Ethics

Question 1

RICS Rules of Conduct: What are the 5 rules of conduct?

Answer 1

1. Members and firms must act honestly and with integrity. They must comply with personal obligations including professional obligations to RICS.

(Do not mislead, do not be influenced, identify and disclosure conflicts, transparency)

2. Members and firms must maintain their professional competency and ensure that the services are provided by competent individuals with the appropriate expertise.

(Skills, knowledge, expertise, competence, meet CPD reqs and current legislation)

3. Provide and good-quality, diligent service.

(Understand clients needs, agree scope of work, confirm RICS regulation, keep proper records of work)

4. Treat people with respect and promote diversity and inclusion.

(do not discriminate, report abuse, act cooperatively, address unconscious bias))

5. Must act in the public interest, take responsibility for their actions, act to prevent harm and ensure public trust in the profession.

(raise concerns and question decisions, respond to complaints promptly, take action if rules have been breached)

Question 2

When where the rules of conduct implemented and what are the changes?

Answer 2

Effective from 02 February 2022.

Updated from the 2007 Rules of Conduct and Global Ethical and Professional Standards.

Updated to provide a simpler structure with one clear framework to improve the clarity of the rules with great focus on challenges such as D&I.

One document replacing:
-RoC for members
-RoC for firms
-Global professional and ethical standards

Question 3

Structure of RICS?

Answer 3

Based under the terms of the Royal Charter

1. Governing Council (20 members runs RICS)
2. Management Board,

Contains:
-membership services
-Audit, Risk , assurance and finance committee
-Knowledge and practice committee,
-nominations and renumeration committee.

2. Standards and Regs Board

Contains:
Dispute Resolution Board,
Valuation Assurance Committee
Qualification and assessments committee

Question 4

When was it established?

Answer 4

Royal Charter granted in in 1881.

Question 5

Role of RICS?

Answer 5

Maintain the highest standards of education and training.

Protect consumers through strict regulation of professional standards

Accountable to both members and the public.

Be the leading source of information and independent advice on Land, Property, construction and associated issues.

Involved in policy influence and political engagements

Question 6

Benefits of RICS membership

Answer 6

Gold standard distinction

Status - professional recognition that provides confidence to clients.

Competitive Advantage - recognition place me ahead of competitors.

Network - Access to registered professionals worldwide.

Knowledge - Regulated by international standards .

Question 7

STAR: Professional Obligations for Members.

Answer 7

Maintain professional competence.

Min 20 hours at least 10 formal CPD.

Maintain an understanding of Ethical and professional standards on a rolling 3 year basis.

Cooperated with RICS at all times.

Question 8

Mandatory Professional Obligations for Firms

Answer 8

Must publish CHP and ADR procedure and maintain complaints log

Have appropriate PII

Cooperate with RICS

Promptly provide all info required by the Standards and Regs Board

Display RICS literature to show regulation.

If a sole principal- must make arrangements for death, incapacity or absence.

Question 9

Ethics decision tree?

Answer 9

Framework for decision making.

Fundamental question is would I be happy with my action’s to be made public?

Question 10

What to ensure Fee Negotiations (Ethics)

Answer 10

Avoid fixed prices - they should be made on an market basis

No aggressive fee cutting or collusion.

Referrals should be considered in the context of the Bribery Act 2010 and the Rules of Conduct.

Question 11

Asked to provide a fee for a job, what do you check?

When would You decline?

Answer 11

Check competence and for conflicts

Confirm both in writing .

Decline if:

Terms are not agreed;
Not competent or conflicted;
Cant agree PII;
Client is on sanctions list;
Advice is Pro-bono or for a friend

Question 12

What is RICS Global Statement COI 2017?

Answer 12

Mandatory professional standard

Firms and individuals must not act of there is a conflict significant risk of conflict.

Identifies 3 types of conflict:

1. Party Conflict - working on same /related instruction for another client
2. Own Interest Conflict
3. Confidential info conflict - maintaining confidentiality of one client when having provide the confidential info to another.

Use Informed Consent for conflict management. - Has to be agreed in writing by both parties.

Conflict must be fully disclosed so that affected party understands.

Only seek this if all parties and satisfied and best served by it.

HAS TO BE IN THE INTEREST OF ALL PARTIES.

RICS has a good letter template in this statement

Question 13

Steps in managing a conflict?

Answer 13

Avoidance - Does it effect your impartiality? Avoid the conflict or manage it.

Advice - Inform client in writing on nature of the conflict. Must get written consent from both parties of you were to still act.

Management - Set up and information barrier.

Barrier would be using secure password protected files. Reasonable steps taken and audit trail kept throughout. Surveyors must be physically separated via office.

Question 14

RICS Pro Statment COI UK Commercial Prop Market Investment Agency 2017

Answer 14

Detail key information in regards to conflicts.

