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APC Residential > Ethics 1 > Flashcards

Ethics 1 Flashcards

1
Q

What does the RICS Stand for and when was it founded? Then granted royal charter?

A

Royal Institution Of Chartered Surveyors.
Founded in 1868.
Received royal charter in 1881.

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2
Q

What is the role of RICS

A
  1. Provide high standards of education and training
  2. Protect consumers through strict regulation.
  3. Leading source of information and professional advice
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3
Q

Current President of RICS

A

Ann Gray FRICS

CEO- Justin Young

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4
Q

Why do you want to become a member of RICS?

A
  1. Internationally status
  2. Become a better professional
  3. Market/competitive advantage
  4. Improve my knowledge
  5. Network of leading industry professionals
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5
Q

What do you understand by the term self-regulation?

A

RICS self-regulates, by operating within it’s own published regulatory framework, rather than being legislated by Government.

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6
Q

Can you tell me what you understand by the principles of better regulation?

A

PACTT
· Proportionality
· Accountability
· Consistency
· Targeting
· Transparency

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7
Q

What is a Bye-Law and provide and example?

A

A set of regulations approved by the Privy council for all RICS members to promote better self-regulation.

Example: The Rules of Conduct apply to all members and Firms Regulated by RICS

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8
Q

What is RICS Global Professional & Ethical Standards and what do they replace?

A

APPTT
1. Act with integrity
2. Professional Competence
3. Provide good-quality and diligent service.
4. Treat others with respect and encourage diversity and inclusion.
5. Take responsibility

Effective From February 2022

They simplify existing rules into 5 new rules for all and deal with modern day societal issues (i.e. sustainability/ Diversity & Inclusion)

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9
Q

Who is the New RICS Rules of Conduct aimed at and what else do they include?

A

Professional Obligations for Member and Firms

I.e. comply with CPD/ have appropriate PII cover and Complaints Handling Procedure

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10
Q

Example of Act with Integrity

A

Informing the client of all fees in terms of engagement before starting survey.

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11
Q

Example of Professional Competence

A

Undertaking further CPD to develop my level of service.

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12
Q

Examples of Providing good-quality and diligent service

A

Undertaking due diligence checks for valuation report

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13
Q

Examples of Treat others with respect and encourage diversity and inclusion

A

Talking to my client openly and honestly about a survey report.

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14
Q

Examples of taking responsibility

A

Completing a survey on time.

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15
Q

What are the core professional obligations of firms and members to RICS?

A

Members must:
1. Meet CPD requirements
2. Cooperate with RICS
3. Provide any info to the SRB on request

Firms must:
1. Publish Complaints Handling Procedure
2. Adequate PII
3. Adequate after service cover
4. Cooperate with RICS
5. Provide any info to the SRB on request
6. Show they are regulated by RICS
7. Report any matters relating to Rules for the Registration of Firms

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16
Q

What disciplinary procedure can RICS impose?

A

Self regulated by RICS

3 x levels:
1. Fixed penalty Notice
2. Regulatory Compliance Order
3. Regulatory Tribunal- suspension or expulsion

Can be due to a concern or complaint about a RICS members where they’re deemed serious enough with supporting evidence.

Last updated March 2020

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17
Q

What is your understanding by the term professional practice?

A

Best practice that surveyors should follow, where the word ‘should’ is used. In these instances, there may be alternative approaches or methods that may achieve a better overall outcome. This will be up to the individual surveyor to decide upon

Example: further training, CPD, etc.

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18
Q

What money laundering regulations or legislation are you aware of?

A

Money Laundering Regulations 2017 & 2022

Concealing origins of illegally obtained money and using for legitimate business & being aware of money laundering and not reporting it.

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19
Q

What are the potential penalties and how long you need to keep records?

A

Penalties: Unlimited fine and up to 14 years in Jail

Records: 5 years from end of transaction.

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20
Q

What is a red flag of money laundering?

A

Misuse of the real estate sector for money laundering or terrorist financing purposes.

