Conduct rules and ethics Flashcards

Question

What are RICS Professional Statements and can you name three?

Answer 1

mandatory include: 1. conflicts of interest 2017 2. Property measurement 2018 3. RICS Home Survey Standards 2019

Answer 2

Mandatory guidance from RICS E.g. Surveyors acting as Expert Witnesses Surveyors acting as advocates.

Answer 3

1. Voluntary 2. e.g. Reinstatement cost Assessment of Buildings 2018 3. Surveying Safely 2018 4. Surveyors acting as Adjudicators 2017

Answer 4

Can be mandatory or recomended good practice Examples include#: S/C Residential management code 2016 Rating Consultancy code of practice 2017

Answer 5

MANDATORY 1. international standards 2. professional statements 3. practice stateements 4. some codes of practice. VOLUNTARY Guidance notes

Answer 6

1. AVOID COLLUSION (competition and markets authority) 2. AVOID PRICE FIXING 3. AVOID UNDERCUTTTING OTHER COMPANIES 4. PROFESSIONAL RENEGOTIATION OF FEES IS ALLOWED AFTER INITIAL PROPOSAL 5. TRANSPARENCY on referral fees (bribery act, 5 global ethical standards!)

Answer 7

1. RICS ethical standards 2. Bribery Act 2010 3. Be transparent with your client

Answer 8

Terms of engagement 1. Signed agreement with the client to a surveyors fee proposal 2. Confirmed terms of engagement in writing 3. must state how calculated 4. Must state copy of firms CHP available on request 5. MUST CHECK NO CONFLICT OF INTEREST 6. MUST BE COMPETENT to carry out the works 7. Must get client approval before starting works. 8. There is a 14 day cooling off period under The Consumer Rights Act

Answer 9

1. Not competent, outside limitations 2. Not enough information (FACTS) 3. Conflict of interest 4. Client wont sign terms of engagemetn or sign AML checks (Anti money Laundering) 5. PI insurance cap cannot be agreed 6. PI wont cover 7. Client is in government sanctions list 8. Not happy for actions to be made public (ethics test)

Answer 10

1. Description of the works 2. List of services to be included 3. List of services not to be included 4. Limitations of liability 5. Timescales 6. Fee and how calculated 7. Terms and conditions (CHP, payment terms)

Answer 11

When a member or firm is not able to act impartially or independtely on an instruction due to conflicting interests 3 types: 1. party conflict -between two client interests e.g. acting for the tenant and landlord on same instructions ooposing sides 2. confidential information - between the duty of an RICS member to provide material information to one client and their duty or that of a regulated firm to another client to keep that same information confidential (restricted to the member) 3. own interest - personal interest by member directly/indirectly involved in the instruction conflicts Conflicts of interest global professional statement 2017 provides a framework of the principles that must be followed when assessing whether there is a conflict of interest, and what action should be taken if there is.

Answer 12

1. **Obtain full facts** 2. I would consult the **Conflicts of interest global professional statement 2017** which provides a framework of the principles that must be followed when assessing whether there is a conflict of interest, and what action should be taken if there is. 3. 2 possible actions 1. **conflict avoidance** * If impartiality will be compromised * dont accept instruction, politely decline. 2. **conflict management** * TELL CLIENT IN WRITING 1. nature of conflict 2. any relevant facts 3. proposal for dealing with it 4. inform to seek independent advice if required. 5. Request written confirmation of their consent * set up measures to protect client with the written agreement of all parties such as an information barrier or chinese wall. * Information barriers are arrangements that are designed to prevent the flow of information between separate departments or individuals. * In practice, they may consist of restricting access to electronic documents; and/or separating personnel so that they are located on separate floors of the same office or in different locations completely. * Management does not work unless there is informed consent * informed consent should only be sought if the surveyor is happy that proceeding is in the interest of both parties and legal.

Answer 13

* I would use the RICS Global Professonal Statement 2017 on conflict of interest to determine the best action. * If it was not in the interests of both parties or legal to proceed I would decline the instruction. * If I could not obtain informed consent from both parties to manage a conflict of interest for example with an information barrier. * I would seek advice also from a more senior colleague.

