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APC Revision > Ethics > Flashcards

Ethics Flashcards

1
Q

Why do you want to become a Chartered Surveyor?

A
  1. Status
  2. Recognition
  3. Market Advantage
  4. Knowledge
  5. Network

“I would like to become a member of the Royal Institute of Chartered Surveyors because it would provide me with increased credibility in the eyes of my clients, help me maintain and further my professional competency, and provide me with access to a network of 130,000 property professionals worldwide.”

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2
Q

When was the RICS Founded?

A

1886

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3
Q

When was the Royal Charter established

A

By the Privy Council in 1881

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4
Q

How do you become a Fellow of the RICS?

A

(1) 5 years or more as an MRICS
(2) A leadership role in the industry
(3) Professional Technical Achievement
(4) Academic Achievement
(5) Raising the profile of the RICS

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5
Q

Who is the Current President of the RICS?

A

Ann Gray FRICS from 1 January 2023

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6
Q

What is the Governing Structure of the RICS?

A

Governed under the terms of the Royal Charter by various internal councils, boards and associations

  • Governing council runs the RICS
  • Supported by various management boards who report to the governing council
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7
Q

What are the 4 membership levels (starting with the most junior)?

A
  • Trainee/Student
  • AssocRICS
  • MRICS
  • FRICS
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8
Q

What are the 5 RICS Rules of Conduct 2021 (Effective, Feb 2022)?

A
  1. Members and firms must be honest and act with integrity
  2. Members and firms must maintain their professional competency
  3. Members and firms must provide good quality and diligent service
  4. Members and firms must treat each other with respect and encourage diversity and inclusion
  5. Members and firms must act in the public interest and maintain public confidence in the profession

Remember CHIRPS

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9
Q

What’s the Role of the RICS, according to the RICS Global and Professional Ethical Standards (2015)?

A
  • High Standards of Education and Training.
  • Protect Consumers through regulation of professional standards.
  • Leading Source of Information and independent advice in built environment
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10
Q

What are the five principles of the RICS Regulation for Members and Firms (2007)

A
  1. Proportionality
  2. Accountability
  3. Consistency
  4. Targeting - focused approach on problem/issue
  5. Transparency

Remember PACTT

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11
Q

What are the Benefits of Being an RICS Regulated Firm?

A
  • Confidence
  • Professionalism
  • Security

Remember CPS

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12
Q

What are the Requirements for Registration as an RICS Regulated Firm?

A
  • Type of firm - firm detail form
  • Statutory regulated activities
  • Nature of clients
  • Complaints Handling Procedure
  • PII
  • Clients Money

Remember NSPCTT

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13
Q

What are the 3 rules for Members that form Appendix A of the RICS rules of Conduct for Firms (2021)?

A
  1. Comply with CPD Requirements
  2. Cooperate with the RICS
  3. Promptly provide all requested information by the Standards and Regulation Board
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14
Q

What are the 7 rules for Firms that form Appendix A of the RICS rules of Conduct for Firms (2021)?

A
  1. Complaints Handling Procedure
  2. PII Cover
  3. Sole principle - make appropriate arrangements
  4. Cooperate with RICS
  5. Promptly provide all requested information by the Standards and Regulation Board
  6. Display that you are regulated by the RICS
  7. Under any matter that they are required, to report under the Rules for the Registration of Firms
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15
Q

Is your firm regulated by the RICS, and if so what level of PI insurance do you have?

A

SW is regulated by the RICS, we have a maximum PII of £20M. No cap on liability with SLAs, can place a cap on jobs without SLAs.

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16
Q

If a breach of Conduct is Referred to the Disciplinary Hearing, what Penalties can be Imposed on the Breaching Party?

A

Referral to the Disciplinary panel is used for more serious breaches, the head of regulation can consider that a hearing is required under the discipline rules, 50% of this panel are lay members (i.e. not RICS). Penalties can be:

(1) Issue a consent order

(2) Impose an unlimited (but proportionate) fine for each breach.

(3) Conditions on Continued Membership of the RICS.

(3) Expulsion from Membership or Remove a firm.

(5) Require publication of the results of a hearing in Modus magazine, on the RICS website and in the local newspaper of the area where the offending firm is located.

