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Ethics L3 EP APC Residential 2022 > *EP APC Ethics > Flashcards

*EP APC Ethics Flashcards

1
Q

When was the RICS founded?

A

1868

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2
Q

When did the RICS receive Royal Charter?

A

1881

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3
Q

What is Royal Charter?

A

Method of incorporation granted by the Queen.

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4
Q

What is the RICS Motto?

A

There is measure in all things

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5
Q

What are the 4 levels of membership?

A
  1. MRICS
  2. FRICS
  3. AssocRICS
  4. Trainee
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6
Q

How do you become a fellow?

A
  1. 5+ years as MRICS
  2. Leadership role
  3. Professional/technical achievement
  4. Raised the profile of the RICS
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7
Q

How is the RICS Governance Structure shaped?

A

Royal Charter, Bye Laws and Regulation.

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8
Q

What is the Governance Structure of the RICS?

A
  1. Privy Council
  2. Governing Council
  3. Standards & Regulatory Board / Management Board / Audit Committee
  4. Management Board comprises 17 professional groups.
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9
Q

What is the role of the Privy Council?

A

Grants awards and Royal Charter

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10
Q

What is the role of the Governing Council?

A

Governing Council is the highest governing body, setting global strategy and ensuring RICS fulfils its Royal Charter obligations.

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11
Q

What is the role of the Standards and Regulatory Board?

A

They are responsible for exercising the standards and regulatory functions of the RICS.

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12
Q

What is the role of the Management Board?

A

To direct RICS affairs under delegated authority from Governing Council.

Comprised of non-members (independent), members of RICS, and RICS Executives.

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13
Q

What is the role of the Audit Committee?

A

The Audit Committee operates independently of Governing Council, the Management Board and the Standards and Regulation Board.

Each year it reports to Governing Council on how it has discharged its duties.

Comprises member and non-members.

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14
Q

What is the role of the Regulatory Tribunal?

A
  • regulates the RICS
  • fair and independent judicial body
  • consists of lay members and RICS members
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15
Q

Who is currently in RICS governing positions?

A

Chair of Governing Council - Nicholas Maclean (interim)
CEO = Richard Collins (interim)
President = Clement Lau
President Elect = Anna Gray

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16
Q

Why do you want to become a member?

A

I want to be part of a prestigious organisation which allows me to progress in a career I am passionate about.

It will give me the status and recognition, which will enhance my work with clients by promoting trust in my work.

It will also allow me to continue to develop my knowledge and network

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17
Q

What are the principles of regulation?

A

They provide a framework within which members and firms can decide how they can best meet the requirements of the Rules of Conduct.

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18
Q

Example of when you have acted with integrity?

A

Glenmore Portfolio

I was honest and upfront to the client about not being able to meet the deadline on time due to multiple employees of the property having COVID-19.

I expressed my morals of wanting to adhere to goverment guidance and not be in contact with anyone who had COVID, for the sake of my own, my colleagues and the workers’ safety.

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19
Q

Example of when you have promoted trust in the profession?

A

UPDATE!!!

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20
Q

How do you promote trust in the profession in your private life?

A

I hold and conduct myself in a way which does not bring embarrassment to the RICS.

I ensure, for example on my public social media profiles, that nothing is on there which could in any way show the profession or the RICS in bad light.

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21
Q

Example of when you have treated others with respect?

A

I’ve had an instance where a local agent I contacted was not very friendly and was stand-offish about me seeking local expertise.

Regardless of what he said to me, I remained calm and polite and treated him with respect, thanking him for his time.

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22
Q

Example of when you have provided a high level of serivce?

A

UPDATE!!!

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23
Q

Example of when you have taken responsibility?

A

I always take responsibility for conducting conflict of interest checks on any work that I undertake, so I can be fully satisfied that I can conduct the work objectively.

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24
Q

Examples of 5 Ethical Standards and your case study?

A

Standard of service - complying with ToE
Trust - complying with ToE and answering questions to the best of my ability
Integrity - assessing my impartiality and objectiveness by doing a COI
Responsibility - took responsibility for the whole instruction
Respect - treated everyone with respect throughout.

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25
Q

What are AWH values?

A
  1. To act with integrity
  2. To take an entrepreneurial approach to business
  3. Take pride in everything we do
  4. Help our people fulfill their potential

UPDATE!!!

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26
Q

What is the point of the RICS Rules of Conduct for Members?

A

It sets out the standards of professional conduct and practice expected of members.

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27
Q

What is Part 1 of the RICS Rules of Conduct for Firms 2007?

A

Sets out definitions for regulated firms

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28
Q

What is Part 3 of the RICS Rules of Conduct for Firms 2007?

A

Firm Administration

(ASAUIC)

  1. Advertising
  2. Solvency
  3. Arrangement to Cover Death or Incapacity of Sole Practitioner
  4. Use of Designations
  5. Information to the RICS
  6. Co-Operation.
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29
Q

What are the benefits of being a member?

A

SRMKN

  1. Status
  2. Recognition
  3. Market advantage
  4. Knowledge
  5. Network
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30
Q

What are the benefits of a firm being registered?

A
  1. Confidence - for clients as firms are regulated
  2. Professionalism - firms must provide clear expert advice
  3. Security - firms must have CHP and PII cover
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31
Q

Who can become regulated?

A

Firms who provide a surveying service to the public are required to register - need to have 1 member to register.

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32
Q

Who are principles?

A

Sole practitioners
Directors
Partners
Board members

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33
Q

What is a Responsible Principle?

A

Each firm must nominate a responsible principle who makes sure the firm adheres to the RICS requirements

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34
Q

Who controls disputes about becoming a registered firm?

A

Standards and Regulation Board

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35
Q

How does your firm demonstrate implementation of the Rules of Conduct for Firms?

A

My firm has a CHP

My Firm holds PII over the minimum requirements.

Endeavours to provide a high standard of service.

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36
Q

How does you demonstrate implementation of the Rules of Conduct for Members?

A

I always assess my competence prior to undertaking instructions.

I comply with the CPD requirements.

I provide a high level of service.

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37
Q

What is the RICS Ethical Decision Tree?

A

The decision tree provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner.

Ultimately, would you be happy with the information/act to go public?

https://www.rics.org/globalassets/rics-website/media/upholding-professional-standards/standards-of-conduct/ethics-decision-tree-rics.pdf

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38
Q

List three things on the Ethical Decision Tree?

A
  1. Is it legal
  2. Is it in line with the RICS ethical standards
  3. Happy for it to be made public
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39
Q

How does the RICS regulate itself?

A

Self-regulation

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40
Q

Does not following the Rule of Conduct result in disciplinary action?

A

Not every short coming will give rise to disciplinary proceedings.

However failure to comply with RICS guidance will be considered when examining a firm or member.

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41
Q

What is the first step of disciplinary action?

A

Initial investigations by the Head of Regulation of the RICS

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42
Q

What are fixed penalties?

A

Used for breaches of the Rules relating to the supply of information to the RICS by firms and members.

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43
Q

What are CPD sanctions?

A

They place an obligation on a member to follow the CPD requirement

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44
Q

When is action by the Regulatory Tribunal taken?

A

On more serious breaches of conduct.

