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APC Building Surveying > Conduct rules, ethics and professional practice > Flashcards

Conduct rules, ethics and professional practice Flashcards

1
Q

What does the RICS stand for?

A

Royal Institution of Chartered Surveyors

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2
Q

How many countries does the RICS operate out of?

A

146

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3
Q

When was the RICS founded?

A

1868

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4
Q

Who is the current president of the RICS?

A

Timothy Neal FRICS​ (appointed on 02 December 2019)

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5
Q

Who is the president elect of the RICS?

A

Kath Fontana FRICS​.

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6
Q

Who is the Senior Vice President of the RICS

A

Clement Lau.

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7
Q

What is the RICS royal charter status?

A

“Promote the usefulness of the profession for the public

advantage in the UK and in any other part of the world”.

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8
Q

What is the RICS Matrix?

A

For students, trainees and those with <10PQE. 35 local groups across UK.

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9
Q

What is RICS Lionheart?

A

benevolent fund for past and present members and their families. Charitable company which is not funded or managed by RICS. Governed by a board of trustees who are RICS members. Providing advice and info by advisors to members who have suffered bereavement, accident, ill health, unemployment, family issues or retirement difficulties.

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10
Q

Can you outline what RICS Bye-laws are?

A

as the RICS is incorporated by the Royal Charter if there are any important changes to the constitution (the bye-laws) they have to be ratified by the UK Government through the Privy Council.

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11
Q

Can you outline what RICS Regulations are?

A

as approved by Governing Council - these support the bye-laws, rules of condition and how RICS and Firms regulate.

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12
Q

When did the RICS obtain Royal Charter status?

A

1881

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13
Q

Who granted the Royal Charter status?

A

It is ​granted by the Monarchy ​and ​Privy Council.

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14
Q

What are the RICS Bye-Laws? (10)

A
  1. Application.
  2. Membership and Registrations
  3. Designation
  4. Contribution to funds
  5. Conduct
  6. Governing Council, officers and staff
  7. Subordinate boards, committees and groups
  8. Procedure for general meetings
  9. Accounts and audit
  10. General

BYE LAW 6 was amended to establish a modernised, future facing governance structure fit for a 21st Century professional body.

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15
Q

What is the structure of the RICS?

A

1) Privy Council ​- Grants and awards Royal Charter.
2) Governing Council ​- Management of Royal Charter Obligations, setting direction and strategy. ~
3) Standards & Regulation Board​ - The arm’s length Regulatory Board reports solely to the Governing Council on its activities.
4) Management Board​ - Day-to-day performance and delivery of the business plan.

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16
Q

What are the benefits of RICS membership? (5)

A
  1. Status ​- provide unrivalled client confidence.
  2. Recognition​ - Promotion of your professional excellence to governments and markets.
  3. Market advantage​ - RICS status give you a competitive advantage.
  4. Knowledge​ - International practice standards, professional guidance, CPD and knowledge
    sharing.
  5. Network​ - Access to all professionals worldwide.
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17
Q

What is the role of the RICS? (4)

A
  1. Advises governments and business.
  2. Protect consumers through strict regulation of professional standards.
  3. To maintain high professional standards of training and education.
  4. Leading source of information and advice on land, property and construction.
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18
Q

What are the rules of conduct for members? (7) Remember ICE CSC SIC

A

1) Ethical Behaviour​ - Members at all times shall act with integrity and avoid conflicts of interest and any actions that are inconsistent with the professional obligations.
2) Competence​ - Member shall carry out their professional work with due skill, care and diligence.
3) Service​ - Carry out professional work in a timely manner and with regards to standards of service and customer care.
4) CPD​ - Members shall plan, undertake and record all CPD and provide evidence to RICS.
5) Solvency ​- Member should ensure personal and professional finances are managed appropriately.
6) Information to RICS​ - Members shall submit such information and in such form as the regulatory board may reasonably require.
7) Co-operation​ - Members shall co-operate fully with RICS staff and any person appointed by the Regulatory Board.

