Ethics

Question 1

Why do you want to become a member of RICS?

Answer 1

My professional status will provide client confidence, its a promotion of my professional excellence and will give me a competitive market advantage. the RICS are internationally recognised with knowledge sharing and CPD. It will provide me with access to worldwide professionals.

Question 2

What is the role of RICS?

Answer 2

RICS’ main roles are: to maintain the highest standards of education and training

to protect consumers through strict regulation of professional standards

to be the leading source of information and independent advice on land, property and construction and associated environmental issues.

Question 3

What are the key functions of RICS?

Answer 3

As a globally recognised professional body, everything the RICS do is designed to effect positive change in the built and natural environments.

Through our respected global standards, leading professional progression and our trusted data and insight, we promote and enforce the highest professional standards in the development and management of land, real estate, construction and infrastructure.
*Advancing the highest ethical and technical standards for professionals in land, property and the built environment
*Protecting and providing benefits to consumers by enforcing standards and codes of best practice
*Providing expert impartial advice to governments, business and the public
*Equipping RICS members with leading edge advice, market insight and professional training
*Promoting RICS status and standards in key worldwide markets as the mark of property professionalism.

This commitment to act in the interest of society is in everything we do and continues to be our guiding principle.

Question 4

What is a Royal Charter?

Answer 4

A Royal Charter is an instrument of incorporation, granted by The King, which confers independent legal personality on an organisation and defines its objectives, constitution and powers to govern its own affairs.

This means RICS has a seat on the privy council to advise the Crown (Her Majesties
Government).
Royal Charter requires members to promote the profession for the public benefit.
- Self-regulatory
- ‘Gold standard of excellence’
RICS members need to think about ‘public benefit’ that is the Royal Charter
difference.

Question 5

Who is the current RICS president?

Answer 5

Ann Grey FRICS became RICS president in January 2023. Tina Paillet is the president elect.

Question 6

What are the 5 Rules?

Answer 6

They are the new RICS rules of conduct which is effective from 2 February 2022which is a new structure, 5 simple rules that apply to all, 3 professional obligations to RICS for members and 7 professional obligations to RICS for firms.

Question 7

What are the core professional obligations of firms and members to RICS?

Answer 7

In addition to the 5 rules according to rule 1, members must comply with 3
professional obligations to RICS.

1. Members must comply with the CPD requirements set by RICS.
2. Members must cooperate with RICS.
3. Members must promptly provide all information reasonably requested by the
   Standards and Regulation Board, or those exercising delegated authority on its behalf.

The following 7 obligations are mandatory for RICS-regulated firms.
1. Firms must publish a complaints-handling procedure, which includes an
alternative dispute resolution provider approved by RICS and maintain a
complaints log.

2. Firms must ensure that all previous and current professional work is covered
   by adequate and appropriate professional indemnity cover that meets the
   standards approved by RICS.
3. Firms with a sole principal must make appropriate arrangements for their
   professional work to continue in the event of their incapacity, death, absence
   from or inability to work.
4. Firms must cooperate with RICS.
5. Firms must promptly provide all information reasonably requested by the
   Standards and Regulation Board, or those exercising delegated authority on
   its behalf.
6. Firms must display on their business literature, in accordance with RICS’
   published policy on designations, a designation to denote that they are
   regulated by RICS.
7. Firms must report to RICS any matter that they are required to report under
   the Rules for the Registration of Firms.

Question 8

Give an example behaviour for each.

Question 9

Explain to me the new RICS Rules of Conduct - what do they replace?

Answer 9

Rule 1: Members and firms must be honest, act with integrity and comply with their
professional obligations, including obligations to RICS.
example: keep client money safe and have appropriate accounting controls, bribery and gifts, conflicts of interest.

Rule 2: Members and firms must maintain their professional competence and ensure
that services are provided by competent individuals who have the necessary
expertise.
example: stay up to date with legislation and codes of practise. only to undertake work that they have the knowledge, skills and resources to carry out competently.

Rule 3: Members and firms must provide good-quality and diligent service.
Members and firms must ensure that all data used is accurate and up to date, is kept securely, and that they have proper legal rights to use it and, where required, share it. Members and firms communicate with clients and others clearly and in a way they can understand.

Rule 4: Members and firms must treat others with respect and encourage diversity and
inclusion.
example: Members and firms treat everyone fairly and do not discriminate against anyone on any improper grounds, including age, disability, gender reassignment, marriage or civil
partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.

Rule 5: 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.
Example: Members and firms respond to complaints made against them promptly, openly and professionally. Members and firms question practices and decisions that they suspect are not right, and raise concerns with colleagues, senior management, clients, RICS or any other appropriate person, body or organisation where they believe in good faith that it is necessary to do so.Rule 1: Members and firms must be honest, act with integrity and comply with their
professional obligations, including obligations to RICS.
example: keep client money safe and have appropriate accounting controls, bribery and gifts, conflicts of interest.