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45
Q

What does the appeal panel do?

A

Will hear a firm or member’s appeal

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46
Q

What can the appeal panel do?

A

Review the decision.

Can allow the appeal or vary the penalty imposed.

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47
Q

Who does the appeal panel comprise of?

A

50% lay people

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48
Q

What are the different advice levels of RICS documents?

A
  1. International Standards (Mandatory)
  2. Professional Statements (Mandatory)
  3. Practice Statements (Mandatory)
  4. Guidance Notes (voluntary)
  5. Codes of Practice (mandatory or recommended)
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49
Q

What would you need to do if you were starting a new practice?

A
  1. Inform RICS
  2. Appoint Responsible Principle
  3. Register for regulation
  4. Arrange PII and send details to RICS
  5. Set up how you will handle client’s money
  6. Register for VRS
  7. Seek RICS approval for CHP
  8. Set up a complaints log
  9. Appoint CHO
  10. Obtain Logo kit
  11. Ensure CPD is logged online
  12. Set up a staff training plan
  13. Complete annual return at the end of each year
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50
Q

Why is it important for RICS members to undertake CPD?

A

One of the Rules of Conduct.

But means we can continue to offer the best service possible to clients by being up to date and in the know on latest guidance and information.

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51
Q

What are the RICS CPD requirements?

A

20 hours minimum.

50% formal.

Ethics CPD every 3 years

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52
Q

Where do you need to record your CPD?

A

RICS CPD Management System - arc

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53
Q

Can you tell me two of the new Rules of Conduct?

A
  1. Members and Firms must treat others with respect
  2. Member and firms must provide good quality and diligent service
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54
Q

Who is the RICS ultimately accountable to?

A

The Public

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55
Q

Tell me about three topical issues currently facing the RICS?

A
  1. Defining our future consultations
  2. Alison Levitt QC Enquiry
  3. Rules of Conduct changing to one set of 5 rules
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56
Q

What does the Alison Levitt enquiry involve?

A

4 non executive directors were dismissed after trying to explore a financial report.

Levitt looked into it and ascertained that they were wrongly dismissed.

Made recommendations for how the RICS should be goverened.

Governing Council accepted all the recommendations.

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57
Q

What is your opinion on the outcome of the Alison Levitt QC enquiry?

A

Disppointed in the events.

As members we adhere to strict ethical standards, which the RICS didn’t do in this instance.

However, I am happy that action has been made and that the Governing Council has accepted all the recommendations.

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58
Q

What were the key principles of ‘Defining our Future’?

A

Kath Fontana, previous president, launched this review.

Main aim is to review RICS business plan:

  1. how to maintain public and stakeholder trust
  2. how to ensure RICS remains a sustainable body
  3. How RICS can be aligned to further reinforce relevance to members.
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59
Q

What have the Rules of Conduct been updated?

A

The old rules are arguably quite outdated now, from 2007.

To help the global professions respond to new risks and opportunities.

Incorporating example behaviours to illustrate how to adhere to the rules.

Incorporates how to deal with technology.

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60
Q

How would you set a fee?

A
  1. Assess resource required
  2. Assess time needed to complete
  3. Assess value of property
  4. Level of PII required
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61
Q

What must you do before starting work?

A
  1. Check Competence
  2. Confirm no COI
  3. Cofirm ToE
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62
Q

Why do the RICS Bye Laws state regarding confidentiality?

A

Client confidentiality must be maintained for all client affairs.

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63
Q

What should you do if you receive confidential information in error?

A

It cannot be used for their own purposes.
Need to advise client and sender of the error.
Inform compliance officer.
Delete securely.

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64
Q

When may a surveyor be negligent?

A

Duty of care exists to clients and third parties.

If this is breached and there is a loss, they can claim for damages.

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65
Q

What do you know about the RICS Guidance Note: Complaints Handling (2016)?

A

A firm’s written CHIP must be approved by the RICS.

Notify PII insurers as soon as possible if a compliant arises.

Details of CHP issued same time as ToB.

Complaints log must be maintained showing details and status.

CHP must include an RICS approved Alternative Dispute Resolution.

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66
Q

What are the RICS minimum procedures for CHP?

A
  1. Acknowledge a written complaint within 7 days
  2. Respond within 28 days
  3. Refer to independent redress provider if unresolved
  4. Log in a complaints log
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67
Q

If you are a sole practitioner who can you use as your complaints handling officer?

A

A surveyor from another firm.

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68
Q

What is professional indemnity insurance?

A

Insurance to protect clients, surveyors and third parties against negligence claims.

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69
Q

What are the minimum PII requirements?

A

Based on firm turnover:

Less than £100k = £250k min
£100,001 to £200k = £500k min
> £200,001 = £1,000,000

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70
Q

What are the maximum levels of uninsured excess required by the RICS?

A

You can’t have much uninsured excess.

Limit of indemnity / Maximum uninsured excess

£500k - Greater of 2.5% of sum insured or £10,000

> £500k - 2.5% of sum insured

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71
Q

In relation to PII, what does retroactive mean?

A

Policy covers claims that are made within the insurance period, regardless of when the negligent act occurred.

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72
Q

If a firm can’t arrange PII cover what is available?

A

RICS assigned risk pool

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73
Q

What are the RICS rules regarding PII?

A

Mandatory requirement - Rules of Conduct for Firms

Need RICS approved insurer (list on website)

Need adequate and appropriate level for each instruction.

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74
Q

Why do firms have PII?

A

One of the Rules of Conduct.

Protects against negligent behaviour.

Protects clients, firm and me.

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75
Q

Is PII needed for pro-bono work?

A

Yes

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76
Q

Are you aware of any new RICS guidance on insurance?

A

RICS Guidance Note: Risk, Liability and Insurance 2021

RICS has secured new insurance terms, lifting the 12 month fire safety exclusion from PII.

From May 2021, insurers must provide cover for fire safety claims on a property 4+ storeys

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77
Q

What is run off cover and how long should it last?

A

For when the firm ceases to exist = need minimum 6 years but claims made up to 15 years

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78
Q

Why is client money handling important?

A

One of the Rules of Conduct for Firms - client money must be kept safe.

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79
Q

How should you hold client money?

A
  1. held separately with an authorised bank
  2. account needs to be entitled with the client’s name and Client
  3. money held must be immediately available
  4. provide written communication of any money movement
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80
Q

Can you accept cash?

A

Under company policy, I can’t.

However, I am aware that under money laundering regulations, I am permitted to accept cash up to £10k in euros.

However, this needs to be witnessed and ideally take place in the office.

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81
Q

Are there any guidance notes to be aware of for PII?

A

Yes - RICS Guidance note on Risk, Liability and Insurance currently under consultation

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82
Q

Name two key components of legislation that relate to gifts, bribery and corruption?

A

Bribery Act 2010
Proceeds of Crime Act 2002

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83
Q

What would you do if rejecting the gift would offend the client?

A

Would report it to the Head of Department and compliance team.

Head of Department will either to donate the item to charity, or to distribute or raffle the item among a large group of employees.

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84
Q

What is money laundering?

A

Proceeds of criminal activities are disguised/ converted and then realised as legitimate assets.