It is where a transaction is deem unusual and can be classed in 5 categories:
1. The client
2. The parties
3. The source of funds
4. The transaction
5. The instructions

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21
Q

What bribery legislation are you aware of?

A

Bribery Act 2010- reduce bribery in UK and abroad

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22
Q

What types of offense are there and potential penalties?

A

4 offences:

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

Penalties: Unlimited fine and up to 10 years in Jail

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23
Q

What is PII and RICS requirements?

A

Professional Indemnity Insurance - Covers the cost of compensating clients for loss or damage resulting from negligent services or advice provided

Minimum required PII based on turnover of firm
£100,000 or less = £250,000 minimum cover
£100,000 to £200,000 = £500,000
£200,000+ = £1 million

This should be fully retroactive!

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24
Q

How would you show you acted with consideration and due process if there was a claim?

A
  1. Terms of engagement include exclusions, limitations and liability clauses.
  2. Robust record keeping
  3. Fees, Liability cap & PII
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25
Q

What is the difference between ‘aggregate’ and ‘claims made’ PII

A

An ‘any one claim’ policy provides cover up to the full limit for each individual claim made, whereas an ‘aggregate’ policy provides cover up to full limit for all claims made in the period of insurance.

RICS require each Firm or Sole trader to have PII cover on a claims made basis that insures current work and retrospectively.

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26
Q

If you were providing services outside of your usual scope to a client, what might you need to do in relation to your PII cover?

A

Inform the client in the terms of engagement of the scope of works and what will be included or excluded.

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27
Q

What is run-off cover & how long does this need to be?

A

Run-off cover is a form of PII that protects firms or members against claims after they cease trading.
It must have a limit of £1m and last for 6 years from ceasing practice.

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28
Q

What changes did RICS recently make to the Minimum Approved PII Wording?

A

Increased cladding and fire safety cover

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29
Q

What precedent has caselaw set in terms of keeping adequate site notes
(and therefore providing a defence in a PII claim)?

A

Merrett V Babb (2001)
Regarding run-off cover

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30
Q

What is an Assigned Risk Pool?

A

Open to all UK RICS regulated firms that are unable to obtain PII

31
Q

Explain your understanding of the RICS Guidance Note Risk, Liability and
Insurance (1st Edition).

A

Provides understanding of the main risks and liabilities associated with surveying and how to mitigate them.

32
Q

What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?

A
  1. Scope of the work
  2. Basis on which the fee will be calculated
  3. Liability cap
33
Q

What is a CHP (Complaints Handling Procedure)

A

A complaint is any expression of dissatisfaction made by a client, or anyone else to whom a member owes a duty of care.

CHP should have two distinct stages:
1. consideration of the complaint by a senior member of the firm or the firm’s designated complaints handler &
2. if the complaint isn’t resolved, referral to an RICS-approved independent third party redress scheme.

34
Q

What are the CPD Requirement’s for RICS members?

A

At least 20 hours total CPD annually with 10hrs formal CPD minimum.
This must be recorded online and renews annually.

Every 3 years must carry out CPD in Rules of Conduct and Ethics.

All members must maintain a relevant and current understanding of our professional and ethical standards.

35
Q

Tell me about the RICS’ guidance on dealing with Conflicts of Interest.

A

RICS Professional Statement Conflict of Interest 2017

Where an agent is acting for clients who have competing interests or the agents personal interests conflicts with those of their clients.

36
Q

What is dual agency?

A

This is where the agent is acting for both the buyer and seller of the property at the same time.
N.B. Conflict of interest and should not be undertaken.

37
Q

How would you close down a regulated firm?

A
  1. Agree the closure date
  2. Seek advice if the firm is insolvent
  3. Inform staff.
  4. Inform clients.
  5. Deal with any outstanding money in client accounts (in line with the RICS Professional Statement Client Money Handling)
  6. Notify your professional indemnity insurer to arrange run-off cover.
  7. Make arrangements relating to hard copy and electronic files and keep them for as long as necessary (up to 15 years under the Limitation Act 1980). Any documents not required should be destroyed confidentially
  8. Inform RICS and fill in the firm deregistration form
  9. Set up a system whereby anyone trying to contact you after closing is notified that the firm is closed.
  10. Contact any other parties who need to be told about the firm closure.
38
Q

What can you tell me about RICS guidance relating to bribery, corruption
or money laundering?

