ERC&P Questions Flashcards
What are the RICS Bye Laws?
- They are laws and regulations set by the privy council which are the basis of the RICS rules of conduct.
- Changes to the Bye-Laws must be approved by the government through the Privy Council
- 10 bye laws
What is the difference between RICS Ethics and Rules?
Ethics are a set of moral values while rules of conduct are a framework for members to work to
What are the new RICS Rules of Conduct? HCSRP
1 - Members and firms must act with honesty and integrity,
2 - Members and firms must maintain their competence,
3 - Members and firms must provide an excellent standard of service,
4 - Members and firms must act with utmost respect,
5 - Members and firms must always act in the public interest
What is the mission statement of the RICS?
To qualify and equip our professionals to provide the highest standards of service
To promote and enforce standards,
To lead solutions to the major challenges facing the built environment through professional expertise.
Can you name the 5 principles of better regulation and what do they mean? PACTT
i. Proportionality:
1. Meaning the RICS should only intervene when necessary And any remedies they impose should be proportionate.
2. For example, If one of their members were to pay their subscription fees late This could be dealt with by a verbal warning Whereas continued failure to pay and lack of Cooperation with the RICS May result in expulsion.
ii. Accountability:
1. Regulators must be able to justify their actions under public scrutiny and to promote complete fairness so being able to clearly explain why certain decisions have been taken.
iii. Consistency:
1. There must be a complete fair and level playing field treating everybody the same no matter what background they come from.
iv. Targeting:
1. Focusing on the problem and minimising any side effects from a scattergun approach so any measures that the RICS do not undertake should be unambiguous and very targeted.
v. Transparency:
1. Keeping regulation simple and user friendly and always effectively communicating avoiding a heavy handed approach where possible.
Why were the Rules of Conduct changed?
- Simpler structure
- Clear examples
- Focusing on ED&I
- Understanding evolving technology
- Tackling global challenges
Why are the rules of conduct important?
They set out the standards of professional conduct and practice expected of Members of the RICS.
If you were in breach what actions can the RICS take?
The head of regulations could impose the following:
1. Impose a fixed penalty fine.
2. Make a regulatory compliance Order (consent pre 2019)
3. Refer the matter to the disciplinary panel.
If the matter reaches the disciplinary panel they can administer the following:
1. Impose a fixed penalty fine.
2. Make a regulatory compliance Order.
3. Hold a hearing public.
4. Publish the outcome of the disciplinary panels decision in local publications and on the RICS website.
5. Impose retraining on the member.
6. Expell the member.
7. Reprimand or severely reprimand a member.
8. Require costs to be paid.
What would you have to do to set up a business as a sole practitioner?
- Register with the RICS for the regulation of the firm by the Regulatory Board.
- Prepare a complaints handling procedure to be sent to all clients with the Terms of Business.
- Obtain professional indemnity insurance and send details to the RICS.
Set up financial systems to comply with the members’ accounts regulations, if holding clients’ money. - Members who practice as surveyors, who are directors of a limited or unlimited company, must ensure that the Memorandum and Articles of Association of the company include a clause confirming that the business will be conducted in accordance with the RICS Bye-Laws, Conduct Regulations and Practice Statements.
- Obtain an up to date logo kit from the RICS to use for the production of all practice material to ensure compliance with the new designation ‘ Regulated by RICS’.
How do you calculate fees?
By assessing the amount and level of resources required over suitable time to carry out the service requested. They should be clear and detailed enough to show the Client what resources and rates have been allowed for so they can make a valued judgement when comparing competitive fee bids.
What do you need for a fee agreement?
Scope of service, terms and conditions, fees schedule of rates or breakdown, signatures of approval, fee draw down or expenditure cashflow.
How do you build up a fee proposal?
Base it on the level of resources and rates required to meet the clients requirements over the life of the project.
Would you lower your fees to get a job?
No the fee shouldn’t be lowered as this is the cost or providing the resources required to carry out the requested service. Also tell client it was a fair fee for works. Could reduce the services offered to lower fee. Fee cutting is unethical and damaging to the industry.
If a client is unhappy and refuses to pay fees what would you do?
I would initially ask him why he was unhappy, and request he outlines reasons and see if in any way I can amend my service/resolve the unhappiness. If he remained unhappy I would advise him to make a formal complaint to my organisation to resolve the situation.
Would you accept fees for work you had not carried out?
No, by accepting fees you also accept liability for work you can’t ensure has been carried out professionally.
Why don’t we use the RICS scale fees anymore?
