Ethics Flashcards
Rule 5 is 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. Provide an example behavior
It is important to not undermine public confidence with public statements so I ensure I am careful about what I post on social media
Rule 4 is members and firms must treat others with respect and encourage diversity and inclusion. Provide an example behavior
It is important to respect rights of others and treat others with courtesy. Therefore I ensure I am always polite, professional and understanding to everyone.
Rule 3 is members and firms must provide good quality and diligent services. Provide an example behavior.
It is important to understand the clients needs and objectives. Therefore when the new service charge budget was done for YE2024 which is apportioned on ratable value it was clear that due to the revaluation some tenants saw exceptionally high increases. I communicated with my client and advised we should look into amending this to weighted floor area if possible. Throughout this project I kept in touch with the client providing them updates and arranging meetings for further discussions and analysis.
Rule 2 is members and firms must maintain their professional competence and ensure that services provided by competent individuals who have necessary expertise. Provide an example behavior of this.
It is important I maintain and develop my knowledge and skills through my career and I therefore ensure I take part in regular CPD sessions that provide me updates or refreshers on regulations, legislation and the market.
Rule 1 is members and firms must be honest, act with integrity and comply with their professional obligations including obligations to RICS. Provide an example behavior of this.
Identifying potential COI.
When I was in vals, if a new instruction came in I would check my companies internal database to ensure there wasn’t a conflict. If I was still unsure I would send an E-mail out to all and wait 7days for a response.
Why do you want to be a RICS surveyor
Being a chartered surveyor informs the clients that my work is to be of a high professional standard which is upheld by ethical rules and regulations that I have to follow.
What are the benefits to being a regulated firm
It provides clients with confidence as they are monitored by the RICS.
Professionalism as they have to provide clear impartial advice and
security as they have to have a CHP, access to free independent redress and PII cover.
What are a companies requirements to be able to register with RICS
At least 1 RICS member
Provide an annual return confirming compliance with obligations
If 50% of principles are RICS members it must be regulated (25% optional)
Regulated firms must use prescribed RICS text and logo within terms of engagement
What information is required for a company to register with RICS
Type of business and staffing details
Name of responsible principle
Statutory regulated activities
Nature of clients
CPH details and records
PII details
Whether the company will handle clients money
What are the mandatory professional obligations for members
Comply with CPD requirements
Cooperate with RICS
Provide all information requested by the standards and regulation board
What are the mandatory professional obligations for firms
Publish CHP including dispute resolution provider and maintain complaints log
All work covered by PII
Ensure work can continue in the event of incapacity/death or absence
cooperate with RICS
What was the purpose of new rules of conduct?
Simple structure
clear examples
Focusing on respect
Understanding evolving tech
Tackling global challenges
What are the international standards?
These are developed in collaboration with other organizations internationally and include
RICS Valuation - Global standards 2021
International Property Measurement Standards (IPMS) 2019
Name Professional statements
Countering Bribery, Corruption, Money Laundering and Terrorist financing 2019
Conflicts of Interest Global 2017
Property Measurement 2018
Service charges in Commercial Property 2018
Name Guidance Notes
Surveying Safely 2018
Risk Liability and insurance 2021
Asbestos: Legal Requirements and Best Practice for Property Professionals and Clients 2021
Name 3 steps to follow for terms of Engagement
Check professionally competent
No conflicts of interest or personal interests
Confirm terms of engagement in writing and before carrying out work
Why would you decline an instruction
Because you are not of the competent to do so
There is a conflict of interest
Terms of engagement are not signed
Don’t have sufficient facts
PII cap not agreed
What are the 3 types of conflicts
Party conflict - work on the same or related instruction
Own interest - personal
Confidential information
What are the professional ethical standards
Think HCRPD
To act with honesty, integrity and to comply with personal, professional and RICS obligations
To ensure you are competent to carry out the work and it is within my expertise
To treat others with respect and encourage diversity and inclusion
To act in the publics best interest
To provide good quality and diligent service
What are the 3 main roles of the RICS
Maintain high standards of education and training
Protect consumers through strict regulation of Professional standards
To be the leading source of information and independent advice within property.
