Ethics Flashcards
1
Q
Why do you want to become a member of the RICS?
A
I want to achieve a gold standard in my profession and be able to give back to the industry by educating and training aspiring surveyors
2
Q
What is the role of the RICS?
A
To promote and enforce the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure
3
Q
What are the key functions of the RICS?
A
- Maintain the highest standards of education and training
- Promote trust in the industry through strict regulation and standards
- Be a leading source of information and independent advice
4
Q
What is a Royal Charter?
A
A Royal Charter is a instrument of incorporation, granted by the Queen, which confirms independent legal personality on an organization, and defines its objectives, constitution and powers to govern its own affairs
5
Q
Who is the current RICS president?
A
Clement Lau FRICS (September 2021 - )
6
Q
What do you understand about the term self-regulation?
A
The fact of something or someone regulating itself without intervention from external bodies
i.e. Upholding high standards, acting with integrity, acting in the best interest of the Client
7
Q
What are the functions of the RICS?
A
- Consumer protection
- Influence policy
- Set standards
- Accredit professionals
- Quality assurance
8
Q
at Can you tell me what you understand about the 5 principles of better regulation?
A
TPACT
- Transparent
- Proportional
- Accountable
- Consistent
- Targeted
9
Q
What is a Bye-Law?
A
A regulation made by a local authority or corporation
10
Q
When were the RICS Bye-Laws updated?
A
February 2020
11
Q
What are the 5 professional and ethical standards?
A
- Act with integrity
- Always provide a high standard of service
- Act in a way that promotes trust in the profession
- Treat others with respect
- Take responsibility
12
Q
Tell me about the latest edition of the Rules of Conduct
A
Rules of Conduct 2022
Combines the previous rules of conduct for members and firms, which were in place since 2007
13
Q
What changes were made to the Rules of Conduct 2022?
A
- Simpler structure
- Clear examples
- Focus on respect, diversity and inclusion
- Understanding evolving technology
- Tackling global challenges
14
Q
What is Rule 1?
A
Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to the RICS
15
Q
Give 3 examples of Rule 1
A
- Members and firms do not take unfair advantage of others
- Members and firms act to prevent others being misled about their professional opinion
- Firms keep Client money safe and have appropriate accounting controls
16
Q
What is Rule 2?
A
Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
17
Q
Give 2 example behaviours of Rule 2
A
- Members and firms only undertake work that they have the skills, knowledge and resources to carry out competently
- Members and firms supervise any employees undertaking work for them and ensure that these employees have the necessary skills, knowledge and resources to do their tasks competently
18
Q
What is Rule 3?
A
Members and firms must provide good-quality and diligent service
19
Q
Give 3 example behaviours of Rule 3
A
- Members and firms must understand Client’s needs and objectives before accepting any professional work
- Members and firms communicate with Clients and others clearly in a way they can understand
- Members and firms understand the risks and benefit of using relevant technology
20
Q
What is Rule 4?
A
Members and firms must treat others with respect and encourage diversity and inclusion
21
Q
Give 3 examples of Rule 4
A
- Members and firms respect the right of others and treat others with courtesy
- Members and firms do not bully, victimise or harass anyone
- Members and firms work cooperatively with others
22
Q
What is Rule 5?
A
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
23
Q
Give 2 example behaviours Rule 5
A
- Members and firms respond to complaints made against them promptly, openly and professionally
- Members and firms do not dissuade complaints from approaching an ADR, RICS or other regulatory board
24
Q
Name 2 mandatory professional obligations for RICS members
A
- Members must cooperate with RICS
- Members must comply with CPD requirements set out by RICS
25
Name 3 mandatory professional obligations for RICS frims
* Firms must cooperate with RICS
* Firms must publish a CHP, which includes ADR, approved by RICS, and maintain and complaints log
* Firms must display on their business literature, in accordance with RICS published policy on designations, a designation to denote they are regulated by RICS
26
What disciplinary procedures can RICS impose?
Head of Regulation can sanction through:
* Fixed penalty notices
* Consent order/Regulatory compliance order
* Interim measures
* Panel hearings/refer to disciplinary panel
* Expulsion from RICS
27
What disciplinary and regulatory sanctions can RICS impose?
