APC Mandatory - Ethics Flashcards
Ethics
1
Q
Why do you want to become a member of RICS?
A
I want to become a member of RCS because I want to have industry recognition, provide a gold standard of excellence and develop my career.
2
Q
What is the role of RICS?
A
- To maintain the highest standards of education and training. 2. To protect consumers through strict regulation of professional. 3. To be the leading source of information and independent advice on land, property, construction
3
Q
What are the key functions of RICS?
A
ToÊpromotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure
4
Q
What is a Royal Charter?
A
The Royal Charter allows the RICS to be self-governed. It maintains and promotes the usefulness of the profession for public advantage.
5
Q
Who is the current RICS president?
A
Clement Lau
6
Q
What do you understand by the term self-regulation?
A
RICS self-regulates, meaning that itÊoperates within it’s own published regulatory framework, rather than being legislated by Government. RICS regulation is led by an independently-chaired Regulatory Board and regional sub-boards.
7
Q
Can you tell me what you understand by the principles of better regulation?
A
PACTT. 1. Proportionality - make the penalty proportional to the breach. 2. Accountability - Regulators must be able to explain their actions under public scrutiny. Promote complete fairness. 3. Consistency - treat everyone equally. 4. Targeting - focusing on serious breaches.
5. Transparency - Regulations are simple, clear and effectively communicated to all members, clients and public.
8
Q
What is a Bye-Law?
A
Enabling Principle ratified by the Privy Council
9
Q
Give an example of one of the RICS Bye-Laws.
A
There are 10 e.g. Conduct - complying with regulation and rules.
10
Q
Explain to me the new RICS Rules of Conduct - what do they replace?
A
The new Rules of Conduct is a single document which replaces the old Rules of Conduct for members, Rules of Conduct for firms and global ethical principles
11
Q
RICS Rules of Conduct: When do they take effect?
A
2 Febuary 2022
12
Q
RICS Rules of Conduct: Who do they relate to?
A
Members and firms.
13
Q
What are the 5 Rules?
A
1.Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
2.Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
3.Members and firms must provide good-quality and diligent service.
4.Members and firms must treat others with respect and encourage diversity and inclusion.
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
14
Q
RICS Rules of Conduct: Give an example behaviour for each.
A
- Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS (Members and firms do not mislead others by their actions or omissions, or by being complicit in the actions or omissions of others.)
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise. (: Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.)
- Members and firms must provide good-quality and diligent service. (Members and firms understand clientsÕ needs and objectives before accepting any professional work.)
- Members and firms must treat others with respect and encourage diversity and inclusion. (Members and firms respect the rights of others and treat others with courtesy.)
- 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 (: Members and firms respond to complaints made against them promptly, openly and professionally.)
15
Q
What are the core professional obligations of firms and members to RICS?
A
Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
16
Q
What disciplinary procedures can the RICS impose and what circumstacnce can they be imposed?
A
- Action by Head of Regulation
- Regulatory Tribunal
- Appeal Panel
17
Q
When did RICS last update their disciplinary panel rules?
A
1st October 2019
18
Q
What are the different levels of disciplinary action within these procedures?
A
Investigations, Regulatory Complicane order, Diciplinary panel.
19
Q
What do you understand by the term professional practice?
A
Professional practice means to upholding standards set by the profession.
20
Q
What money laundering regulations or legislation are you aware of?
A
The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. RICS Professioanl Statement - Countering bribery and
corruption, money laundering
and terrorist financing 2019
21
Q
What is a red flag of money laundering?
A
A warning or indicator suggesting a serious problem e.g., criminal activity.
22
Q
What bribery legislation are you aware of?
A
Bribery Act 2010
23
Q
What is a bribe?
A
A bribe is something given in expectation of a change in behaviour.
24
Q
What are the penalties for accepting a bribe?
A
Penalties include fine or prison
25
What are the penalties for being involved in money laundering?
Penalties include fine or prison
26
What constitutes an offence under the Bribery Act 2010?
Giving a bribe, taking a bribe, bribing an official, not having systems in place to prevent a bribe.
27
What constitutes an offence under the current money laundering regulations?
Facilitating money laundering, not having systems in place and not reporting suspicious activity
28
What is Professional Indemnity Insurance (PII)?
Professional indemnity insurance
29
Can you tell me about the RICS requirements in relation to PII?
