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HD APC OCT 21 > Ethics > Flashcards

Ethics Flashcards

1
Q

What is the key impact of the consumer rights act 2015?

A

Firms must publish their fees in the office, online and in any terms.

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2
Q

What happens if a client is not happy with your complaints resolution?

A

Direct them to RICS DRS or Property Redress Scheme

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3
Q

Name a professional statement, practice statement and guidance note you use in practice.

A

PS RICS Property Measurement or RICS conflicts of interest

Practice Statements Surveyors acting as expert witnesses

GN Comparable evidence in real estate valuation or Surveying safely

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4
Q

Who, as an RICS member do you have a duty of care to?

A

Client, Public, Third parties

Must treat with “reasonable skill and care”

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5
Q

What governs the RICS and it’s governing council?

A

The RICS Bye Laws

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6
Q

What is an improper obligation?

A

Where there is an additional incentive for a gift or hospitality that is against the law or ethical practice.

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7
Q

How did you record your Clapham lunch in your companies gift register?

A

We have a written gift register where we can record an offer or accepted hospitality which is regularly reviewed. We are also urged to inform the companies compliance team in advance.

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8
Q

What steps did you go through to get informed consent in Dartford?

A

Conflict avoidance or management?

Benefit for both sides?

Wrote to both sides informing them of conflict

Management plan

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9
Q

When have you shown integrity?

A

Advising my clients on the benefits and the risks of serving notices. Not misleading them with just the positives.

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10
Q

What is the role of the Governing Council?

A

Total of 25 member who take strategic and management decisions for RICS. Regulatory, management and committees board all report to GC.

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11
Q

What is the difference between formal and informal CPD?

A

Formal is structured learning with clear learning objective

Informal is self managed learning

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12
Q

Can you tell me a key bye law?

A

5.2.1. RICS members must conduct themselves in a manner befitting the profession.

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13
Q

What ethical standards do you believe you showed in your Whyteleafe example?

A

Integrity

Trust in profession

High standard of service

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14
Q

What is Transparency in the RICS principles for regulation?

A

To all members, client and public

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15
Q

How do the RICS make sure you are correctly handling client money?

A

Annual return

RICS Regulatory Review Visits but RICS accountant every three years.

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16
Q

You mention your training on AML and CTF. Please outline what this covered and what you have learnt from your training.

A

Learn about the signs of money laundering and also covered what to do when spotted.

Inform compliance officer

Notify authorities

Refuse to work with party

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17
Q

What is accountability in the RICS principles for regulation?

A

Accountable to the members and the public

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18
Q

Please outline your firms policy with regards to gifts.

A

Proportional to work undertaken

No undue influence

Regardless of size, put on gift register

Max £80 per head

Inform compliance

If in doubt, politely refuse

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19
Q

What is the key RICS material relating to client money?

A

RICS PS ‘Client Money Handling, 2019

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20
Q

What is consistency in the RICS principles for regulation?

A

Consistent treatment for all RICS members

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21
Q

What can trigger RICS disciplinary proceedings?

A

Complain, allegation or RICS finding.

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22
Q

What are the potential penalties in AML?

A

Max 14 years plus an unlimited fine for money laundering

Max 5 years plus an unlimited fine for tipping off

Max 5 years for not reporting

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23
Q

What are the steps you should take when a conflict arises?

A

Can you manage the conflict or should you avoid it?

Written advice to both parties of conflict and how you propose to deal with it.

Conflict management with informed consent in writing.

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24
Q

What are the three stages of disciplinary action?

A

Action by head of regulation

Regulatory tribunal

Appeal panel

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25
Q

How many professional groups are there in the RICS?

A

17

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26
Q

What would you do if you received a complaint?

A

Acknowledge complaint (7 days)

Notify PII

Complaints handling officer (Mark England)

Be transparent in investigation

Respond (28 days)

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27
Q

What are the key elements of RICS COMPLIANCE when starting a new practice?

A

Inform RICS of new practice

Register for regulation

Appoint responsible principle

Share PII details

Share client money procedure.

Share complaints procedure, officer and log

Register firm with RICS and get logo list

Set up CPD / staff training

Succession plan

Annual return

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28
Q

What are the key elements of an information barrier?

A

Complaints office informed

Separated surveyors

Robust info storage

Clear audit trail

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29
Q

Who is the current RICS president?

