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Ethics > 1 > Flashcards

1 Flashcards

1
Q

What procedures must you follow if you are setting up a new practice?

A

1) inform RICS of your new practice by completing a firms details form
2) appoint a responsible principle for all RICS communication
3) register with RICS for regulation of the firm
4) arrange PII and send details to RICS
5) set up procedures for clients money
6) obtain RICS approval of complaints handing procedure
7) set up a complaints log
8) appoint a complaints handling officer
9) use logo kit from the RICS to comply with the designation “regulated by RICS”
10) plan for succession/future running of the business if sole practitioner
11) ensure cpd is logged and set up staff training plan
12) ensure completion of an online RICS annual return at the end of each year

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2
Q

What insurances would you need if you were setting up your own firm?

A

1) professional indemnity insurance
2) employers liability
3) public liability
4) building insurance of office premises

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3
Q

What’s the Merrit v Babb case law?

A

Dates back to 2001 and highlights the importance of having run off cover in place
A surveyor was sued for negligence by a former client
As the surveying firm was no longer in existence, the individual surveyor was pursed themselves

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4
Q

What would you do if you received a letter of complaint?

A

I would acknowledge receipt and I would forward it to my firms designated complaint handler, as per our complaint handling procedure
Inform PII providers

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5
Q

How many hours of CPD must you do?

A

A minimum of 20 hours per year with at least half being formal
Member must undertake learning on the RICS ethics every 3 years
All CPD must be recorded via the RICS online system

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6
Q

How do you keep to up date with topical issues?

A

I am on the mailing list for several cdp providers
I read several industry articles
I follow updates on the rics website

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7
Q

What is the purpose of PII?

A

To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty

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8
Q

What are the requirements regarding PII set out by RICS?

A

1) the policy must be made on an “each and every” claim basis
2) RICS set out the minimum levels of indemnity
3) RICS set out the minimum levels of uninsured excess
4) run off cover must be in place for at least 6 years
5) the policy should include cover for past and present employees, directors and partners

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9
Q

What are the minimum levels of indemnity insurance?

A

Based on the firms turnover in the preceding year….
£100k or less then minimum of £250k
Between £100k and £200k then minimum of £500k
Over £200k then minimum of £1m

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10
Q

What are the maximum levels of uninsured excess?

A

Based on firms turnover in the preceding year
£10m or less then maximum of 2.5% of the sum insurer or £10k whichever is greater
£10m or above there is no limit

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11
Q

What measures should be taken to try and avoid PI claims?

A

Keep full and detailed records of meetings and conversations
Record recommendations and advice given
Use proper letters of engagement, scope of services and terms of engagement
Don’t advise on a specialism outside your field of experience
Use rics guidelines
Avoid poor management and excessive workloads

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12
Q

What are the main elements included within a fee proposal?

A

Terms and conditions
Scope of services
Exclusions
Assumptions

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13
Q

What is meant by a conflict of interest?

A

A situation in which the duty of a RICS member or firm to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another

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14
Q

What are the 3 different types of conflicts?

A

Party conflict
Own interest conflict
Confidential information conflict

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15
Q

What’s your firms complaint handling system?

A

Upon receiving a complaint, we would send them a letter acknowledging receipt of complaint within 3 working days of receiving it.
Investigate the complaint. Provide a formal written outcome of investigation within 15 working days.

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16
Q

How many years after an instruction has been completed can a PII claim be made?

A

15 years

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17
Q

What’s the name of the rics guidance on bribery and money laundering?

A

Professional Standards - Countering bribery and corruption, money laundering and terrorist financing. Effective September 2019

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18
Q

What information do registered firms need to send to RICS annually?

A

It’s called an annual return
Failure to do so can result in a fixed penalty
It includes:
- type of business and staffing
- nature of clients
- training provisions
- PI insurance details
- whether the firm hold clients money

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19
Q

What would you do if you were closing down your practice?

A

I would:
1) inform the RICS of the closure
2) ensure clients are informed at the earliest opportunity and hand-over arrangements are made to a new firm
3) return any monies held by clients in their own accounts
4) inform insurers and procure PII run off cover for a minimum of 6 years from the expiry of the policy in force at the time of cessation
5) retain copy of clients files and records for a minimum of 6 years

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20
Q

What legislation is there regarding bribery?

A

The Bribery Act 2010

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21
Q

What is a bribe?

A

A sum of money or other inducement offered or given to entice someone to do something

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22
Q

What are the 4 offences under the bribery act ?

A

Making a bribe
Receiving a bribe
Bribing a foreign public official
Failing to prevent bribery

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23
Q

What six principles is the bribery act based on?

A

1) proportionality
2) top level commitment
3) risk assessment
4) due diligence
5) communication
6) monitoring and review

24
Q

Under the bribery act, under what circumstance is a facilitation payment permitted?

A

The only circumstance in which is it okay to make a facilitation payment is when you are under duress
For example, if there is a real and present risk or danger

25
Q

What penalty is there is the bribery act is breached?

A

Maximum penalty of 10 years imprisonment and/or an unlimited fine

26
Q

What is money laundering?

A

Concealing the source of proceeds of criminal activity to disguise their illegal origin

27
Q

What RICS document is there regarding money laundering?

A

RICS Professional standard: Countering Bribery, corruption, money laundering and terrorist financing 2019

28
Q

What mandatory requirements are in the RICS document about bribery and corruption?

A

RICS regulated firms must:
1) not offer or accept anything that could constitute a bribe
2) have procedures in place to comply with the law
3) report suspicion to the relevant authority
4) act with due diligence & evaluate risk
5) retain records to show how the firm has met the requirements of the professional statement

29
Q

What document was recently published which supplements Rule 4? And what guidance does it include?