ÔFirms must ensure that all previous and current professional work is covered by adequate and
appropriate professional indemnity cover that meets the standards approved by RICS.Õ - If turnover =< £100k =PII of £250k
- If turnover £100-£200k =PII of £500k
-If turnover >£500k =PII of £1m
30
What would you do if you received a notice of a PII claim from a client or their solicitor?
Notify insurance
31
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?
Increase PI cover.
32
What is run off cover?
To ensure that firms, members and their clients are not exposed to financial detriment in the period following a firm ceasing to trade.
33
What RICS requirements are there relating to run off cover?
Run-off cover for 6 years with a minimmum of 1 million.
34
What changes did RICS recently make to the Minimum Approved PII Wording?
Under the new terms, 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.
35
Explain PII requirements relating to fire safety cover and cyber cover.
Since 2020, insurers have imposed a blanket fire safety exclusion on PII terms provided due to concern following high profile fire safety failures, meaning chartered surveying firms have increasingly been left uninsured for fire safety exposure on all aspects of their business. There is a new regulatory requirement for insurers to clarify the cyber cover provided in PII policies.
36
How long can a PII claim arise after the work is undertaken?
15 years
37
What is the Assigned Risks Pool (ARP)?
The assigned risks pool is for firms that are unable to obtain professional indemnity insurance (PII) in the insurance market
38
Who might need to access the ARP?
Firms unable to gain insurance.
39
Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance (1st Edition).
This guidance note is intended to assist both members and their clients in understanding the main risks and liabilities associated with surveying.
40
Explain when you might agree a liability cap.
Where legally permissible and following the principles of good practice set out in the guidance note, as a way to manage the risk of their professional work, and to ensure that there is a fair allocation of risk and reward between members and their clients.
41
How would set out third party reliance in Terms of Engagement?
You would clear state it within the Terms of Engagements
42
What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?
The scope of the work
The basis on which the fee will be calculated
The liability cap
43
What is an annual return?
A document that contains details of a company's share capital
44
Tell me what you understand about Complaints Handling Procedures
RICS Guidance Note Ð Complaints handling 2016.
- A firm must operate a CHP
- It must include a redress system
- A firm must have a complaint handing office and a log.
- CHP are free of charge to the complaint initially, but back-to-back complaints may be part paid if the ADR process is used.
- Sole traders canÕt deal with complaints themselves
Time limit for RICS complaint policy:
- Acknowledge within 7 days
- Reply with 21 days (28-day total)
- 2nd stage redress if client is dissatisfied e.g., Property Ombudsman
45
When and how can the RICS be involved in a complaint about a firm or member?
If the complaint gets reported to the RICS.
46
Can you tell me about the CPD requirements for members of RICS?
CPD requirements are 20 hours each year 50% formal and ethical standards every 3 years.
47
Why is CPD important?
Continuing professional development to esnure your are updating your skills and knowledge.
48
Tell me about the RICS guidance on dealing with Conflicts of Interest.
RICS Conflict of interest Professional Statement 2017.
RICS Rules of conduct set obligation for members and firms to act with integrity, avoid conflicts and avoid actions inconsistent with professional obligations.
49
What is double dipping (dual agency)?
When a survyeors represents both parties.
50
Why is double dipping (dual agency) an unacceptable practice?
Unethical
51
What can you tell me about RICS guidance relating to bribery, corruption or money laundering? What status does it hold?
This professional statement sets out mandatory requirements for RICS members and RICS-regulated firms in relation to bribery, corruption, money laundering and terrorist financing.
52
What are some of the key principles of RICS Money laudering guidance?
Additional obligations of firms working in areas of higher money laundering risk. Aims to stop criminals using professional services to launder money by requiring professional to take a risk-based approach.
53
What are the current RICS rules for registration of firms? When did these last change?
What were the key changes?
RICS new rules for registration of firms are effective from the 2nd of February 2022. They set out rules which firms must apply. Key changes include interpretation of a firm, firms required to register/eligibility and procedures to register and the responsible principle.
54
Who is a qualified member of RICS?
An associate or Chartered member
55
What is a phoenix firm?
Firms which close in a disorderly way and then rapidly re-establish themselves as a new trading entity
56
When must a firm register for regulation? What are the registration eligibility criteria?
A firm is required to register if they provide a surveying service to the public, operate in regulate Area A (UK) or at least 50% of the firmÕs principals are RICS members.
57
Who is a Responsible Principal?
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.
58
What happens if a firm cannot comply with the RICS eligibility criteria?
A firm may not be able to register or it can appeal to the Head of Regulation.
