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Ethics > Ethics > Flashcards

Ethics Flashcards

1
Q

How many MRICS are there?

A

137,500

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2
Q

What is the governance structure of the RICS?

A
  • Privvy Council
  • Governing Council - 21 members

Governing Council has various boards including;

  • Regulatory Board
  • Management committee
  • Audit Committee
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3
Q

What are the levels of membership?

A
  1. FRICS
  2. MRICS
  3. AssocRICS
  4. Trainee/Student
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4
Q

How do you become an FRICS?

A
  1. 5 or more years at MRICS
  2. A leadership role
  3. Professional/technical achievement
  4. Academic achievement
  5. Raising the profile of RICS
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5
Q

What is the role of the RICS?

A

R - protect consumers through strict regulation
A - to be leading source of information and advice
T - maintain high standards of education and training

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6
Q

What are the benefits of becoming and RICS member?

A

MA - Market Advantage
R - recognition
K - knowledge (CPD, guidance notes etc)
S - status (provides client confidence)
N - network (members etc)

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7
Q

Name some Professional Obligations of members?

A
  1. CPD requirements
  2. Cooperate with the RICS
  3. Promptly provide all information requested by the Statutory and Regulation board
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8
Q

What are the professional obligations of firms? 🥲

A
  1. Publish a complaints handling procedure, alternative disputes resolution provider and complaints log
  2. To ensure all work is covered by PII
  3. Process in place should the sole principal be unable to work
  4. Promptly provide all information requested by the statutory and regulation board
  5. Cooperate with the RICS
  6. Display on business literature that they are regulated by the RICS
  7. Report any RICS matter to the RICS
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9
Q

What are the RICS rules for regulation 2022?

A

If 50% of principles are MRICS, the firm has to be regulated.

If only 25%, then can apply to be regulated.

Must have a nominated responsible principal.

Must include a prescribed text in TOE explaining what being regulated by the RICS means.

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10
Q

What are the benefits of being regulated?

A

Confidence
Professionalism
Security

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11
Q

When would the disciplinary procedure be triggered?

A
  1. Someone complaining to the RICS
  2. Allegation by a client or third-party
  3. Information received by the RICS
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12
Q

What are the three levels of disciplinary action in the RICS?

A
  1. Action by the head of regulation
  2. Regulatory tribunal/disciplinary panel
  3. Appeal panel
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13
Q

What is the purpose of the ethical decision tree?

A

To provide members with a framework of questions to ask themselves when faced with a potentially unethical situation

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14
Q

Give me some examples of questions in the decision tree?

A

Is it legal?
Do you have enough information on the issue?
Have you consulted the appropriate people?
Would you be content for your actions to be made public?

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15
Q

Name 3 important pieces of RICS core material (hierarchy of documents)

A
  1. International standards (Mandatory)
  2. Professional statements (Mandatory)
  3. Guidance notes (voluntary)
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16
Q

Name 2 international standards

A
  1. RICS Valuation - Global Standards, 2021 (effective Jan 2022)
  2. IPMS (2014, 2016, 2018, 2019)
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17
Q

Examples of professional statements:

A
  • Conflicts of Interest, Global, 2017
  • Code for Leasing Business Premises, 2020
  • Countering Bribery, Corruption, Money Laundering & Terrorist Financing, 2019
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18
Q

An Example of a Guidance Note?

A
  • Surveying Safely, 2018
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19
Q

Example of a Code of Practice?

A
  • Code of Measuring Practice, 2015
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20
Q

What should be avoided when negotiating fees?

A

Price fixing, fee cutting, collusion, undercutting other firms

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21
Q

How should fees be considered?

A

Fee should be market based and agreed on an ad-hoc basis. Must be transparent with the client, especially when in receipt or offering referral fees

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22
Q

What must Terms of Engagement include?

A
  • Proposed fee
  • Calculation of Payment of Expenses
  • State that complaints handling procedure is available upon request
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23
Q

What are the 3 steps when issuing ToE?

A

(CIT)

  • Check professionally Competent
  • No conflicts of Interest
  • Confirm Terms of engagement in writing and get written approval from the client before starting work on the instruction
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24
Q

What must be included in ToE for agency work?

A

Compliance with S.18 of the Estate Agents Act 1979; and Money Laundering Regulations 2017 (as amended) 🥴

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25
Q

What does the Consumer Rights Act 2015 state?

A

There’s a cooling off period of 14 days from the date of agreement of ToE

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26
Q

When should you decline an instruction?

A
  • Conflict of Interest
  • outside sphere of Competence
  • fail to agree of ToE
  • fail to provide AML requirements
  • PII cap cannot be agreed
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27
Q

What are examples of types of conflicts of interest?

A
  1. Financial interest
  2. A personal interest
  3. Commercial relationship
  4. Acting on both sides of a transaction
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28
Q

What is a conflict of interest?

A

A conflict of interest arises when a member or firms’ independence and impartiality threatened due to the existence of a conflict between two clients

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29
Q

What is conflict avoidance?

A

When you do not accept the instruction

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30
Q

What is conflict management?