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85
Q

What is terrorist financing?

A

Is the financing of terrorist acts, and of terrorists and terrorist organisations

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86
Q

What is the key legislation on money laundering?

A

Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2019

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87
Q

What are the key components of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2019?

A

Adopt appropriate internal controls
Provide staff training
AML checks
Record keeping

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88
Q

What are an estate agents legal obligations re money laundering?

A

Letting agents to register with HMRC if letting properties for more 10,000 euros per month.
Customer Due diligence checks
Enhanced due diligence checks if red flags occur

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89
Q

Who is a PEP?

A

Members of parliament
Ambassadors
Heads of States
Their families.

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90
Q

What are red flags?

A

Unwillingness to provide documents
Unusual patterns of transaction i.e. undue urgency, potential loss making
Changing currencies
Changes to parties involved

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91
Q

What are some key requirements for firms regarding money laundering?

A

Annual registration with HMRC
10,000 euros is the maximum cash payment
Detailed record keeping
Keep records for min 5 years
Report discrepancies to Company House Register

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92
Q

What money laundering checks do you need to do for private individuals?

A

Passport/drivers licence
Utility bill from last 3 months

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93
Q

What money laundering checks do you need to do for PLCs?

A

London Stock Exchange Listing

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94
Q

What money laundering checks do you need to do for public bodies?

A

Government ownership / control

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95
Q

What money laundering checks do you need to do for private limited companies?

A

Certificate of incorporation
Full name
Registered Office
Registered number
Business address
Name of all shareholders with over 25% stake.
(report discrepancies to Companies House)

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96
Q

What do you actually do for your AML checks?

A

Take photo copy of their ID.
Provide information to Compliance Team:

  1. Have I met them
  2. Estimated value of asset
  3. The official Land Registry Documents
  4. Do I believe there has been suspicious activity
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97
Q

Who polices the Mouney Laundering and Terrorist Financing and Transfer of Funds Regulations?

A

National Crime Agency

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98
Q

What would you do if you suspect suspicious activity?

A
  1. Report to our Money Laundering Reporting Officer
  2. They would raise a Suspicious Activity Report
  3. Send it to the National Crime Agency
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99
Q

What is the purpose of the RICS Professional Statement - Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)?

A

Sets out mandatory, global requirements for RICS members and firms.

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100
Q

What ADR does the RICS provide?

A

RICS Dispute Resolution Service

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101
Q

How long do files need to be held for?

A

Minimum of 6 years

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102
Q

Are you allowed to pitch for work over coffee?

A

No, could be seen as a bribe even though it is small.

Should be done in an appropriate workplace setting.

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103
Q

When can you allow a third party to access your files?

A

Only if you get prior approval from the client.

OR

There is a statutory duty overiding the client’s confidentiality rights, such as a police or HMRC investigation.

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104
Q

‘What would you do if you were offered a dinner at a Michelin Restaurant?

A

I would need to consider if it was ‘reasonable’.

If I were invited by a client who I completed a high value instruction for successfully I might accept.

However, if I was invited by a client during an instruction, or for a low value fee I wouldn’t. I would also need to gain approval in line with company policy.

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105
Q

What would you do if you were offered a gift after an instruction had completed?

A

Check company gift policy.

Check reasonableness.

Accept if reasonable.

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106
Q

What would you do if you were offered a gift by a third party or contractor?

A

Politely decline as they are not my client.

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107
Q

What would you do if you were offered a gift during an instruction?

A

Politely decline as the instruction is not yet complete and this could impact my impartiality.

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108
Q

Example of Act with Integrity

A
  1. Disclosed all cost info to client prior to commencing marketing and disclosed all info on brochure
  2. Informed client that report going to be delayed
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109
Q

Example of high standard of service

A
  1. Report provided in timely manner
  2. Undertook high level of due diligence for valuation report
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110
Q

Example act in a way that promotes trust in profession

A
  1. Arranging key organisation for viewings
  2. Used ethical decision tree to ensure making correct decision - illustrates trustworthiness as based on own judgement
111
Q

Example treat others with respect

A
  1. Informing tenant of inspection and being respectful of their operations
  2. Contacting all parties who were not successful in bid process
112
Q

Example take responsibility

A
  1. Submit report in timely manner
  2. Organising inspections and covid 19 protocols
113
Q

Benefits of regulation for firms

A
  1. Confidence (as firms monitored by RICS)
  2. Professionalism
  3. Security (as need to have PII cover/ CHP etc)
114
Q

What else will new rules include?

A

Professional Obligations for Member and Firms

Eg comply with CPD/ have appropriate PII cover and CHP

115
Q

Responsible person

A

Someone elected within a firm Who is responsible for ensuring the firm complies with its regulatory and statutory obligations of the RICS

New rule from 1 April 2020

116
Q

Run off cover

A

Need 6 years PII cover following cease of trading

117
Q

Assign risk pool

A

Scheme by RICS for firms who are unable to arrange cover

Eg if firm needs to renew cover and still had claims to sort so obtain temp cover from RICS whilst dealing with claims

118
Q

PII policies made on a…

A

… claim by claim basis

Ie doesn’t matter when negligence occurs, use current insurer when claim is made

119
Q

Rules for holding clients money

A

Client accounts must be kept separately
‘Client’ must be name on account
Client must be able to have access to their money on demand
Annual audit by certified accountant

120
Q

types of bribe offences

Act?

A

Bribery Act 2010

Aim- reduce bribery in UK and abroad

4 offences:
1 bribing
2 receiving a bribe
3 bribing a foreign official
4 failing to prevent a bribe

121
Q

Money Laundering

A

Money Laundering Regulations 2007

Concealing origins of illegally obtained money and using for legitimate business

122
Q

Types of DD for money laundering

A
  1. Customer Due Diligence
    Identify client and verify identity
    (Ie usual AML checks)
  2. Enhanced Due Diligence
    Additional procedures needed when dealing with politically exposed person or person from a high risk third country
  3. Simplified Due Diligence
123
Q

Politically Exposed Person

A

Someone who has been entrusted with a prominent public function and therefore is at higher risk of bribery due to their influence

124
Q

Defining our future

A

Consultation to review RICS strategic direction

125
Q

Defining our future issues being addressed

A

8

  1. purpose of RICS as a professional body
  2. Qualification and entry to the profession
  3. Membership engagement and involvement
126
Q

Tell me about the Merrett Vs Babb case?

A
  • Babb did a valuation as an employee of a company
  • Valuation was negligent.
  • original company no longer existed.
  • The Court rules they could go against Babb for the losses.
127
Q

Why was the Merrett Vs Babb case significant?

A
  • The case saw a professional employee was vulnerable to claims being brought directly against them for advice given on behalf of their employer.
  • Highlights importance of run-off cover.
128
Q

Your brother in law is a chartered surveyor. You find out he is working outside RICS rules and regulations, what do you do?

A
  • verify the facts
  • confront him - remind of duties as a member of RICS.
  • Inform the RICS - specifying my relationship to the person and any corrective action needed
129
Q

What is on the latest cover of Modus?

A

Why millennials are leaving the city for the suburbs?

130
Q

How do you keep up with current affairs and topical issues?

A

RICS news/modus

Property Week.

