3 - Ethics Flashcards
Tell me about RICS PII Requirements
- Must be Each and Every or ITAWRTCR
- Must be as per minimum levels and uninsured excess
- Must be by RICS approved insurer
- Covers past and previous employees
- Must be fully retroactive
- Must have run off cover
- Take note of minimum policy wording
- No fire safety inclusion on building under 4 storey
What are the different types of RICS Publications?
- Professional Statements
- Guidance Notes
- Data Standards
- International standards
- Assessment standards
Name some Professional Statements
- Client Money Handling
- Conflicts of Interest
- Countering Bribery, money laundering, corruption and terrorist financing
Name some Guidance Notes
- Asbestos
- Surveying Safely
- Lessons Learned
Explain the Principles of Better Regulation
Better Regulation Executive set out 5 principles:
- Proportional
- Accountable
- Consistent
- Targeting
- Transparent
Explain how the RICS abides by the Principles of Better Regulation
- Proportional - Fines fit the punishment
- Accountable - To the members and public
- Consistent - Treats all members/firms equally
- Targeting - Doesn’t have a scattergun approach
- Transparent - Clear, concise and easily followed
Name all the RICS Standards of Conduct
- Countering Bribery, corruption, money laundering and anti-terrorist financing
- Conflicts of Interest
- Ethics
- Rules of Conduct
- Client Money
- Risk, Insurance and Liability
What are the RICS requirements for a CHP?
- Must be in at least two stages 1) deal with it internally and 2) refer to independent redress
- Acknowledge within 7 days, respond within 28
- Fit for purpose and understood by staff
- Agreed by PII Brokers
- Must be freely provided
- Must have a form of ADR approved by the RICS
- Must keep a Complaints Log
- Must notify insurer if required
When does the RICS get involved in Complaints?
Usually only if the Firm has not responded to the complaint or has prevented the complainant accessing the independent redress mechanism in some way
What are the Ethical Standards? Name them.
The standards set by the RICS that all members should uphold in the course of their work.
- Act honestly, with integrity and comply with obligations
- Professional competence
- Always provide a high standard of service
- Treat other with respect
- Take responsibility and act in the public interest
When was RICS formed? What is the structure?
- Formed in 1868
- Awarded Royal Charter in 1881
- Privvy Council - Awards RC and ratifies changes
- Governing Council - Fulfils RC duties
- RICS Board - Delivery of business plan
- Standards and Regulation Board - Sets S&Rs
- Audit Committee - Internal audit across entire organisation
- Regulatory Tribunal - Independent body that acts as the disciplinary panel
What do you need to do when setting up a Firm?
- Register with Companies House
- Comply with Companies Act 2006
- Register with RICS - at least 25% of directors needs to be MRICS
- Appoint a contract officer/principal representative
- Comply with the Rules of Conduct
- Submit an Annual Return to RICS
- PII Cover from RICS insured
- Submit annual accounts
- Set up designations / locum
- CPD, training and development
- Complaints handling procedure
What do you need to do when closing down a Firm?
- Inform RICS
- Hand over Clients to others
- Return Client Money
- Keep files for 15 years (recommended)
- Obtain run-off cover
Can you tell me what is in the Countering Bribery, Money Laundering and Terrorist Financing Professional Statement?
- Sets out what firms must and must not do
- Have procedures in place to prevent such as doing identify/credit checks
- Report suspicious activity
- Retain records
- Having a record of all hospitality
Tell me about the Proceeds of Crime Act 2002
- Allows Government to recover proceeds of crime
Also established the following crimes:
- Using criminal property
- Knowingly entering in to an agreement where criminal property/proceeds are involved
Tell me about the Money Laundering and Terrorist Financing Regulations 2019
- Cannot be complicit
- Have systems and training in place
- report suspicious activities
- Take measures to understand client and purpose of transaction
- Record info detailing how firms have met RICS standards.
What is Stace’s CHP process?
Complaint in writing
Goes to the Nominated person who has 7 days to understand the issue and 21 days to make a decision
If you don’t like a decision it goes to the RICS Representative, 14 days
Don’t like the decision it goes to mediation and then arbitration
How do you act with Integrity?
- Be honest and trustworthy in all that I do; never accept a bribe.
- Not revealing a winning bidders fee
How do you treat others with respect? Give an example for your Case Study
- Practice Active Listening
- Democratic leadership in chairing meetings
How do you act in a way that promotes trust in the profession? Give an example for your Case Study
- I conduct myself professionally in both my work and personal life, particularly with regards to social media.