They were deregulated in 1980 and surveyors now tender for work competitively.
What do you know about Merritt V Babb?
Member of RICS found negligent because his employer was not properly insured. House valuer (Babb) over valued a property for Ms Merritt, who was unable to recover damages from his employer due to their PI being cancelled. Case resulted in RICS setting up member support service to assist members who are not required to carry their own PI.
What is PI insurance?
Professional indemnity insurance is required to indemnify clients from any professional negligence on a surveyors part.
What does PI cover and what is it for?
It covers QS’s, architects and protects against contractual failure or professional negligence
Why do we need PI insurance?
- ensure that if the firm faces a claim, it is protected 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 that it commits through its professional activities (Negligence)
- ensure that the firm’s clients do not suffer financial loss, which the firm cannot meet
What factors effect the level of PI?
The firm’s turnover in the preceding year.
What are the levels of PI insurance required in the RICS code of conduct and what are the given turn over rates they relate to?
- Turnover £100,000 or less, minimum level of indemnity required £250,000.
- Turnover £100,001 to £200,000, minimum level of indemnity required £500,000.
- Turnover £200,001 and above, minimum level of indemnity required £1,000,000.
If you discover another surveyor doesn’t carry PI what would you do?
Inform the RICS
What is run off cover?
Insurance which continues to cover a surveyors work on projects for 6 years after they cease practising / company ceases trading
Does ‘run off cover’ cover latent defects and how long for?
Yes, for 6 years minimum
What are CPD requirements?
- Every year a chartered surveyor must do a minimum 20 hours logged CPD:
- Formal CPD – if it has a fixed and defined learning outcome
- Informal CPD – self study, group Q&A sessions
- Complete the professionalism module every 3 years
- Provide the RICS with relevant evidence and log on RICS online portal
What is the RICS matrics?
Junior organisation of the RICS
A client wants to pay in advance before the end of the financial year, what would you advise?
Firstly tell the client I would rather not accept advance payment, if they insist I could accept fee but need to ensure it is kept in a separate bank account and any interest was returned to client.
A neighbour asks for some advice would you give it?
No, PI insurance doesn’t cover me acting outside the company.
If a client offered a hotel room for the duration of the project would you accept?
No, unless this had been agreed as part of the expenses they would cover under the fee agreement.
Who is the chief executive of the RICS?
Justin Young
Who is the president of the RICS?
Tina Paillet FRICS
Who is the president elect of the RICS?
Justin Sullivan FRICS
How many professional groups are there? How many can you become a member of?
There are 18 professional groups and you can join up to 3.
What types of documents do the RICS issue and can you tell me whether they are mandatory or not?
RICS are currently reviewing the standards portfolio so they will fit in to 2 catagories:
1) Professional standards - Documents which set requirements for competent and ethical practice e.g. our existing professional statements and guidance
2) Practice information - These documents provide advice or practice support to RICS members and firms e.g. processes, toolkits, checklists and insights
Would you accept tickets from a contractor?
No I would view it as a potential conflict of interest
The contractor wants to take you for lunch after a valuation would you go?
Yes but either pay for myself or reciprocate next time.
The project is finished and the contractor is taking everybody out, do you go?
Depending on the circumstances I would consider attending and would also check to ensure the client had been invited.
What’s the difference between a partnership and limited liability partnership?
A partnership usually means that should the partners are fully liable for any financially difficulty an organisation may experience, whereas a LLP means that each partner will have limited liability. This means they will only be financially liable for monies they have put into the business.
What do you need to do when you set up your own company?
- Contact RICS for guidance and obtain a compant start up pack
- Notify RICS and register for regulation
- Take out PI Insurance
- Complaints procedure & appoint a complaints handling officer
- Appoint contact officer for all RICS comms
- Abide by the rules of conduct for firms
- Use the designation ‘regulated by RICS’ on all practice material
- Set up bank accounts to comply with members account regulations if the firm is likely to hold clients money.
If you set up your own practice how would you get work?
Write a targeted business plan and marketing strategy to identify my target market. Then advertise in in trade journals, establish website, attend functions/ fairs to meet prospective clients.
What is the motto of the RICS?
Est Modus in Rebus’ - There is measure in all things
A client has a complaint what should you do?
Follow the complaints handling procedure I have set up in my company. Try to rectify the problem and Notify the RICS
Where is your local RICS branch?
12 George Street, Parliament Square, London, SW1P 3AD
What are the levels of RICS membership?
Proffessional member, Fellow, Technical Member, Honary Member, Probationer
Why have the code of conduct?