General news.

131
Q

What is your CPD strategy?

A
  • Meet manager to set objectives
  • Set CPD based on current topics/Nationwide issues
132
Q

State a commonality between Rule of Conduct for members and firms?

A

Rule 3

  • states that members and firms should act with integrity and avoid conflict of interest.
133
Q

What is the Property Ombudsman?

A

A scheme providing customers and property agents with an alternative dispute resolution since 1990.

134
Q

What does ‘without prejudice’ mean in a letter?

A

The letter can not be produced in legal proceedings

135
Q

Difference between RICS Guidance Note and RICS Practice Statement?

A

Guidance note is voluntary

Practice Statement is mandatory

136
Q

What is RIDDOR?

A

Reporting of Injuries, Diseases, and Dangerous Occurrences Regulations 1995

137
Q

What is your duty under RIDDOR?

A
  1. Report injuries within 7 days to HSE
  2. Keep a record of all injuries
  3. Keep injury information for minimum of 3 years
138
Q

Who determines regulation?

A

The Better Regulation Commission

139
Q

What are the different types of RICS Core Material?

A
  1. International Standards - Mandatory
    - RICS Valuation - Global Standards, 2019 (effective Jan 20)
  2. Professional Statements
    - Conflict of Interest, Global, 2017
  3. Practice Statements
    - Surveyors Acting as Expert Witnesses, 2014
  4. Guidance Notes
    - Surveying Safely, 2018
  5. Codes of Practice
    - Service Charge Residential Management Code 3rd Ed 2016
140
Q

What is the law of Tort?

A

The law of tort is designed to regulate the conduct of individuals to each other and allows for compensation or damages if 1 party suffers a loss through another’s action. It deals with civil wrongs.

141
Q

What is the Levitt Enquiry?

A

Review concluded 4 non-exec board members, who raised legitimate concerns that audit had been supressed, were wrongly dismissed. ​

Main recommendation from the report – External review needed for the purpose, governance and strategy of RICS ​

In addition ​

  • Executive remuneration to be review ​
  • Whistle blower policy to be reviewed ​
  • Legal advice provided with the RICS as the client (not senior management) ​
  • Greater oversight for the Governing Council.
142
Q

How do you set up professional indemnity insurance?

A

Contact a provider eg Zurich

143
Q

What is the valuer registration scheme?

A
  • quality assurance mechanism
  • monitors all registered RICS members who carry out valuations
  • ensure consistent standards
144
Q

What is the central purpose of the RICS (3, To M, To P, To Be)?

A
  1. To maintain the highest standards of education and training
  2. To protect consumers through strict regulation of professional standards
  3. To be the leading source of information and independent advice on land, property, construction and associated environmental issues
145
Q

How does the RICS ensure members abide by the Rules of Conduct for Members, 2007 (as amended 2013) (4 powers)?

A

Head of Regulation at the RICS investigates claims of misconduct. They have the power to:

  1. Serve a Fixed Penalty notice - used only for supply of info breaches.
  2. Make a Regulatory Compliance Order - low level breaches that can be easily corrected, written document stating actions to take within a specified time period.
  3. CPD sanctions - obligation to do some CPD req.
  4. Refer to a Disciplinary Panel - serious breaches, 50% are lay members (non RICS)

Member has right to appeal decision made at a Disciplinary Panel by going to an Appeal Panel

146
Q

How does the RICS ensure firms abide by the Rules of Conduct for Firms, 2007 (as amended 2017) (3)?

A

RICS ensures firms comply by conducting audits
Firms have to provide information when:
registering with the RICS and
in an annual return

147
Q

Why must a Chartered Surveyor do CPD (2 sort of)?

A

It is one of the Rules of Conduct for Members, 2007 (as amended 2013)
Ensures you remain up to date with relevant legislation and any changes in the industry

148
Q

Why must a Chartered Surveyor main solvent (2 sort of)?

A

It is one of the Rules of Conduct for Members, 2007 (as amended 2013)
May impair your decision making and mean that you’re more likely to take bribes and not act in the best interest of the client
If you’re unable to manage your own finances, it does not reflect well on you being able to manage your client’s finances

149
Q

What is the structure of the RICS (GC, who reports to, groups below GC and responsibilities)?

A

Governing Council (33 (now 25?) members) runs the RICS and provides management and strategic direction.
• They meet three times a year.
• New president every year.

Regulatory Board, Management Board and Audit Committee and various committees report to the Governing Council

17 specialist professional groups covering property, land and construction

Each professional group has an elected board and is responsible for outlining standards of competence and practice.

150
Q

What changes have been made to the Royal Charter and Bye-Laws (GC, head position roles)?

A

Creating a smaller, more diverse and geographically representative Governing Council (i.e. only 6 for UK and EMEA)

Reduced size of Governing Council to a minimum of 25 seats, with 15 geographical seats

A new Chair of the Governing Council will act for up to 6 years
President will focus on ambassadorial duties and continue to be elected on an annual basis

151
Q

What are the THREE benefits of regulation for firms (CPS)?

A
  1. Confidence - for client as regulated firms are monitored by RICS regulation
  2. Professionalism - firms have to provide clear, impartial and expert advice
  3. Security - firms have to have recognised CHP, access to ADR and PII cover
152
Q

What are the Rules of Conduct for Members, 2007 (as amended 2013) (ECS CPD SIC)?

A

ECS CPD SIC:

Ethical behaviour
Competence
Service
Continuing Professional Development (CPD)
Solvency
Information to the RICS
Co-operation

153
Q

What are the Part II - Conduct of Business Rules of Conduct for Firms, 2007 (as amended 2017) (PCS CPD CCI)?

A

PCS CPD CCI:

Professional behaviour
Competence
Service
Continuing Professional Development (CPD)
Complaints handling
Clients’ money
Indemnity insurance

154
Q

What information is required by the RICS for registration and in the annual return (6)?

A
  1. Type of business and staffing details
  2. Statutory regulated activities - such as for financial services
  3. Nature of clients
  4. Complaints handling procedure and records
  5. Professional indemnity insurance certificate
  6. Whether the firm hold clients’ money
155
Q

How many Principals in a firm have to be RICS members for a firm to be regulated (2 dates), and what is a Responsible Principle?

A

Until April 2020: a regulated firm is a practice that has 50% or more principals who are RICS members

From April 2020: if a practice provides surveying services and 50% of principals are RICS members, then it has to be regulated. If firms want to apply to be registered then they must now have more than 25% of Principals as RICS members (previously they only required one Principal to be an RICS member)

Responsible principal - firm must nominate a responsible principal who is obliged to ensure all steps are taken to ensure compliance with regulatory and RICS requirements, including reporting to the RICS

156
Q

Why are the RICS requiring 25% of Principal to be members in order for firms to apply to be regulated?

A

Concerned that as the RICS profession and brand grows, having a single RICS qualified Principal does not provide sufficient assurance that RICS professional standards have adequate influence within the senior management of firms

157
Q

What is the law associated with gift giving and receiving (2)?

A

Bribery Act 2010 and Proceeds of Crime Act 2002

158
Q

What are the SIX principles of the Bribery Act 2010?

