Ethics Flashcards
How would you set a fee?
- Assess resource required
- Assess time needed to complete
- Assess value of property
- Level of PII required
Can you alter your fee?
Yes, you technically can, so long as you behave in a professional manner.
However, fee should have been assessed correctly before, still need to provide a high standard of service.
What must you do before starting work?
- Check Competence
- Confirm no COI
- Cofirm ToE
What do you do prior to acting for a client for agency purposes?
- Assess competence
- No COIs or personal interest
- Issue ToB
- Get signed ToB
- Conduct AML checks
Why might you decline an instruction?
- Not competent
- Not enough resource to complete in timescales required
- There is a COI
- Not enough facts
- Work is for a friend and PII won’t cover for personal interests
- PII can’t be agreed.
- Wouldn’t be happy if it was made public
What does the Consumer Rights Act 2015 allow?
A 14 day cooling off peiod upon the signing of Agency Instruction Agreements.
Why do the RICS Bye Laws state regarding confidentiality?
Client confidentiality must be maintained for all client affairs.
What should you do if you receive confidential information in error?
It cannot be used for their own purposes.
Need to advise client and sender of the error.
Inform compliance officer.
Delete securely.
When may a surveyor be negligent?
Duty of care exists to clients and third parties.
If this is breached and there is a loss, they can claim for damages.
How can a surveyor avoid negligence?
- understanding client’s instruction
- competent
- undertake work in accordance with RICS Standards & Guidance Notes
- make detailed notes and take photographs
- keep up to date with market knowledge
What do you know about the RICS Guidance Note: Complaints Handling (2016)?
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.
What are the RICS minimum procedures for CHP?
- Acknowledge a written complaint within 7 days
- Respond within 28 days
- Refer to independent redress provider if unresolved
- Log in a complaints log
What is Savills CHP?
- Acknowledge within 5 days
- Respond within 10 days
- If unresolved, refer to independent redress provider
If you are a sole practitioner who can you use as your complaints handling officer?
A surveyor from another firm.
What is professional indemnity insurance?
Insurance to protect clients, surveyors and third parties against negligence claims.
What are the minimum PII requirements?
Based on firm turnover:
Less than £100k = £250k min
£100,001 to £200k = £500k min
> £200,001 = £1,000,000
What are the maximum levels of uninsured excess required by the RICS?
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
In relation to PII, what does retroactive mean?
Policy covers claims that are made within the insurance period, regardless of when the negligent act occurred.
If a firm can’t arrange PII cover what is available?
RICS assigned risk pool
What are the RICS rules regarding PII?
Mandatory requirement - Rules of Conduct for Firms
Need RICS approved insurer (list on website)
Need adequate and appropriate level for each instruction.
How long should old files be held for?
Minimum 6 years, then destroyed securely
Why do firms have PII?
One of the Rules of Conduct.
Protects against negligent behaviour.
Protects clients, firm and me.
Is PII needed for pro-bono work?
Yes
Are you aware of any new RICS guidance on insurance?
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
What is run off cover and how long should it last?
For when the firm ceases to exist = need minimum 6 years but claims made up to 15 years
Why is client money handling important?
One of the Rules of Conduct for Firms - client money must be kept safe.
How should you hold client money?
- held separately with an authorised bank
- account needs to be entitled with the client’s name and Client
- money held must be immediately available
- provide written communication of any money movement
Can you accept cash?
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.
Are there any guidance notes to be aware of for PII?
Yes - RICS Guidance note on Risk, Liability and Insurance currently under consultation
Name two key components of legislation that relate to gifts, bribery and corruption?
Bribery Act 2010
Proceeds of Crime Act 2002
What is a bribe?
The giving, offering, promising, receiving of an advantage such as payment for an action - which is illegal or a breach of trust.
What are the key principles of the Bribery Act 2010?
Aims to reduce bribery in business.
What are the 6 principles of the Bribery Act 2010?
PTR DCM
Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitoring and review
What are the offences under the Bribery Act 2010?
Bribing
Receiving a bribe
Bribing a foreign public official
Failure to prevent bribery
Who policies the Bribery Act 2010?
Serious Fraud Office
What are the penalties of the Bribery Act 2010?
Maximum 10 years in prison and /or unlimited fine.
What would you do if rejecting the gift would offend the client?
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.
What is your company’s policy on gifts?
