8 - COI Flashcards
What is a conflict of interest?
When a member or firm’s independence and impartiality is threatened due to the existance of a conflict between two parties
Where might a conflict of interest arise?
Examples include:
* financial interest
* personal interest
* commercial relationships
* acting on both sides of a transaction.
What is the difference between conflict avoidance and conflict management?
conflict avoidance: you do not accept the instruction
conflict management: instruction accepted, but steps are agreed and put in place to manage the conflict (i.e. information barrier, with written agreement of all parties)
What did the RICS publish on Conflicts of Interest?
‘RICS Professional Statement on Conflicts of Interest (2017)’
What is the ‘RICS Professional Statement on Conflicts of Interest (2017)’?
Mandatory Standard from Jan 2018.
members must not advice a client when a COI identified, unless informed consent is provided.
What is informed consent?
Can only be given in writing by the party if the person explaining the position to them is entirely transparent and sure that the affected party understands what they are doing
When may informed consent be sought?
Informed consent may only be sought where the RICS member is satisfied that proceeding is in the interest of all those affected.
According to RICS Global Professional Statement on Conflicts of Interest, 2017, what three types of conflict might arise?
- Party Conflict – work on same or related instruction between two parties.
- Own Interest Conflict or Personal Conflict.
- Confidential Information Conflict relating to work between two parties which is confidential.
Does every RICS firm have to have in place effective systems and controls appropriate to the size and complexity of their business to ensure full compliance?
Yes.
All firms must also keep records to show their compliance with the standard.
In what circumstances might a conflict of interest not cause you to decline an instruction?
If you identify a conflict but believe it is in the best interests of all involved to proceed with the instruction, and you have informed consent from your client.
How would you perform a Conflict of Interest check?
Check relevant parties, property address, postcode, and company address against the internal system and send a company-wide email to double check.
If you had valued the property next door would you be conflicted?
No, you would be well placed to inform on the value of that property.
What would you consider if you were invited to a sporting event?
I would consider the value of the gift, the situation, ongoing and future works with the client, appropriateness of attendance, and ensure no gifts are accepted during a current instruction.