Rule 2: Members and firms must maintain their professional competence and ensure
that services are provided by competent individuals who have the necessary
expertise.
example: stay up to date with legislation and codes of practise. only to undertake work that they have the knowledge, skills and resources to carry out competently.

Rule 3: Members and firms must provide good-quality and diligent service.
Members and firms must ensure that all data used is accurate and up to date, is kept securely, and that they have proper legal rights to use it and, where required, share it. Members and firms communicate with clients and others clearly and in a way they can understand.

Rule 4: Members and firms must treat others with respect and encourage diversity and
inclusion.
example: Members and firms treat everyone fairly and do not discriminate against anyone on any improper grounds, including age, disability, gender reassignment, marriage or civil
partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.

Rule 5: 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.
Example: Members and firms respond to complaints made against them promptly, openly and professionally. Members and firms question practices and decisions that they suspect are not right, and raise concerns with colleagues, senior management, clients, RICS or any other appropriate person, body or organisation where they believe in good faith that it is necessary to do so.

Question 10

What is Professional Indemnity Insurance (PII)?

Answer 10

Professional indemnity insurance (PII) is a type of insurance that protects professionals from claims of negligence or breach of duty made by their clients or third parties. PII covers the legal costs and expenses of defending against such claims, as well as any damages or costs that may be awarded14. PII is important for professionals who provide advice, consulting, or services that may cause loss to their clients.

Question 11

Can you tell me about the RICS requirements in relation to PII?

Answer 11

<100,000 needs £250,000 cover
<£100,001 - £200,000 is £500,000 cover
<£200,001 is 1 million cover

• Buy from specialist insurer recommended by RICS (e.g., Miller Insurance
  Services)
• Assigned Risks Pool – short term cover provided by RICS for regulated
  members who are unable to gain cover elsewhere.
• On each claim basis
• Retroactive claims made basis
• Run off cover (6 years)
• Full civil liability

Question 12

What is a PII aggregation clause?

Answer 12

A PII aggregation clause is a term in a professional indemnity policy that allows or requires a number of similar or linked claims to be treated as a single claim. The impact of these clauses can benefit either the insured, by capping the deductible, or the insurer, by capping the sum insured. Professional indemnity policies can be on an “any one claim” basis, which provides cover up to the full limit for each individual claim made in the period of insurance, or on an “aggregate” basis, which provides cover up to the full limit for all claims made in the period of insurance

Question 13

Can you tell me about the CPD requirements for members of RICS?

Answer 13

20 hours min
10 must be formal (verifiable learning outcomes)
Record online (or via app)
Every 3 years – rules & ethics

Question 14

Why is CPD important?

Answer 14

All members must maintain a relevant and current understanding of our professional and ethical standards.

Question 15

Tell me about the RICS’ guidance on dealing with Conflicts of Interest.

Answer 15

RICS Conflict of interest
Professional Statement
Global 2016

RICS Rules of Conduct set an overarching obligation, on both members and RICS
regulated firms, at all times to:

‘…act with integrity and avoid conflicts of interest and avoid any actions or
situations that are inconsistent with its professional obligations.’

Effective identification and management of conflicts of interest is a challenging but
essential component of professionalism.
This professional statement, which supports the RICS Rules of Conduct, also places
an overarching mandatory requirement on all RICS members and regulated firms and
specifies RICS’ expectations of how compliance with the Rules of Conduct should be
achieved.

This document is in three parts:

1. The RICS professional statement on Conflicts of Interest and Confidentiality
   sets out RICS’ mandatory rules in this area. This section also contains the
   definitions used in the professional statement.
2. Commentary: ’General commentary notes’ set out principles as to how RICS
   expects regulated firms and members to apply the professional statement.
3. Commentary: ‘Supplementary commentary notes’ give guidance on how
   members and regulated firms can meet the obligations set out in Part 1.
4. Parts 2 and 3 contain guidance and should be read in conjunction with the
   mandatory requirements in Part 1.

Question 16

What can you tell me about RICS guidance relating to bribery, corruption or money laundering?

Answer 16

Money Laundering
Regulations 2017
RICS Professional
Statement

Countering bribery
and corruption, money
laundering and terrorist
financing 1st edition,
February 2019

‘illegally obtained money purchasing large items - such as property’

More due diligence needed from e.g. stringent ID checks, cannot accept large cash payments (over 10,000 euros), firms must have a money laundering officer, keep up to date records and perform AML checks on clients
* Found to have assisted in money laundering? 14 years in prison/unlimited fine
* Found to have tipped the person off about an investigation? 5 years in prison

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 were enacted on 26 June 2017 and introduce additional requirements for firms who are within the regulated sector for money laundering purposes, including the obligation to conduct
additional customer due diligence.