Dual Agency - Working for buyer and seller - strictly prohibited

Multiple introductions - Contractual relationship with multiple buyers. Exclusive or non-exclusive must be detailed in terms. If not exclusive informed consent must be obtained.

Incremental Advice - advice (e.g. planning, building surveying, valuation) related to a purchase or disposal that is incremental to an existing instruction to advise the buyer/s or seller.

Personal Interests - Must be declared and only act if it does not effect professional judgement.

Question 15

What is confidentiality?

Answer 15

By-Laws state client confidentiality must be maintained for all client affairs and includes historic data provided.

If 3rd party wants access must get approval from client.

Files held for min. of 6 yrs.

If accidentally received confidential info. It cannot be used for your own purposes ad must be disposed of securely and sender must be advised of error.

Question 16

RICS Guidance Note: Complaints Handling 2016

Answer 16

Firms must CHP procedure and must be approved by RICS

Firm must have complaints log

ADR must be approved by RICS.

Publish your complaints-handling procedure

Ensure members of staff are aware of procedure

Question 17

Stages of CHP?

Answer 17

1. In-house

Complaint must be acknowledged by firm within 2 days and investigated within 28 working days.

2. ADR

Independent resolution if above is not enough. Name of institution must be provided in CHP.

Colliers CHP = International Dispute Resolution Centre & Property Redress Scheme

Question 18

Firms PII Requirements. Max Uninsured Excess

Answer 18

Turnover

Less than £10m = £10,000 or 2.5% the insured sum
Over £10m = no set limit.

Run off cover must be a min of 6 yrs from cease of practice

Question 19

Firms PII Req. Min Insured Excess

Answer 19

Turnover
£100k or less = £250,000
£100,001 - £200k = £500,000
£200,0001 or more = £1m

Run off cover must be a min of 6 yrs from cease of practice

Question 20

What is and How to avoid Negligence?

Answer 20

Where duty of care is breached and there is loss or damage to client or third party.

Yianni vs Edwards (1981) - Resi valuer instructed by lender but still has a duty of care to mortgagee relying on the valuation,

Duty of care to clients and third parties.

Avoidance by understanding client objectives/file notes and through abiding by the relevant standards.

Limitations = standard 6 years after date.

Question 21

RICS Professional Standard: Client Money Handling 2019

Answer 21

• Clients name must be on the bank account
  -Client accounts kept separately
  -Client must be able to move money on demand
  -Accurate records kept
  -Annual audit kept by certified RICS accountant

Question 22

What to do when starting a practice?

Answer 22

-Inform RICS
- Appoint responsible principal
-register with RICS
-Arrange PII
-Obtain RICS approval on CHP
-Appoint CHO
-Plan for succession
- Ensure completion of annual return

Ensure statutory compliance (DDA, fire, H+S Act 1974)

Question 23

What to do when closing a practice?

Answer 23

-Inform of retirement
-ensure clients are informed
-return monies held
-inform insurers (run off cover for 6 yrs)
-retain files for min 6 yrs.

Question 24

Key elements Bribery Act 2010

Answer 24

Aims to reduce bribery in businesses in the UK. Extends to associated persons, such as externally appointed consultants.

Companies must have policies and procedures in place.

Far reaching and powerful legislation

A bribe is an illegal breach of trust that can be giving, offering, promising or reviving a gift or payment for an an action.

Offences are:
-Bribing
-Receiving a bribe
-Bribing a foreign official
-failure to prevent a bribe

6 principles of prevention outlined:
Proportionality
top level commitment
Risk assessment
Due Diligence
Communication
monitoring and review

Criminal offence. Max 10 years prison and unlimited fine.

Facilitation payments only permitted under duress where there is a risk to life.

Question 25

Colliers Gifts and Hospitality procedure?

Answer 25

Must register and get approval for gifts within certain thresholds.

0-£29.99 - No action
£30 - £59.99 - Register on gifs register
£60 - £199.99 - Register and get line manager approval
£200 - Register and Compliance officer approval.

Always relate to how would the public view the gift.

Question 26

What is Money Laundering and what checks need to be done?

Answer 26

Proceeds of criminal activity which are disguised and converted.

Provisions from RICS:
-Requirement for AML risk assessments
-Comply with AML checks
-AML checks on purchaser

Letting - if over £10k per month AML checks required.

Question 27

STAR

What are the key aspects of the RICS Countering Bribery and Corruption, ML & TF 2019 & 2022 Update?