59
What are the rules around use of the RICS logo and Regulated by RICS designation? When did these rules last change?
What changes were made?
A RICS member of registered firm may use the logo and regulated by the RICS designation. The rules changed 1st April 2020. A firm registered fore regulation must display on its business literature.
60
Tell me about the restrictions to the use of the designation Chartered Surveyors' by firms
A firm can only use chartered surveyor in its business trading. It is not allowed to feature in the corporate name.
61
What must be included in ToE relating to firm regulation?
Confimation, the service, Surveyors details, charges/terms of payment, CHP, Liability, PII
62
What is a locum and who might need one?
Locum Agreement ensures cover for long term absence/unavoidable events it can be another RICS member of suitably qualified professional e.g., pregnancy.
63
How could a sole trader set up their CHP using a locum?
A locum may be appointed by a sole practitioner as their complaints handling officer to ensure that their Complaints Handling Procedure can be run fairly and impartially.
64
What RICS guidance relates to handling client money? When was this last updated?
RICS Professional Standard Client Money Handling October 2019
65
What do the RICS Rules of Conduct say about client money?
A firm shall preserve the security of clients' money entrusted to its care in the course of its practice or business.
66
Explain your understanding of the RICS Scheme Rules relating to client money protection. What are the main schemes available to firms?
When were these last updated?
What is the current compensation limit?
What does the annual regulatory review fee relate to?
What might client money include?
How does this differ to office money?
RICS operate a Client Money Protection Scheme. This scheme provides protection in the event a firm is unable to repay a clientÕs money. The three schemes include RICS Client Money Protection Scheme for Surveying services, Property Agents and TDS Deposits. This was last updated in April 2019. The current compensation limit is £50,000. Client money is money which is held e.g., rent etc office money is fees etc.
67
What are some of the key principles of the RICS Professional Statement relating to client money protection?
1. Clients must have access to funds. 2. Clients money must be keep separately and clearly identifiable. 3. Include 'client' in account name. 4. Interest must be agreed with client. 5. Maintain a client ledger of transactions. 6. Agree terms and inform client of bank details. 7. Account must never be over drawn
68
Explain the key themes from the RICS Futures 2020 Report.
Use of plastic, Big data, China, Drone technology, Climate change and Ethics.
69
Explain the potential implications of the Hart v Large case.
Surveyors have to be clear on the survey level and scope, limitations and caveats recommending justifiable recommendations and ensuring all relevant documentation is available.
70
Explain your understanding of precedent set in Burgess v Lejonvarn.
Lejonvarn provided PM services for Burgess and was not paid as she was a friend. Burgess alleged that Lejonvarn was negligent and brought a claim. The court decided there was no contract but Lejonvarn had a duty to use reasonable skill for the project and would be negligible for failing to provide a good standard.
71
What is the new maxim of RICS in relation to compliance?
Sanctions Policy: Guidance to RICS Disciplinary, Registration and Appeal Panel Rules
72
What do RICS set out as good practice for the use of social media in their Regulation document (June 2021)?
The standards expected of members do not change because they are communicating through social media rather than face-to-face or other traditional media.
73
Explain your understanding of the RICS Levitt review.
The Independent Review was commissioned by RICS to investigate articles in the press that alleged that RICS Ôtried to supress a critical internal report into its finances in 2018/2019 and then unfairly dealt with those who sought to explore the issue
74
What is whistleblowing?
When a worker raises an issue surrounding a matter in the work place.
75
What does good governance mean to you?
Good governances includes identifying a vision, developing a strategy and selecting and supporting leadership to deliver that strategy.
76
Explain what the Pandora Papers are and the ethical issues raised within them
Integrity, Transparency, Inclusion, Collaboration, Advocacy.
77
Explain what you understand by the RICS Bichard Review.
The RICS appointed Lord Bichard to lead an independent review into the RICS purpose, governance and strategy following the Levitt Review. This was done to create clarity on the profession and advice for future proposals.
78
How do professional integrity and professional ethics differ?
Integrity is the practice of being honest, it is internal and our choice of how we want to behave. Ethics is more or a moral framework which is imposed on us e.g., RICS ethics.
79
What is modern slavery and how would you identify red flags of it?
Modern slavery is situations of exploitation in which a person cannot leave because of threats, violence or abuse of power etc. A red flag would may be someone unwilling to interact with others.
80
What is the SAAMCO case?