A
  1. Proportionality
  2. Top level commitment
  3. Risk assessment
  4. Due diligence
  5. Communication
  6. Monitoring and review
159
Q

What are the FOUR offences under the Bribery Act 2010?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent bribery
160
Q

How would you define a bribe (4 actions, 3 types, 2 reasons)?

A

Bribe can be the giving, offering, promising or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust

161
Q

What is considered an appropriate margin of error (principle and 3 possibilities)?

A

When valuing it depends on the availability of comparable evidence and the complexity of the valuation, as to what would be an acceptable margin of error
±10% is usually considered to be a reasonable margin of error but more likely ±5% for residential property
Case of Dunfermline Building Society and CBRE (2017) assumed an acceptable margin of error of ±15%

162
Q

What must you do to achieve FRICS status (4)?

A

Provide evidence of achievement to the Fellowship assessor of FOUR Fellowship characteristics. They are grouped into the following categories:

  1. CHAMPION - a Member who has gained recognition by an appropriate authority.
  2. EXPERT - a Member who has been verified in advancing, sharing or interpreting knowledge.
  3. INFLUENCER - a Member who influences how professionalism is perceived.
  4. ROLE MODEL - a Member who exceeds standards for the advantage of clients, colleagues or the wider public.

A personal statement on current role, practices and ambitions.

163
Q

What is the UK Structure of the RICS (3 levels)?

A

4 National Associations
10 Regional Boards
Local Associations

164
Q

What are the FIVE Principles of RICS Regulation for Members and Firms?

A

PACTT:

  1. Proportionality: making the penalty proportional to the breach
  2. Accountability: to all members and the public
  3. Consistency: treating all members the same
  4. Targeting: serious breaches
  5. Transparency: to all members, clients and the public
165
Q

What are the International Ethics Standards, 2016, and who publishes?

A

Ethical framework for the global property market
Published by the International Ethics Standards Coalition

166
Q

What relevance do the International Ethics Standards, 2016 have for the RICS, and what may be a future prospect?

A
  • Did not originate from the RICS but are promoted by the RICS
  • RICS are currently reviewing the Global Professional and Ethical Standards, 2015 and may extend them to reflect the International Ethics Standards more closely
167
Q

What are the Rules of Conduct, 2007 and how are they changing?

A
  • Two short documents setting out the standards of professional conduct and practice expected of members and firms
  • RICS announced in November 2019 that there would be a full review of the Rules of Conduct in 2020
168
Q

In what circumstance will the RICS disciplinary procedure be triggered (3)?

A

Someone complaining to the RICS
Allegation by a client or third party
Information received or established by the RICS

169
Q

What are the THREE levels of disciplinary action?

A
  1. Action by Head of Regulation
  2. Disciplinary panel
  3. Appeal panel
170
Q

What are the THREE most common breaches of the Rule of Conduct for Firms, 2007 (as amended 2017)?

A
  1. Professional behaviour
  2. CPD
  3. Protecting client’s money
171
Q

What FOUR actions can the Head of Regulation of the RICS impose?

A
  1. Fixed Penalty notice
  2. Compliance Order
  3. CPD Sanctions
  4. Refer to disciplinary panel
172
Q

What is a Compliance Order, and when used?

A

Written document which states the actions which the member or firm must take or desist from taking for a specified period of time
Used for minor breaches which can be easily corrected

173
Q

Who forms the Disciplinary and Appeal Panels?

A

50% are lay members (non RICS members)

174
Q

What are the FIVE penalties available to the Disciplinary Panel?

A
  1. Compliance Order
  2. Unlimited fine per breach (proportionate though)
  3. Impose conditions upon future continued RICS registration
  4. Expulsion from membership or remove a firm
  5. Publication of results (Modus, RICS website, local newspaper)
175
Q

What does the Appeal Panel do in disciplinary proceeding/what power do they have?

A

Consider a member’s or firm’s appeal to the outcome of a disciplinary procedure
Will review the evidence previously presented and any new representations
Can allow the appeal and vary the penalty previously imposed

176
Q

What is an RICS International standard?

A

High-level, principle-based mandatory standard developed in collaboration with other relevant organisations e.g. RICS Valuation - Global Standards, 2019

177
Q

Give an example of 3 pieces of RICS Core material that you have had reference to in your work?

A

Conflicts of Interest, 2017
UK Commercial Real Estate Agency, 2016
Property Measurement, 2018

178
Q

What is an RICS Practice Statement?

A

Document that provides members with mandatory requirements e.g. Surveyors Acting as Expert Witnesses, 2014

179
Q

What is an RICS Guidance Note, and RICS recommendation?

A

Document provided by RICS to promote good practice. RICS strongly recommend that you have regard to the contents of any relevant guidance note e.g.

Comparable Evidence in Real Estate Valuation, 2019

180
Q

What is an RICS Code of Practice, and status?

A

Document produced with other professional bodies and stakeholders to provide up-to-date research and advice to practitioners e.g. Rating Consultancy Code of Practice, 2017

Have the same status as a professional statement or a guidance note (mandatory or recommended good practice)

181
Q

What should you do if accepting or offering referral fees (3)?

A
  • Must be completely transparent with your clients and consumers, so they understand you are receiving or offering a referral fee
  • State in you terms of engagement if applicable
  • Consider your actions in context of the Bribery Act 2010 and the RICS Global Professional and Ethical Standards, 2015
182
Q

What steps should you follow when you receive instructions from a client (CIT)?

A

CIT:

  1. Competence
  2. Conflicts of interest check
  3. Terms of Engagement
183
Q

What must your Terms of Engagement comply with if you’re undertaking agency work?

A

Section 18, Estate Agents Act 1979
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017

184
Q

What is the cooling off period following the establishment of Terms of Engagement?

A

Consumer Rights Act 2015 allows a cooling off period of 14 days from the date of the agreement

185
Q

Why may it be appropriate to decline an instruction (5)?

A
  1. You are not competent to undertake the work
  2. You do not have sufficient facts on the issue
  3. Proposed client will not sign the terms of engagement or complete the AML checks
  4. There is a conflict of interest
  5. Proposed client is on the UK Government’s sanctions lists
186
Q

What would you do if a family member or friend asked you for some advice on a pro bono basis?

A

I would be unable to give them advice as my firm’s professional indemnity insurance would not cover work carried out on a personal basis
I would refer them to another surveyor who would be able to advise them appropriately

187
Q

What is a conflict of interest?

A

Arises when a member or firm’s independence and impartiality is threatened due to the existence of a conflict between two parties

188
Q

What does RICS Conflicts of Interest, 2017 require all firms to have (2)?

A

Must have effective systems and controls in place appropriate to the size and complexity of their business, to ensure full compliance

Firms must keep records to show their compliance with the statement

189
Q

How should your firm operate information barriers when Conflicts of Interest are being managed (4, think security and procedure)?

A
  • “Reasonable steps” must be taken to operate an effective barrier to prevent information passing between the two parties
  • Surveyors acting on the two sides must be different and be physically separated
  • Information regarding the instruction should be securely stored
  • Keep an audit trail of all actions taken. Firms Compliance Officer must oversee all actions
190
Q

What is a personal interest / own interest conflict?