* Caution
* Reprimand - another form of warning
* Undertakings - condition imposed
* Fine
* Condition - condition to carry out or restrict activities
* Expulsion/removal
28
When did RICS last update their disciplinary panel rules?
RICS Disciplinary, Registration and Appeal Panel Rules (October 2019)
29
What are the different levels of action within the disciplinary panel rules?
* Decision to begin investigation upon receipt of information/allegation
* Decision as to realistic prospect
* If realistic prospect: disciplinary proceedings
30
What do you understand about the term professional practice?
Professional practice refers to the conduct and work of someone from a particular profession
31
What money laundering regulations or legislation are you aware of?
* The money laundering, terrorist financing and transfer of funds regulations 2017
* The proceeds of crime act 2002
* RICS Professional Statement: Countering bribery and corruption, money laundering and terrorist financing, 1st Edition, February 2019
32
What is a red flag of money laundering?
* If a client is secretive about who they are, the beneficial owner, the source of funds or the reason for the transaction
* If the parties appear multiple times in transactions over a short period of time
* if the transaction has unusual features, such as: is loss making or has no obvious commercial purpose
33
What bribery legislation are you aware of?
* Bribery Act 2010
* RICS Professional Statement: Countering bribery and corruption, money laundering and terrorist financing, 1st edition, February 2019
34
What is a bribe?
The offer, promise, giving , demanding or receiving of an advantage or an inducement for an action that is illegal, unethical, or a breach of trust
35
What are the penalties for accepting a bribe?
* Fixed penalty, i.e Fine (unlimited)
* Imprisonment (up to 10 years)
36
What are the penalties for being involved with money laundering?
Fixed penalty (fine) - unlimited
Imprisonment (up to 14 years)
37
What constitutes an offence under the bribery Act 2010?
Offences of bribing another person:
* offers, promises or gives an advantage to another person, to induce a person to perform improperly or reward for improper performance
Being bribed:
* Requests, receives or accepts an advantage for improper performance
38
What constitutes an offence under the current money laundering regulations?
Under The Proceeds of Crime Act 2002:
* Concealing, disguising, converting, transferring or removing criminal property
* Entering into or becoming concerned in an arrangement and knowing or suspecting that it facilitates the acquisition, retention, use or control of criminal property on behalf of another person
* Acquiring, using or processing criminal property
39
What is professional indemnity insurance?
A commercial policy designed to protect business owners, freelancers and self-employed if clients claim service is inadequate
40
Can you tell me about RICS requirements in relation to PII?
RICS Professional Indemnity Insurance requirements 2022:
Turnover £100,000 or less = minimum limit of indemnity £250,000
£100,001 - £200,000 = £500,000 minimum
£200,001+ = £1,000,000 minimum
41
What is an annual return?
A registration form that must be completed by all RICS registered firms each year, providing the RICS with information on your firm
42
Tell me what you understand about CHP
A CHP is a procedure that defines the procedure on how complaints are handled. It should include:
* Form to fill out
* Redress mechanism
* Contact details on investigator
* Handles within 28 days
* Issued with ToE
* Available to and understood by employees
* Agreed with PII insurers
* ADR mechanism
43
When and how can the RICS be involved about a complaint on a firm or member?
* if RICS have received several complaints about the member or firm
* If the complaint cannot be resolved through CHP or ADR
* If RICS Dispute Resolution Services are listed as ADR within the firms CHP
44
What approved ADR is available to firms?
* Centre for Effective Dispute Resolution (CEDR)
* Property Ombudsman / Ombudsman service business to business
* RICS Dispute Resolution Service (DRS)
* Arbitration
45
Can you tell me about the CPD requirements for members of RICS?
20 hours per year, 10 hours formal
46
Why is CPD important?
It helps remove any gaps in knowledge and can keep you up to date with industry changes
47
Tell me about RICS guidance on dealing with Conflicts of Interest
RICS Professional Statement: Conflicts of Interest 2017
Every RICS member must:
* Identify and manage conflicts of interest in accordance with the PS
* Keep records of decisions made
48
Are you aware of any new guidance on Conflicts of Interest?
RICS Professional Statement: Conflicts of Interest, March 2017
Regulation document: Conflicts of Interest: Implementation and Impact, June 2019
49
How would you close down a regulated firm?
