1 - Ethics, rules of conduct and professionalism Flashcards
Why do you want to become a member of RICS?
Demonstrate my commitment to the profession as an ethical construction professional dedicated to continuous development
Community, supported by like-minded peers/network
Enhance skills - Learning and development commitment
Confidence and trust for my clients
What is the role of RICS?
Globally recognised professional body designed to effect positive change in the built and natural environments
Promote and enforce the highest professional standards
What are the key functions of RICS?
Advancing the highest ethical and technical standards
Protecting consumers by enforcing standards and codes of best practical
Providing expert impartial advice to governments, business and the public
Equipping RICS members with leading edge advice, market insight and professional training
Promoting RICS status and standards in key worldwide markets as the mark of property professionalism.
Tell me about an instance of when you have been offered a gift or hospitality by a client
AD - Lunch
Discussed with mgt
Recorded in gifts and hospitality register
Any gifts/raffles would be politely declined
Lunch - why did you accept this invitation?
Newly award MTC contractors, to foster partnership
Lunch - how did you record your decision?
Completed my clients gifts and hospitality form, and submitted to HR (Cc Manager) for record purposes
Newham - why did you not advise the client on the drainage drawings?
This is outside my scope of competence and I did not feel I had the correct skills/knowledge to competently complete this for my client. I supported my client to appoint a surveying practice who could provide the drawing proposals
What is a Royal Charter?
A royal charter is a document issued/granted by the monarch and advised by the privy council that gives independent legal standing to an organisation.
Royal Charter requires RICS to act in the public interest
Enables RICS to govern its own affairs
Can you tell me what you understand by the principles of better regulation?
Transparency - Regulators should be open and keep Regulations simple and user friendly
Proportionality - Regulators should only intervene where required and be proportional
Accountability - Regulator should be fair and publish their decisions
Consistency - common sense approach, fair and in line with policy
Targeted - focus on the problem
What is a Bye-law?
Local laws made by a local council or body under an enabling power. Non-observation of these laws can be enforced with a sanction or penalty
Rules made by an organisation to define itself and the sanctions
Give an example of one of the RICS Bye-Laws
- Applications and definitions - who the Bye-Laws apply to. i.e RICS members and firms, and those regulated
- Membership and registration - who counts as a member and firm, their obligations
- Designations - who can use letters after their name - MRICS, FRICS and how firms describe themselves
- Contribution to funds - membership costs, and results of failure to pay
- Conduct - how M&F should conduct themselves, and consequences
- Governing council, officers and staff
- Sub-ordinate boards, committees and groups
- Procedures for general meetings - how they are held and practiced
- Accounts and audits - how RICS keep accounts and run their audits
- General
Explain to me the new RICS Rules of Conduct - what do they replace?
The new Rules of Conduct replace the existing Rules of Conduct for Firms and for Members and the Global Professional & Ethical Standards.
The new Rules of Conduct aim to address global risks and opportunities including:
-simpler structure
-clear examples to support rules
-focus on respect, diversity and inclusion
-focus on sustainability
-highlight use of data and technology
When did the new Rules of Conduct take effect?
February 2022
Who do the New Rules of Conduct refer to?
RICS members and firms globally
What are the 6 ethical principles that the Rules of Conduct are based on?
Honesty
Integrity
Respect
Service
Competence
Responsibility
What are the 5 rules?
Rule 1: Members and firms must be HONEST, act with INTEGRITY and comply with their PROFESSIONAL OBLIGATIONS
Rule 2: Rule 2
Members and firms must maintain their professional COMPETENCE and ensure that services are provided by competent individuals who have the necessary expertise
Rule 3
Members and firms must provide GOOD-QUALITY and DILIGENT SERVICE
Rule 4
Members and firms must treat others with respect and encourage diversity and inclusion
Rule 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.
Give an example behaviour for each Rule of Conduct
Rule 1 - (Honesty, Integrity, Professional obligation) - being transparent with client regarding fees and services
Rule 2 - (Competence) - only undertaking work where you have the relevant knowledge, CPD
Rule 3 - (quality service & diligence) - understanding client needs and objectives before accepting work. Clearly communicating with clients
Rule 4 - (respect, diversity, inclusion) - developing inclusive work culture, treating others with respect
Rule 5 - (public interest, confidence in the profession) - managing professional finances, responding to complaints promptly and transparently.
What are the core professional obligations of firms and members to RICS?
Members must comply with the CPD requirements set by RICS.
