Ethics Flashcards
1
Q
When was the RICS founded?
A
1868.
2
Q
- When did the RICS achieve Royal Status?
A
1881.
3
Q
What is the role of the RICS?
A
- Maintain the highest standards of education and training.
- Protect consumers through strict regulation of professional standards.
- To be leading source of information and independent advice on land, property, construction and associated environmental issues.
4
Q
How many members are there in the RICS?
A
180,000
5
Q
How do you become an FRICS?
A
- 5 or more years at MRICS
- Leadership Role
- Professional or Technical Achievement.
- Academic Achievement or raise profile of the RICS.
6
Q
RICS Motto?
A
‘Modus est Rebus’ – There is measure in all things.
7
Q
What is the RICS Governance Structure?
A
Privy Council
Governing Council
Regulatory Board
Specialist Professional groups
8
Q
What is the UK structure?
A
4 National Associations
10 Regional Boards.
Local Associations.
9
Q
What are the benefits of being an RICS member?
A
- Status
- Recognition
- Market Advantage
- Knowledge
- Network
10
Q
What are the 5 principles of RICS regulation for Members & Firms?
A
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
11
Q
What are the benefits of being a regulated firm?
A
- Confidence
- Professionalism
- Security
12
Q
What is the requirement for RICS registration?
A
- Provide surveying services to the public.
- Operating in a regulated area.
- 50% of firms principles are RICS members.
13
Q
What information must a firm return annually?
A
- Type of business and staffing.
- Statutory regulated activities.
- Nature of Clients.
- Complaints Handling.
- PII.
- Whether firm holds clients’ money or not.
14
Q
What are the levels of disciplinary action?
A
- Action by Head of Regulation.
- Regulatory Tribunal.
- Appeal Panel.
15
Q
What are the options of disciplinary action?
A
- Fixed penalty notice.
- Regulatory compliance order.
- CPD sanction.
- Refer matter to regulatory panel.
16
Q
What penalties are available to the regulatory board for disciplinary action.
A
- Compliance order.
- Unlimited fine per breach but proportionate.
- Conditions of RICS registrations.
- Expulsions.
- Require publication of hearing results.
17
Q
What is the hierarchy for RICS publications?
A
- Rules of Conduct.
- International Standards.
- Professional Statements.
- Practice Statements.
- Guidance Notes.
- Codes of Practice.
18
Q
What must be followed in terms of fee negotiation?
A
- Must avoid price fixing or aggressive fee cutting.
- Fees must be market based and agreed on an ad-hoc basis.
- Must make clients aware of receiving referrals fees and state this in ToE.
19
Q
What year is the Consumer Rights Act?
A
Consumer Rights Act 2015.
20
Q
What does the Consumer Rights Act tell us?
A
Clients have a 14-day cooling off period.
21
Q
What are typical reasons to decline work?
A
- Not Competent for type of work.
- Insufficient facts.
- Proposed client will not sign terms of engagement.
- Conflicts of Interest.
- PII cap cannot be agreed.
- Advice on a pro bono basis of PII will NOT cover.
22
Q
What document relates to Conflicts of Interests?
A
RICS Conflicts of Interest, Professional Statement, March 2017.
23
Q
What does the Conflict of Interests document tell us? Structure?
A
- States members must not advice clients where conflicts exist unless informed consent.
- Informed consent only allowed when proceeding is considered in the interests of all who may or are affected and is not prohibited by law.
- All firms must have effective systems to ensure compliant with statement and must keep records to show compliance.
24
Q
What are the 3 types of conflict of interests?
A
- Party Conflict.
- Own Interest.
- Confidential Information.
25
What is informed consent?
Where affected parties have given consent for surveyor to continue despite any conflicts, as long as within the law. This must be in writing with those affected fully aware.
26
What are the steps to managing conflict of interests?
1. Conflict Avoidance.
2. Written advice to both parties.
3. Conflict Management.
27
What is the information barrier?
Steps taken to ensure information of conflicting parties is not passed.
- Surveyors within one firm must be separate.
- Information should be securely stored.
- Clear audit trail.
28
What does the RICS Bye Law state about confidentiality?
Client confidentiality must be maintained at all times, historic data must be kept for 6 years minimum (15 years ideal).
29
What is negligence?
Where a surveyor has not provided reasonable care and skill for a client.
30
What is the Burgess v Lejonvarn case?