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19
Q

What are the rules of conduct for firms?

A

1) Professional Behaviour​ - Firms at all times shall act with integrity and avoid conflicts of interest and any actions that are inconsistent with the professional obligations.
2) Competence​ - A Firm shall carry out their professional work with due skill, care and diligence.
3) Service​ - A Firm shall carry out professional work in a timely manner and with regards to standards of service and customer care.
4) CPD​ - A Firm shall have in place the necessary procedures to ensure that all its staff are properly trained and competent to do their work.
5) Complaints Handling​ - A firm shall operate a complaints handling procedure and maintain a complaints log. The complaints handling procedure must include an ADR mechanism that is approved by the Regulatory Board.
6) Clients’ Money​ - A firm shall preserve the security of clients’ money entrusted to its care in the course of its practice or business.
7) Professional Indemnity Insurance​ - A firm shall ensure that all previous and current work is covered by adequate and appropriate PI which meets standards approved by the regulatory board.
8) Advertising​ - A firm shall promote its professional service only in a truthful and responsible manner.
9) Solvency​ - A firm shall ensure that its finances are managed appropriately.
10) Incapacity or death​ - A firm that has a sole principal shall have in place appropriate arrangements in the event that the sole principal’s death or incapacity. ​Locum Agreement
11) Use of designations​ - A firm registered of regulation must display on its business literature a designation to denote that its regulated by the RICS.
12) Information to RICS​ - A Firm shall submit such information about its activities and in such form as the regulatory board may reasonably require.
13) Co-operation​ - A firm shall co-operate fully with RICS staff and any person appointed by the Regulatory Board.

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20
Q

What are the main benefits to firms for registering?

A
  1. Confidence​ - for clients.
  2. Professionalism.
  3. Security​ - firms to have a recognised CHP and access to redress and PII.
    It provides a recognised quality benchmark. Regulation provides a ‘gold standard’ of quality control for clients.
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21
Q

A firm is required to register if…

A
  • The Firm ​provides a surveying service​ back to the ​public​.
  • The firm ​operates in the UK.
  • at least ​25% of the Firm’s principals are RICS members​.
22
Q

A firm is eligible to register if…

A
  • The firm provides surveying services to the public.

- At least 25% of the Firm’s Principals are RICS members

23
Q

What information is required by the RICS for registration? (6)

A
  1. Type of business​ and ​staffing details​.
  2. Statutory regulated activities​ - such as for financial services.
  3. Nature of Clients​.
  4. CHP details​ and ​record log​.
  5. PII details.
  6. Confirmation​ of if the firm ​holds client’ money​.
24
Q

What are the five principals for better regulation?

A
  • Proportionality​ - making the penalty proportional to the breach.
  • Accountability​ - to all members and the public.
  • Consistency​ - treat all members the same.
  • Targeting​ - serious breaches.
  • Transparency​ - to all members, clients and the public.
25
Q

What are the RICS Five Ethical Standards?

A
  • Act with Integrity​ - honest, straightforward, trustworthy, open, transparent etc.
  • Always Provide a High Standard of Service
  • Act in a way that promotes trust in the profession ​- inside and outside of work.
  • Treat others with respect
  • Take Responsibility
26
Q

What is a RICS Decision Tree?

A
  • A tool to help surveyors ​decide​ on the ​appropriate​ course of action in a situation they are unsure of.
  • Members can ask themselves the questions on the tree to arrive at a solution.
  • It makes members ​consider the legality​ of their ​actions​ and the consistency with the
    RICS global and professional ethical standards.
  • The ​RICS Regulation Confidential Hotline​ is a service offering members assistance with any ethical issue.
27
Q

What are terms of engagement?

A
  • Scope of services, T’s & C’s exclusions, Standard Limitations fee proposal, expenses and complaints handling procedure.
  • Obtain client’s written approval before proceeding.
  • Must be professionally competent to undertake the instruction, decline if not.
  • No conflicts of interest, if so offer to stand down unless the client is happy to proceed.
    Then obtain in writing and ensure information barriers (Information Barrier) is in place.
28
Q

What does the Consumer Rights Act 2015 allow for from the date of agreement?