- Short timescales for the production of Options Appraisal - promised the Client I would have it done in time and I did.
How do you provide a high standard of service? Give an example for your Case Study
- Have reports, some forms of communication and complex emails peer reviewed and checked by colleagues.
How do you take responsibility? Give an example from your Case Study
- On behalf of the team I own any mistakes made by the project team and manage them fully to resolution, including keeping the Client informed of progress.
- Consulted extensively with Planning Consultant to show the impact to the master schedule.
What is a Bribe? Tell me about the Bribery Act.
- A payment in money or in kind as an inducement for a party to act unethically, illegally or a breach of trust.
1) Top level commitment
2) Due Diligence
3) Communication
4) Risk Assessment
5) Proportionality
6) Monitoring and Review
- Outlaws Facilitation Payments
- 10 year sentence/unlimited fine for individuals
Unlimited fine for companies
What should be in a Service Agreement or Terms of Engagement with a Client?
- Scope
- Basis on which fee is calculated
- Liability Cap (specific attention drawn)
- Advise over CHP
What actions must you take before undertaking work for a Client?
- Check whether any conflicts of interest
- Risk assessment over DD if applicable
- Have a contract/agreement in place
What questions does the RICS Ethical Decision Tree post?
- How does your action fit with the ethical standards?
- Is what you’re doing legal?
- Ultimate test - Would you be happy to have your actions made public?
- Do not proceed, act and reflect, record decision and outcome
What is Stace’s Gifts and Hospitality Policy?
Under £50 - Partner Approval
£50-200 - Declare
Over £200 - Permission from partner and disclosed ahead of accepting
What are the RICS Disciplinary Proceedures?
- CPD Sanctions and Fines for when members have not completed CPD or provided information when required. Usually a stepped process (i.e. first time is a warning)
- Regulatory Compliance Order - Agreement between Firm and RICS that something needs to be improved. Action plan to address.
- Disciplinary Panel Hearing - For serious cases or continued breaches.
Usually only gets involved when it finds something in audit, information isn’t provided, CPD isn’t done or complain/whistleblowing from another party
What are the most common causes for RICS to conduct disciplinary proceedings?
- Not completing required CPD
- Mishandling Client Money
- Not acting in a professional manner
Tell me about the Modern Slavery Act 2015
- Sets out the varying types of modern slavery
- Produce S.54 statement stating what they have done in the past year to combat MS.
- Perform Due Diligence checks on Clients/Supply Chain as required.
- Report anything suspicious to the Home Office
What did RICS do as a result of the Merrett vs. Babb Case?
- Set up the Member Support Service
- Set recommended liability wording
- Mandated run off cover
What are the 3 Key Sectors in the RICS?
- Land
- Property
- Construction
Name 6 Professional Groups
18 Professional Groups in total
- Project Management
- Facilities Management
- Building Surveying
- Valuation
- Quantity Surveying and Construction
- Dispute Resolution
What is the purpose of the Professional Groups?
- Steer and set the entry and assessment requirements to that pathway
- Contribute to development of RICS standards, strategy and direction
- Act as a network for knowledge sharing and support
- CPD support
What is the Levitt Review?
- Review in to dismissal of directors who raised concerns about alleged mismanagement of funds
- Report has been issued
- Many recommendations
- Exec team stepped down
- Further review being undertaken by Lord Bichard
- No illegal activity and governing council more control over management and below
What did RICS do in response to Grenfell?
- Lobbied and provided advice to government
- Provided guidance to landlords and residents
- Set up dedicated Fire Safety Hub online
- Produced documentation on the External Fire Wall review process (EWS) and the EWS1 Form
- Worked with insurers to remove blanket exclusion on fire safety in terms of PII
What are the 4 main roles of the RICS and the purpose under the Royal Charter?
- Regulate and promote the profession
- Maintain the highest professional and educational standards
- Protect Clients and Consumers via a strict code of ethics
- Provide impartial advice and guidance
“Promote the usefulness of the profession for the public advantage in the UK and in other parts of the world”
What are the RICS Standards of Conduct?
- Ethics
- Rules of Conduct for Members and Firms
- Client Money
- Conflict of Interest
- Bribery, Corruption, Money Laundering and Terrorist Financing
- Risk, Liability and Insurance
Can you tell me about Client Money Handling?