Members must cooperate with RICS.
Members must promptly provide all information reasonably requested by RICS
Firms must publish complaint handling procedure
Firms must ensure that all previous and current professional work is covered by adequate and
appropriate professional indemnity
Firms with a sole principal must make appropriate arrangements for their professional work to
continue in the event of their incapacity, death, absence from or inability to work
Firms must cooperate with RICS
Firms must promptly provide all information reasonably requested by RICS
Firms must use designation according to RICS policy
Firms must report to RICS any matter that they are required to report under the Rules for the
Registration of Firms
What disciplinary procedures can the RICS impose?
-disciplinary penalities and costs
-a caution fine
-conditions
-order to expel/deregister the member
In what circumstances can these be imposed?
(Follow up question to ‘What disciplinary procedures can the RICS impose?’)
Where a complaint or concern about a Regulated Member (RICS professional or RICS-regulated Firm) is investigated by RICS and is considered serious enough and supported by evidence
Failure to adhere to the rules or professional standards
When did RICS last update their disciplinary panel rules?
March 2020
What are the different levels of action within these procedures?
Where a complaint or concern about a Regulated Member is investigated by RICS and is considered serious enough and supported by evidence, the Head of Regulation will consider disciplinary action or close case
For less serious cases where the Regulated Member admits allegations, the Head of Regulation may impose a Regulatory Compliance Order (or Consent Order) to ensure future compliance with the standards. This may include a fine, caution or conditions on the membership of the Regulated Member. Where the Regulated Member does not admit the allegations, but the case may not warrant a hearing, the case may be referred to a Single Member of the Regulatory Tribunal to determine the disciplinary outcome (which may include expulsion).
For the most serious cases it may be necessary for Head of Regulation to refer a case to a Disciplinary Panel, who will conduct a hearing to hear evidence and determine outcome.
What are the different levels of action for disciplinary procedures?
Where a complaint or concern about a Regulated Member is investigated by RICS and is considered serious enough and supported by evidence, the Head of Regulation will consider disciplinary action or close case
For less serious cases where the Regulated Member admits allegations, the Head of Regulation may impose a Regulatory Compliance Order (or Consent Order) to ensure future compliance with the standards. This may include a fine, caution or conditions on the membership of the Regulated Member. Where the Regulated Member does not admit the allegations, but the case may not warrant a hearing, the case may be referred to a Single Member of the Regulatory Tribunal to determine the disciplinary outcome (which may include expulsion).
For the most serious cases it may be necessary for Head of Regulation to refer a case to a Disciplinary Panel, who will conduct a hearing to hear evidence and determine outcome.
What do you understand by the term professional practice?
The conduct and work of someone from a particular profession
What money laundering regulations or legislation are you aware of?
The Money Laundering and Terrorist Financing (Amendment) Regulations 2019
What is a red flag of money laundering?
Secretive/evasive clients about who they are, the transaction, the source of funding
Client avoids personal contact
Refuses to provide information or documentation, or the docs are suspicious
Has criminal associations
Large cash payments
Unexplained payments from 3rd parties
Use of multiple accounts or foreign accounts
Unusual transaction for client profile
What bribery legislation are you aware of?
The Bribery Act 2010
What is a bribe?
Inducement or reward offered, promised or provided to gain an advantage i.e. contractual, personal
What are the penalties for accepting a bribe?
For individuals: maximum penalty of 10 years imprisonment, and/or unlimited fine
Corporates face an unlimited fine
What are the penalties for being involved in money laundering?
Financial penalty or criminal prosecution
What constitutes an offence under the Bribery Act 2010?
Offering a bribe
Accepting a bribe
Bribery of foreign public officials
Firms failing to prevent bribery
What constitutes an offence under the current money laundering regulations?
Concealing the source of the proceeds of criminal activity to disguise their illegal origin.
This may take place through hiding, transferring and/or recycling illicit money or other currency through one or more transactions, or converting criminal proceeds into seemingly legitimate property
How long should you keep anti-money laundering records for?
For five years beginning from:
-the date a business relationship ends
-the date a transaction is completed
What is Professional Indemnity Insurance (PII)?
An insurance product for professional firms and people which covers them in the event of certain errors being made during their business.
Policies mainly cover professional negligence, errors or omissions, breach of professional duty and civil liabilities
Can you tell me about the RICS requirements in relation to PII?