A

The Consumer Rights Act 2015 allows for a 14 day cooling off period from the date of
agreement.

29
Q

What are the RICS requirements for setting up a practice?

A
  • Inform ​the​ RICS.
  • Appoint a ​Contact Officer. ​For all RICS communication.
  • Register with RICS for Regulation of Form​ by Regulatory Board​.
  • Arrange for​ PI Insurance ​and send details to RICS​.
  • Set up client ​account ​for​ handling client money. I​ nclude ​procedures for Members Accounts Regulations​ including ​Client Money Protection Scheme details.
  • Set up​ Complaints Handling Procedure ​and​ Complaints Log.
  • Appoint a Complaints handling officer.
  • Plan for ​succession/future running​ of the business ​if a sole practitioner.
  • Staff Training & CPD.
  • Designation (logo kit from RICS) ​stating​ regulation by RICS.
  • Ensure ​completion of an online RICS annual return​ at the end of each year.
30
Q

What are the RiCS requirements for closing a practice?

A
  • Inform the RICS​ of your retirement/closure.
  • Ensure that your ​clients are informed ​ASAP and h​ andover arrangements​ to a new
    firm are made.
  • Return any monies​ held by clients to their own accounts.
  • Inform your insurers​ and ​procure​ PII ​run-off cover​ for a minimum of​ 6 years​ from the
    expiry of the policy in force at the time of cessation.
  • Retain a copy of the client files​ and records for a ​minimum of 6 years.
31
Q

What are the RICS requirements for CPD?

A
  • Members = Minimum of ​20 Hours​.
  • At least​ 10 formal​.
  • Members must maintain​ a relevant and current understanding of ​RICS Professional
    and Ethical Standards​ during a rolling ​3-year period​.
  • Record​ CPD.
32
Q

What is formal CPD?

A
  • Forms of structured learning that have clear objectives and outcomes.
  • Online training, courses, seminars and self-managed learning that is assessed by an expert.
33
Q

What is informal CPD?

A
  • Self-managed learning (not assessed).
34
Q

What is the RICS complaints handling procedure?

A
  • Mandatory in ​ALL ​terms of engagement with RICS regulation firms.
  • Rule 7 for firms states a ​complaints log​ must be maintained.
  • Firms should ​notify PI insurers​ of a potential claim.
  • RICS will get involved if no response or firm prevents access to redress scheme.
  • Firms ​must include​ an ​RICS approved ADR mechanism​ in their ​CHP​.
  • Claim can be taken to ​small claims court​ if the ​compensation​ ​sought​ is ​less than £5k​.
  • Complaints Handling Officer​ (a sole practitioner has to nominate a surveyor in another company).
  • If the ​complainant is not happy​then an independent redress mechanism/scheme can be used which the firm has ​stipulated in the CHP​ e.g. ​property ombudsman or RICS Dispute Resolution Service.
  • An ​acknowledgement letter​ should be issued within ​7 days​.
  • And investigated​ within ​28 days​.
35
Q

What are the aims of Professional Indemnity Insurance?

A
  • This protects a Firm from financial loss that it cannot meet from its own resources.
  • Protect the insured member or firm against the consequences of its liability to pay
    damages to third parties for breaches of professional duty.
  • Ensure that the firm’s clients do not suffer financial loss, which the firm cannot meet.
36
Q

RICS requires that a PII policy should meet the following standards…

A
  • An ​Each and Every​ claim basis;
  • All policies must be underwritten by an RICS approved insurer.
  • RICS’ minimum policy wording or more comprehensive wording. As a minimum, you
    should ensure that your ​policy wording​ is written on a ​full civil liability basis​;
  • The ​minimum level​ ​of indemnity​ is based on the ​firm’s turnover​ in the ​previous yea​r
    (or ​estimated​ for a ​new firm​).
37
Q

What is the minimum limit of indemnity for a firm thats turnover was £100,000 or less in the preceding year?