Burgess v LeJonvarn 2020 – Professionals providing services pro bono and without contract owe a duty of care in tort.
31
What year is the limitation act?
Limitation Act 1980.
32
What does the limitation act tell us?
Limitation Period for Negligance Claims
Contract – 6 years from date of act, 3 years from date of knowledge, 15 years back stop from negligent act.
Tort – 6 years from date the claimant suffered loss.
33
How do you avoid negligence?
- Clear and precise Terms of Engagement.
- Ensure competent to undertake work.
- Make detailed notes and take photos.
- Keep abreast with market knowledge and legislation.
- Cap the professional liability excess on PII policy in Terms of Engagement.
34
What RICS document relates to Complaints Handling Procedure?
RICS Complaints Handling, Guidance Note, July 2016.
35
What are the stages of RICS Complaint Handling?
Stage One (in-house)
- details of complaints handling procedure must be disclosed when complaint received.
- procedure must be quick, clear, impartial.
- complaints handling officer must be contacted to investigate first.
- complaints must be in writing.
- firms must acknowledge complaint within 7 days, and respond in 28 days.
Stage Two (ADR)
- If complainant unhappy with stage 1, involve redress scheme that firm has chosen.
- name of relevant scheme must be provided, such as RICS Dispute Resolution Service.
36
What does the RICS complaint handling document tell us?
- Firms written complaints handling must be RICS approved.
- Always notify insurer as soon as possible of complaint.
- Complaints procedure should be in Terms of Engagament.
- Complaint log must be maintained.
- Firms must include RICS approved ADR mechanism.
- Sole practitioner must nominate a surveyor/firm to act as complaints handling officer.
37
What are the VOA complaints handling procedure?
Tier 1 – Complaint investigated within specific business team.
Tier 2 – Complaints Investigation Team
Further Action – Seek referral to parliamentary and health service ombudsman via MP office.
Will acknowledge within 3 days, respond in 20 days.
38
How long do we have to acknowledge to complaints?
3 working days.
39
How long do we have to respond to complaints?
20 working days.
40
What is run off cover?
Insurance cover when a company closes.
41
How long is run off cover and minimum value?
6-years, £1million minimum.
42
What is a run off pool?
For firms that are unable to obtain cover anywhere else.
43
What document relates to Risk, Liability and Insurance?
RICS Risk, Liability & Insurance, Guidance Note, 1st Edition, 2021.
44
What does the Risk, Liability and Insurance document tell us?
Details courts approach to professional liabilities and liability caps.
45
What document relates to Handling Client Money?
RICS Client Money Handling, Professional Statement, 1st edition, 2019.
46
What are the 6 areas of good client money handling?
1. Holding Client Money
2. Providing information to clients
3. Receipts of client money
4. Payments from client account
5. Accounting record & controls.
6. Compliance.
47
What are the main factors of client money holding?
- Clients accounts must be kept separately and clearly identifiable.
- Word ‘client’ must be on account.
- Client can have monies on demand, withdrawn for proper purchasers.
- Payment of interest is agreed with client and accounts kept in credit.
- Accurate records kept, running balance available.
- Annual audit and reporting obligations by certified accountant.
- All firms handling money need to display procedure online.
- RICS regulatory review visits, usually every 3 years by RICS employed accountant.
48
What is the RICS client money protection scheme?
Scheme for firms where they are unable to repay clients’ money.
49
What do you need to start a new practice?
Inform RICS of new practice.
Appoint principal responsible for RICS communication.
Arrange PII and send cover details.
Set client money handling procedure.
Register for RICS Registered valuer scheme.
Obtain approval for complaints handling procedure.
Set up complaints log.
Appoint complaints handling officer.
Obtain logo kit from RICS.
Plan for succession if sole practitioner.
Ensure CPD logged online.
Set up staff training.
Ensure completion of RICS annual return.
50
What do you need to do to close a practice?
Inform RICS of closure.
Inform client and handover arrangements to new firm.
Return client money.
Inform insurers and arrange run off cover for a minimum of 6 years.
Retain copy of client files and records for minimum of 6 years.
51
What act relates to Bribery?
Bribery Act 2010.
52
What is the purpose of the bribery act?
Aim to reduce bribery in business in UK & abroad.
53
What is bribery?
A bribe is giving, offering, promising or receiving gift, payment or service for an action within is illegal or a breach of trust.