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17
Q

Rank RICS Regulation, and state whether they are Mandatory or Voluntary (There are 5, from most important to least)

A
  1. International Standards (Mandatory)
    - IVS (2017)
  2. Professional Statements (Mandatory)
    - Conflicts of interest
  3. Practice Statements (Mandatory)
    - Very few of these. Home Buyer Report 2016
  4. Guidance Notes (Voluntary
    - Surveying Safely 2018
  5. Codes of Practice
    - Measurement 2015
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18
Q

What 3 things should you do prior to undertaking an instruction?

A

Conflicts
Competence and independence
Terms of Engagement

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19
Q

Where might a conflict arise?

A
  • Financial interest
  • Personal interest
  • Commercial relationships
  • Acting on both sides of a transaction
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20
Q

In what circumstances might a conflict of interest not cause you to decline an instruction?

A

When it is believed that despite the conflict it is in the bets interest of all involved to proceed with informed consent

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21
Q

According to the RICS Professional Statement on Conflicts of Interest, 2017, what three types of conflict might arise?

A

1) Party Conflict
2) Own Interest Conflict/Personal Conflict
3) Confidential Information Conflict

Remember POC

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22
Q

How might a conflict of interest be managed, should you receive written consent and proceed with an instruction

A
  • Information barriers
  • Ensure separation of the two professionals involved
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23
Q

What does RICS Professional Statement Conflicts of Interest say about dual agency?

A

It should not happen under any circumstances

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24
Q

What does RICS Professional Statement Conflicts of Interest say about Multiple Introductions

A

This can happen - in all circumstances the Terms of Engagement must state whether the instruction is on an exclusive or non-exclusive basis

25
Q

What does RICS Professional Statement Conflicts of Interest say about Incremental Advice?

A

Advice can only be provided where there is informed consent and information barriers are created

(Incremental advice example: agent acting for the seller in relation to a disposal is approached by the buyer, or its lender, to provide a valuation.)

26
Q

How long should you retain clients files prior to securely destroying them?

A

6 years

27
Q

How many hours of CPD must an RICS member do each year?

A

20 hours (10 formal)

28
Q

Are there any Rules concerning CPD and Professional Ethical Standards

A

Yes

20 hours (10 informal)
Members required to take CPD related to the Global Professional and Ethical Standards every 3 years

29
Q

What RICS Professional Statement includes Money laundering?

A

RICS Professional Statement - Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)

30
Q

What is the penalty for Bribery?

A

Up to 10 years in prison

31
Q

What legislation allows authorities to recover the proceeds of crime in the UK?

A

The Proceeds of Crime Act (2002)

32
Q

What are the penalties for assisting in Money Laundering?

A
  • 14 years in prison
  • Unlimited fine

If you fail to report money laundering or tip someone off…

  • 5 years in prison
  • Unlimited fine
33
Q

What report should a firms money laundering reporting officer produce should they suspect suspicious activity and where would they send it?

A

Suspicious Activity Report (SAS)
- Send to NCA (National Crime Agency)

34
Q

What position/role must each firm have in place under Money Laundering Terrorist Financing and Transfer of Funds 2017?

A

Money Laundering Reporting Officer

35
Q

What is a PEP?

A

Politically Exposed Person
They present a higher risk of being involved in bribery or corruption

36
Q

What piece of UK legislation covers Money Laundering in relation to estate agency work?

A

Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

37
Q

What are your companies policies on Bribery?

A
  • Gifts register and guidlines
  • Never to give or receive cash equivalents with a value up to £50
  • If you invite a client or attend a meal the value must be less than £125 per head
38
Q

What are the 6 key principles of the Bribery Act 2010

A

1) Proportionality
2) Top level commitment
3) Risk Assessment
4) Due diligence
5) Communication
6) Monitoring

Remember PTRDCM

39
Q

What are the four offences under the Bribery Act 2010

A

1) Bribing
2) Receiving a Bribe
3) Bribing a foreign public official
4) Failing to prevent bribery

40
Q

What is a bribe?

A

Dishonestly persuading someone through inducement

41
Q

What are the gender pay gap reporting regulations?

A
  • Over 250 employees are requirement to state the difference in pay between male and female employees to Government Equalities Office
42
Q

How were the rules for registration for a newly regulated firm changes?