Answer 14

* Manage in accordance with the professinal statement. * Have effective controls in place appropriate to the size fo their business * Keep records to demonstrate compliance with the RICS Professional global staement on COI 2017

Answer 15

3 types: 1. **party conflict** -between two client interests e.g. 1. DUAL AGENCY -acting for the tenant and landlord on same instructions opposing sides at the same time (MUST NOT BE UNDERTAKEN as per the conflcit of interest professional statement 2017. 2. MULTIPLE INTRODUCTIONs - real estate agents dealing with multiple buyers for a property -must state exclusive (decline other instructions) or non exclusive basis (manage but obtain informed consent) 3. INCREMENTAL - e.g. act for seller of property re disposal then for buyer afterwards to provide a valuation 2. **confidential information** - between the duty of an RICS member to provide material information to one client and their duty or that of a regulated firm to another client to keep that same information confidential (restricted to the member) 3. **own interest** - personal interest by member directly/indirectly involved in the instruction conflicts - connected person e.g. famil relationship - must declare

Answer 16

1. financial interests 2. personal interests 3. commercial relationships 4. acting on both sides of a transaction

Answer 17

1. A type of conflict of interest management proceedure 2. Information barriers are arrangements that are designed to prevent the flow of information between separate departments or individuals. 3. Must be robust so no info passes 4. you must take **reasonable steps** to operate the barrier 5. Information must be securely stored 6. In practice, they may consist of restricting access to electronic documents; and/or **physical separation** of personnel so that they are located on separate floors of the same office or in different locations completely. 7. Firms compliance manager should over see 8. Keep records and audit trail of corrospondance and oral communication e.g. telephone calls. 9. Management does not work unless there is informed consent 10. informed consent should only be sought if the surveyor is happy that proceeding is in the interest of both parties and legal.

Answer 18

1. Bribery Act 2010 2. Proceeds of crime act 2002 3. Money laundering regulations 2017

Answer 19

**_The Bribery Act 2010_** **_AIM_** To reduce bribery in business in the UK and abroad. **A Bribe is** * giving, offering, promising or receiving of an advantage for an action which is ilegal or a breach of trust. * The advanatge may be a payment, gift or service. **FOUR OFFENCES UNDER THE ACT** 1. **bribing** 2. **receiving a bribe** 3. **bribing a foreign official** 4. **failing to prevent bribery** * Hospitality is not prohibited under the act but it must be reasonable and proportional and be declared and recorded on a company gift register. * Companies must take steps to prevent bribery: * training * clear policies * regular reviews

Answer 20

**A Bribe is** * Giving, offering, promising or receiving of an advantage for an action which is ilegal or a breach of trust. * The advanatge may be a payment, gift or service. * e.g. lavish corporate entertainment suring tender consideration. **FOUR OFFENCES UNDER THE BRIBERY ACT 2010** 1. bribing 2. receiving a bribe 3. bribing a foreign official 4. failing to prevent bribery

Answer 21

* Yes * Unless they can provde they had adequate policies and proceedures in place to prevent bribery which is a defence under Bribery ACt 2010. * money laundering regulations 2017 say no cash payment of more than 10,000 euros is acceptable to reduce opportunity for bribes.

Answer 22

There are six principles of the Bribery Act 2010: 1. Proportionality 2. Top level commitment 3. Risk assessment 4. Due digiligence 5. Communication 6. Monitring and review. **PTRDCM** **People taking recreational drugs cant move**

Answer 23

1. The serious fraud office polices 2. max 10 years imprisonment 3. unlimited fine (as well as custodial sentence) 4. RICS fine 5. Sweett group 2016 Uk construction company bribe offered to win middle eastern companies businessfined 1.4mill and 125K +costs RICS plus exceutive who destroyed evidence was jailed.