A

Arises when acting for a family member, a close business associate or someone with whom you have a financial / personal interest / benefit (known as a ‘connected person’)

191
Q

What should you do if a personal interest / own interest conflict arises?

A

Must not let it interfere with or influence your professional judgement. Full transparency is required
Facts must be declared in writing before the instruction is accepted

192
Q

What legislation governs a personal interest / own interest conflict when undertaking agency work?

A

Section 21, Estate Agents Act 1979
Any personal interest with a “connected person” (i.e. someone who could benefit financially from the transaction) should be declared in writing

193
Q

What is the aim of the Bribery Act 2010?

A

Reduce bribery in business in the UK and abroad

194
Q

Who is responsible for an employees’ corrupt actions under the Bribery Act 2010?

A

Companies are responsible for an employees’ corrupt acts unless they can show that they had adequate policies and procedures in place to combat bribery

195
Q

Is hospitality permitted under the Bribery Act 2010?

A

Offering clients reasonable and proportionate hospitality does not constitute an offence, as long as they are recorded in a gift/hospitality register

196
Q

What steps (4, simple procedural) must companies put in place to prevent bribery under the Bribery Act 2010?

A

Identification of potential risks, staff training, provision of clear policies and regular reviews

197
Q

Who is the Bribery Act 2010 policed by?

A

Serious Fraud Office

198
Q

What is the penalty for individuals and companies for breaching the Bribery Act 2010?

A

Individuals: maximum of 10 years imprisonment and/or an unlimited fine
Companies: an unlimited fine

199
Q

Who do the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 cover?

A

Estate agency work and relevant financial business work inside and outside the UK by a firm

200
Q

What are the key provisions of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 (8, documents, staff, compliance, procedures, new check, appointment)?

A
  1. Written money laundering and terrorist financing risk assessment for the firm
  2. Implement systems, policies and controls and procedures
  3. Provide staff training
  4. Comply with new customer due diligence (CDD), enhanced due diligence (EDD) and simplified due diligence requirements (SDD)
  5. Comply with the requirements relating to politically exposed persons (PEPs)
  6. Ensure appropriate record keeping, policies and procedures
  7. Vendor’s agent must undertake AML checks to confirm the identity of the proposed purchaser and verify their source of funds before contracts are exchanged
  8. Money Laundering Reporting Officer (MLRO) must be appointed to report any suspicions to the National Crime Agency using a Suspicious Activity Report (SAR)
201
Q

What did the changes in 2020 to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations require letting agents to do (3, registration and checks in certain circumstances)?

A
  • Letting agents have to register with HMRC within 12 months of May 2020 if they let individual properties for more than the equivalent of €10,000 per month
  • Where they undertake lettings of properties for more than €10,000 per month, they will have to undertake CDD check on landlords and tenants on any new letting or subletting
  • EDD will have to be undertake when any red flags occur
202
Q

When should you undertake Enhanced Due Diligence (2)?

A

If the client is a politically exposed person (PEP), a PEP family member/business associate or from a high-risk third country

203
Q

How long must a firm maintain records for under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017?

A

5 years

204
Q

Who is responsible for policing the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017?

A

HMRC are responsible for policing the regulations for estate agents

205
Q

What are the penalties (2 crimes) for failing to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017?

A

Assisting with money laundering: maximum 14 years prison sentence and/or unlimited fine

Tipping off a person or for failing to report suspicion: maximum 5 years prison sentence and/or unlimited fine

206
Q

What is the Proceeds of Crime Act 2002?

A

Provides powers for enforcement authorities in the UK to recover in criminal and civil proceedings money and other assets which are deemed to be the proceeds of crime
Creates a set of criminal offences intended to combat money laundering

207
Q

What are the THREE main areas of offence under the Proceeds of Crime Act 2002 (CAA)?

A
  1. Concealing criminal property: if a person conceals, disguises, converts or transfers criminal property
  2. Arrangements: if a person enters into or becomes concerned in an arrangement which they know or suspects facilities the acquisition, retention, use or control of criminal property by or on behalf of another person
  3. Acquisition use and possession: if a person acquires, uses or has possession of criminal property
208
Q

What is the RICS guidance on bribery and corruption called?

A

RICS Countering bribery, corruption, money laundering and terrorist financing, 2019

209
Q

What are the THREE parts of RICS Countering bribery, corruption, money laundering and terrorist financing, 2019 (MGS)?

A
  1. Mandatory requirements for anti-bribery and corruption and for anti-money laundering and terrorist financing
  2. Guidance setting out supporting good practice for the above
  3. Supplementary guidance on some of the concepts set out in Parts 1 and 2
210
Q

What does RICS Countering bribery, corruption, money laundering and terrorist financing, 2019 say RICS regulated firms must do/not do in relation to bribery and corruption (procedural/records, 5)?

A
  • Not offer or accept anything that could constitute a bribe
  • Have procedures in place to comply with the law
  • Report suspicion to the relevant authority
  • Act with due diligence to perform periodic written evaluations of the risk the firm faces
  • Retain records to show the firm has met the requirements of the Professional Statement
211
Q

What does RICS Countering bribery, corruption, money laundering and terrorist financing, 2019 say RICS regulated firms must do/not do in relation to money laundering and terrorist financing (ML & TF) (procedural/records, 8)?

A
  • Not facilitate or be complicit in ML and TF
  • Have systems in place to comply with the laws
  • Report suspicion
  • Evaluation and review the risks presented to the firm
  • Use third party reliance for checks only where there is a level of confidence for the quality of information provided by the third party
  • Take appropriate measures to understand the client and the purpose of the instruction
  • Verify the client by undertaking basic ID checks
  • Retain records to show how the firm has met the requirements of this Professional Statement
212
Q

What practical guidance (Part 2) is contained within RICS Countering bribery, corruption, money laundering and terrorist financing, 2019 (7)?

A
  • Have a written policy in place
  • Publish a code of behaviour for staff
  • Encourage transparency
  • Set up a gifts register
  • Provide staff training
  • Senior management to take control of procedures
  • Keep up to date with legislation
213
Q

What supplementary guidance (Part 3) is contained within RICS Countering bribery, corruption, money laundering and terrorist financing, 2019 (3, approaches/how to think about certain issues)?

A
  • ‘Risk-based approach’ – considering who you act for, what you are doing and why you are being asked to do something – when assessing risks to your business
  • Dealing with politically-exposed persons (PEPs) – they are higher risk as they hold positions of influence and enhanced due diligence is required
  • The need to identify the beneficial ownership of a company partnership or trust – such as by requesting a recent Certificate of Incorporation or Annual Return for a company
214
Q

What is Formal CPD?

A

Includes structured learning that has clear learning objectives and outcomes e.g. seminars

215
Q

What is Informal CPD?

A

Includes self-managed learning that is relevant or related to your professional role

216
Q

How long should files be kept for?

A

A minimum of 6 years before disposing and destroying them securely (although can be sued for negligence for up to 15 years)

217
Q

What should you do if a third parties requests access to your files?

A

Must get the client’s approval first unless you are subject to a statutory duty overriding the client’s confidentiality rights e.g. the police or HMRC investigation

218
Q

What should a surveyor do if they find out a confidential piece of information in error about a party who is not their client (4 actions/prohibitions)?

