at Work Act 1974)
Employer’s liability insurance (Employers' Liability (Compulsory Insurance) Act 1969)
How would you close down a RICS firm?
Inform the RICS
Inform my clients at the earliest opportunity and hand over arrangements made to new firm
Return clients money
Arrange for PII run off cover - 6 years minimum
Keep clients files for 6 years minimum
What are the requirements for a firm to be able to register with RICS?
Offers professional surveying services to professional, corporate, institutional and other clients who rely on such services
Have at least 25% principals (senior manager / partner / owner) who are RICS qualified professionals (MRICS, FRICS, AssocRICS)
Agree to observe and comply with RICS ROC for Firms, including working to RICS standards
What are the benefits of being a RICS regulated firm?
A flexible approach allowing firms to comply with rules in a way suiting their business size, sphere in which they operate and needs and demands of their clients
Opportunity to nominate single point of contact in the firm and provide compliance info to RICS through a single annual return
For firms holding clients' money, a lower cost compliance regime that provides help and guidance from RICS accountancy team
For eligible firms, use of 'Regulated by RICS' on letterheads and business stationery to profit from the reputational benefits of RICS
What is the Annual Return?
Completed by RICS firms online
Provides RICS Regulation with info needed to regulate
and monitor your firm
Information then used to develop a risk profile for your firm, enabling RICS to:
- Provide info and guidance to your firm on work you carry out
- Target monitoring resources to firms carrying out higher risk work
Auditors from RICS Regulation will periodically visit your firm
Firm charged annual fee and receives invoice accordingly
What are the Regulatory Details required as part of the RICS Annual Return?
Principals: details of directors and principals
Training: firms must have procedures to ensure staff =
properly trained to do work and CPD
General: general info about your firm and its staff
Activities: advise RICS about surveying services provided by your firm
Nature of clients: Commercial, residential, public authorities, industrial
Number individual valuations you have performed in the last 12 calendar months
Best estimate amount for the highest value valuation you carried out in last 12 months
Estimate amount of firm's total income from valuation services in last 12 months
Details of PII: coverage limit, basis cover is held ('aggregate' or 'each and every'), retroactivity of policy, and which insurer provider
Availability of CHP in your firm/organisation
Approved ADR provider engaged by your firm/organisation under CHP
From whom will information be requested for the RICS Annual Return?
All regulated firms = requested to appoint a contact officer
Typically RICS member who is a principal of the firm
If I have already provided the primary contact and firm details, am I still required to go through the registration process?
Yes, the two processes are separate
The firm details = used to set up the firm
Annual Return = provide specific regulatory information to RICS
What must your firm's Terms of Engagement state and confirm?
The proposed fee basis
Payment of expenses and how calculated
Limitations of Liability
Must confirm valuer’s competence via qualification, expertise and areas of skill
Must confirm any COI or personal interests
For agency work, compliance with the Estate Agents Act and Money Laundering Regs = required
For what reasons would it be appropriate to decline instruction?
You are not competent to undertake work
Client will not sign TOE or provide info for money laundering purposes
There is a COI / personal interest
Advice is for a friend and your insurance does not cover work on a personal basis
What is Negligence?
Negligence = a ‘tort’
In case of RICS professional, negligence = failure to provide services with the standard of skill and care expected from member
Duty of care to clients and third parties using ‘reasonable care and skill’
When breached = loss and claim for damages arises