Answer 24

Yes bottle of wine from contractors at chrismas time BUT... In accordance with the bribery act 2010 ensured: * It was proportional * there was no expectation from the other party in return and that I could remain impartial and it didnt conflict with any current consideration e.g tender process * i also ensure transparency by registering on my companieds gift register as per their policy and in compliance with my employment contract. Also consider - tax implications and money laundering

Answer 25

**_Money laundering_** When the proceeds of criminal acitvity are hidden or coverted into legitimate assets.

Answer 26

**Responsbilities under the money laundering regulations 2017 (ammended 2020)** 1. Money laundering/terrorist financing RA 2. implement policies and proceedures meet regs 3. appropriate internal controls 4. Staff training 5. New customer due diligence 6. AML checks (confirm source of funds) 7. include high risk factor consideration e.g. high risk countru transactions.

Answer 27

* Its a professional statement from RICS with 3 parts to guide surveyors these are: 1. Mandatory requirements on bribery and corruption and money laundering e,g, 1. not offer or accept bribes 2. procedures in place to comppy witjh the law 3. Report suspicions 4. Verify basic ID check on clients, AML, Dunham Bradsrteet checks 5. only accepteing money throguh bank transfer - audit trail proof of funds 2. Good practice e.g. 1. have written policy 2. set up a gifts register 3. foster transparency 3. Supplmentary guidance 1. Risk base approach Who What Why?

Answer 28

1. Get all the facts 2. Try to resolve it informally first e.g. waive the fee FIRST STAGE 1. Acknowledge a written complaint within 7 days 2. Refer them to the company CHP which includes RICS approved ADR (although for clients this would have been in the engagement agreement they signed). 3. Log the complaint - details progress and outcome 4. Notify PI insurer in case escalates to a negligence claim 5. Should be investigated within 28 days SECOND STAGE 1. ADR -Independent redress e,g, RICS dispute resolution service or the centre for dispute resolution (CEDR) 2. RICS usually only become involved if you fail to operate the complaints handling proceedure effectively.

Answer 29

* COVID-19 * Economic impact * Contract Administration * Brexit * Economic Impact * Regulatory * Grenfell * Fire regulatioms * Sustainable building * Carbon Neutral * House supply and demand * empty buildings in cities * Flooding * Building on flood plains * Recent floods * Education and training * PRME

Answer 30

1868 by Royal charter granted by the Privy council

Answer 31

1. FRICS 2. MRICS 3. AssocRICS 4. Student

Answer 32

Provide for the fellowship assessor: 1. evidence of achievement of 4 charateristics 1. (5+ years mRICS) 2. leadership role 3. technical or professional achievement 4. academic achievement or raising RICS profile 5. Portfolio of professional achievement INC CPD

Answer 33

1. By the _governing council_ 2. 33 members 3. provides management and strategic direction 4. 17 specialist groups inc property land and construction 5. Each group has an elected board and outlines standards of competenc and practice.

Answer 34

1. 4 national associations 2. 10 regional boards 3. local associations 4. Current president is Timothy Neal 5. President elect Kath Fontana 6. Current CEO is Sean Tomkins

Answer 35

Its's a really exciting time at the moment our workld is changing , there are a lot fo opportunities we can harness. 1. technology such as drones, prop tech, artificial intelligence. 1. AI receptionist in one building 2. Harness technologu to free us up to spend more time on the things which create value for our client. 3. Big data - internet sensors on building How we collect it manage it, protect it from cyber attack keep up to date with fast moing technology, data is more instantly obtained such as the other day my contractor live streamed video to me from an abseil survey of a particular issue. 4. Urbanisation and climate change how do we manage usage of finite resource, I know I want the world to be a better place in the future for my son and his children and the built environment will have a large influnce on that. 5. Workplaces are changing (especially in light of corona virus to more flexible). 6. International security - protecting spaces from terrorism whih is a threat to business and our way of living - HVM hostile vehicle mitigation

Answer 36

1. Smaller more diverse governing council 2. more powers to workd regional boards 3. new chair of the governing council will act for up to 6 years. 4. President will contimmiue to focus on abassador duties, still elected on annual basis. Regulatory board will dcide on policy and regulatory matters.

