Ethics Flashcards
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What is the role of RICS?
- Global leading professional body promoting the highest standards in the property industry.
- Gold standard of professional regulation.
Why do you want to become a member of RICS?
“1. Professional recognition
- Quality Assurance
- International Voice
- Career Development
- Competitive Advantage”
What is a Royal Charter?
A Royal Charter is an instrument of incorporation, granted by the Queen, which confers independent legal personality on an organisation and defines its objectives, constitution and powers to govern its own affairs.
What are the key functions of SCSI?
1) ADVOCATE
Representing the profession in the public interest. This means promoting, defending and representing the interests of members of SCSI. Producing high quality research and surveys on key market issues. Providing market analysis and commentary. Providing independent, impartial professional advice to government departments, policy makers, state agencies etc is a key function.
2) EDUCATE Supporting a highly skilled surveying profession
Accredits undergrad & postgrad degrees, sets standards for new surveyors, manages APC’s. Delivers CPD programmes to ensure professionalism and high competence.
3) REGULATE Enforcing the highest professional standards for the benefit of the public, consumers and SCSI members.
The SCSI & RICS, through its professional groups, develops professional standards, guidance and information to ensure that it meets its core objective of protecting the public interest. SCSI monitors, guides and assists members to comply with rules, regulations and ethical standards. Investigates complaints and takes disciplinary action.
Consumer protection Influence policy Set standards Accredit professionals Quality assurance
Who is the current SCSI president?
President TJ Cronin
Who is the current SCSI CEO?
Shirley Coulter
What do you understand by the term self-regulation?
RICS self-regulates, meaning that it operates within it’s own published regulatory framework, rather than being legislated by Government. RICS regulation is led by an independently-chaired Regulatory Board and regional sub-boards.
What is the SCSI structure?
Board -Board of Directors
Council – Committee of the Board
Standing committees
Registration Body
Can you tell me what you understand by the principles of better regulation?
(PACTT)
- Proportionality – regulators should only intervene when necessary. Remedies should be appropriate to the risk
- Accountability – Regulators must be able to justify their decisions and be subject to public scrutiny to promote complete fairness.
- Consistency – Regulators must adopt a common sense approach and that rules and standards must be joined up and implemented fairly. Regulation should be predictable in order to give stability and certainty to those being regulated.
- Targeting – Regulators should be focused on the problem and minimise side effects and that regulations should focus on the problem and avoid a scattergun approach.
- Transparency – Regulators should be open and keep regulations simple and user-friendly.
What is a Bye-Law?
Is a rule or law made by an organisation to control the actions of its members
Give an example of one of the RICS Bye-Laws.
B2.1 Classes
B2.1.1 – The Members of RICS shall consist of the following classes:
(a) Chartered members, comprising:
(i) Fellows;
(ii) Professional Members;
(b) Non-Chartered members; and
(c) Honorary Members
B4.3 Payment – A person shall be liable for the payment of his fees, subscription, levy or other sums payable while he is or was in membership
Tell me what are the 5 professional & ethical standards.
(RRIST)
- Take responsibility
- Treat other with respect
- Act with integrity
- Always provide a high standard of service
- Act in a way that promotes trust in the profession
How many years after an instruction has been completed can a Professional Indemnity Insurance claim be made?
15 years
What type of cover would you need to cover a claim brought after a firm or member ceases to trade?
Run off cover
Explain to me the new RICS Rules of Conduct - what do they replace/ When do they take effect?
Rules Changing February 2022.
Rules of Conduct 2021 replace 1) Rules of conduct for members 2) rules of conduct for firms and 3) global professional and ethical standards.
Why did the rules of conduct change?
- Simpler structure
- Clear examples
- Focus on respect, diversity and inclusion.
- Understanding evolving technology
- Tackling global challenges
Who do the new rules of conduct relate to? What are the 5 Rules?
Rule 1
- Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
Rule 2
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
Rule 3
- Members and firms must provide good-quality and diligent service.
Rule 4
- Members and firms must treat others with respect and encourage diversity and inclusion.
Rule 5
Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
Give an example behaviour for each.
Rule 1
- Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS. Example behaviours include not being improperly influenced by others and being transparent with clients about fees and services.
Rule 2
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise. Example behaviours include only undertaking work where a Member has the relevant knowledge, skills and resources and undertaking sufficient CPD each year.