A

Steps are agreed to manage the conflict e.g. information barrier with written agreement from all parties

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31
Q

What is informed consent?

A

Can only be given in writing if there’s transparency about all factors and a clear understanding.
Surveyors should only seek informed consent if satisfied that all parties are best served by doing so.

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32
Q

What are the three types of conflict of interests?

A
  • party conflicts
  • own interest conflict
  • confidential information conflict
33
Q

What is the role of an information barrier?

A
  • Must be robust
  • Must take reasonable steps to operate effective barrier
  • Surveyors on each side must be different and physically apart e.g. different floors of a building, different support teams
  • all info securely stored
  • Keep audit trail and this must be overseen by the firms compliance officer
34
Q

What does the RICS Professional Statement (Conflict of Interest - UK commercial property market investment agency, 2017) relate to?

A

Only UK commercial investment agency work where a specific risk has been identified

35
Q

What is dual agency?

A

Where an agent has a contractual relationship with the seller and the buyer - MUST NOT BE UNDERTAKEN (Jan, 2018)

36
Q

What is multiple introductions?

A

Where an agent has competing contractual relationships with several buyers

37
Q

What is incremental advice?

A

The agent is approached by another party to provide advice e.g. an agent is acting for the seller and the buyer has asked for valuation advice.

Members must only provide if consent is given and an information barrier in place

38
Q

What is a personal/own interest conflict?

A

Must be declared promptly before accepting instruction
Section 21 of the Estate Agents Act 1979

39
Q

What do the RICS bye-laws state on confidentiality?

A

Client confidentiality must be maintained for all client affairs

40
Q

How long to files need to be kept securely

A

6 years

41
Q

What is your firms complaints handling procedure?

A
42
Q

What is the RICS Guidance Note and what does it outline?

A

Complaints Handling, 2016

  • Procedure must be approved by the RICS
  • CHP issued to client with ToE
  • Complaints log with details, progress & outcomes
  • RICS approved alternative disputes resolution
  • process must be clear, quick, transparent & impartial
43
Q

When does the RICS get involved in complaints handling?

A

If a member fails to respond to the complaint or prevents the party gaining access to an independent redress mechanism

44
Q

What must dole practitioners do for complaints handling?

A

Nominate a surveyor in another firm to act as their Complaints Handling Officer

45
Q

What are the 4 requirements of CPD?

A
  • Minimum if 20 hours per year
  • 10 hours of formal CPD
  • Maintain a relevant and current understanding of Rics Rules of Conduct
  • Record all CPD using the RICS CPD Management System by 31st Jan every year
46
Q

What is formal CPD?

A

Structured learning e.g. online training and professional courses

47
Q

What is informal CPD?

A

Self- managed and related to work e.g. private study/on the job training

48
Q

What is the purpose of Professional Indemnity Insurance (PII)?

A

It’s a mandatory requirement to protect clients, surveyors and 3rd parties against negligence claims

49
Q

When would PII be used?

A

If the duty of care has been breached

If a claim for damages arises

50
Q

What’s are the RICS rules for PII?

A

An adequate and appropriate level, proportionate to the instruction

Policies must be underwritten by a RICS insurer

PII Certificate must be sent to RICS annually

PII needed for pro-bono work

51
Q

What are the minimum levels of PII?

A

Firms turnover is £100,000 or less = £250K

£100k-£200K = £500K

Firms turnover is £200,000 or more £1,000,000

52
Q

What is the relevant RICS Guidance note on PII?

A

Risk, liability and insurance, 1st edition (2021)

53
Q

When would you claim for negligence damages?

A

When the duty of care has been breached and there is a LOSS

54
Q

What is the current limitation period for negligence under the Limitation act 1980?

A

Contract - 6 years from date of negligence
Tort - 6 years from the date the claimant suffered the loss

55
Q

How do you avoid negligence?

A

Clearly understand and outline the clients objectives in the ToE

Ensure you are competent

Refer to RICS standards and Guidance Notes

Take notes and photos for each instruction

Ensure you are up to date with your knowledge (CPD and legislation)

Cap the PII in all ToE

56
Q

What are the procedures for handling client money?

A
  1. Client accounts must be held separately and identifiable
  2. ‘Client’ must be labelled on the bank account
  3. Money must be available on demand
  4. Payment of interest and account must be in credit
  5. Accurate records and a current balance must be available
  6. Money can only be withdrawn is properly required
57
Q

When can the RICS step in when handling client money?

A

RICS has a Clients money protection scheme for claims from clients which provides last resort where a firm is unable to repay a clients money

58
Q

When starting a new practice, what do you have to report for RICS compliance?

A

😵

  1. Inform RICS of a new practice and Firm Details Form
  2. Appoint a Responsible Principal
  3. Register for Regulation
  4. PII and send details to RICS
  5. Procedures for Client Money Handling, including Protection Scheme
  6. Register for Valuer Registration Scheme of undertaking Red Book Global Valuations
  7. RICS approval for Complaints Handling Procedure
  8. Set up a complaints log
  9. Complaints Handling Officer
  10. Use logo kit
  11. Ensure CPD logger and staff training plan
  12. Complete RICS Annual Return yearly
59
Q

What do you have to report for statutory compliance?