Answer 37

The RICS is a highly respected global regulatory body for prfesssionals within the land, property and construction sector. _REMEMBER: EVERY PENGUINS IGLOO!_ it has 3 main roles: 1. **EDUCATION/TRAINING** - maintain highest standards 2. **PROTECT CLIENTS** - by strict regulation and professional standards. 3. **INFORMATION/ADVICE** - leading source of information and indepedent advice

Answer 38

**_Benefits of RICS Membership_** 1. **STATUS** =professional credentials give cleints confidence 2. **RECOGNITION** = promotion of excelelnece to government and markets 3. **MARKET ADVANTAGE** - competition 4. **KNOWLEDGE** - international practice standards CPD 5. **NETWORK** - access to 125,000 professionals.

Answer 39

**_The five principles of better regulation_** **_PACTT_** 1. Proportionality (penality proportional to the breach) 2. Accountability - to all members and the public 3. Consitency - treat all members the same 4. Targeting - serious breaches 5. Transparency

Answer 40

Why do you want to join the RICS? 1. Because I love building surveying, I've been doing it for a few years and i want to be the best I can be 2. I want to join a respected professonal body forspecific to my industry 3. Status and recognition 4. Market advantage over competitors Why not just CIOB - because RICS has a wider perspective and it is also a closer match to what I do now.

Answer 41

***Est*** ***Modus*** ***i******n*** ***Rebus***

Answer 42

* Minimum 20 hours at least 10 hours must be formal CPD.

Answer 43

I would also like to attend the RICS conference in July if there is still a space as I missed it last year, it's a good way to udnerstand the latest news within RICS and the economy, to network with other progessionals and receive CPD from leading experts. I would also like to do some CPD on BIM as it is something i dont currently use but would like to understand more about and pronbbably do an autocad course.

Answer 44

_Formal_ - structured learning with clear learning objectives _Informal_ - self managed learning relevant to my professional role There is a helpful flowchart on the RICS website to help me decide whether CPD is informal or formal

Answer 45

I would be requried to ensure run off insurance cover was in place once I stopped working . 1. Consumeer claims -1 million aggregate cover over 6 years. 2. Commercial -adequate and appropriate for 6 years minimum 3. RICS advises longer than 6 years as claims can occur up to 15 years before they are statue barred under the limitation act 1980

Answer 46

Mneumonic IRRIMCTACSL I rarely reach in my clothes though architects can scratch lots. 1. INFORM RICS (firm detail form) 2. RESPONSIBLE PRINCIPLE (appoint for comms 3. REGULATORY BOARD - register with RICS RB 4. INSURANCE - Arrange PI cover, inform RICS 5. MONEY HANDLING PROCEEDURE for clients 6. COMPLAINTS HANDLING PROCEEDURE -set up a log and appoint CH officer 7. TRAINING PLAN - for staff 8. ANNUAL RETURN online RICS form (info on CHP and PI) 9. CPD - logged online on RICS system 10. SUCESSION PLAN - for handover 11. LOGO kit If stuck say the information can be found on the RICS website or I would give them a ring to discuss any concerns or queries

Answer 47

MNEUMONIC I Have Many Dirty Red Cars 1. **INFORM** RICS and Clients asap 2. **HANDOVER** arranged 3. **MONEY** - return it! 4. **DATA** - keep files for 6 years. 5. **RUN OFF COVER** - insurance inform them winding up 6 year min 6. **COMPANIES HOUSE** -not rics requirements - London Gazette notice if disolving the company

Answer 48

1. Disclose business name 2. Health and safety act 1974 compliance 3. Equality Act 2010 4. Bribery Act 2010 5. RR Fire safety 2005 6. Mponey laundering officer (money laundering regulations 2017) 7. Asbestos register 8. GDPR - register for it 9. Employer and public liability insurance 10. Employment law - e.g. working hours

Answer 49

* I dont handle client's money myself but I know the rules of conduct for firms states firms must keep clients money secure. * There is also a Professional statement on client momney handling produced this year 2020 with 6 main principles of good practice in RICS: 1. Holding 2. Information 3. Receipts 4. Payments 5. Accounting records 6. Compliance * keep client money separate to the firms * Word client on the account/check book * Client should get access to their money on demand * Interest payments agreed with client * keep accurate records of the balance * Display the proceedures on their website. * RICS also runs 2 schemes to protect client money one for residential agents and one for surveying firms.