Firm turnover £100,000 < (min. limit of indemnity = £250,000
Firm turnover £100,001 to £200,000 (min. level of indemnity = £500,000
Turnover £200,001 and above (min. level of indemnity £1milli
What is a PII aggregation clause?
Refers to the basis of cover on a professional indemnity insurance policy
An aggregate policy provides cover up to the full limit for all claims made in the period of insurance
What does ‘claims made’ mean in terms of PII?
The policy in place at the time the claim is made by the client will provide cover.
Is a PII excess usually paid per claim?
Yes, all policies will have an excess to be paid by the firm
In a negligence claim, what would help to show that you acted with consideration and due process?
Full and detailed recorded of meetings, conversations etc.
Records of recommendations and advice given.
Letters of engagement and appointment contracts including limitations and disclaimers
Record any changes in instructions
Report with disclaimer for any hidden defects
Can good record keeping help to provide a defence in a PII claim
Yes, good records can help support you in the defence of the claim.
Can help provide proof of decisions and actions carried out should they be questioned or challenged.
Generally what you can prove can help determine the outcome
Can support you to contest what the other party suggests
Helps support your story
If you were providing services outside of your usual scope to a client, what might you need to do in relation to your PII cover?
Review cover to ensure you have the appropriate level of cover to carry out that work
What is run-off cover?
Run-off cover is insurance for claims made against a law firm after it has stopped doing business.
It makes sure that:
-clients can be compensated for claims made after a firm has closed
-retired partners of the firm have financial security and won’t be personally liable for any claims
What RICS requirements are there relating to run-off cover?
RICS-regulated firms should ensure that in the event of the firm’s practice ceasing, there
will be ‘run-off insurance’ in place to protect the firm’s partners and its customers
Six years should be looked on as a minimum
What changes did RICS recently make to the Minimum Approved PII Wording?
2021 - the changes allowed more chartered surveying firms to obtain improved fire safety cover within their PII
PII policies will provide greater fire safety cover for chartered surveyors
Under the new rules insurers are not permitted (without specific dispensation) to exclude fire safety claims on a property four storeys or less, and fire safety coverage must be provided as a minimum on an aggregate, defence cost inclusive basis.
What precedent has case law set in terms of keeping adequate site notes (and therefore providing a defence in a PII claim)?
That surveyors should collect appropriate evidence from each survey to back up their findings (i.e. proper notes and effective photographs).
Good set of notes can help support your story
Ryb v Conways Chartered Surveyors [2019]
Would a dictated report avoid the need to have any written site notes?
I would say no. Written site notes allow you to share with the relevent parties for all to review and agree. It is easier to do this that dictated notes.
Written notes are easier to review, and comment on
How long can a PII claim arise after the work is undertaken?
Up to 15 years from the date of the negligent act
What is the assigned risk pool?
The assigned risks pool is for firms that are unable to obtain professional indemnity insurance (PII) which meets RICS minimum requirements in the insurance market.
Who might need to access the Assigned Risks Pool? (ARP)
Any RICS members unable to obtain professional indemnity insurance (PII) which meets RICS minimum requirements
Explain when you might agree a liability cap?
For larger jobs or commercial clients, where it is possible that the amount of damages claimed could be in excess of the amount covered by the policy and so a liability cap is just an important way of providing a level of extra protection to the policyholder from aggressive claimants
How would you set out third party reliance in Terms of Engagement?
Include a clause in the engagement letter and included in the firms standard terms & conditions. The statement should be replicated in a prominent position in the body of the report as well. I.e our advice is for your benefit alone
What are the three key terms that should be considered from a risk?
- The basis on which the fee will be calculated.
- The scope of the work.
- The liability cap
Tell me what you understand about Complaints Handling Procedures
A structured process for managing complaints/disatisfaction in an appropriate manner. They provide an opportunity to rectify service problems and further develop client relationships.
When and how can the RICS be involved in a complaint about a firm or member?
When it is about the service or professionalism of a member or regulated firm, i.e. if the standard of a reasonable professional or firm has been breached.
Can you tell me about the CPD requirements for members of RICS?
Members must undertake a minimum of 20 hours of CPD activity each calendar year, at least 50% formal
Why is CPD important?
- Helps you develop and improve your professional practice
- Keeps skills and knowledge up to date
- Prepare you for greater responsibilities
- Boasts confidence
- Helps you in tackling new challenges
- Enable you to make better decisions
- Help career progression
Tell me about the RICS guidance on dealing with conflicts of interest
Guidance note to provide clear rules for RICS members to identify and manage potential conflicts of interest. Outlines 3 types of conflict:
* party conflict
* own interest conflict
* confidential information conflict
What is double dipping (dual agency)?