The SAAMCo principle determined that a claimant must establish not merely that the loss for which damages were claimed were caused by the professional's breach of duty in the "but for" sense, but also that that loss fell within the scope of the duty owed by the professional defendant.
81
How do you ensure that you comply with bribery legislation?
Regularly updating anti-bribery and corruption policies, setting the right tone, ensuring gifts meet a proportional criteria, regularly training and looking out for red flags.
82
How do you ensure you comply with money laundering regulations?
Conduct risk based due diligence, have a AML officer, regularly reviews and training on the legalisation, reporting anything suspicious.
83
How do you ensure you comply with your firmÕs bribery and gifts policy?
Record gifts in the gift register and only accept gifts which are proportional.
84
Tell me about an instance of when you have been offered a gift or hospitality by a client?
I was offered a bottle of wine following a survey. The bottle was cheap and therefore proportional to the work so would not be seen as a bribe.
85
Tell me about what you would do if you felt that an instruction wasoutside your scope of experience or knowledge.
I would decline it and refer it onto someone who was competent or a specialist.
86
Tell me about an instance of when you have handled clients money.
Taking deposits from a client. I always ensure that the clientÕs money is easily identified in a separate account, they are given a receipt and it is passed onto TDS as soon as possible.
87
How would you keep clients money securely and safely held?
Ensuring client money is in a sperate account and clearly identifiable, give clients a receipt, maintaining a ledger and ensuring I remain compliant with RICS guidance and being part of a proteciton scheme.
88
Tell me about how you would handle a client complaint.
I would inform my manager who would acknowledge and record the claim and provide the client with a copy of our CHP.
89
Tell me about a conflict of interest check you have carried out. If you identified a potential or actual conflict of interest
CMS survey for a friend own interest conflict. Referred the survey onto one of my friends
90
Dumbarton Road why did you decline the instruction?
Explain why this was a Conflict of Interest?
How did you deal with securing informed consent?
I declined the instruction because I identified myself as a direct conflict of interest as I am friends with the client. Informed consent was achieved by identifying myself and making my friend aware I could not do the survey but one of my colleagues could.
91
Church St Ð why did you accept the bottle? What principles did you apply? How did you record this? Would you have accepted it if it was a very expensive, rare fine wine?
I accepted the wine because it was a cheap bottle which was a genuine thank you. It was proportional to my work, and I recorded it in the gifts register. I would not have accepted it if it was an expensive/rare wine.
92
Give me an example of when you have acted with integrity?
By acknowledging conflicts of interests I have showed integrity.
93
Tell me about when you have provided a high standard of service.
Regularly communication prior and after a survey reflects a high level of service to ensure the client fully understands your advice.
94
Tell me about how you have promoted trust in the profession.
By fulfilling my obligations this helps promote trust in the profession.
95
Explain how you have taken responsibility in your current role.
I was going to send a day late. I took responsibility by informing the client and apologising.
96
Tell me about how you treat clients with respect.
Always being polite and considerate to clients.
97
Tell me about how you treat other surveyors with respect.
By never discriminating any other surveyors.
98
Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying.
1. Inform RICS. 2. Appoint contact officer. 3. Obtain PII. 4. Set up client account and procedures for client money. 5. CHP. 6. Arrange CPD and staff training. 7. Ensure meet requirements of Rules of Conduct
99
If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.
Refuse as this could be seen as a bribe.
100
What would you do if you were asked by a client to reduce a fee proposal to win new work?
Refuse and state to the client I will not reduce my fees to win new work as it is unethical.
101
What would you do if you became suspicious that a client was involved in money laundering?
Report it to the AML officer, MD or Police.
102
If you were to set up in practice on your own, tell me about the types of insurance you would need.
PII, public liability, buildings insurance, employer liability cover, directors and officers cover, contents insurance, business interruption insurance.
103
Town End Meadow Ð why did you decline the instruction?
Why was it important to act within your remit?
How did you check the listing?
I declined the instruction because there was a potential conflict, and it was outside my competence. I thought a more specialist surveyor was needed. It is important to remain within your remit to remain competent. I checked the listing via Historic England.
104
How do you adhere to client money handling rules?
1. Clients must have access to funds 2. Clients money must be keep separately and clearly identifiable 3. Include 'client' in account name 4. Interest must be agreed with client 5. Maintain a client ledger of transactions 6. Agree terms and inform client of bank details 7. Account must never be over drawn
105
How do you ethically deal with deposits?
At the start of the tenancy I transfer the deposit to the TDS who are insured and custodial which protect the deposit.