- Keep Client money safe
- Ensure robust processes in place for managing money
- Client Money used for appropriate purposes only
- Never go overdrawn
- Full audit trail and ledger
What is the Client Money Protection Scheme?
- Provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client’s money, up to the limits and exceptions set out in the scheme rules.
What is the Royal Charter?
- Establishes separate legal entity of the body itself rather than just the individuals
- Required RICS to develop profession for public advantage
- Allows members to use ‘Chartered’ in their title
- Written description of RICS powers and obligations
- Awarded by Victoria to maintain and promote the usefulnes of profession for public advantage
What is the RICS Vision?
“To be recognised in key international markets as the leading body that develops and enforces professional standards, and offers access to the most sought-after professional status”
What is the purpose of the RICS?
- Regulate and promote the profession
- Maintain the highest professional and ethical standards
- Protect Clients and Consumers via a strict code of ethics
- Provide impartial advice and guidance
What the 4 key elements of the new RICS business plan?
TIPS
- Trusted by our stakeholders and society
- Influential thought leader
- Professional qualifications remain in demand
- Sustainable 21st Century professional body
What are the 6 key principles of the Bribery Act? What is the mnemonic?
DTM and CPR
- Due Diligence
- Top Level Commitment
- Monitoring and Review
- Communication
- Proportionality
- Risk Assessment
Can you tell me about the current senior staff at the RICS?
President - Ann Gray
President Elect - Tina Paillet
CEO - Justin Young
Can you talk about any articles you have seen in Modus?
- Will 3D printed homes lead to a workforce revolution.
- Addresses the problem of reduced workforce. Construct a storey a day
What is the RICS HQ Address?
12 Great George St. Parliament Square
Why do you want to join the RICS?
- Validate my competency in the most prestigious way
- Access to network of professionals
- Great base for further development via professional groups and forums
What should you check before starting work for a client?
- Terms of Engagement/Service are clear and agreed
- No conflicts of interest
- Competent to undertake the work
- Basis of Fee
- Scope agreed
- Statement of liability etc.
Can you name me two pieces of legislation that are related to ethics?
- Equality Act 2010
- Bribery Act 2010
- Money Laundering and Terrorist Financing Regulations 2019
What are the RICS Bye-Laws? Can you give some examples?
Set out the specific internal RICS rules that it must abide by itself. Examples:
- Setting the value of membership fees
- Specifies what designations can be used by who
- Members to notify if they may be receiving a custodial sentence
What does the RICS stand for?
Promotion and enforcement of the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure.
What are the three professional statements related to Ethics?
- Conflict of Interest
- Client Money
- Countering Bribery, Corruption, Money Laundering, and Terrorist Financing
What tools did the RICS produce to assist with CPD?
- CPD Tree (is it formal / informal)
- Offer CPD Seminars
- CPD Checklist
What changes were there to the PII requirements this year?
- Greater fire safety cover
- Assigned risks pool increased
- Increased number of insurers
What is the Client Money Protection Scheme? What are the limits?
- For the misappropriation of client funds from an agent
- Last resort to protect Client money in the event RICS firm can’t pay it back.
- £50k limit per claim
- Absolute maximum £20.3m aggregate.
What are some of the Client Money rules?
- Must have the name and the word ‘Client’ on the account name
- Ledger must be kept
- Full access at all times
- Cannot go overdrawn
- Full records
What is a regulatory compliance order?
Agreement between RICS and a member or firm that accepts liability for a wrongdoing and:
- admits that they have fallen short of the standards expected
- agrees to an appropriate sanction
- in some cases, take steps to meet the standards expected and/or to prevent it happening again
What are the 7 cautions/reprimand for regulatory compliance orders?
- Caution
- Reprimand
- Undertakings in the future
- Stop doing something
- Fine (£2000 action)
- Conditions on individual membership
- Conditions on firm regulation in future
What is the Bichard Review?
- Following Levitt Review an independent review of the RICS based on three key requirements from the Governing Council:
- Made proposals for how RICS can become a beacon of best practice, transparency and legitimacy to strengthen its reputation.
- Re-establishing RICS’ reporting lines
- Introduction of new leadership roles to simplify its governance model
- Public fund for public interest activities
Why is the 15 year limitation limit the absolute backstop for contract liability?