- Gifts must be under £50
- Hospitality must be under £250
What is money laundering?
Proceeds of criminal activities are disguised/ converted and then realised as legitimate assets.
What is terrorist financing?
Is the financing of terrorist acts, and of terrorists and terrorist organisations
What is the key legislation on money laundering?
Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2019
What are the key components of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2019?
Adopt appropriate internal controls
Provide staff training
AML checks
Record keeping
What are an estate agents legal obligations re money laundering?
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
When is enhanced due diligence required?
If there are red flags.
If the person is a PEP (politically exposed person)
What is a PEP?
Someone who has been entrusted with a prominent public function.
Has a higher risk of potential involvement in bribery and corruption by virtue of their position.
Who is a PEP?
Members of parliament
Ambassadors
Heads of States
Their families.
What are red flags?
Unwillingness to provide documents
Unusual patterns of transaction i.e. undue urgency, potential loss making
Changing currencies
Changes to parties involved
What are the penalties under the Money Laundering, Terrorist Financing and Transfer of Funds Regulation 2019?
Assisting = Max 14 years imprisonment and/or unlimited fine
Tipping off = max 5 years imprisonment and/or unlimited fine
What are some key requirements for firms regarding money laundering?
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
What money laundering checks do you need to do for private individuals?
Passport/drivers licence
Utility bill from last 3 months
What money laundering checks do you need to do for PLCs?
London Stock Exchange Listing
What money laundering checks do you need to do for public bodies?
Government ownership / control
What money laundering checks do you need to do for private limited companies?
Certificate of incorporation
Full name
Registered Office
Registered number
Business address
Name of all shareholders with over 25% stake.
(report discrepancies to Companies House)
What do you actually do for your AML checks?
Take photo copy of their ID.
Provide information to Compliance Team:
- Have I met them
- Estimated value of asset
- The official Land Registry Documents
- Do I believe there has been suspicious activity
How long does AML information need to be held for?
5 years
Who polices the Mouney Laundering and Terrorist Financing and Transfer of Funds Regulations?
National Crime Agency
What is the Proceeds of Crime Act 2002?
Provides power for enforcement authorities to recover money and assets deemed to be the proceeds of crime
What would you do if you suspect suspicious activity?
- Report to our Money Laundering Reporting Officer
- They would raise a Suspicious Activity Report
- Send it to the National Crime Agency
What are the main areas of offence under the proceeds of Crime Act 2002?
Concealing criminal property
Arrangements
Acquisition, use and possession
What is the purpose of the RICS Professional Statement - Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)?
Sets out mandatory, global requirements for RICS members and firms.
What must RICS firms do in relation to Bribery, Corruption, Money Laundering and Terrorist Financing?
Not offer or accept bribes
Report suspicions to relevant authorities
Not facilitate or be complicit to ML or TF
What ADR does the RICS provide?
RICS Dispute Resolution Service
How long do files need to be held for?
Minimum of 6 years
Are you allowed to pitch for work over coffee?
No, could be seen as a bribe even though it is small.
Should be done in an appropriate workplace setting.
When can you allow a third party to access your files?
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.
‘What would you do if you were offered a dinner at a Michelin Restaurant?
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.
What would you do if you were offered a gift after an instruction had completed?
Check company gift policy.
Check reasonableness.
Accept if reasonable.
What would you do if you were offered a gift by a third party or contractor?
Politely decline as they are not my client.
What would you do if you were offered a gift during an instruction?
Politely decline as the instruction is not yet complete and this could impact my impartiality.
What are some of the statutory compliance steps for starting a new practice?
Disclose business name
Disability discrimination
Appoint a Money Laundering officer
Fire Safety compliance
Inform HMRC for Tax and VAT registration
What are the steps for starting a new practice?
Inform RICS (firm detail form)
Appoint responsible principal
Register for RICS regulation
Arrange PII and send to RICS
Procedures for handling client money
Register VRS if valuing
Obtain RICS approval for CHP
Set up complaints log
Appoint CHO
Logo kit
Plan for succession
CPD log on RICs CPD Management system
Staff training
Complete online RICS annual return
What are the steps for closing an RICS registered practice?
Inform RICS
Ensure clients informed and hand over arrangement in place
Return client money
Inform insurers and ensure 6 year minimum run off cover
Retain client files for min 6 years
