Conduct, Rules, Ethics and Professional Practice Level 1 Flashcards
Can you explain the general overview of the New Rules of Conduct (February 2022)
New Rules of Conduct provide a simplified framework for ethical decision making. Simpler structure for behaviours and inclusion, data and technologies and sustainability.
There are 5 New Rules of Conduct, explain Rule 1?
Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
Example behaviours
1.1 Members and firms do not mislead others by their actions or omissions, or by being complicit in the actions or omissions of others.
1.2 Members and firms do not allow themselves to be influenced improperly by others (as a result of, for example, giving or receiving work referrals, gifts, hospitality or payments) or by their own selfinterest.
1.3 Members and firms identify actual and potential conflicts of interest throughout a professional assignment and do not provide advice or services where a conflict of interest or a significant risk of
one arises, unless they do so in accordance with the current edition of Conflicts of interest, RICS professional statement.
1.4 Firms have effective processes to identify actual and potential conflicts of interest, to enable appropriate decisions to be made on whether to accept work, and to keep records of decisions made
about actual and potential conflicts of interest.
1.5 Members and firms providing advice and opinion in a professional context do so honestly and objectively based on relevant and reliable evidence, and firms have processes to ensure that directors, partners and employees do so.
1.6 Members and firms are open and transparent with clients about their fees and services.
1.7 Members and firms act to prevent others being misled about their professional opinion.
1.8 Members and firms do not take unfair advantage of others.
1.9 Members and firms protect confidential information and only use or disclose it for the purposes for which it was provided, where they have the necessary consent to do so or where required or permitted by law.
1.10 Firms keep client money safe and have appropriate accounting controls.
1.11 Members do not misuse client money and comply with controls intended to keep it safe.
1.12 Members and firms do not facilitate any financial crime including money laundering, tax evasion, bribery or corruption. Firms have effective processes to prevent directors, partners or
employees from doing so.
There are 5 New Rules of Conduct, explain Rule 2?
Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
Example behaviours
2.1 Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.
2.2 Members and firms supervise any employees undertaking work for them and ensure that these employees have the necessary knowledge, skills and resources to do their tasks competently.
2.3 Members and firms check that subcontractors have the necessary knowledge, skills and resources to do their tasks competently.
2.4 Members and firms reflect on the work they have undertaken and its impacts, and consider how they might apply what they have learned to their future work.
2.5 Members maintain and develop their knowledge and skills throughout their careers. They identify development needs, plan and undertake continuing professional development (CPD) activities
to address them and are able to demonstrate they have done so. Firms encourage and support directors, partners and employees to maintain and develop their knowledge and skills, and check that
they are complying with CPD requirements set by RICS.
2.6 Members and firms stay up to date and comply with relevant legislation, codes of practice and other professional and relevant technical standards. Firms ensure that their directors, partners and
employees do so.
There are 5 New Rules of Conduct, explain Rule 3?
Members and firms must provide good-quality and diligent service.
Example behaviours
3.1 Members and firms understand clients’ needs and objectives before accepting any professional work.
3.2 Members and firms agree with clients the scope of the service to be provided and its limitations, and timescales for the work.
3.3 Firms inform clients that they are regulated by RICS and that they may need to disclose records to RICS where required for regulatory purposes.
3.4 Members and firms inform clients promptly and seek their agreement if it is proposed that any of the terms of engagement or estimated fees or costs be changed.
3.5 Members and firms undertake their work in a timely manner; with due care, skill and diligence, and in accordance with RICS technical standards.
3.6 Members and firms communicate to clients the material information on which their professional advice and opinion is based.
3.7 Members and firms communicate with clients and others clearly and in a way they can understand.
3.8 Members and firms ensure that any referral or introduction they make for a client is in the best interests of the client and inform clients about any financial or other benefits to the member or their
firm from a referral or introduction.
3.9 Members and firms keep proper records of their work and decisions in enough detail to allow them to answer questions from clients and to allow their work to be audited for quality assurance or regulatory purposes.
3.10 Members and firms, when advising clients about projects, encourage solutions that are sustainable in that they minimise harm and deliver balanced economic, social and environmental benefits.
3.11 Members and firms understand the risks and benefits of using relevant technology.
3.12 Members and firms check that all data used is accurate and up to date, is kept securely, and that they have proper legal rights to use it and, where required, share it.
3.13 Firms have effective quality assurance processes for their work.
There are 5 New Rules of Conduct, explain Rule 4?
Members and firms must treat others with respect and encourage diversity and inclusion.
Example behaviours
4.1 Members and firms respect the rights of others and treat others with courtesy.
4.2 Members and firms treat everyone fairly and do not discriminate against anyone on any improper grounds, including age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.
4.3 Members and firms do not bully, victimise or harass anyone.
4.4 Firms check that supply chains do not involve modern slavery or other abuses of the workforce.
4.5 Members and firms report abusive labour practices to proper and recognised authorities if they become aware of, or suspect, them.
4.6 Members and firms work cooperatively with others.
4.7 Members and firms develop an inclusive culture in their workplaces, support equal access and opportunity for all, and identify and address unconscious bias.