A
  • Cannot use the information for their own purposes
  • Client and sender should be advised of the error
  • Matter should be recorded in a note to the firm’s compliance officer
  • Any confidential information received in error should be disposed of securely
219
Q

What are the criteria for proving a negligence claim (3)?

A
  1. Duty of care owed
  2. Breach of the duty of care
  3. Loss that was caused by that breach
220
Q

What does the Limitation Act 1980 state are the limits on the period for negligence?

A

Contract: 6 years from the date of the negligent act, breach of contract or omission. (If later) up to 3 years from the date of knowledge of the damage. Claims for negligence are barred for any period longer than 15 years after the negligent act, breach of contract or omission

Tort: 6 years from the date the claimant suffered the loss

221
Q

How can you avoid negligence claims (6)?

A
  • Understand client’s objectives and confirm precise instructions in writing in the Terms of Engagement
  • Ensure you are competent to undertake the instruction
  • Undertake the work in accordance with the relevant RICS Standards and Guidance Notes
  • Make detailed file notes and take photographs
  • Keep up to date with market knowledge and legislation and undertake and record your CPD
  • Cap the professional liability excess on your PII policy in the Terms of Engagement
222
Q

Who must Professional Indemnity Insurance policies be underwritten by? Provide some examples.

A

RICS approved insurer e.g. AIG, Allianz and AXA

223
Q

What is the regulatory document issued by the RICS on Professional Indemnity Insurance called?

A

RICS Professional Indemnity Insurance Requirements, 2019

224
Q

What level of Professional Indemnity Insurance cover should a new business obtain?

A

Estimate their turnover and adjust in due course

225
Q

What level of run-off cover is required following the cessation of trading (consumer/commercial/RICS recommendation)?

A

Consumer claims: minimum of £1,000,000 of aggregate cover over a minimum of six years

Commercial claims: must consider what is an adequate level of cover for a minimum period of six years

RICS recommend more length cover as claims can be made up to 15 years after work is undertaken

226
Q

Who can firms apply to if they are unable to obtain run-off Professional Indemnity Insurance cover?

A

RICS Run-off Pool

227
Q

Who can members apply to if they cannot arrange Professional Indemnity Insurance?

A

RICS Assigned Risk Pool

228
Q

Who can members go to if they are facing personal negligence claims for work carried out by a former employer who they though had Professional Indemnity Insurance cover, but does not ?

A

RICS Member Support Service (MSS)

229
Q

What guidance did the RICS publish on the Professional Indemnity Insurance and valuation?

A

RICS Guidance Note on PII, Risk, Uncertainty and Insurance in Valuation Work, 2018

230
Q

Why would a firm of surveyors handle clients’ money?

A

Holding deposits, rent, service charge and retentions

231
Q

What are the SIX main area of good practice set out in the RICS Professional Statement Client Money Handling, 2019?

A
  1. Holding client money
  2. Providing information to clients
  3. Receipt of client money
  4. Payments from client accounts
  5. Accounting records and controls
  6. Compliance
232
Q

What scheme does the RICS run for instances where an RICS Regulated Firm is unable to repay a client’s money?

A
  • RICS Clients’ Money Protection Scheme
  • This is a free service provided to clients of RICS-regulated firms.
  • Is an insurance policy to cover client’s direct loss of funds due to a firm regulated by the RICS.
  • Scheme split into two parts covering money held by firms undertaking surveying activities and those undertaking residential agency activity
233
Q

When starting a new practice, what RICS regulations do you have to comply with-
(Inform who,
appoint who,
register with,
arrange what,
procedures for handling what,
register for what,
obtain approval for what,
set up what,
appoint a,
obtain a,
plan for,
log what,
set up for what staff,
ensure what end of each year?)

A
  • Inform RICS - of your new practice by completing a Firm Detail Form
  • Appoint a Contact Officer - for all RICS communication
  • Register - with RICS for regulation of the firm by the Regulatory Board
  • Arrange - Professional Indemnity Insurance and send details to RICS
  • Set up procedures for Members Accounts Regulations for handling clients’ money, including Client Money Protection Scheme details
  • Register for the RICS Valuer Registration Scheme (VRS) if undertaking Red Book Global valuation work
  • Obtain RICS approval for the Complaints Handling Procedure
  • Set up a complaints log
  • Appoint a Complaints Handling Officer
  • Obtain a logo kit from the RICS to use to produce all practice material to ensure compliance with the designation ‘Regulated by RICS’
  • Plan for succession/future running of the business if a sole practitioner
  • Ensure CPD logged online on the RICS CPD Management System
  • Set up staff training plan
  • Ensure completion of an online RICS Annual Return at the end of each year
234
Q

When starting a new practice, what statutory regulations do you have to comply with?
(requirement to,
compliance with E, F, B, HS, F, EA, EL, I
appoint whom
Get what register
Register for what
Inform whom (financial))

A

• Requirement to disclose business name

  • Disability discrimination compliance (Equality Act 2010)
  • Financial services compliance (Financial Services and Markets Act 2000 and Financial Services Act 2012)
  • Bribery Act 2010 compliance
  • Fire Safety compliance (Regulatory Reform (Fire Safety) Order 2005)
  • Health and Safety compliance (Health & Safety Act 1974, as amended)
  • Set up estate agency compliance (Estate Agents Act 1979, Consumer Protection Regulations 2008, Misrepresentation Act 1967)
  • Ensure compliance with current employment law i.e. National Living Wage, working hours, stakeholder pensions, gender pay gap reporting etc.
  • Ensure insurance compliance for employer and public liability
  • Appoint a Money Laundering Reporting Office (Money Laundering Regulations, 2017)
  • Asbestos register (Control of Asbestos Regulations, 2012)
  • Register for data protection (General Data Protection Regulation, 2016 and Data Protection Act 2018)
  • Inform HMRC for VAT and Tax registration (VAT registration threshold is currently £85,000 per annum turnover)
235
Q

What does the RICS require you to do if you are closing a practice? (Inform whom, (3), return what, retain what)?

A

• Inform RICS of your retirement/closure
• Ensure that your clients are informed at the earliest opportunity and hand over arrangements made to the new firm
• Inform your insurers and procure professional indemnity insurance run off cover for a minimum of 6
• Return any monies held by clients to their own accounts
years in accordance with RICS requirements
• Retain a copy of the client files and records for a minimum of 6 years

236
Q

What are some of the greatest challenges facing the RICS?

A
  • Lack of diversity in the industry
  • Keeping up with an ever-evolving industry
237
Q

What do the new rules state about the use of the RICS logo and designation ?

A
  • Use of the RICS logo has been restricted to members and regulated firms only
  • Logo must be same size as in the document.
  • The ‘regulated by RICS’ designation must be displayed clearly to ensure visibility
  • Prescribed text that must be included in the terms of engagement
238
Q

What countries have been identified as high-risk third countries/by whom?

A

16 countries have been identified as high-risk third countries by the European Commission. These include: Afghanistan, Iraq, Syria, Iran and North Korea

239
Q

Why must a regulated firm have professional indemnity insurance (2 sort of)?