* Agree closure date
* Inform staff and take necessary steps to end employment
* Inform Client and recommend another firm
* Deal with / return client money
* Notify PII insurers and arrange run-off cover
* Keep files for a minimum of 6 years before safely and securely destroying (can be sued for negligence up to 15 years)
* Inform RICS
50
Can you tell me about RICS guidance relating to bribery, corruption or money laundering?
Countering bribery and corruption, money laundering and terrorist financing, February 2019
51
What status does countering bribery and corruption, money laundering and terrorist financing hold?
professional statement - mandatory
52
What are some of the key principles of countering bribery and corruption, money laundering and terrorist financing?
* Not offer or accept, directly or indirectly anything that constitutes a bribe
* Report suspicious activity that may breach anti-bribery laws
* Act with due diligence
* Not facilitate or be complicity in money laundering or terrorist financing
* have systems and training in place to comply with laws
* Report suspicious activity
53
What must/should members/firms do to comply with money laundering and bribery guidance?
* Not offer or accept bribes
* Not facilitate or be complicit in money laundering and terrorist financing
* Evaluate risks and have appropriate training and systems in place
* Report suspicious activity
54
What are the current RICS rules for registration of firms?
Rules for registration of firms, February 2022 (regulation document)
55
When must a firm register for regulation?
* If the firm provides surveying services to the public
* if the firm is operating in Regulated A Area
* At least 50% of the firms principals are RICS Members
56
What are the registration eligibility criteria?
* The firm provides surveying services to the public
* At least 25% of the firms principals are RICS members
57
Who is a responsible principal?
A responsible principal will have primary responsibility for ensuring that RICS professional, technical and ethical standards are applied, upheld and supported
58
What happens if the firm cannot comply with the eligibility criteria?
* Can register if Head of Regulation is satisfied the firm is implementing a plan to comply with the rule: 25% of principals are RICS members
* If Head of Regulation is satisfied the firm is being supported and supervised by another RICS firm
59
What are the rules around the RICS logo and ‘regulated by RICS’ designation?
* Only RICS firms can display the RICS logo
* The ‘Regulated by RICS’ designation must be displayed clearly on business literature
* Only registered firms are able to display the designation
60
When did the RICS logo and designation rules change?
February 2022 - regulation document
Rules for the use the RICS logo and designation by firms, February 2022, Version 6
61
What were the key changes to the use of RICS logo and designation?
* Use of logo restricted to firms only
* Use of ‘Chartered Surveyors’ designation restricted to trading name only
* Regulated firms must include prescribed text in their ToE to explain what being regulated means to clients
62
Tell me about the restricted to the use of the designation ‘ Chartered Surveyors’ by firms
Restricted to trading name only. Not allowed in company name.
63
What must be included in ToE relating to firm regulation?
Must include prescribed text to explain to Clients wat being regulated by RICS means
64
What is a locum and who might need one?
A locum is another professional who is appointed to ‘stand in’ for a surveyor if they are unable to work
A sole practitioner requires a locum. A firm which has a sole principal requires a locum.
65
What RICS guidance relates to handling Client money?
RICS Professional Statement: Client Money Handling, 1st Edition, October 2019
RICS Client Money Protection, Version 1, April 2019 (regulation document)
66
When was the Client money handling professional statement last updated?
October 2019
67
What do the RICS Rules of Conduct say about Client money?
Rule 1 - Members must be honest, act with integrity and comply with their professional obligations
* 1.10 - Firms keep Client money safe and have appropriate accounting controls
* 1.11 - Members do not misuse Client money and comply with controls intended to keep it safe
68
Explain your understanding of the RICS scheme rules relating to Client money protection
The main purpose of the scheme:
* Allow RICS registered firms to offer Client money protection
* Compensate Clients for failing to account for Client money to the person entitled to it
69
Tell me what you know about the key principles of handling Client money according to the RICS client money protection scheme
Handling Client money:
* Client money must be held in a Client money account with a bank or building society that is appropriately authorised
* A Client money account must be designated as such and easily distinguished
* All Clients must be advised that Client money will be held and provided with account details
* Confirm in writing with the bank that the monies must not be combined or transferred
* Keep records and accounts that show all dealings
70
What are the main Client money protection schemes available to firms?