A
  • From April 2020, no longer require 50% of the firms principles to be RICS qualified members. This has been lowered to 25%

If a firm is unable to meet this
- they can apply to be registered at the discretion of the RICS Head of Regulation
- They must have a plan to ensure compliance in the near future

43
Q

What are the requirements for a client account when handling client money? (8 Mandatory)

A

SIMPLIFY THIS ANSWER

(1) Confirm that client’s money is to be held in a client account (including bank account details), that the firm has exclusive control over.

(2) Ensure client money account contains no other funds, and funds withdrawn in error are replaced.

(3) Not to hold office money in the account, unless it is in receipt of mixed monies

(4) All client money accounts include the word “client” in the name.

(5) Ensure money held in a client account is immediately available even at the sacrifice of interest.

(6) Only withdraw out of a high interest (penalty-bearing account) with written consent from the client.

(7) Confirm account operating conditions with bank (No set-off for other firm accounts, no mixing of funds)

(8) Ensure that when a client requests it, money is held in an account that the firm and client have access to. (Has to be an account established by the client, not the firm).

44
Q

What RICS documentation is there on Client Money?

A

RICS Professional Statement on Client Money Handling 2019

45
Q

What happens is you have surplus client’s money in client account?

A
  • If after 6 years no claimant has come forward (and every effort has been made to identify that person)
  • It can be donated to a registered charity
  • Example, LionHeart
46
Q

What is the difference between a claim in contract and a claim in negligence?

A

Contractual claim = claim by client

Claim in negligence = by third party (the surveyor owed a duty of interest)

The Limitations act limits claims…
- Contractural claims = 6 years from omission
- Negligence claims = 15 years from negligence

47
Q

Has the RICS published anything on negligence and PII?

A

Yes - RICS Risk, Liability and Insurance in Valuation Work (2021)

Provides advice on courts position on valuer liability and PII in relation to third party reliance, liability caps and contractual terms

48
Q

What is the RICS Requirement for Run-off Cover once a firm closes

A
  • Firm maintains at least £1M cover of 6 years

Recommended longer as you are liable for negligent acts for 15 years under section 14A of the Limitations Act (1980)

49
Q

What else does the RICS say about PII?

A
  • Seek cover from RICS approved insurer
  • Have a retroactive policy
  • Provide details of their cover as part of the firms annual return to RICS
50
Q

What level of PII does the RICS require practicing surveyors to have?

A

The RICS requires, according to RICS Requirements for Professional Indemnity Insurance (2019); that for firms with a turnover of less than £100,000, they have a professional indemnity cover of at least £250,000 for each claim, for firms where turnover us between £100,001 and £200,000 they require cover for each and every claim of £500,000 plus, and for firms where turnover exceeds £200,001, they are required to have a cover of at least £1,000,000 for each and every claim.

51
Q

What level of PII does your firm have?

A

ask Louie

52
Q

Can you give an example of a case in which the acceptable margin of error of +/- 15% was adopted to uphold the decision in favour of the valuing surveyor?

A

Dunfermline Building Society v CBRE (2017)

Remember Dundermifflin - THE OFFICE!

53
Q

What did Singer & Friedlander Ltd. v J D Wood (1977) establish?

A

That for relatively simple valuations there is a smaller margin for error and more complicated valuations there is a greater margin of error acceptable.

54
Q

What is the legally acceptable Margin of Error in Property Valuation?

A

As found in Lincoln vs CB Richard Ellis (2010), it was established that there was an acceptable margin of erro of 5% for single resi, 10% for single commercial and 15% for more complex holdings

55
Q

What would you consider if you were invited to a sporting event?

A
  • The value of the gift
  • Scope of ongoing and future works
  • Is it appropriate
  • I would ensure any gift accepted would not be during a current instruction and any fees payable would already be made
56
Q

How did you Carry Out a Conflict of Interest Check?

A
  • Using company internal software
  • Search for any instructions relating to the following
  • address, client, tenant and the name of the borrower
57
Q

When starting a new practice what would you do in regard to VAT?

A

You must inform HMRC for VAT and Tax registration – current threshold is £85,000 p.a. in turnover.

58
Q

What is ‘informed consent’?

A

Consent to carry on with an instruction that involves a conflict of interest. Can only be given in writing by the party if it is entirely transparent about any material factors. Party must understand what they are doing. Surveyors should only seek informed consent if satisfied that all parties are best served by doing so.

APC Revision (6 decks)

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