There are 5 New Rules of Conduct, explain Rule 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.
Example behaviours
5.1 Members and firms question practices and decisions that they suspect are not right, and raise concerns with colleagues, senior management, clients, RICS or any other appropriate person, body or organisation where they believe in good faith that it is necessary to do so. Firms provide processes to allow and support individuals within the firm to raise concerns with senior management.
5.2 Members and firms support directors, partners, employees, colleagues or clients who have acted in good faith to report concerns.
5.3 Members and firms ensure that public statements made by the firm, or in which members are (or could be) identified as members of the profession, do not undermine public confidence in the profession.
5.4 Members and firms respond to complaints made against them promptly, openly and professionally.
5.5 Members and firms do not dissuade complainants from approaching an alternative dispute resolution provider, RICS or any other regulatory body.
5.6 Members and firms cooperate with investigations into complaints or concerns, and provide information where it is reasonably requested and they can do so lawfully.
5.7 Members consider the effect that any health conditions may have on their competence or ability to undertake professional work, and inform management or clients where they require reasonable adjustments or are unable to continue to undertake work competently.
5.8 Members and firms manage their professional finances responsibly.
5.9 Members and firms take appropriate action when they consider that the rules have been breached, and report suspected significant breaches of the Rules of Conduct by themselves or others to RICS.
What is in Appendix A: Professional obligations to RICS?
The following professional obligations to RICS are mandatory for RICS members.
1. Members must comply with the CPD requirements set by RICS.
2. Members must cooperate with RICS.
3. Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
The following obligations are mandatory for RICS-regulated firms.
1. Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
2. Firms 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.
3. Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
4. Firms must cooperate with RICS.
5. Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
6. Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
7. Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
Give an example of one Rule that you comply with every day?
Rule 4, treat others with respect and encourage diversity and inclusion. Equality Act 2010, unconscious bias
There are 5 New Rules of Conduct, can you pick one and explain what it is?
Rule 1, Honest, integrity, professional obligations and obligations to the RICS, not to mislead others, gifts, Bribery Act 2010, Money Laundering Regulations 2019, Conflicts of interest and client money handling.
What is included in Appendix A (Professional Obligations) in the New Rules of Conduct
The following professional obligations to RICS are mandatory for RICS members.
1. Members must comply with the CPD requirements set by RICS.
2. Members must cooperate with RICS.
3. Members must promptly provide all information reasonably requested by the Standards and
Regulation Board, or those exercising delegated authority on its behalf.
The following obligations are mandatory for RICS-regulated firms.
1. Firms must publish a complaints-handling procedure, which includes an alternative dispute
resolution provider approved by RICS, and maintain a complaints log.
2. Firms 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.
3. Firms with a sole principal must make appropriate arrangements for their professional work to
continue in the event of their incapacity, death, absence from or inability to work.
4. Firms must cooperate with RICS.
5. Firms must promptly provide all information reasonably requested by the Standards and
Regulation Board, or those exercising delegated authority on its behalf.
6. Firms must display on their business literature, in accordance with RICS’ published policy on
designations, a designation to denote that they are regulated by RICS.
7. Firms must report to RICS any matter that they are required to report under the Rules for the
Registration of Firms.
What do you need to do if you set up in practice?
Complaints handling procedure, professional indemnity insurance, have arrangements in place if sole principle dies etc. Cooperate with RICS, provide information to the standards and regulations board, display RICS logo, report according to the rules and regulations for firms. 25% of RICS qualified principles, designated responsible principle
What are the CPD requirements for a chartered surveyor? What about ethics?
20 years CPD, 10 hours formal minimum. Global Professional and Ethical Standards every 3 years
Why would you require Professional Indemnity Insurance (PII) if you were to set up in private practice?
Clients trying to claim back money from valuations
How would you assess the level of PII you would need when setting up in private practice?
RICS Rules of Conduct, depends on turnover, protected from loss in the event of a claim. protect liability, to pay damages for breach of professional duty, ensure clients don’t suffer financial loss.
Firm’s turnover in the preceding year = Minimum limit of indemnity
£100,000 or less = £250,000
£100,001 to £200,000 = £500,000
£200,001 and above = £1,000,000
Minimum level of uninsured excess.
Limit of indemnity -> maximum uninsured excess
£10,000,000 or less = The greater of 2.5% of the sum insured, or £10,000
£10,000,000 and above = no set limit
Would the PII indemnity levels increase as your business expanded?
Yes, based on turnover
When would you arrange PII run off cover and why and how long is it held for?
Consumer claims is 6 years. Depends on currently running contracts.
Contracts under hand are for 6 years
Contracts under deed are for 12 years
How would you protect your client’s interests if you decided to give up practice?
Closing down checklist. Tell clients to arrange another firm to take over work. return or transfer client money
How would you determine the time period that run off cover would need to be provided?
6 years from the expiry of the policy in place at the time of cessation
With regards to client’s money, how should you name the bank account you are required to set up for this purpose?
“client”, “name of firm”, “client or property identity”