Approved schemes:
* Client money protect
* Money shield
* Property Mark
* RICS Client money protection
* Safeagent (previously NALS)
* UKALA Client money protection
71
What are the penalties for not having appropriate client money protection in place?
Fined up to £30,000 if you do not join a Client money protection scheme (Gov)
Fine up to £5,000 for not displaying certificate (Gov)
72
When were the Gov Client money protection scheme last updated?
The Client money protection schemes for property agents regulations (2020) (amendment)
73
What is the current Client money protection compensation limit?
As of June 2020:
* £50,000 per claims limit
* £10.3mil aggregate annual claim (previously £5.3million)
Covers pecuniary loss (no indirect or consequential loss)
74
What does the annual regulatory review fee relate to?
All regulated firms who hold Clients' money pay a regulatory review fee on an annual basis
The income generated from the fees covers the operational costs of the Client money regulatory review visit programme and any advice or guidance your fir may need during a review visit
Fee is based on number of principals within a firm
75
What might Client money include?
money of any currency (cash, cheque etc) that:
* A firm holds or receives on behalf of another person
* Is not immediately due and payable on demand to the firm for its own account
E.g: Rent and service charge monies
76
How does Client money differ to office money?
Office money is money of any currency belonging wholly to the firm or its principals
i.e fees charged for works outside of scope, such as LTA fees
77
What are some of the key principals relating to the RICS professional statement relating to Client money handling?
* Hold all client money in a client money account
* Ensure only client money is held in the client money account
* Ensure the word ‘Client’ is stated on client money accounts.
* Ensure name of firm is stated on accounts (unique identifier if discreet)
* Ensure client money is immediately available
* Confirm in writing bank operating conditions
* Provide all information to Clients
* Ensure client money is paid into the account promptly when received
78
Explain the key themes from the RICS Futures report 2020
Report is about change and how we are responding to change - sustainable and commercial focus
Building roads out of plastic
Extracting utility from big data
Adopting drone technology
Protecting cities from climate change
* Improving talent and skill in the profession: reviewing RICS eligibility requirements and CPD model
* Improving data and technology: ensuring data standards are captured
* Identifying climate and sustainable risks: established RICS building carbon database and new professional statement
79
What is the RICS professional statement on carbon?
RICS Whole life Carbon Assessment for the Built Environment, 1st Edition, November 2017 - professional statement
80
What do you know about the Hart v Large case?
Related to a dispute between purchasers, Hart, and their surveyor, Large, who was instructed to provide a level 2 HomeBuyer report
Negligence claim brought against Large for defects not identified - damages awarded to Hart in the sum of £750,000 which is unusually large as normally only compensated for simple missed defects
81
Explain the potential implications of the Hart v Large case
Large missed the defects, failed to advise further investigations are required and lack of advice to obtain PCC
Surveyors must now:
* be clear and transparent when advising Clients on scope of survey and limitations
* Recommending justifiable further investigation
* Update advice if justifiable, considering new information
82
Explain what you understand aby the RICS consultation on ethics and the rules of conduct
* Consultation period ran for 1 week in December 2020 and was guided by 3 principals: clarity, effectiveness and Brevity
* Public consultation on standards is part of the process when making amendments
* Concluded that the new rules provide clarity and support appropriate standards of professional ethical practice
83
What are the key changes to the new rules of conduct, effective February 2022?
* Simpler structure
* Clear examples
* Focus on respect, diversity and inclusion
* Understanding evolving technology
* Tackling global challenges
84
Explain your understanding of the precedent set in Burgess v Lejonvarn
* Lejonvarn provided services to Burgess for free
* Claim brought against Lejonvarn for negligent services
* Court decided that Lejonvarn had a duty to use reasonable care and skill
* Lejonvarn could therefore be liable even though she had not received payment and there was no contract between the parties
85
When were the rules of conduct last updated?
Effective February 2022
86
How do you ensure that you comply with bribery legislation?
* ensure i follow my companies anti-corruption and bribery policy
* I never accept cash or cash equivalent
* All gifts and/or hospitality are registered on the gift/hospitality register to ensure transparent behaviour
87
How do you ensure you comply with money laundering regulations?
* I always act cautiously and carry out risk assessments on high risk Clients from high risk sectors and countries
* Adhering to my companies policy, i never accept cash payments
* I ensure i report red flags
* I ensure i attend training and CPD when available
88
How do you ensure you comply with your firms bribery and gift policy?