When the professional works for/acts for multiple agencies, i.e. the buyer and the seller, or competing organisations
Why is double-dipping (dual agency) an unacceptable practice?
In conflict of the ethics of a professional, breaches:
* Transparency
* Confidentialiy
* Trust
How would you close down a regulated firm?
- Agree the closure date
- Inform staff, and notify of any redundancies
- Inform clients, and let them know if another firm could take over
- Deal with outstanding money in client accounts
- Notify insurer for run-off cover
- Make archiving arrangements, and destruction of any confidential data not being kept
- Set up a system for anyone who tries to contact the firm to notify them, i.e. voicemail
- Notify relevent people, i.e solicitor
Explain your understanding of the RICS Guidance Note Risk, Liaibility and Insurance (1st Ed)
Aims to provide guidance on mitigating or avoiding the risks and liabilities associated with surveying work
What can you tell me about RICS guidance relating to bribery, corruption or money laundering
RICS published Professional Statement for countering bribery and corruption, money laundering and terroist financing (Feb 2019):
* Published to help members identify and manage risks of bribery, corruption and money laundering.
* Divided into 3 sections:
1. Mandatory requirements
2. Good practice guidance
3. Supplementary guidance on section 1 & 2
March 2022 update: anti-money laundering sanction update in response to the war in Ukraine:
* reminding members importance of complying with sanctions
https://www.rics.org/uk/upholding-professional-standards/standards-of-conduct/aml-bribery-corruption-terrorist-financing/
What can you tell me about RICS guidance relating to bribery, corruption or money laundering
RICS published Professional Statement for countering bribery and corruption, money laundering and terroist financing (Feb 2019):
* Published to help members identify and manage risks of bribery, corruption and money laundering.
* Divided into 3 sections:
1. Mandatory requirements
2. Good practice guidance
3. Supplementary guidance on section 1 & 2
March 2022 update: anti-money laundering sanction update in response to the war in Ukraine:
* reminding members importance of complying with sanctions
https://www.rics.org/uk/upholding-professional-standards/standards-of-conduct/aml-bribery-corruption-terrorist-financing/
What status does the RICS guidance on bribery, corruption, money laundering hold?
Professional statement - mandatory requirements for members and regulated firms
What are some of the key principles of the bribery, corruption and anti-terrorist professional statement:
Part 1 - Mandatory requirements
Part 2 - Guidance
Part 3 - supplmentary advice in relation to part 1 and 2 relating to mitigation
Some of the key principes:
* Do not accept or offer anything which can be constituted as a bribe (acceptance/offer)
* Have plans in place to mitigate corruption and bribery and ensure these are implemented (policies & implentation)
* Report any breaches in accordance with local legislation, if no relative legislation report to senior member and record (report)
* Due diligence
* Record-keep how company has complied with professional statement
What must members/firms do to comply with the countering bribery and corruption, money laundering and terrosit financing professional statement?
Members:
* Do not accept or offer bribes
* Have adequate knowledge of bribery and corruption to following prof statement
* Report breaches in accordance with local legislation, if there is not any, record and report to senior management
Firms:
* Do not facilitate in terrorist financing or money laundering
* Systems and training, in place & followed
* Report suspicions to authority, if there is none record
* Appropriate checks to risk in place, i.e. client check
* Record and keep record of how complied to guiance
* Take appropriate measures to understand client and transaction
What are the current RICS rules for registration of firms?
Regulation - Rules for the registration of firms version 8
made in accordance with bye-laws
Rules for the
registration of firms - when did these last change?
Effective from February 2022
Rules for the
registration of firms - what were the key changes (following last change Feb’22)
Introduce the requirement
for all RICS regulated firms to appoint a Responsible Principal.
Will have primary responsibility for ensuring that RICS’ professional, technical and ethical standards are applied, upheld and supported by an appropriate assurance framework within a regulated firm.
Who is a ‘qualified member’ of RICS?
AssocRICS, MRICS and FRICS
Who is a responsible principal?
RP has primary responsibility for ensuring that RICS’ professional, technical and ethical standards are applied, upheld and supported by an appropriate assurance framework within a regulated firm.
Expectation is that the responsible principal would normally be an RICS member who is a
Director/Principal within the firm.