Answer 50

* It is linked to turnover * Under 100K (250,000min) * 100-200K (500,000) * 200k + (1 mill)

Answer 51

* Professsional Indemnity Insurance * Protect surveyors, clients and third parties from negligence claims * Neglicence claims arise when a duty of care is breached and a claim for damages occurs. * Professional Indemnity Insurance Requirements 2019 * Has to be underwritted by RICS approved insurer.

Answer 52

1. client objectives - clear confirm instruction in writing 2. ensure competent 3. use rics standards and guidance to undertake work 4. make detailed file notes and take photos 5. keep knowledge up to date CPD 6. cap professional liability excess on PII policy terms of engagement

Answer 53

* The Limitation Act 1980 * UNDER CONTRACT * 6 years from the date of the negligent act/braech of contract * 3 years from the date of knowledge of the damage 15 year long stop. * UNDER LAW OF TORT * 6 years from the date the claimant suffered the loss.

Answer 54

1. HOLDING 2. INFORMATION 3. RECEIPT 4. PAYMENTs 5. ACCOUNTING 6. COMPLIANCE HIRPAC Hairless Irish Rats persued Affectionate Cats

Answer 55

**MAX EXCESS** 1. Liability **up to £500,000** 1. **2.5%** of the sum insured or **£10,000** which ever is greater 2. Over **£500,000** 1. ****2.5% of the sum insured

Answer 56

1. Mandatory to have PI 2. RICS Professional Indemnity Insurance Requirements 2019 guidance 3. Must be underwritten by RICS approved insurer 4. Amounts based on previous years turnover of firm (if new firm - estimate it then adjust after 1st year) 5. Must be retroactive, claims made basis (insured regardless of if the act was before the insurance. 6. Adequate and appropirate run off cover - 6 years 7. Most firms cap their liability on instructions with clients

Answer 57

I would tell them I would need to have the appropriate PI insurance in place as RICS requires this for PROBONO work (as you can still be sued if they rely on your advice whether it is unpaid or not!) I'd also need a written and signed agreement with them for the scope of services and Ts and Cs.

Answer 58

There is a **RICS assigned risk pool** (still costs) for members whp cannot arrange cover and also an **RICS low earners scheme** for part time or retired members,

Answer 59

RICS runs a **Member Support Service MSS** for this to offer help and advice.

Answer 60

**INFORM YOUR PI INSURER AS THEY REQUIRED EARLY NOTICE**

Answer 61

1. RICS BYE LAW: 'client confidentiality must be maintained for all client affairs' 2. Includes historic information provided by client 3. Hold all old files for 6 years min before destroying 4. If confidential information is overhead this can not be used for ones own benefit and the party disclosing and client should be informed and the companies compliance officer. 5. Confidential material should be disposed of securely if received by accident or no longer needed.

Answer 62

1. Inform the sender 2. Client should be informed 3. Companies compliance officer informed 4. Must not be used for my own benefit 5. The confidential information must be disposed of securely

Answer 63

1. Avoid aggresive rate fee cutting 2. Do not collude to price fix with other firms 3. You can enter into further fee negotiations with client after initial proposal as long as in a professional manner. 4. If vary fee proposal may want to vary proposed level of service - ensure still able to provide a high level of service. 5. BE TRANSPARENT - especially where a referral fee is earned. (9 bribery act and global and ethical standards important here)

Answer 64

Our Royal Charter requires us to promote the usefulness of the profession for the advantage of the UK public and in other parts of the world. In practice, the charter means that important changes to our constitution – its bye-laws – have to be ratified by the UK Government, through the Privy Council, even after they’ve been approved by a majority of our members voting at a general meeting. The continued demand for royal charters, which may seem an antiquated concept, shows that they retain their cachet in the modern professional world as a “gold standard” of excellence and integrity.