Latent Defect Act 1986 provided an additional 3 years on the 1980 Limitation Act 12 year backstop, from the point they know about the issue, to put together a claim. Hence 12 + 3 = 15.
What is the role of the RICS?
- Be leading global body for the profession
- Create standards that are in the publics interest
- Develop members professionally
- Provide opportunities for it members
- Promote usefulness of the profession for the public advantage in the UK and in other parts of the world
How is the governing council elected?
By members every 3 years
How do you become involved in a professional group?
- Sector forum - after APC
- Leader’s forum - after APC
- Working group - anyone at any time
What is a complaint?
Expression of dissatisfaction
What is meant by Fully Retroactive?
Covers all current and previous work done
What is meant by a Full Civil Liability basis?
- Widest cover available - all aspects included unless it’s specifically not.
- Covers acts of liability that non-negligent.
What are the typical PI premiums? What are they based on?
- 1-5% of turnover
- Based on overall risk profile of your firm
Who makes the RICS disciplinary rules?
- Regulations and byelaws allow Standards and Regulation board to administer the rules
What are the Bye Laws set by the RICS?
Internal rules governing the management of a corporation and covering such matters as election of directors, appointment of committees, duties of officers and permitted business activities.
2 - Membership and Registration
5 - Conduct
8 - Procedure for General Meetings and Voting
9 - Accounts and Audit
What is Run off Cover
Protection against claims after ceasing business operations
What are the 5 rules of conduct?
IPA TA
Act with honesty and integrity
Provide a high level of service
Act within your competency
Treat other with respect
Act in public interest
What is a conflict of interest? Do you have an example?
When an individuals personal interests could compromise their judgement, decisions or actions.
A director recommends a tender bid by a company owned by a relative
What standards does the Stace Ethical Trading Policy set?
Promotes policies to encourage a culture of ethical behaviour within the business
- Operate non exploitative employment practices
- Conflict of interest and bribery
- Community and ‘giving back’
What is Lionheart?
An RICS charity set up to support RICS past present and future members through difficult times.
What do you need to set up a RICS firm?
- Comply with Companies Act 2006
- PI Insurance
- 25% of board memebers must be MRICS
- Complaints Handling Procedure
- Employers Liability Insurance
- Comply with Rules of Conduct / Royal Charter / Bye-laws
- Provide CPD
Locum Agreement
Sole practitioner is incapacitated it would set out fees, scope and disbursements etc.
Professional Obligations for Firms
- Complaints Handling Procedure
- Have adequate PII
- Sole practitioner have arrangements for death / incapacity
- Cooperate with RICS
- Provide info to S&R board
- Designation to denote RICS regulation
- Must report anything they are required under Rules for the Registration for Firms
What is the privvy council?
- Changes to bye-laws have to be approved even if majority want it
What is the RICS Matrix?
Established to support, develop and provide networking for members for entering / newly qualified members
Rules for registration of firms
- 25% of principals to be chartered
- Required to register is 50% of partners are members
- Must have responsible person
- Responsible person must take all reasonable steps to ensure the firm complies with regs / stat obs
- Complies with professional obligations
Functions of professional groups
- Drafting reviewing and maintaining guidance
- Setting up the standard of professional competence
- Contribute to policy information
- Commission and undertake specialist research
- Contribute to CPD events
What are the different types of documents the RICS produces?
Practice Statements - Mandatory requires to comply with bye-laws
Codes of Practice - Docs approved by RICS and endorsed by other bodies
Guidance Notes - Recommendations for accepted practice
Information Papers - Practice based papers with latest info
Minimum Uninsured Excess
Less than 10m - 2.5% or 10k
Greater than 10m - non limit
PI Fire Safety Exclusions
- From 1st May 2021 any exclusion will not apply to professional work to buildings of 4 storeys or under.
What is Run-Off Pool?
Firms that are unable to obtain run-off from their incumbent insurer or the open market will be able to apply for coverage from the pool.
What are Assigned Risks Pool?
Open to all RICS firms that are unable to obtain PII which meets the RICS Standards
What are Assigned Risk Pool considerations?
- Entry considered if all options are exhausted
- Deposit and final premium substantially higher
- Extent of cover lower as aggregate rather than E&E
- Firms remain in for max 3 years to which they will be audited and guided to amend practice
Client complaint to a sole practitioner?
- Escalated if cannot be dealt with internally
- Appoint mediator or PI
Your friend is failing to meet standards what do you do?