54
What are the 6 principles of bribery?
1. Proportionality.
2. Top Level Commitment.
3. Risk Assessment.
4. Due Diligence.
5. Communication.
6. Monitoring & Review.
55
What are the 4 offences of bribery?
1. Bribery
2. Receiving a bribe.
3. Bribing a foreign official.
4. Failing to prevent a bribe.
56
What is the penalty for bribery?
10 years in prison or an unlimited fine.
57
What is the Money Laundering legislation?
Money Laundering, Terrorist Financing & Transfer of Funds Regulations 2017.
58
What is money laundering?
Money Laundering is where proceeds of crime are disguised or converted and then realised as legitimate assets.
59
What happening in the money laundering amendment? What year was this?
2019 – art market, crypo assets, custodian wallet, letting agents, tax advisor.
60
What are the key provisions of money laundering regulations?
1. Requirement for written money laundering and terrorist financing risk assessment.
2. Implement systems, policies and controls to prevent and meet requirements under regulations.
3. Adopt appropriate internal records.
4. Provide staff training.
5. Comply with new customers enhanced and simplified due diligence checks.
6. Comply with requirements relating to politically exposed persons.
7. Ensure appropriate record keeping, policies and procedures.
8. AML checks must be undertaken to confirm identity of proposed purchaser and check sources of funds before contracts exchange.
9. Include additional high-risk factors when assessing need for enhanced due diligence and seek additional information.
61
How many levels are there for due diligence check (money laundering)?
2 Levels; simplified and enhanced.
62
What is included in the simplified due diligence (money laundering)?
- Identify client (passport, driving licence).
- Make reasonable endeavorsto identify beneficial owns of the client.
- For a company, its name, company number and registered address.
- Names of directors, unless a listed company on stock exchange.
- Obtain information on purpose of business relationship and proposed funding.
63
What is included in the enhanced due diligence (money laundering)?
- Additional procedures required if involving person/business in high-risk third country or a politically exposed person.
- Politically exposed person is someone who carries out a prominent public person.
- Politically exposed persons present higher risk due to links and influence.
- More detailed examination of background and purpose of transaction.
64
What other requirements are there for the money laundering regulations?
- Firms must register with HMRC regularly
- Max 10,000 euros for acceptance of cash.
- Senior member must be appointed tot take responsibility for compliance.
- Money Laundering Reporting Officer must be nominated and report any suspicions to the National Crime Agency.
- Firm to maintain records for minimum of 5 years.
65
What are the penalties for money laundering?
Maximum 14 years or unlimited fine for assisting, Maximum of 5 years or unlimited fine for not reporting suspicion.
66
What are the red flags for money laundering?
- Inability or unwillingness to provide identity documents.
- Changes to parties involved in transactions.
- Unusual transaction features, unexpected urgency, potential loss making.
- Payment of fees or purchase costs in unusual currency.
67
What year is the proceeds of crime act?
Proceeds of Crime Act 2002.
68
What are the Proceeds of Crime Act?
Allows authorities in the UK to recover money and assets deemed to be from proceeds of crime creates a set of criminal offences intended to combat money laundering.
69
What are the 3 principles of the Proceeds of Crime Act?
1. Concealing Criminal Property.
2. Arrangements for use of Criminal Property.
3. Acquisition and Possession.
70
What professional document relates to bribery, corruption, money laundering etc?
RICS Countering Bribery and Corruption, Money Laundering & Terrorist Financing. 1st Edition. February 2019.
71
What is the structure of the RICS countering bribery document?
Part 1 – Bribery and Corruption.
Part 2 – Guidance.
Part 3 – Supplementary Guidance.
72
What other key legislations relate to ethics?
Unregistered Companies Regulations 2009
Terrorism Act 2000
Companies Act 2006
Limited Liability Partnership Regulations 2009
Electronic Money Regulations 2011
73
What are the civil service core values?
Integrity
Honesty
Objectivity
Impartiality
74
What is the main RICS document for ethics?
RICS Rules of Conduct, October 2021.
75
What is the structure of the rules of conduct?
5 Rules
3 Professional Obligations for Members.
7 Professional Obligations for Firms
76
What are the 5 rules of conduct?
Rule 1 – Members and Firms must be honest, act with integrity and comply with professional obligations.
