Conflict of Interest Flashcards
What is a Conflict of Interest?
When a member or firms independence or impartiality is threatened due to the existence of a conflict between two clients.
What are some examples of a Conflict of Interest?
- Any financial interest
- Personal interest
- Commercial relationships
- Acting on both sides of a transaction
What are the three types of Conflict of Interest?
- Party conflict
- Own interest conflict
- Confidential information conflict
What is a Party Conflict?
Working on the same instruction for two different parties
What is an Own Interest Conflict?
When acting for a ‘connected person’ e.g family member
What is a a Confidential Information Client Conflict?
When acting for a new or existing client would require using or disclosing confidential information obtained from another client without their consent
What does the RICS Global Professional Standard say on Conflict of Interest?
A member must not advise or represent a Client where doing so would involve a conflict of interest other than where they have provided their informed consent.
What is Informed Consent?
When a client fully understands the nature of the conflict, its potential risks, and how it will be managed, and then agrees in writing to continue with the instruction.
What are the three steps in handling a Conflict of Interest?
- Conflict Avoidance - by declining the instruction
- Written Advice to both parties - by disclosing the nature of the conflict
- Conflict Management - Gaining informed consent setting information barriers
How should you manage a conflict?
By getting to informed consent in writing from all parties
Disclosing it in the Terms of Engagement
Keeping an audit trail
What information barriers would you create between two parties?
Ensuring it is robust enough so no information passes between the two parties
Operating reasonable steps
Securely storing all information
Keep a clear audit trail
What is an example of where you have seen a Conflict of Interest managed in your firm?
My brother who is a developer was trying to relocate a gymnastics company based in Selly Oak to develop student accommodation. This was an Own Interest Conflict.
What is the Professional Standard on Conflicts of Interest?
UK Commercial Property Market Investment Agency 2017
What is Incremental Advice?
Guidance provided to a client in increments rather than as a single recommendation from the outset.
What is an example of providing Incremental Advice?
An agent is acting for the seller and the buyer requests a valuation.
What does RICS Bye laws state on confidentiality?
Client confidentiality must be maintained for all client affairs
How long should old files be kept for?
A minimum of 6 years
How do you do a Conflict of Interest check?
On our Conflict of interest checking software (EBIS) to check against registered instructions. This highlights any prior relationships on the client and the property.