- Verify facts
- Remind them of duties
- Complain if nothing changes
Client Money Handling Best Practice
- Separate designated bank accounts
- Client approval of account handling terms
- Monies available to pay client on demand
- Interest paid to client
- Agreed signatories
- All firms audited by RICS
What is the Client Money Protection Scheme?
- Run by the RICS
- Member of public get reimbursed for loss of funds
- Provided through RICS Insurance policy
What would be considered a high standard of service?
- Understanding Client Needs
- Advising clients of latest regs
- Communicating clearly allowing for informed decisions
- Encouraging sustainable solutions
What firms must do for bribery
- Dont offer or accept a bribe
- Do not bribe a foreign public official
- Ensure adequate training is in place
- Comply with applicable laws
- Undertake due diligence
- Show compliance with RICS requirements
- Have adequate knowledge of bribery and corruption
- Report any activities that breach laws
Client Bank Accounts
- RICS firms must hold client money in a client money account where firm has exclusive control.
- Ensure client money is available instantly
- Ensure money is paid into account promptly
- Obtain a receipt for an indemnity of client money paid into a charity
- Only use client money for client matters
- Leftover money is returned
- Ensure all payments from client money has written approval
- Check sufficient funds are available for payment
- Records of money in and out
- Publish written procedures
RICS Countries and Members
149 Countries
140,000 members
How do you register with the RICS?
Contact RICS to recieve a start up pack
Inform the RICS and register for regualtion
Appoint a contact officer
Stace’s Money Laundering and Bribery
- Anti corruption training
- Evaluate controls periodically
- Ensure sufficient knowledge
- Do not be complicit
Types of conflict of interest
- Party conflict
- Own interest conflict
- Confidential information conflict
Types of risk?
Project risks
Programme risks
Consequential risks
Political Risks
What is a project manager?
An individual that control manages and coordinates people to complete a certain project objective.
When is CPD Formal?
- Formal Structure
- Independently assessed
- Learning enhances technical knowledge
What is informal CPD
- No formal structure
- Self assessed
- Does not enhance technical knowledge
When do you have to submit CPD to the RICS
- Actual courses completed 31 December
- Submitted online on 31 January
What did you learn from the Party Wall CPD?
- Resolves disputes before construction starts
- Prevents people undermining structural integrity of neighbours
- A PW is something that separates each owner but both have an interest.
What did you learn from the Role of a Clerk of Works CPD?
- Role of the Clerk of Works
- Common mistakes (brick ties too short, weep holes missing)
What did you learn from the KP Noise and Planning CPD?
- Why we need it at planning stage
- Affect on final user
- Different decibel requirements at different places
What did you learn from the Avande Home Tech CPD?
- Smart tech in homes
- One combined system
- Services: lighting, security, network, electrical
What did you learn from he Ardex Flooring CPD?
- Product presentation
- Services they provide: flooring, tiling, concrete repair, screeding
What did you learning from the Disperse Building Tech CPD?
- Programme presentation for a project management tool.
- Show accurate progress again a programme
What did you learn from the Mental Health CPD?
- Importance of speaking to people
- Employee assistance programme
- Train line managers to spot it and be mental health first aiders
What did you learn from the Building Regs - Office Fitout CPD?
- Everything needs compliance.
- Part A, structural changes like introducing a mezzanine
- Part B, fire and exit routes 1 exit max 60 occupants.
What did you learn from the Ekkist Healthy Homes CPD?
- Best practice guidance based on studies and reports into what makes a healthy home.
What did you learn from the Changes to Building Regs Part O, F, L & S CPD?
- Part L, cut in carbon
- Part F, minimise ingress of external pollutants
- Part O, strategies to limit solar gain
- Part S, new developments must have EVCP’s
What did you learn from the WELL Certification Requirements for a Contractor CPD?
- Contractor must review the testing requirements
- Check before substituting products
- Letter of Assurance signing
What are the steps for Client Money Handling?
- Hold money in a bank account you have exclusive control over
- Keep this money safe
- Use for appropriate purposes
- Procedures to protect money
- Include the word client and the name of the firm
- Immediately accessible
- Compliant with Countering Bribery etc.
How is the RICS Regulated?
It is self regulated
What did you learn from the Airflow CPD?
- Impact of bad airflow, means overheating and uncomfortable
- Reduced reliance on natural ventilation
- Increased use of mechanical systems to achieve requirements.