A

Professional Standards
February 2019 : Countering Bribery And Corruption ,Money Laundering And Terrorist Financing, 1st Edition

It is split into 3 parts:
1. Mandatory requirements
2. Good practice guidance
3. Supplementary guidance on parts 1 & 2,

Relates to bribery and corruption mitigation controls and effective management of money laundering and terrorist financing risks

39
Q

What are some of the key principles of this guidance?

A
  1. Proportionality
  2. Top-Level Commitment
  3. Risk Assessment
  4. Due Diligence.
  5. Communication & Training
  6. Monitoring & Review
40
Q

What must/should firms/members do to comply with the guidance?

A
  1. Firms must have a written policy & Members must follow
  2. Appropriate governance and systems controls in place
  3. Training for staff- Code of Behaviour
  4. Keep reports of suspicion confidential.
  5. Due Diligence Checks
  6. Appoint a senior person who deals with guidance. MLRO.

Members:
Up to date with legislation
Adequate Training
Comply with policies and procedure
Record keeping
Inform Senior member of staff.

41
Q

What are the current RICS rules for registration of firms?

A
  1. Provides surveying services to the public
  2. At least 25% of the Firm’s Principals are RICS Members.
  3. Operate in the UK

Feb 2022 which supersedes the 2020 version.

42
Q

Who is a Qualified Member?

A

Associate Member
MRICS
FRICS

43
Q

What is a phoenix Firm?

A

Firms which close in a disorderly way and then rapidly re-establish themselves as a new trading entity.

44
Q

What are the rules around the use of the RICS logo and ‘regulated by RICS’ designation?

A

Key changes:
1. Registered firm only.
2. The term chartered survey to be only used by firms.
3. Regulated firms must explain in the terms of engagement what being Regulated by RICS means.

FEB 2022

45
Q

Who is a Responsible Principal?

A

Someone that ensures RICS’ professional, technical and ethical standards are applied and upheld within firm.

46
Q

What is a locum and who might need one?

A

A professional who is appointed to ‘stand-in’ for the surveyor if they are unable to work.

47
Q

How would a sole trader set up their CHP using a locum?

A

A locum could be used as a complaints handling officer to ensure that their CHP can be run fairly and impartially.

48
Q

What RICS guidance relates to CHP?

A

RICS Complaints Handling, July 2016

49
Q

What do the RICS rules of conduct say about client money?

A

Keep client money safe and have appropriate accounting controls.
Not misuse client money and comply with controls intended to keep it safe.

50
Q

Explain your understanding of the RICS scheme rules relating to client money protection?

A

RICS Client Money Protection Scheme 2019 -
Provides protection, as a last resort, where an RICS Regulated firm is unable to repay a client’s money.

51
Q

What are the Main CMPS scheme available to Firms and their compensation limits?

A

RICS Client Money Protection Scheme for Surveying Services
RICS Client Money Protection Scheme for Property Agents
TDS- Tenancy Deposit Scheme

£50,000 limit per claim

52
Q

What does the annual regulatory review fee relate to?

A

Firms who hold clients’ money pay an annual regulatory review fee, depending on the number of directors or principals the firm has.

53
Q

Examples of Client Money:

A

-Payment on account of general costs
-Rent
-Service charges
-Interest credited to a client account
-Arbitration fees
-Client money held but due to be paid to contractors

54
Q

How does this differ from office money?

A

-Interest on general client accounts which the client agrees will not accrue to them
-Fees
-Disbursements
-Money paid in advance in respect of an agreed fee for surveying services, but not property agent work in England

55
Q

What are some of the key principles of the RICS professional statement relating to client money protection?

A
  • Keep client money safe
  • Ensure client money is used only for appropriate purposes
  • Ensure RICS-regulated firms have appropriate controls and procedures in place to safeguard client money
56
Q

Explain the Key Themes from the RICS Futures 2020 Report?