Answer 65

1. **Service** - I ensure my client received a high standard of service for example I make sure my client knows what to expect from the terms of engagemnt and that they are kept informed throughout, and i can maintain that level of service. 2. **Trust** I always aim to be transparent to promote trust and remain professional for example Im careful with social media to ensure I stay professional at all times 3. I**ntegrity** - I ensure any information remains confifdential e.g. carrying out dilaps inspections where I am entering an occupied premises. I ensure any gifts are registered on my companies gift register and that they are appropirate and not considered a bribe under the bribery act 2010. 4. **Respect -** I treat others as I woudl wish to be treated, for example I treat contractors and clients with equal respect. 5. **Responsible** I act responsibley ensuring contractors are fulfilling their health and safety obligations.

Answer 66

As a firm regulated by RICS we are required to have professional indeminity insurance that covers my clients in the case of negligence and also protects me and the firm not having to pay out personally

Answer 67

1. I would tell them I am not a registered valuer, this is not my expertise and I am not compet to provide this information. I could put them in touch with one of my colleagues qualified to give that advice or refer them to the RICS contact/find a surveyor system for advice. 2. Probono unpaid work is ok but must be instructed formall and I would also have to have the correct PI insurance in place.

Answer 68

Reread the RICS core material, ethical standards and rules for members firms etc to stay up to date.

Answer 69

**INFORMED CONSENT FROM BOTH PARTIES!**

Answer 70

1. Keep up to date with current regulation and good practice standards 1. RICS countering bribery and corruption, money laundering and terrorist finace 2019 document. 2. Money laundering and terrorist financing (amendment) regulations 2019 2. Have good policies in place to meet the regs: 3. Money laundering/terrorist financing risk assement for business activities 4. Train staff to 1. indentify money laundering 2. Report any supcious acitvity 5. Carry out basic ID check on clients and new customer due diligence 1. AML checks 2. Dunham Bradsrteet checks 3. Be aware of higher risk countries. 6. Robust proceedures and internal controls e.g. 1. Confirming the source of the clients funds 2. only accepteing money through bank transfer to ensure audit trail 7. Responsbilities under the money laundering regulations 2017 (ammended 2020) 8. Staff training 9. New customer due diligence 10. AML checks (confirm source of funds)

Answer 71

The modern slavery 2015

Answer 72

* It is designed to combat modern slavery in the UK and consolidates previous offences relating to trafficking and slavery * **Modern slavery is severe exploitation of vulnerable people for personal or commercial gain** * Victims cannot refuse or leave because of threats, violence, coercion, abuse of power or deception * In construction this could mean people trafficked into the UK and forced to work for no or little renumeration. * The Act applies to all organisations with a turnover, or group turnover - that is, the total turnover of a company and its subsidiaries - of £36 million or more which are either incorporated in the UK or carry on a business in the UK.

Answer 73

1. Fragmented structure. 2. temporary/irregular work 3. low skilled low wage jobs

Answer 74

* Modern slavery is severe exploitation of vulnerable people for personal or commercial gain * Victims cannot refuse or leave because of threats, violence, coercion, abuse of power or deception * Film Slumdog millionaire shows forced begging (children blinded to improve begging prospects and cooerced to sing) and forced prositution (lathika)

Answer 75

* Consolidates discriminiation law * Including the DDA * Obligations on controllers of let permises * unlawful to discriminiate or victimise an occupier * Make reasonable adjustments to help disabled people if they would be placed at a substantial disavtange if the works were not carried outl * Make alterations to a building. * Must be reasonalbe (cost, extent and disruption). * Access stateement/audit for all properties setting out access arrangements and alternative arrangemetns if access cannot be reasonably provided. * Most requiremetns in part M

Answer 76

1. REMOVE 2. ALTER 3. AVOID ( provide a reasonable means to avoid) 4. ALTERNATIVE **Test for reasonableness** 1. Effectiveness 2. ppracticality 3. cost and disruption 4. Financial/resources available to the service provider.

Answer 77

1. REMOVE 2. ALTER 3. AVOID ( provide a reasonable means to avoid) 4. ALTERNATIVE **Test for reasonableness** 1. Effectiveness 2. ppracticality 3. cost and disruption 4. Financial/resources available to the service provider.