A

Clement Lau since September 2021, replacing Kathleen Fontana.

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30
Q

When being offered corporate entertainment, what should you be thinking and what steps should you take?

A

Proportionality to the work undertaken

Entertainment genuinely promotes business interest

No undue influence

Value of gift (Not more than £80)

Gift register

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31
Q

What are the key steps to closing a practice?

A

Inform RICS

Inform clients, arranging handover plans

Return client money

6 year PII run off. Recommended 15 years.

Retain copy of all case files for minimum 6 years

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32
Q

What are the rules for firm registration? When did they last change?

A

The rules changed in April 2020.

Mandatory registration if over 50% principle staff are RICS members

Optional registration if over 25% principle staff are RICS members

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33
Q

What are the CPD requirements for members?

A

Minimum 20 hours per year of which 10 hours must be formal

Ethics assessment every 3 years

Record CPD in RICS CPD management system

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34
Q

What is a regulatory tribunal and what are the potential penalties?

A

Tribunal panel of 50% not RICS members

Compliance order

Fine

Impose conditions

Expulsion

Publication of results

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35
Q

What is the role of the RICS?

A

Maintain standards

Protect consumers

Leading source of info on built environment

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36
Q

Tell me about the new draft PS regarding the rules of conduct and ethics?

A

Statement of ethical principles and rules of conduct, 1st edition. Effective FEBRUARY 2022.

Will replace rules of conduct and ethical standards. Merging both together into five principles for both members and firms.

Aim to make rules simpler, clearer, W/ focus on sustainability, technology and respect / diversity/ inclusion. Also gives examples in each one.

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37
Q

What are the three types of conflict?

A

Party conflict - working on related instruction for two different parties

Own interest conflict - personal gain

Confidential information conflict - working for two clients where confidential info conflicts

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38
Q

If you were approached by the buyer of an asset when you are instructed on the sale, could you do this?

A

No - Duel Agency on the whole is prohibited in the UK.

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39
Q

What are the two levels of due diligence?

A

Customer DD

Verify ID, beneficial owners, nature of funding and reason for purchase.

Enhanced DD

High risk customers and PEPs. More info on all fronts.

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40
Q

What is Targeting in the RICS principles for regulation?

A

Targeting major breaches, not small ones

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41
Q

What are the RICS global professional and ethical standards, 2015? (core values)

A

Integrity

Service

Trust

Respect

Responsibility

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42
Q

What review has recently concluded? What were its findings?

A

Independent External Review by Alison Levitt QC.

Review of RICS Audit Committee after reports of RICS supressing internal financial reporting

Produced 18 recommendations

Produced Values Statement to emphasise culture and behaviour expected of RICS members. eg. Integrity, transparency etc.

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43
Q

What are the PII requirements under ‘RICS Professional indemnity insurance Requirements’ V7, 2020

A

Minimum requirements are based on turnover:

Sub £100k = £250k

Sub £200k = £500k

Plus £200k = £1m

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44
Q

What is the limitations act 1980?

A

Sets out the rules and time limitations on negligence claims.

Contract = Max 6 years from breach and Max 3 years from knowledge of the breach.

Tort = Max 6 years from date of loss.

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45
Q

What must your complaints procedure have as a sole practitioner?

A

Another surveyor must be named in your complaints procedure.

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46
Q

What are the four levels of RICS membership?

A

FRICS (5 years, leadership + 4 fellow characteristics)

MRICS

AssocRICS

student member

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47
Q

What are the potential actions by the head of regulation?

A

Fixed penalty notice (fine or caution)

Regulatory compliance order

CPD sanction

Regulatory tribunal

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48
Q

What is conflict management? How does it differ from conflict avoidance?

A

Conflict management allows a conflicted surveyor / firm to accept an instruction, with certain measures in place eg. Information barrier or informed consent.

Conflict avoidance is the refusal of the instruction regardless.

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49
Q

How do you undertake a conflict of interest check?

A

We rely on a company system which scans for conflicts. We are required to enter the address of the property, the job type and the client. This will then scan the system for conflicts by:

Building

Location

Job

Client.

The surveyor must then go and speak internally and to the client if there is a conflict.

50
Q

What are the key steps to agreeing terms of engagement?

A

Competence?

Conflicted?

Money laundering checks

Confirm terms in writing

51
Q

How do RICS standards ensure consumer protection?

A

Training, regulation, ethics and compliance of members.