Rule 2 – Members and Firms must maintain their professional competence and ensure services are provided by competent individuals.
Rule 3 – Members and Firms must provide good-quality and diligent service.
Rule 4 – Members must treat others with respect and encourage diversity and inclusion.
Rule 5 – Members and Firms must act in the public interest, take responsibility for actions to prevent harm and maintain public confidence.
77
What are the 3 professional obligations for members?
PO 1 – Members must comply with CPD requirements set by the RICS.
PO 2 – Members must co-operate with the RICS.
PO 3 – Members must promptly provide all information reasonably requested by the standards and regulation board, or those exercising delegated authority on its belief.
78
What are the 7 professional obligations for firms?
FPO 1 – Firms must public a complaints handling procedure with includes ADR and maintain complaints log.
FPO 2 – Firms must ensusure that all previous and current professional work is covered by adaquete and appropriate professional indemnity cover.
FPO 3 – Firms with a sole practitioner must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
FPO 4 – Firms must co-operate with RICS.
FPO 5 – Firms must promptly provide all information reasonably requested by the standards and regulation board.
FPO 6 – Firms must display on their business literature in accordance with RICS published policy on designations.
FPO 7 – Firms must report to RICS any matter that they are required to report under the Rules for the Registrations of Firms.
79
How many bye-laws are there?
10
80
What is a bye-law?
The enabling principles underpinning rules and regulations.
81
Name 5 of the RICS bye laws?
Bye-Law 2: Members and Registration
Bye-Law 4: Contributions to Funds
Bye-Law 6: Governing Council, Officers and Staff
Bye-Law 8: Procedure for General Meetings
Bye-Law 10: General
82
What are the RICS regulations? How many are there?
The build on the bye-laws with detail about fees and memberships.
83
Name the RICS regulations (10)?
1. Definitions
2. Membership and Registration
3. Designation
4. Contribution to Funds
5. Conduct
6. Governing Council, Officers and Staff
7. Subordinate boards, committees and groups.
8. Procedure for General Meeting and Voting
9. Accounts and Audit
10. General
84
What is professional indemnity?
Insurance to cover the cost of compensating clients for loss or damage
resulting from negligent services or advice provided by a business or an
individual.
85
What document relates to PII?
RICS UK Professional Indemnity Insurance Requirements, Version 9.
86
What are the minimum covers for PII?
Under £100,000 = £250,000
£100,000 to £200,000 = £500,000
£200,000 and above = £1,000,000
87
What is an assigned risk pool?
Short term cover by the RICS for regulated members and firms unable to gain cover.
88
What is a Locum Agreement?
Ensures cover in the case of long-term absence, death, holidays or unavoidable events.
89
What document relates to Registration of Regulated Firms?
RICS Rules for the Registration of Firms, Version 7, February 2022.
90
What is required of a firm to register with the RICS?
a. Provides surveying services to the public
b. Operating in Regulated Areas
c. 50% of firms principals are RICS members.
91
Who is the RICS president?
Clement Lau
92
Who is the RICS president elect?
Anne Gray
93
Who is the Acting Chief Executive?
Richard Collins
94
Who is the Senior Vice President?
Tina Paillet
95
What is the Levitt Review?
A review commissioned to review RICS governance, necessary due to concerns over a financial audit and unfair treatment of 4 non-executive members of the governing council who raised issues.
96
How many recommendations in Levitt review?
18
97
What is the Bichard review?
Independent review of the RICS purpose, governance structure and strategy.
98
List some of the Levitt review recommendations.
1. Updates to be given to Governing Council following every meeting
2. Updates to Governing Council is responsibility of the Chair of the Board, not CEO or senior members.
3. Management Board members should raise matters with Governing Council without chairs permission.
4. Overhaul of the whistleblowing structure, with a 3rd party organisation.
5. Public apology to the 4 non-executive members.
99
How many recommendations in the Bichard review?
36
100
1What legislation governs Health and Safety?
Health and Safety at Work Act 1974
101
What are the 3 objectives of Bichard review?
1. Create clarity about RICS’ purpose given its current position and the context within which the profession and institution operate.
2. Make proposal for future, to stand as beacon for best practice in governance, transparency and accountability.
3. Propose new leadership and governance body, ensuring strategy, structures, cultures and resources appropriate.
102
If you are a new business, with no preceding turnover, how much cover do you take?
Base figure on estimated turnover.