* I never accept cash or cash equivalent
* The giving or receipt of hospitality is acceptable if it complies with the law nd is given openly and without the intention of influencing
* All gifts and hospitality must be registered
89
Tell me about an instance when you have been offered a gift or hospitality by a Client
I received a bottle of wine at Christmas from a Client for my work throughout COVID-19. I notified the partner in charge and logged the gift on the gift register
90
Tell me what you would do if you felt like an instruction was outside your scope of experience or knowledge
I would advise the Client that it is outside my scope of knowledge and recommend that we liaise with an expert who can advise/provide their recommendations
91
Tell me about an instance when you have handled Client money
Each quarter we receive rent and service charge payments.
These are paid into Client accounts, which have the Client name in the account details and are easily distinguishable.
Once all monies are received, the payments are promptly transferred to an account of the Clients choice, managed solely by the Client.
They are kept updated throughout the process to ensure a high standard of service
92
How would you keep Clients money safely and securely held?
I ensure it is kept in a Client bank account with the Client name clearly denoted.
I would confirm with the bank that no monies are to be transferred or combined.
I would provide the Client with bank details and keep records of all dealings
93
Tell me how you would handle a Client complaint?
I would refer to my companies Complaints Handling Procedure and advise the Client it is available to them.
In the first instance i would attempt to resolve the complaint myself and refer them to the partner in charge to also resolve if this fails.
Following this, the Client can make a complaint to the Group Company Secretary, who's details are available on the CHP.
Independent ADR information is also listed on the CHP as a final resort.
94
Tell me about your understanding of your firms process for escalating a complaint to ADR
If the complaint cannot be resolved by a member of staff in the first instance, the complaint should be written to the Group Company Secretary, who will confirm receipt within 7 days and a final response within 28 days.
The complaint can be escalated to the Property Redress Scheme for consumers or the Centre for Effective Dispute Resolution for Clients.
95
What are the 3 principle Conflicts of Interest types?
* Party Conflict
* Own Interest Conflict
* Confidential information Conflict
96
What is a party conflict?
A situation in which the duty to act in the interest of a Client or other party in a professional assignment conflicts with a duty owed to another Client or party in relation to the same or a related professional assignment
97
What is an own interest conflict?
A situation in which the duty to act in the interest of a Client is a professional assignment conflicts with the interests of that same RICS member/firm
98
What is a confidential interest conflict?
A conflict between the duty of an RICS member to provide material information to one Client, and the duty of the RICS member to another Client to keep that information confidential
99
What RICS guidance is there on Conflicts of Interest?
RICS Professional Statement: Conflicts of Interest, 1st Edition, March 2017
100
What is your firms policy on Conflicts of Interest?
All standard procedures relating to potential new instructions require, amongst other things, a conflict of interest check before accepting
Anyone who finds themselves in a conflict situation must declare and disclose it for consideration by partners and the advisory board
* Immediately disclose all actual and potential conflicts they identify
* Avoid any situation that might give rise to an actual or potential conflict
* Withdraw from a situation that develops into a conflict or a potential conflict, until the situation has been considered and resolved
* Comply with the firms instructions and any controls imposed following the disclosure of a conflict of interest
* Monitor the actual and potential conflict identified and update the conflicts of interest database as necessary
101
Tell me about a conflict of interest check you have carried out
Upon receiving a new instruction, i checked if the property is already on TRAMPS, our property management database.
As the property was not on TRAMPS, it was reasonable to assume the firm had no previous involvement and i therefore confirmed to the Client that the instruction can be accepted
102
Tell me how you would proceed if he firm has previous involvement with the property (conflicts of interest question)
If the property is recorded on TRAMPS, i would then enquire with the Partner responsible for the instruction to establish the extent of the firms involvement
The Partner and I would then decide whether or not acceptance creates a conflict. If yes, we would refer the matter to the advisory boards through the conflicts of interest database
The advisory board reviews the details and decided how to proceed (i.e decline the instruction or propose moving forward with informed consent and once both Clients agree)
Upon reaching an agreement to proceed, IT are instructed to restrict access to existing files held on our database to create a suitable information barrier and ensure correct procedures are followed