52
Q

As well as RICS ‘Find a Surveyor’ what else could you have directed the tenant to in your Borehamwood example?

A

Guidance under the code for leasing business premises

53
Q

What are the key requirements of RICS PS client money handling, 2019?

A

Separate accounts and clearly identifiable “client”

Money available on demand

Interest payment agreed

Regular reconciliations

Display process on company website

Return when no longer needed.

54
Q

What are the rules of conduct for members, 2007?

A

ECS CPD SIC

Interpretation
Communication w/ members

Ethics
Competence
Service

CPD

Solvency
Information
Co-operation

55
Q

What are the principles of RICS regulation and what is their purpose?

A

Think PACTT

Proportionality (penalties), accountability (to members and public), consistency (to members), targeting (major breaches), transparency (members, clients, public).

Provides framework for members and firms to determine how to meet the requirements of the RICS rules of conduct.

56
Q

What specific actions must a firm take to with regards to ‘Money laundering, Terrorist Financing and the Transfer of Funds regulation, 2017?

A

Risk assessments

Clear policies

Staff training

Due diligence (CDD & EDD)

Records

Scrutinise transactions

57
Q

What is incremental advice?

A

Where an agent is approached by an opposing party for advice related to the purchase or sale of a property.

58
Q

What are the rules for VAT when setting up a new practice?

A

Current VAT threshold is £85,000. If your annual taxable return is over the threshold, you must register with HMRC.

59
Q

What are multiple introductions?

A

Where an agent has competing contractual relationships simultaneously. Where this happens, you must write to the parties, setting out the competition.

60
Q

What should you do if you are offered a gift / entertainment that you think is disproportionate, or could have an undue influence?

A

Politely decline the invitation or gift. Look to maintain the relationship and register the offer in your companies gift register.

61
Q

What are the benefits of RICS registration for clients?

A

CPS

Confidence

Professionalism

Security

62
Q

How do you undertake customer due diligence?

A

Company has three phases of customer DD. Onboarding, compliance and head of compliance.

Use Vigilance.

  • Company info like name, number, registered office, directors, shareholders and high risk clients.
  • Personal info like ID and a bank statement or utility bill not more than three months old to prove address.

If red flags / PEP = EDD

63
Q

What are the key ethical requirements of fee negotiations?

A

Market Based

Proportional

Cannot price fix

Cannot collude

Cannot aggressively price cut.

64
Q

What RICS material did you consider when you were invited to lunch in your Clapham example? What does it say on the matter?

A

RICS PS Countering Bribery and corruption, money laundering and terrorist financing.

Don’t accept anything that could constitute a bribe

Report suspicious activity

Declare on gift register

Follow company policy

65
Q

Are you aware of any recent regulatory tribunals?

A

Jack Cook, August 2020 who was expelled for plagiarism in his submissions to become an RICS member.

66
Q

How did you gauge what was proportional in your Clapham example?

A

I considered the duration of the instruction and scale of the work involved.

I considered the result we achieved for the client.

I consider the price of the hospitality the client proposed.

67
Q

What is the potential penalty for a bribery offence?

A

Policed by Serious Fraud Office.

10 years imprisonment and unlimited fine for members.

Unlimited fine for firms.

68
Q

How would you manage a conflict if one arose?

A

Consider conflict avoidance (Pick a party). Or;

Write to both parties informing them, presenting management options and seeking informed consent

Information barrier

69
Q

What are the obligations on a letting agent with regards to AML-CTF?

A

Log any letting over €10k per month with HMRC.

Customer and enhanced due diligence

Scrutinise transactions

70
Q

What is the RICS policy to run-off cover? What do the RICS provide if you cannot afford it?

A

Minimum 6 years. RICS advises covering for 15 years.

If firm cannot afford, RICS run-off pool there for assistance.

71
Q

What are the proposed new rules in the merger of the rules of conduct and core values?

A

Integrity, Competence, Service, Respect, Responsibility and Public Confidence.

72
Q

What’s the benefit of the royal charter

A

Seat on privy council and increased public confidence

73
Q

Can your office sell a property owned by your senior director?

A

I would not feel comfortable doing this so would decline the instruction. If my colleague was persistent, I would call the RICS hotline.

74
Q

Please could you outline your companies complains procedure?