Who is the president and current (interim) cheif exec of RICS
Ann Gray (01/01/2023)
Richard Collins
How would you handle a conflict of interest?
Decide if it can be managed
If it can I ensure that all parities are happy to proceed and would request this in writing.
I would then ensure an information barrier is in place, either a team would work from home or a different office.
What are the common AML red flags
Will not provide appropriate ID
Changes to parties involved in the transaction
Unusual transactions
Payment of fees in unusual currencies
What are AML penalties?
Assisting - Max 14 years prison and/or unlimited fine
Tipping off - Max 5 years prison and/or unlimited fine
What checks need to be done to prevent AML
Due diligence checks such as
Identification - driving license /passport
For companies - company house check with company number
What is money laundering
When proceeds of criminal activities are disguised or converted and then released as legitimate assets
What are the bribery penalties
It is policed by Serious Fraud Office with Max 10 year prison and or unlimited fine
What are the 4 offences of bribery
Bribing
receiving a bribe
Failing to prevent bribery
Bribing a foreign public official
What are the 6 bribery principles
Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitoring and review
What is a bribe
It is the act of giving, offering, promising or receiving of an advantage such as gift or service for an action which is illegal or breach of trust
How do you close a practice
Notify the RICS
Notify clients and provide them with a reasonable hand over period
Return clients money
Inform insurers and have PII run off cover
Retain client files for 6 years
What are the statutory compliance to start a new practice
Disclose business name
Equality act 2010 compliance
Financial services compliance
Bribery Act 2010 compliance
Appoint AML officer
H&S compliance
Asbestos register
Fire safety compliance
Inform HMRC for VAT and tax purposes
Employment law compliance
How to start a practice in line with RICS compliance
Notify the RICS by completing a firm details form
Appoint responsible principal
Register with RICS for regulation
Arrange PII cover
Set up and have approved by RICS a CHP
Set up complaints log
Appoint CH officer
Use RICS logo kit
Plan for succession/future running
Ensure CPD logged
Complete annual return form to RICS
How do you handle clients money
Must be kept separate and clearly identifiable
‘Client’ is on the account
Client must be able to have money on demand
Payment of interest agreed
Regular recs carried out of bank account
accurate records kept
Annual audits done
What are the minimum PII requirements
This is mandatory for surveyors
protects against negligence claims
All policies must be RICS approved
It is based on turnover
Anything up to £100,000 = £250,000 cover
£100,001 - £200,000 - £500,000 cover
£200,000 + = £1m cover
What are the 4 requirements of CPD
20 hours carried out each year
At least 50% formal
To be logged on the RICS system by 31/1 each year
Maintain rules of conduct during rolling 3 year period
What is minimum CHP
Notify client of the complaint and respond to the complaint within 7 days
Investigated within 28 days
Procedures and timescales recorded.
Complaint must be in writing
If unresolved then will need to move to ADR
What are the key factors of a complaints handling procedure
Details set in RICS guidance note on Complaints Handling 2016
Firms CHP must be approved by RICS
Must notify PII of complain as could lead to negligence claim
CHP should be in terms of business
Maintain a complaints log
ADR must be included within CHP
Define conflict avoidance and conflict management
Avoidance is deciding to decline an instruction where as management would be accepting an instruction and putting procedures in place such as an information barrier.
What is a conflict of interest
It arises when a member or firms independence and impartiality is threatened due to the existence of a conflict between 2 clients
Examples are
Financial
Personal
Commercial
Acting on both sides of a transaction
What are the RICS document for rules
RICS Rules of Conduct 2021 effective Feb 2022
What is the professional statements
RICS Global Professional Statement on Conflicts of Interest 2017 effective Jan 2018
RICS Professional Statement on Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019
When valuing a retail park in Bournemouth you mentioned the Client did not want you disclose information. How did you carry out this task?