A

“Diversity, Equity & Inclusion”
Guidance includes actions for firms and highlights the risks of not having a robust DEI strategy

30
Q

What recent document did RICS publish regarding sustainability?

A

“Whole life carbon assessment” 2nd edition. Rics professional standard.
A whole life Carbon assessment is the calculation and reporting of the quantity of carbon impacts expected throughout all life cycle states of a project but also includes an assessment of the potential benefits and loads occurring beyond the system

31
Q

What’s a locum?

A

Another professional who is appointment to stand in for the surveyor if they are unable to work e.g in the event of an accident / illness, unforeseen circumstances etc

32
Q

What RICS document is there regarding conflicts of interest?

A

RICS Global Professional Statement “Conflicts of interest” effective Jan 2018
Is mandatory

33
Q

What are the 2 new categories for RICS Core Material?

A

1) RICS Professional Standards - mandatory to follow and set requirements / expectations for members and firms to follow
2) RICS Practice Information - not mandatory but is to support the practice and performance of RICS members and firms

34
Q

What are RICS regulation practice alerts?

A

These are issues to regulated members from time to time and their purpose is to remind members of their professional and regulatory obligations relating to compliance with all statutory and RICS regulatory requirements

35
Q

Name a recent regulation practice alert

A

Phoenxining firms
Where a RICS regulated firm which has gone into liquidation but the responsible principle looks to set up and register a new entity immediately afterwards

36
Q

What is the property ombudsman?

A

A scheme which provides a free, fair and independent service to protect consumers from unfair practice

37
Q

If you were to be successful with your APC, and you decide to start your own firm, what sort of things will you need to consider and do?

A

1) advice RICS that you are starting a business
2) register for regulation
3) meet the requirements of the rules of conduct
4) obtain insurance- employers liability, PII, health and safety policy
5) use the RICS logo set out by RICS

38
Q

As a qualified surveyor you are working for a surveying practice and a friend asks you for advice. What should you do?

A

I would not give advice as I do not have professional indemnity insurance but would encourage them to seek advice through my company. Potential conflict of interest

39
Q

What is whistleblowing?

A

The activity of a person revealing information about an activity within an organising which is deemed illegal or immoral

40
Q

What does the RICS document, countering bribery, corruption, money laundering and terrorist financing say about whistleblowing?

A

Depending on the size of the firm, it may be appropriate for a RICS regulated firm to have a formal whistleblowing policy covering when and how employees should report concerns

41
Q

What does the Limitation Act 1980 say about claims?

A

The act allows claims to be brought for up to 15 years from the date of the negligent act. RICS Guidance note provides further advice on the limitation periods under contract and tort

42
Q

What is a liability cap?

A

It limits the amount of damages that can be claimed by a client in the event of a loss. This helps firms manage risk

43
Q

What’s the difference between a firms liability cap and a firms PII limit?

A

Liability cap: contractual agreement between client and the firm and is the maximum amount that would be paid to the client in the event of a claim
PII limit: the maximum about that the insurer will pay out for a claim

44
Q

What RICS document is there regarding risk, liability and insurance?

A

RICS Practice Information: Risk, liability and insurance 1st edition

45
Q

Are you aware of any cases regarding negligence?

A

Smith v Bush
In 1980 a firm of valuers were instructed to inspect and value a property that was being purchased.
The valuers were held liable to the purchaser for negligently, failing to discover that the chimneys had been left unsupported following the removal of the chimney breasts.
The borrower sued valuer for damages

46
Q

What happens if the Rules of Conduct are breached?

A

serious breaches of the rules are likely to result in disciplinary action whilst minor breaches can be dealt with through self correction or firms’ processes

47
Q

Prior to issuing terms of engagement or accepting an instruction what 3 things should you do?

A

CIT
Check professional competence
No conflicts of interest
Confirm terms of engagement in writing and signed by client

48
Q

What are the penalties for failing to comply with the regulations of money laundering?

A

Maximum of 14 years imprisonment and unlimited fine for assisting with money laundering

49
Q

What are some red flags associated with money laundering ?

A

Inability or unwillingness of parties to provide identity documents
Changes to parties involved transactions
Unusual transaction features eg urgency requested by parties

50
Q

What are the 3 levels of disciplinary action?

A

1) action by head of regulation
2) disciplinary panel
3) appeal panel

51
Q

What are the 5 benefits of being a RICS member?

A

1) status
2) recognition
3) market advantage
4) knowledge
5) network

52
Q

PII protects who?

A

According to the RICS document “UK PII requirements” the purpose of PII is to protect firms in the case of a claim. It is also to protect the firms client and ensures they do not suffer a financial loss

53
Q

What are the 3 steps to handling / dealing with a conflict of interest?

A

1) conflict avoidance: once all facts have been established, consider whether the conflict is unavoidable or whether it can be managed properly. Decide whether to accept instruction or not
2) written advice to both parties: assuming you wish to accept the instruction, set out in writing the nature of the conflict and the circumstances around it. Enable both parties to make their own decision. Request written informed consent.
3) conflict management: once you have received written consent, set up an information barrier in accordance with agreement of both parties

54
Q

How do you act without unconscious bias?

A

Make sure you are compliant with the rules of conduct. Avoid making assumptions

55
Q

How does your firm encourage diversity and inclusion?

A

Equal pay for equal work
Write inclusive job ads for example include flexible working
Get feedback from employees

Ethics (3 decks)

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