A

Inform us

Given to Mark England

Internal investigation

Propose resolution

If not acceptable, advise they contact RICS DRS or Property Redress scheme

75
Q

In your Borehamwood rent review, what was the passing rent and what was the rent increasing to?

A

£6,000 to £14,000 pa.

76
Q

What are the stages of the RICS decision tree?

A

Sufficient info? Legal? In line with RICS regs? Consulted people? Clear rational? Made Public

77
Q

What is included in a firms annual return?

A

Type of business and staff details

Statutory regulated activities

Nature of clients

Complaints procedure and record

PII details

Client money information

78
Q

How did you implement an information barrier in Dartford?

A

Worked separately from conflicted colleague

No contact with conflicted colleague

Separate filing for case that colleague could not access

79
Q

What are the reasons to decline an instruction?

A

Not competent

Won’t pass AML

Conflicted

PII won’t cover work

Unethical work

Cannot agree terms of engagement

80
Q

When was the RICS founded? When did it receive its royal charter?

A

1868 and 1881

81
Q

Who is the current chair of the RICS Governing Council?

A

Nicholas MacLean

82
Q

How was an audit trail maintained in Dartford?

A

All communications were had via email and a BNP compliance office was copied in all communications.

83
Q

What are the three elements of RICS PS ‘Bribery, corruption, money laundering and terrorist financing, 2019’?

A

Mandatory requirements including complaints systems, reporting suspicions, client checks, evaluate risks and keep records

Good practice including written policy, staff training, gift register

Supplementary guidance on PEPs and beneficial owners

84
Q

What are the benefits of RICS membership for its members?

A

Client confidence

Recognition

Competitive advantage

Knowledge

Network

85
Q

What are the provisions of ‘RICS Bribery, Corruption, Money Laundering and Counter Terrorist Financing’?

A 
PART 1 - Mandatory 
Bribery
- Don't offer / accept 
- Risk Assess 
- Report suspicions 
- Keep records

Money Laundering

  • Don’t facilitate
  • Scrutinise transaction
  • CDD / EDD
  • Report suspicions
  • Keep records

PART 2 - Guidance

  • Gift register
  • Policy
  • Training
  • Transparency

PART 3 - Additional

  • PEPs
  • Beneficial owners
86
Q

What would you do if you overheard confidential information between your opposite number and his surveyor?

A

I would inform them of the breach and not use the information for my own gain. If I had a physical copy of the data, I would delete it.

87
Q

What’s services do the RICS provide when a firm cannot repay client money?

A

Client money protection schemes for surveying services and Resi agency

88
Q

Please define what constitutes negligence.

A

Where a duty of care was owed, this was breached, and as a result the client suffered loss.

89
Q

When have you shown a high standard of service?

A

When I adapted my advice and increased the regularity of my communication with the client after the lockdown.

90
Q

Why did you recommend an information barrier at Dartford?

A

To ensure there was no unfair advantage given to the party via my conflicted colleague and there was a clear advantage to be gained from both sides by continuing the transaction.

91
Q

What are the RICS rules with regards to the use of logos? When did they come into effect?

A

April 2020.

Only registered firms can use the logo

Prescribed text in terms of engagement regarding what regulation means

Term chartered surveyors can only be in trading name

92
Q

How would you determine if you are competent for an instruction?

A

SUK - Skills, Understanding, Knowledge

93
Q

Can you give a friend free pro bono advice?

A

Not unless your PII covers it which it rarely does.

94
Q

What was the nature of the conflict in your Dartford Example?

A

It emerged a colleague in the time had a connected business interest with one of the potential purchasers. They had also informed the purchaser that the property was for sale.

95
Q

Why did you want to become a chartered surveyor?

A

Gold standard for property professionals

Knowledge, network, recognition, superior service.

96
Q

What are the RICS requirements on uninsured excess? (The bit of a claim the firm must pay)

A

Indemnity up to £500k = 2.5% of sum insured or min £10k

Indemnity over £500k = 2.5% of sum insured

97
Q

When have you shown respect in you work?

A

Carefully dealing with the sensitive topic of rent arrears with the tenant.

98
Q

What are the key Acts relating to bribery and corruption?

A

Bribery Act, 2010

Proceeds of crime Act, 2002

Money Laundering, Terrorist financing and transfer of funds regulations, 2017

99
Q

What is the purpose of the Proceeds of Crime Act, 2002?

A

Allows enforcement to recover money deemed to be the proceeds of crime. Also defines the offenses of AML.