Rule 3
- Members and firms must provide good-quality and diligent service. Example behaviours include understanding clients’ needs and objectives before accepting work and communicating clearly with clients.
Rule 4
- Members and firms must treat others with respect and encourage diversity and inclusion. Example behaviours include treating others courteously and respectfully and developing an inclusive workplace culture.
Rule 5
Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession. Example behaviours include managing professional finances responsibly and responding to complaints promptly, openly and professionally.
What are the core professional obligations of firms and members to RICS?
Members:
1) Comply with CPD requirements
2) cooperate with RICS
3) promtly provide info requested by standards and regulation board.
Firms:
1) Publish CPH procedure including ADR approved by RICS and maintain complaints log.
2) Ensure PII is in place and approved by RICS
3) Sole trader must appoint a locum
4) Cooperate with RICS
5) promtly provide info requested by standards and regulation board.
6) Display logos etc in accordance with RICS designations
7) must report any matter required to report under Rules for Registration.
What disciplinary procedures can the RICS impose?
Disciplinary options range from cautions to expulsions or the deregistration of Regulated Members.
• When an allegation is received, the RICS Head of Regulation will:
o Make further enquiries.
o Inform the person the allegation is made against in writing, who can write a response within 28 days.
o Decide whether there are grounds for the complaint.
If there is, they will either: A) Issue Compliance order (low level breaches where member admits wrongdoing) or B) Refer to Regulatory Tribunal and then most serios goes to the Disciplinary Panel.
In what circumstances can disciplinary measures be imposed?
RICS can only take disciplinary action if they conclude that there is a realistic prospect that a Disciplinary Panel, will most likely find the facts of an allegation proven, and that misconduct/serious professional incompetence will be established.
When did RICS last update their disciplinary panel rules?
October 2019, RICS revised ‘Disciplinary, Registration and Appeal Panel Rules’.
March 2020, the Conduct and Appeal Committee was renamed the Regulatory Tribunal.
What are the different levels of RICS disciplinary action?
Three levels of disciplinary action:
- Regulatory Compliance Order
- Regulatory Tribunal
- Disciplinary panel (serious breaches) 50% of panel are lay members
What do you understand by the term professional practice
Professional practice refers to the knowledge, conduct and work from someone in a particular profession
What bribery legislation are you aware of?
Legislation - Criminal Justice (Corruption Offences) Act 2018.
Regulation - RICS Professional Statement Countering bribery and corruption, money laundering and terrorist financing. (1st edition 2019)
What is a bribe?
Bribery - the offer, promise, giving, demanding or acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust.
What are the penalties for accepting a bribe?
Under the Criminal Justice (Corruption Offences) Act 2018, penalties range from a fine of up to €5,000 to imprisonment for up to 12 months and/or forfeiture of property of the value of the gift or benefit obtained in connection with the offence.
What are the penalties for being involved in money laundering?
Maximum penalty of 14 years imprisonment and or an unlimited fine.
What is money laundering?
Money Laundering occurs when criminals, use the proceeds of crime for legitimate purposes (e.g. to buy property) in a bid to hide its illegal origins.
What money laundering regulations or legislation are you aware of?
Regulation - RICS Professional Statement Countering bribery and corruption, money laundering and terrorist financing. (1st edition 2019)
Legislation - The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 - 2021
What constitutes an offence under relevant money laundering regulations
Money laundering is where the proceeds of criminal activities are converted into legitimate assets
1) Tipping someone off who is under suspicion
2) Providing advice or assistance to anyone engaged in money laundering.
3) Assisting a criminal to obtain, hide or invest funds
4) Failing to report knowledge or suspicion
What are PSP’s Key AML Responsibilities?
- Internal Policies, Procedures and Training
- Business Risk Assessment
- Client Risk Assessment
- Customer Due Diligence
- Suspicious Transaction Reporting
- Record Keeping
What is Professional Indemnity Insurance (PII)?
Professional Indemnity Insurance
Purpose
To protect firms from financial loss in the event of a negligence claim and consequences to pay third party damages
To protect clients from financial losses which the firm cannot meet
Can you tell me about the RICS requirements in relation to PII?
Firms must have adequate PII cover under Professional Obligations to RICS.
The minimum level of Professional Indemnity Insurance as required by SCSI = €375,000 for each and every claim. My firm maintain a high level of Professional Indemnity Insurance currently in the sum of €3 million.