A

£250,000

38
Q

What is the minimum limit of indemnity for a firm thats turnover was £100,001 to £200,000 in the preceding year?

A

£500,000

39
Q

What is the minimum limit of indemnity for a firm thats turnover was £200,001 or above in the preceding year?

A

£1,000,000

40
Q

How does a PII policy work?

A
  • PII policies work on a ‘claims made’ basis. This means that the policy covers ​claims​ that are ​first made against the insured​ ​during the period of insurance​ ​regardless of when the negligent act occurred​.
  • A certificate is to be sent to the RICS on an annual basis as part of the Firm’s annual
    return.
  • If the ​retroactive date​ of the policy is stated as ​‘none’​ then the policy is ​retroactive​ and all ​former work​ carried out ​is covered​.
  • RICS Assigned Risk Pool​ is available at a cost for ​members who cannot arrange cover​.
  • Most firms aim to cap their liability with clients for individual instructions.
41
Q

Does PII policy cover past and present employees?

A
  • This includes all ​past and present​ partners, directors, members and ​employees​. This protects​ your firm for the ​work​ that has been ​carried out in its name​ and also when those ​leave the firm.
  • RICS Low Earners Scheme for retired/part time members.
  • RICS runs a Members Support Service (MMS) for members facing claims for work carried out by an employer who has since gone into administration.
42
Q

What is a conflict of interst?

A

When a firms independence and impartiality is threatened due to the existence of a conflict between two clients.
- Examples: ​financial interest, personal interest, commercial relationships, acting on both sides of a transaction.

43
Q

What is the professional statement by the RICS on conflict of interest?

A

RICS Conflicts of Interest 2017​.

44
Q

What does the RICS Conflicts of Interest state?

A
  • This states that ​a member must​ not give advice​ or represent a client where doing so would​ involve a conflict of interest​ or significant risk of a conflict of interest, u​nless they have provided their i​nformed consent.
  • Informed consent​ is where the RICS member or firm is satisfied that those affected by the conflict wish to proceed, knowing there is a conflict. Given in writing. Explaining that the position to them is entirely transparent.
  • All​ conflicts​ are to be ​managed in accordance​ with the ​professional statement.
  • Every ​RICS Firm​ must have in place effective​ systems​ and ​controls​ appropriate for the size of their firm.
  • All Firms must​ keep records​ to ​show compliance.
45
Q

What are the three types of conflice?

A
  • Party Conflict ​-​ same​ or​ related instruction​ for ​two different parties​.
  • Own Interest Conflict​ - personal interest in the instruction/party.
  • Confidential Information Conflict​ - relating to work between two parties which is
    confidential.
46
Q

What is a bribe?

A

A bribe can be ​the giving​, o​ ffering, promising or receiving​ of ​an advantage​ for an
action which is illegal or a breach of trust​.

47
Q

Bribes are based on six principles. What are they?

A

a. Proportionality.
b. Top Level Commitment
c. Risk Assessment
d. Due Diligence
e. Communication
f. Monitoring and review

48
Q

What are the four offences of the Bribery Act 2010?

A

a. Bribing
b. Receiving a bribe
c. Bribing a foreign public official
d. Failing to prevent bribery.

49
Q

What is not prohibited under the act?

A

Hospitality is not prohibited​ under the act. S​ ports events​ and ​meals​ etc are
acceptable​ as long as they are ​accurately recorded in a gift/hospitality register​.

50
Q

RICS Professional Statement: Countering Bribery and corruption, money laundering and terrorist financing 2019: RICS firms must….

A
  • Have an anti-bribery policy.
  • Have appropriate governance in place.
  • Encourage transparency by implementing a register.
  • Provide guidance for staff.
  • Appoint a contactable person.
  • Have a code of behaviour for staff.
51
Q

RICS Professional Statement: Countering Bribery and corruption, money laundering and terrorist financing 2019: RICS Members must:

A
  • Declare any items such as gifts.
  • Attend training.
  • Act in compliance with company policy.

APC Building Surveying (11 decks)

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