Question 17

Talk me through the completion statement you Issued at Magdalen Hill Cemetery Lodge.

Answer 17

Firstly the completion statement was issued to all relevant parties, finance team, legal team and tenants. It detailed the tenancy information and term/rental with a brief description of the property.

It then states the monthly rent and rent deposit figures in advance so the first months rent was paid giving time for the finance team to set up direct debit mandates for the monthly rent going forward. Lastly it detailed the Council bank details and account reference so that the funds were allocated correctly.

Question 18

Tell me about your understanding of your firm’s process for escalating a complaint to Alternative Dispute Resolution (ADR).

Answer 18

Our Alternative dispute resolution is through Local Government and Social Care Ombudsman or the Housing Ombudsman to review your complaint. Which is a free service, we also suggest involving their local councilor, which they can do at any point for advice or for representation. Its free service and can take up to 12 weeks

Question 19

Tell me about a conflict of interest check you have carried out.

Answer 19

I have not carried out a conflict of interest check due to the nature of our business servicing the public. I know that external companies, for example law firms review potential clients information, including parties involved, the nature of the matter and any other relevant details, then compare this information to their existing client and matters list.

Question 20

If you identified a potential or actual conflict of interest, how could you handle this?

Answer 20

Officers are servants to the public and I am held accountable to the Council as a whole. I am required to carry out the Councils work under the direction and control of my manager. Any conflict of interest between Officer/members or the public should be reported to the monitoring officer and alloctaed to a avaoid a siutation of conflict or close familiarity which may influence the work. Any personal relationships must be disclosed.

Question 21

What are the six RICS values published as a result of the Levitt review?

Answer 21

“The Levitt Review was commissioned by the Governing Council of RICS to investigate the events that took place in 2018 and 2019 in relation to the management and decision-making on treasury management process and the subsequent dismissal of four Non-Executive Directors 1. The review made 18 recommendations, all of which were accepted by the Governing Council upon publication of the report on September 9, 2021 1. One of the key recommendations was that RICS should commission an overarching statement defining RICS values and culture by September 30, 2021 1. The statement has been published and identifies six key values that are expected of all those who represent RICS. These values are:

Integrity: We act honestly, ethically, and with integrity at all times.
Inclusion: We are inclusive and respect diversity.
Accountability: We take responsibility for our actions and decisions.
Professionalism: We act professionally and with competence.
Collaboration: We work collaboratively with others to achieve our goals.
Agility: We are agile and adaptable to change “

Question 22

Explain your understanding of the RICS Levitt review.

Answer 22

The levitt report was commisioned by the RICS following a treasury management review audit in 2018. Prioir to the audit the RICS had to extend its overdraft facility by circa £3m due to inaccurate cashflow forecasting. The treasury management audit offered a ‘no assurance verdict’ on RICS interbnal financial control procedures and following this the Levitt report was commissioned as an independent review. The conclusion of the report illuded to an internal power struggle due to its board structure made up of a management board and executive board. Following the report the RICS accepted each of Levitts recomendations including: The RICS givernbing council are to have more oversight over internal dealings iof the RICS. The RICS Governing Council are to be briefed by the management board as opposed to a single CEO. The RICS governing Council are to oversee the executive management bonuses. The report called for greater transparancy as the CEO could have involved the management board in ordewr to rectify the treasury issues. No evidence of improper or illegal conduct was discovered.

Question 23

Talk me through how you treated your elderly client with respect.

Answer 23

I always made sure that I had time for them, When speaking on the phone, I was patient and clear with my tone and voice and I was kind. I did not rush the conversation and after speaking I would confirm what we discussed by a letter. I would then arrange a follow up call in a fewe days time to make sure it was received and understood. I also recommended that the client pursued independent legal advice.

Question 24

Why did you recommend an external firm undertake the long leasehold valuation?

Answer 24

“This valuation was for the purchase of the freehold interest, Enfranchisement. The long lease was originally to Hampshire police authority in 1948 before being assigned in 1989 for £6pa. Enfranchisement:
The Leasehold Reform Act 1967 (the 1967 act) gives leasehold tenants of houses the right to buy the freehold. The right to buy the freehold (and any intermediate leasehold interest, for example the head lease) without the landlord’s agreement is called ‘enfranchisement’. Some landlords will sell the freehold without you needing to make a formal claim.
There is a prescribed form and notice required however in this instance the tenant has not served notice. In order to calculate the Freehold value the rateable value needs to be known. The Council did not have this information for the property only for neighboring properties and I did not have the expertise in the field to make an appropriate assumption. I instructed Carter Jonas to undertake the caalculation as they had expertise in this field.”