Why do firms need PII?
Rule 9 of the Rules of Conduct for Firms states that ‘a firm shall ensure that all previous and current professional work is covered by adequate and appropriate indemnity cover that meets standards approved by the Standards and Regulation Board.’
3 main purposes of holding PII:
- The firm is protected from financial loss if it faces a claim that cannot be met from it’s own financial resources
- The firm’s clients are protected from financial loss that a firm cannot meet
- The firm or insured member is protected against the ‘consequences of its liability to pay damages to third parties for breaches of professional duty that it commits through its professional activities’
What would you do if you received a notice of a PII claim from a client or their solicitor?
Notify insurer immediately. Send a copy of the letter, unanswered, to my firm’s broker or insurers.
• Await further instructions before answering or entering into discussions
• It can be helpful to send your firm’s insurer a draft of what you might want to say to the client, seeking their approval.
What is an annual return?
RICS Regulated Firms and Registered Valuers are required to complete a regulatory annual
return to assists RICS Regulation in risk assessing our firms and practising valuers.
Tell me what you understand about Complaints Handling Procedures (CHP).
A CHP is A system of dealing with formal complaints against a company/person, for which there is a formal redress system.-Professional obligation for Firms requires a firm to operate a CHP and complaints log.
Guidance Note called ‘Complaints handling (1st edition, 2016)’.
- CHP must include an Alternative Dispute Resolution (ADR) mechanism that is approved by 1) Regulatory Board’ and 2) Professional Indemnity Insurance provider.
What are the key principles of an effective CHP?
(FUARR)
Fit for purpose Understood Available Readily shared Reviewed regularly
When and how can the RICS be involved in a complaint about a firm or member?
A client can complain to the RICS about the service or professionalism of a member or regulated firm, i.e. if the standard of a reasonable professional or firm has been breached.
They will not determine whether a professional’s opinion is correct or offer a second opinion and cannot resolve issues subject to Court proceedings or where another resolution mechanism exists.
However, RICS generally only investigate matters if they are in the public interest in order to take disciplinary action to protect the public, rather than to punish the professional or firm.
The process usually takes 6 months and there is generally no right of appeal against a decision to close a case or agree a consent order.
What are the key stages of complaints handling?
- Acknowledge the complaint
- Inform the customer that you are taking action
- Record and categorize the customer complaint in a complaints log
- Resolve the complaint according to company policy
• Inform management
• Pass to manager if necessary
• Ask management what resolutions can be made and how can I help to resolve. - Follow up with the customer to make sure they are satisfied
- If they are not satisfied, refer it to a third party for reconciliation.
Can you tell me about the CPD requirements for members of RICS?
- Minimum of 20 hours each year
- At least 10 hours must be formal CPD, i.e. any structured learning with a clear learning objective and outcome.
- CPD activities must be recorded online by 31 January of the following year.
- RICS Professional & Ethical Standards must be reviewed on a 3-yearly rolling basis.
Why is CPD important?
1) To improve your professional competence for your own benefit and that of your clients, employers and others.
2) To enable you to demonstrate how you have sought to maintain your competence in the event of a claim or allegation.
Tell me about the RICS’ guidance on dealing with Conflicts of Interest.
A member must not advise or represent a client where doing so would involve a conflict of interest or significant risk of a conflict of interest, other than where all those who are, or may be affected have provided their informed consent.
• RICS Professional Statement Conflicts of Interest, 2017
Defines three types of conflict:
1) Party Conflict: work on same or related instruction for two different parties.
2) Own Interest Conflict: relating to a personal interest
3) Confidential information conflict: relating to work between two parties which is confidential
What is double dipping (dual agency)?
Where an agent had a contractual agency relationship with both the seller and buyer at the same time – must not be undertaken in any circumstances from 1st January 2018. i.e. The agent lists a house for sale and also lands the eventual buyer. When that happens, the agent retains the entire commission, but often fails to represent the best interests of one side of the transaction or the other.
Why is double dipping (dual agency) an unacceptable practice?
Conflict of interest to represent both parties.
How would you close down a regulated firm
- Inform the RICS
- Inform your clients and arrange handover to new firm
- Return any client monies
- Inform insurance – take out run off cover of £250,000 for a minimum of 6 years
- Retain client files and records for a minimum of 6 years