A

Rules of Conduct for Firms, 2007 (as amended 2017) require firms to have PII
Protect clients and your company from negligence claims

240
Q

What are the FIVE RICS Global and Professional Ethical Standards, 2015?

A
  1. Act with integrity
  2. Always provide a high standard of service
  3. Act in a way that promotes trust in the profession
  4. Treat others with respect
  5. Take responsibility
241
Q

What document has the RICS issued on the handling of client money?

A

Client money handling, 2019

242
Q

When did Client money handling, 2019 become effective

A

1st January 2020

243
Q

What is a PEP?

A

Someone who has been entrusted with a prominent public function - generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and influence they may hold.

244
Q

Tell me something topical at the RICS (2)?

A
  • Partnership with Land Aid to raise 2.25 million for homeless to celebrate 150 years
  • RICS joined International Fire Safety Standards coalition
245
Q

Tell me an issue at the RICS?

A

Lack of women and ethical representation

246
Q

What are the RICS doing to change that issue? (Lack of women and ethical representation)

A

RICS Inclusive Employer Quality Marks. Pledge for firms to be diverse in recruitment and representation.

247
Q

How many rules are there for members?

A

9
(Seven main rules of conduct
+ Two general rules)

248
Q

How many rules are there for firms?

A

15

249
Q

How many international ethics standards are there?

A

10

250
Q

What identification do you require on a private client (2) to do Customer Due Diligence?

A
  • Identity check - Licence/Passport
  • Identify beneficial owners where applicable
    (??2. Proof of address (e.g. bank statement, council tax statement) not more than 3 months old??)
251
Q

What identification do you require on a company client (5) to do Customer Due Diligence?

A
  1. Certificate of incorporation
  2. Full name
  3. Company number
  4. Address of registered office
    5, Names of directors and beneficial owners as anyone who has a shareholding of 25% or more
  5. Obtain information on purpose of the transaction and proposed funding arrangements
252
Q

What is the Royal Charter?

A

• Awarded in 1881 by Queen Victoria, to maintain and promote the usefulness of the profession for the public advantage.

253
Q

How many Countries and how many Members does the RICS operate in and have?

A
  • RICS operates in 146 countries.
  • RICS has approximately 140,000 members.
254
Q

Where is the RICS Head Quarters?

A

• Parliament Square, London.

255
Q

Can you name some of the professional groups?

A
  • Building Surveying.
  • Planning and Development
  • Commercial Property
256
Q

What are the duties of these professional groups?

A
  • To provide best practice guidance.
  • To set standards for professional competence.
  • To provide training, CPD and network opportunities.
257
Q

What are the three market sectors covered by the RICS?

A
  • Land.
  • Property.
  • Construction.
258
Q

What is the RICS Matrics?

A
  • A division of the RICS dedicated to student surveyor training.
  • Produces a network of Charity and Networking events.
  • Promotes seminars and lectures.
259
Q

What is the Carsberg Report?

A

• A report undertaken in 2005 as a result of members general dissatisfaction with the RICS’ internal Regulatory procedures.

260
Q

What is Lionheart?

A

• A benevolent fund dedicted to providing support and financial aid to current and past members and their families.

261
Q

If you become qualified, how will you become involved with the RICS?

A

• I will attend RICS events.
• Become and APC supervisor.
• Respond to Surveys and Consultations.
- Promote the profession

262
Q

Would you like to become an APC Assessor?

A

• Yes, I would like to keep learning and broadening my understanding of the profession.

263
Q

How do you become an assessor?

A

• Must be MRICS for three years, plus a 1 day training course.

264
Q

What is the difference between ethics and rules?

A
  • Ethics are a moral principle and value.
  • Rules are the framework we work to.
265
Q

What do you do if you find a member working outside the RICS Rules of Conduct?

A
  • Verify the facts, then politely remind them of their duties as a member of the RICS.
  • If they persist I would write to the RICS Head of Regulation and inform them.
266
Q

What can result in expulsion?

A
  • Fraud.
  • Dishonesty.
  • Criminal Offence.
267
Q

What are the indicators of Money laundering?

A
  • Secretive Client.
  • Not knowing where the money is coming from.
  • Paying in a special way, i.e. cash.
268
Q

What would you do if a Client offered to pay you in cash for your works?

A

• Ask them to pay the cash into an online bank account then transfer the money, as paying in cash could be seen as tax evasion.

269
Q

What is the difference between an Institute and an Institution?

A

An institute is an organisation to advance the study of a particular subject.
An Institution is an organisation that exists to serve a public purpose.

270
Q

When were the Members/Firms rules updated, and which rules were updated?

A
  • Members and Firms Rules Update – Standards and Regulatory Board
    o Update February 2020
  • Updated firms rules (only the below updated):
    o Complaints handling
    o Clients money
    o Indemnity
    o Use of designations
     I HAVE PRINTOUT, CHECK QS TO SEE IF I HAVE TYPED UP, OTHERWISE USE PRINTOUT.
271
Q

What Conduct Rule relates to Locums, what is a Locum, and what are the requirements of a locum re.
Person
Notification
Appointment
Business Closure
PII cover
Things locum can handle (3)

A

o Rule 12 of Rules of Conduct for Firms relates to sole practitioner incapacity/death cover arrangements.

o A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work e.g. illness/death etc. The requirements are as follows:

 Ideally another surveyor, or another ‘trusted professional’
 Must notify RICS if firm being run by locum.
 Locum should be appointed formally in writing, documenting appointment details, fee basis, termination, PII requirements and process for the locum to act independently/need to seek instructions before proceeding.
 If business must close, locum must be able to oversee the sale.
 PII cover must cover locums in event of death.

 Locum would typically have to be able to handle
• complaints,
• client money and
• access to client files for completion of ongoing work.

272
Q

When were the PII reqs updated, what was clarified, what change was made to automatic wording, and what addition was made to the ARP?

A

o 1 April 2019 - PII Requirements V7 –
o Clarified ‘adequate and appropriate’ means min 6 years for consumer claims.
o Insurers will provide a £1m aggregate limit for consumer claims, included automatically in the minimum wording.
o The Assigned Risks Pool will be opened to include a Run-Off Pool – to allow firms that cannot reasonably procure run-off for commercial claims on the open market.

273
Q

What 3 consequences have been created re. PII due to COVID, and what 4 actions have RICS taken/seeking to take to help address this issues?

A
  • Current market conditions have resulted in a reduction in PII supply, increased use of exclusions (particularly fire safety exposure), alongside significant increases in premiums being paid.
  • RICS actions:
    o Recently amended minimum policy wording to provide insurers greater flexibility to write terms.
    o Made changes to ARP to allow it to provide more flexible and market appropriate terms, with further changes coming April 2021.
    o Upcoming update to Risk, Liability and Insurance Guidance Note to help firms manage ongoing risks.
    o Seeking to address firm difficulties in obtaining cover for fire safety work – firms must ensure that the use of EWS1 forms are understood and cover is in place to undertake this work before proceeding.
274
Q

5 Principles of ‘Better Regulation’

A
  • Proportionality
  • Accountability
  • Consistency
  • Transparency
  • Targeting

Ethics L3 EP APC Residential 2022 (1 decks)

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