A

Data & Technology
Sustainability
Talent & skills

57
Q

Explain the potential implications of the Hart V Large case.

A
  • Being clear when advising clients on the survey level and scope of inspection, limitations and caveats
  • Recommending justifiable further investigation
  • Considering whether any new information provided after inspecting or reporting affects their original advice, and updating their advice if it is justified to do so
58
Q

Explain your understanding of precedent set in Burgess v Lejonvarn?

A

The court decided- A duty to use reasonable skill and care in providing the architectural and project management services for Burgess in relation to the project.
Lejonvarn was liable in negligence for failing to provide those services to the required standard, even though she had not received any payment for her work.

59
Q

What is RICS new maxim in relation to compliance?

A

Responsible Business, Responsible employer.

60
Q

What do RICS set out as good practice for the use of social media in their Regulation document (June 2021)?

A

Use OF Social Media

RICS’ Rules of Conduct- high standards of professional behaviour expected of
RICS members and, in so doing, protect the interests of members and the profession as a whole.

61
Q

Explain your understanding of the RICS Levitt Review?

A

RICS ‘tried to supress a critical internal report into its finances in 2018/2019 and then unfairly dealt with those who sought to explore the issue
Recommendations on governance, executive remuneration, whistle blowing and legal advice.

62
Q

What is whistleblowing?

A

According to RICS Speaking up guidance - Speaking up about wrongdoing, in order to help prevent further harm from happening and to maintain trust in the profession.

63
Q

What does good governance mean to you?

A

Being ethical, accountable and effective.

64
Q

What are the key values of the interim governing council statement relating to ethics, behaviours and culture?

A

Openness
Transparency
Fairness
Support
Example

65
Q

Explain what the Pandora Papers are and the ethical issues raised within them?

A

The Pandora Papers was a huge leak of documents and files exposing the secret wealth and dealing of the worlds leaders and politicians and billionaires.
Ethical issues: Bribery, money laundering, terrorist financing.

66
Q

Explain what you understand of the RICS Bichard Review?

A

The Bichard Review was an Independent review of the RICS’ purpose, governance and strategy.
Made 36 recommendations such as to “significantly improve its technology”.

67
Q

How will these recommendations be implemented by RICS?

A

The governing council establishing 5 new working groups in 3 phases.

68
Q

How do Professional Integrity and Professional Ethics differ?

A

“Ethics” are principles that guide behaviour, while “integrity” suggests that we should carry out ethical principles in our daily lives and activities.

69
Q

What is modern slavery and how would you identify red flags for it?

A

slavery, servitude, human trafficking and forced labour.
RICS Red Flag indicator, 5 categories:
1. Client
2. Parties
3. Source of funds
4. Transaction
5. Instructions

70
Q

Explain the implications of the sanctions and anti-money laundering act 2018.

A

Surveyors must:
Undertake anti-money laundering due diligence checks.
Red flags or a money laundering concern.

If they suspect issue then a report must be submitted to the National Crime Agency (NCA).

71
Q

What is the sanctions list and why should you be aware of it?

A

The sanctions list is a lists published by the UK government of those designated under the regulations of the sanctions act.
Surveyors must be aware of the lists as they will have to carry out due diligence checks on high risk clients.

72
Q

Why was the Register of Overseas Entities introduced?

A

Government strategy to tackle global economic crime. which tell us who their registrable beneficial owners or managing officers are.

73
Q

What are the six RICS values published as a result of the Levitt Review?

A
  1. honesty
    2.integrity
  2. competence
  3. service
  4. respect
  5. responsibility.
74
Q

Explain the impact of the economic crime enforcement act 2022?

A

Proliferation Financing- Provision of Funds for nuclear or biological weapons added to the list of financial crimes.

Amending Applicable Assets- Crypto currency, clarifying and extending definitions.

Discrepancy Reporting- Limits only the need to report material discrepancies.

Suspicious Activity Report- Improved clarification for supervisory authority.

APC Residential (24 decks)

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