A
  1. Disclose business name
  2. Disability discrimination compliance (Equality Act 2010)
  3. Bribery Act 2010 compliance
  4. Appoint a Money Laundering Officer
  5. Health and Safety compliance (Health & Safety Act, 1974)
  6. Register for Data Protection (GDPR, 2016 and Data Protection Act, 2018)
  7. Inform HMRC for VAT and Tax
60
Q

What do you do when closing a practice?

A
  1. Inform the RICS
  2. Inform clients at earliest opportunity and hand over arrangements
  3. Return any money to clients
  4. Inform insurers and PII run off cover for min. 6 years from the expiry of the policy
  5. Retain client files for min 6 years
61
Q

What is EB’s Gifts and Entertainment Policy?

A
62
Q

What is the Bribery Act 2010 and what are the 6 principles it is based on?

A

Aims to reduce bribery in the UK and abroad

  1. Proportionality
  2. Top level commitment
  3. Risk assessment
  4. Due diligence
  5. Communication
  6. Monitoring and review

Hospitality not included as long as it’s proportionate and reasonable

63
Q

What is a bribe?

A

Giving, offering, promising or receiving an advantage such as payment, gift or service for an action which is illegal or breach of trust

64
Q

What are the penalties for accepting a bribe?

A

Policed by the serious fraud office.

Max penalty of 10 years imprisonment and/or an unlimited fine for individuals.

Firms face and unlimited fine

65
Q

What are the four offences of bribery?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent
66
Q

What is money laundering?

A

Money laundering is Win proceeds of criminal activities are disguised or coverted and then realised as legitimate assets

67
Q

Money laundering, terrorist financing and transfer of funds (information on the payer) regulations, 2017 (as amended in 2019).

What are some of the key provisions of the regulations?

A

These regulations cover estate agency work and relevant financial business work inside and outside of the UK by a firm

  1. Requirement to have a written money laundering and terrorist financing risk assessment
  2. Implement policies, systems and controls to address the risks
  3. Adopt appropriate Internet controls
  4. Provide staff training
  5. Comply with a new customer due diligence requirements
  6. Comply with requirements relating to PEP’s
  7. Ensure appropriate recordkeeping
  8. AML checks To confirm identity of proposed purchaser and check source of funds before contracts exchanged
  9. Include additional high risk factors when assessing need for enhanced due diligence
68
Q

What are the steps for customer due diligence?

A

Identify the client and verify identity with reliable independent source (E.G. passport)

Identify beneficial owners of the client (Using companies house).

For a company: name, company number and address of registered office. The names of directors are required unless company is listed on the regulated market (London stock exchange).

Obtain information on the purpose and intended nature of the business relationship and the proposed funding arrangements

69
Q

What is enhanced due diligence?

A

For those in high-risk countries (E.G.Russia/Siri/BVI) politically exposed persons (PEP’s)

More detailed examination of the background and purpose of the transaction

70
Q

What are the penalties of assisting with money laundering?

A

Max.14 years prison sentence and/or unlimited fine

71
Q

What are the penalties of failing to report suspicion or tipping off a person under suspicion of money laundering?

A

Max.five years in prison and/or unlimited fine

72
Q

What are some red flags to look out for on money laundering?

A

Inability to provide identity documents.

Changes to parties involved in transaction.

Unusual transactions E.G.unexplained urgency.

Payment in unusual currencies.

73
Q

What is the proceeds of crime act 2002?

A

Provides powers for enforcement authorities to recover money and other assets deemed to be the proceeds of crime

74
Q

What are the three main areas of offence under the proceeds of crime act 2002?

A
  1. Concealing criminal property
  2. Arrangements: facilitating the acquisition/retention of criminal property
  3. Acquisition: use and position: if a person acquires, uses or has possession
75
Q

What is the economic crime (transparency and enforcement) act 2022?

A

Includes measures for a beneficial ownership register of overseas entities owning property in the UK. Strengthens investigation powers regarding unexplained wealth orders. Allows the easier prosecution of those involved in sanctions-busting inability or unwillingness of parties to provide identity documents

76
Q

What is the RICS professional statements – countering bribery, corruption, money laundering and terrorist financing, 2019

A

Set out the mandatory, globally applicable requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing. It is divided into three parts

77
Q

What are the mandatory requirements for the countering bribery, corruption, money laundering and terrorist financing 2019?

A

Bribery and corruption – standard bribery and corruption regulations.

Money laundering and terrorist financing – all points mentioned previously

78
Q

What is the guidance setting out supporting good practice for the counter in bribery, corruption, money laundering and terrorist financing, 2019 RICS professional statement?

A

Practical guidance must be in place such as:

Written policy in place for, and senior management to take control of, the procedures.

Publish a code of behaviour for staff and staff training.

Encourage transparency. Set up a gift register. Keep up-to-date with the legislation.

Ethics (4 decks)

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