Conduct, ethics and professional practice

Question 1

What are the PII minimum requirements for firms?

Answer 1

Look at previous year’s turnover.
Up to £100k = min. £250k limit
Between £100k - £200k = min. £500k limit
Above £200k = min. £1m limit

Question 2

What about the maximum level of uninsured excess for PII?

Answer 2

Up to £10m turnover = £10,000 or 2.5%, whichever is greater
Over £10m turnover = no limit

Question 3

How would you determine the time period that run off cover would be
needed?

Answer 3

Check RICS PII “regulation” doc:
- Consumer claims: £1m “in all” for 6 years minimum
- Non-consumer: 6 years minimum

Question 4

How would you set up an RICS regulated practice?

Answer 4

• First, have a company that offers professional surveying services
• Meeting the minimum % eligibility criteria
• Agree to be bound by “rules of conduct for firms” and “rules of registration for firms”
• “Contact officer” to complete “Firms details” application form

Question 5

What is a “contact officer”?

Answer 5

• Person at firm who liaises with RICS
• They also submit the firm’s “annual return”

Question 6

What is a “responsible principal”?

Answer 6

Someone appointed in a firm that has responsibility for ensure that RICS
- technical
- professional
- ethical
standards are applied and upheld.

Question 7

What is a “General”, and “Discreet/Designated” client bank account?

Answer 7

General: one account for all client’s money
Discreet/designated: one account per client

Question 8

How would you give client assurance as to how you were going to hold their money, so that it would be securely kept and accounted for?

Answer 8

• Bank Operating Conditions Letter provided. (BOCL)
• Under Rule 1 or ROC we HAVE to “keep client money safe and have appropriate accounting controls”.
• Client Money Handling Professional Statement says firms must confirm to clients that the account is only accessible via that firm.

Question 9

Who controls client money accounts?

Answer 9

Principals who have signed a mandate with the bank

Question 10

What are your firm’s timescales for responding to complaints?

Answer 10

• 7 days to acknowledge in writing
• 14 days from there (so 21 in total) for nominated person to investigate and uphold complaint or not.
• Stage 2 – if complainant not happy, it goes to director where Jon has 14 days to investigate/review.
• Still unhappy – go to 3rd party redress mechanism.

NOTE: RICS one was “resolve within 28 days”

Question 11

Discuss a relevant third-party redress mechanism and their role?

Answer 11

Ombudsman Services - for Consumers
RICS Dispute Resolution Service - for non-consumers

Question 12

What Laws and regulations govern the formation and workings of RICS?

Answer 12

Royal Charter 1881
Bye-laws (February 2020 edition)

Question 13

What legislation are you aware of relating to bribery or money laundering?

Answer 13

• Proceeds of Crime Act 2002
• Bribery Act 2010
• Money laundering, terrorist financing, transfer of funds Regulations 2017 (2019 amendment)
  Sanctions and Anti-money Laundering Act 2018

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Question 14

Tell me something about the RICS Professional Statement on money laundering. Including its full name

Answer 14

Countering Bribery, Corruption, Money Laundering and Terrorist Financing
(CBMT… alphabetical!)

It has:
- Mandatory requirements
- Good practice guidance
- Supplementary guidance

Question 15

In the RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing - what must RICS Members and Firms do?

Answer 15

• Not be complicit in money laundering activities
• Not facilitate money laundering activity
• Report any suspicion of money laundering

Question 16

What constitutes an offence under the money laundering regulations?

Answer 16

• Handling criminal property;
• Concealing criminal property
• Criminally obtained money/assets, exchanged for ‘clean money’/assets

Question 17

What is the Bribery Act 2010?

Answer 17

• Updated and enhanced UK Law on bribery
• inc. foreign bribery
• strict penalties for active and passive bribery by individuals and companies

Question 18

What MUST you do as a member in relation to bribery and corruption?

Answer 18

• Not offer or accept bribes
• Ensure adequate knowledge of bribery/corruption to comply with PS
• Report activity that breaches bribery/corruption laws

Question 19

What MUST you do as a member in relation to money laundering/terrorist financing?

Answer 19

• Not facilitate or be complicit in money laundering/terrorist financing
• Report suspicions of activity to authorities

Question 20

What SHOULD you do as a member in relation to bribery and corruption?

Answer 20

• Declare and record gifts etc
• Attend training
• Know your company policy/code of behaviour

Question 21

Give me an example of a “party conflict”.

Answer 21

ROL - being asked to represent an affected neighbour in a negotiation with a developer that you are already appointed by (on the same or another development).

BS - being asked by a leaseholder to complete a defect report and lease check for responsibility, as they are taking action against a property manager whom is a long-standing client of yours

Question 22

Give me an example of a “confidential information conflict”.

Answer 22

ROL - risk of confidential information on a negotiation being shared between surveyors who work together in the same firm but appointed by a neighbour/developer separately

EG. developer is planning material amendment to a scheme, whereas neighbour has agreed deed of release to publicly available plans

Question 23

Give me an example of an “own interest conflict”.

Answer 23

BS - A tender submission by a friend of mine, I am reviewing his tender. We are good mates and have been for a long time. Would have to inform client, even if consent given may not be appropriate to continue.

BS - Wife writes a proposal from within another company, is client amenable to considering proposal given that wife/me/us would benefit from instruction? With informed consent, would be OK.