I prepared the agents details that I wanted to speak to and listed the properties to discuss
I made a list of questions I wanted to ask
I also prepared a response if they asked why I was calling. I advised them that I am doing a valuation for a retail park. If they asked for more details, I apologized and advise I am unable to disclose the location of that property but would appreciate it if you could provide me with details in order to help with this valuation.
When valuing a retail park in Bournemouth you mentioned the Client did not want you disclose information. What other locations did you contact?
As there were not many other retail parks within Bournemouth I had to look for ones in similar locations that had similar links, popularity and business economy such as Poole, Sailsbury and Southampton
When valuing a retail park in Bournemouth you mentioned the Client did not want you disclose information. What comparable did you use?
For the rental evidence we had around 10 recent transactions on the park which we used as well is 5 or 6 in negotiations. For the investment evidence we had around 10 retails parks that had sold recently within Basingstoke, Bicester and great Yarmouth
When valuing a retail park in Bournemouth you mentioned the Client did not want you disclose information. What was the valuation details
£186m with 5.35% equiv £337/sq ft
When valuing a retail park in Bournemouth you mentioned the Client did not want you disclose information. What is the current yield?
6-6.25%
When carrying out a valuation you did a conflict check. How did you do this?
I used the companies internal database Dynamic to search the clients company name. This did not show a conflict, to be safe I sent an e-mail to all and allowed 5 working days for someone to respond
When valuing a retail park in Bournemouth you mentioned the Client did not want you disclose information. What would you have done if a conflict arose
I would have let those involved in the conflict what the conflict was and would allow them to decide if they would like to proceed.
When a conflict arises how do u manage it?
I would need this in writing from all parties. I would then put in place an information barrier
When valuing a retail park in Bournemouth you mentioned the Client did not want you disclose information. What steps would be included in an information barrier
steps such as working from a different office ensuring I am not in contact with those involved with the other party. Password protected folders on the system and ensuring I lock away any information relating to the work at the end of the day.
When managing Telford you was discussing rent and the tenant mentioned other peoples rent. Can you explain this situation
Yes, I was discussing a tenants and he quickly advised he couldn’t afford the rent and that he was aware other tenants that are bigger brands pay more than him. I assume he was using this as part of his argument to pay less rent and then proceeded to ask what his neighbor was paying. I advised I am unable to disclose this information as it is confidential that I can only discuss his situation as it would be unethical to talk about others.
When managing Telford you was discussing rent and the tenant mentioned other peoples rent. If they had carried on discussing others rent what would you have done
I would have politely advised him that I am unable to continue this conversation if he persisted but this would not be beneficial to him as we need to come to some arrangement to clear these arrears before they become out of hand.
Why did the Bichard review happen?
In 2018 - 2019 a number of articles alleged that the RICS tried to suppress a critical internal report into finances and then unfairly dealt with those who had sought to explore the issue
Who did the independent review
Alison Levitt QC in 2021
What did Alison Leviit QC conclude
the 4 board members were wrongly dismissed. One of these recommendations was to convert the internally led review to an external review of purpose, governance and strategy.
What was the purpose of the Bichard review?
To clarify the purpose of RICS
recommend on governing structure
Provide proposals for the incoming leadership and governing body.
Bichard review What were the recommendations
Focus on public interest, amend the Royal Charter and create a public interest panel to advise governing council
Maintain self-regulation
Increase focus on diversity and inclusion
renewed focus on younger members
Independent reviews of RICS governance every 5 years
Simple, clear, accountable governance structure
Bichard Review. What are the 5 key themes
Governance
Strategy
People
Culture and Values
Member service
What are the 5 benefits of being an RICS member
S R M K N
Status
Recognition
Market advantage
Knowledge
Network
How many members within RICS
140,000 members in 146 countries