Concealing criminal property

Arrangements

Use / possession

100
Q

When have you acted in a way that promoted trust in the profession?

A

Acting in accordance with PS and GN in my work to calculate and ERV for the client.

101
Q

What are the key elements of STATUTORY COMPLIANCE when setting up a new firm?

A

Inform HMRC of business name, VAT and tax registration

Ensure compliance with:

Equality act, 2010

Financial services act, 2012

Bribery act, 2010

Health and safety act, 1974

GDPR, 2016 and Data protection act, 2018

Estate agents act, 1979

CPRs / BPRs / Misrepresentation act, 1967

Money laundering regs, 2017

102
Q

What core values do you think you displayed in your Dartford example?

A

Taking responsibility

Trust in the profession

Integrity

103
Q

What did you first consider when you were made aware of the conflict in Dartford?

A

Could this conflict be managed or should we step away from the transaction.

104
Q

How many RICS members are there?

A

135k

105
Q

What governs confidentiality for RICS members? What are the key features of this governance?

A

The RICS bye laws

Client permission is needed to disclose confidential information.

Must disclose accidental breach.

Members cannot use confidential data for own gain which is was mistakenly disclosed.

Only exception is if it’s statutory duty to disclose eg. HMRC

106
Q

Are you aware of any recent reviews underway in the RICS?

A

The ‘ Defining our future’ Review. Objectives included:

Stakeholder / Public trust in RICS

Remaining a sustainable Prof. Body

Align purpose and ambition of RICS with its members

Outcome November 2021

107
Q

When did you disclose the conflict to the parties in Dartford?

A

As soon as I became aware of the conflict. I wrote to them both in an email with a member of our compliance team copied in

108
Q

How can NEGLIGENCE claims be minimised?

A

Client instruction in writing

Ensure competence

Follow RICS core materials

CPD

109
Q

What is Lionheart?

A

RICS Charity for RICS professionals.

110
Q

What are the key elements of the Bribery Act, 2010?

A

The act defines the four types of bribery offence. Bribing, Receiving a bribe, Bribing a foreign public official, Failure to prevent a bribe.

Sets out six principles to deal with offences:

Proportionality

Top level commitment

Risk assessments

Due diligence

Communication

Monitor and review

111
Q

What is the key RICS core materials on conflicts? What are it’s key takeaways?

A

RICS Conflicts of Interest, 2017.

Defines types of conflict

Avoid conflict unless you having informed consent.

Firms should have complaints procedure appropriate to size.

Records of compliance

112
Q

What are the five types of RICS core material? Which are mandatory?

A

International standards (M)

Professional Statements (M)

Practice statements (M)

Guidance note

Code of Practice

113
Q

How did you become aware of the conflict in Dartford?

A

The conflicted party had submitted an offer. As standard practice, we undertook a conflict of interest check and AML check. This showed the connection.

114
Q

What is a conflict of interest? Please provide some examples?

A

When a member or firms impartiality is threatened.

Eg. Financial interest, commercial relationship, personal interest, acting for both sides.

115
Q

What tools are available to members to help their ethical decision making?

A

RICS decision tree. It’s a framework of questions members should ask themselves. Ultimate test is would you be happy for your actions / decisions to be made public.

Confidential RICS hotline

116
Q

What is proportionality in the RICS principles for regulation?

A

Penalty proportional to breach

117
Q

What are the Rule of Conduct for firms, 2007?

A

PCS CPD CII

Definition
Communication

Professional behaviours
Competency
Service

CPD

Complaints procedure
Clients money handling
Indemnity

Advertising
Solvency 
Cover for incapacity & death
Use of designations
Info to RICS
Co-Operation
118
Q

What is the role and guidance of RICS PS - conflicts of interest - UK commercial property market investment agency, 2017?

A

Relates specifically to risks in investment agency. Covers

Duel Agency

Multiple Introductions

Incremental advice

Personal conflicts

119
Q

What RICS core values do you believe you displayed in your Borehamwood example?

A

Promoted trust in the profession

Acted with integrity

Took responsibility

120
Q

What is the role of a responsible principle in a firm?

A

Ensure compliance and communicate with the RICS

121
Q

When have you shown you can take responsibility?

A

I took decisive action when I realised my advice to the client could be better, advising they served a S25 to retain control of the timeframes.

HD APC OCT 21 (18 decks)

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