The code of conduct enables member to have a clear principles to govern their everyday professional practice.
What is a conflict of interest and how would you deal with it?
Conflicts of interest can arise in 3 situations:
- where members interest is in conflict with the client
- where 2 or more clients conflict
- in circumstances which are reasonably seen as interfering with the members objective judgement.
If a conflict arises I would Inform the client of potential conflict and advise in writing that they should seek independent advice on the conflict. E.g of conflict working for contractor and client on same project.
What can you get expelled from RICS for?
Not paying membership fees, not renewing PI insurance, not completing CPD, misconduct under codes of conduct.
What must you do every year as a surveyor?
Keep up to date with your CPD requirements keeping records for possible presentation to the RICS, pay RICS membership fees, renew PI insurance.
What is Lionheart?
Charity for RICS members and their dependants in need
What should a complaints procedure contain?
- Should be made available in writing to the person complaining upon request
- Name an initial point of contact for dealing with complaint
- Provide a timescale for investigation and aknowledgement of complain
- Provide a point of refferral if unhappy with initialpoint of contact
- Provide a system for mediation
- Provide a system for arbitration where mediation is unsuccessful
Does your organisation have PII?
Yes
What is the limit of liability for one claim?
GBP 5,000,000 any one claim
You have been requested by your brother’s company to include them on tender list for a project. What would you do?
STEP ONE, Assuming that you do not wish to decline the instruction, disclose to each client in writing as soon as you are aware of the confilict the possibility and nature of the conflict, the circumstances surrounding it and any other relevant facts.,
STEP TWO, Promptly inform each client in writing that neither he personally nor his firm can act or continue to act for him unless requested to do so having advised each client to first obtain independent professional advice on the handling of the conflict from another surveyor outside the firm.,
STEP THREE, Obtain written confirmation from both clients that you can act.,
There have been a dozen or so mergers and acquisitions by QS firms in the last 2 years. Why do you think this is?
A large number of firms have moved towards “one-Stop shop” consultancy which is seen as a benefit of incorporating a larger range of services into their practices such as Consultancy and PM. There are also strategic and brand benefits of merging allowing companies to become more global in their delivery and reduce overhead costs through centralising their HR, IT, etc. The influence of recent changes in the law i.e. LLP means that smaller firms have benefited by become part of larger practices in terms of their own regulation costs being reduced.
Over the last few years there has been a lot of talk about QA – what benefits do you think QA brings to the profession, your practice and the client.
The use of Quality Assurance or Best Practice continually keeps the standards of delivery to Clients at a much higher level. It also improves internal management of workloads and DATA management.
How could I check you had QA
I would check under the ISO 9000 regulations.
If a client rang you up and told you how much a competitors fee was and asked you to do it for less what would you do
I would provide them with a like for like service fee proposal for their consideration, I would not reduce my fees. I would negotiate on levels of service if the Client was not happy with my fee proposal.
If you are qualified and your mate who has just bought a house asks you to look after the building works what would you do.
I would ask him to formally approach the organisation I work for if I thought it was a service provision we could offer. Subsequently I would submit a detailed fee proposal for his acceptance prior to undertaking any works.
What would you do if you received a letter of complaint
Refer it to the compliants handling officer within my organisation.
If it wasn’t the client complaining would you tell the client
It would depend if that client would be affected in any way by the claim. If not then no.
If you were in private practice and the client wanted to pay you in advance what would you do
You accept payment for services yet to be undertaken provided the client’s money is put into a client holding account. There are certain rules provided by the RICS which govern the handling of client’s money.
• You must maintain separate designated bank accounts for clients’ money. Your own practice accounts should be completely separate.
• Obtain bank confirmation of account conditions, including making sure the bank does not combine or offset funds in your client account with any other account held by the firm.
• Advise the client and agree terms of account handling in writing.
• The accounts are to be clearly identifiable and must include word ‘client’ and the client name if appropriate.
• Monies must be available on demand to clients.
• Monies should be paid into accounts at the earliest opportunity.
• Interest to be paid to clients unless otherwise agreed.
• Money can only be withdrawn from a client account if properly required.
• They must be kept in credit.
• If you make use of cash receipts to settle transactions by cash make sure your records show all cash transactions.
• Signatories must be agreed with only authorised staff and two signatures should be required.
At the golf club you hear that a contractor was going bust and you were asked to minimise his payment would you do so.
I would politely refuse to minimise the payment and ensure that what I heard remained strictly confidential. I would also check their financial standing using Dun & Bradstreet if they would adversely affect any of my projects.