Answer 27

Mandatory PROFESSIONAL STANDARD that sets out requirements and good practice for countering B&C,ML&TF

3 parts:
1. Mandatory Bribery & Corruption and Money Laundering and terrorist financing
RICS Regulated Firms must :
-not offer or accept bribes
-not facilitate ML or TF
-have procedures in place to comply with laws
-reports suspicious activity
-act with dd and evaluate risks
-only use third party reliance where there is confidence in the info provided
-take measures to understand the client in the transaction
-verify client (id checks)
-retain records

2. Guidance
   -Have a written policy
   -set up gifts register
   -keep up to date with legislation
3. Supplementary Guidance
   Provided on a range of issues such as:
   -Establish a risk based approach
   -Dealing with PEP’s

2022 - Update with Sanctions list following Ukraine war.

Question 28

Types of Due Dilligence

Answer 28

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

CDD
-Identify Client/verify identity
-Identify beneficial owners
-obtain registered company details

EDD
-For high risk red flag politically exposed people.
- requires a more detailed examination.

Simplified Due Diligence (SDD)
only be appropriate if there is a low risk of money laundering or terrorist financing. I.e if the client is listed on the stock exchange

Question 29

Penalties for Money Laundering

Answer 29

Criminal offence

14yrs or unlimited fine for max
For not tipping off 5yr / unlimited fine

Question 30

Typical AML checks for different form of client?

Answer 30

PLC - Stock Exchange listing
Public Body - Govt Ownership
Limited company - Certificate of incorporation, registration and names of directors
Individual - ID and address.

Question 31

What are the relevant UK Acts for crime?

Answer 31

Bribery Act 2010

Proceeds of Crime act 2002
-Concealing or acquiring criminal property, allows for recovery of those assets/

Economic Crime Act 2022
-Greater focus on foreign criminals using UK property - allows govt to act quicker,

Question 32

What are the new documentation updates?

Answer 32

Implementation of Two new categories of document to replace original docs

-Pro Statement
-Guidance Note
-code of Practice

Professional Standards which will be mandatory
and
Practice information which will be best practice guidance.

Pro Standards already
1. Client Money Handling 2019
2. COI 2017
3. Countering Bribery & Corruption, money laundering and terrorist financing 2019

Question 33

ETHICS: When have you applied one the 5 ROC in your experience?

Answer 33

I have maintained my professional competency over the my 24 months experience in accordance with ROC 2.

I have provided good-quality and diligent work in accordance with ROC 3 as shown by client satisfaction feedback.

Question 34

ETHICS: How have you implemented the Rules in a personal capacity?

Answer 34

I always act honestly and comply with my personal obligations such as ensuring my bill are paid in a timely manner

Question 35

ETHICS LV2 Cornwall: What would you have done of the gift was not proportional?

Answer 35

I would politely thank them and decline the gift.

Question 36

ETHICS agency Devon LV2: What are other aspects of the estate agency act other than reporting every offer?

Answer 36

Must not mislead within sales details.

Must not discriminate against purchasers

Must outline fees within the terms.

Must disclose any conflicts of interest

Question 37

ETHICS LV3 Suffolk: Why could you not act for the valuation in Suffolk as you colleague was selling.

Answer 37

It may have affected or be construed to have affected my ability to act objectively.

When citing the Ethical Decision Tree I decided I would not be comfortable if the public where aware of my actions and may damage public opinion of the profession.

Question 38

ETHICS LV3 Suffolk: Why could you not act for the valuation in Suffolk as you colleague was selling.

Answer 38

It may have affected or be construed to have affected my ability to act objectively.

When citing the Ethical Decision Tree I decided I would not be comfortable if the public where aware of my actions and may damage public opinion of the profession.

Question 39

ETHICS Dorset LV3: Why did you not value the letting property in Dorset,

How would you value it?

Answer 39

I did not feel I had the necessary skills, understanding and expertise of that asset type and recommended that contact an appropriate valuer.

As a HMO I would suggest investment and comparable but I would not undertake the valuation.

Question 40

What do you do if offered a bribe?

Answer 40

In line with the Countering Bribery And Corruption, Money Laundering And Terrorist Financing and the Colliers Bribery policy I would report any activity to my line manager and recall the details and the contact the the relevant authorities. (serious fraud office)

Question 41

Conflicts: What do you do with a Politically exposed person?

Answer 41

I would consult my line manager who would in turn contact an appropriate senior manager

Undertake Enhanced Due Diligence to review the client and transaction.

Question 42

ETHICS: What was the Bichard Review?

Answer 42

Following the independent Levitt review in 2021 the RICS commissioned Lord Bichard to undertake a further review to clarify the purpose of the RICS and its responsibility to the publics advantage .

Bichard reported in 2022 and made 36 recommendations with 7 key areas:
1. Increased focus on public interests
2. Maintaining self regulation
3. Focus on D & I
4. Empowering members
5. Undertaking an independent review every 5 years
6. Simplified and clearer governance structure
7. Shower greater leadership on issues that matter most to society

The RICS adopted all recommendations.

Question 43

ETHICS LV2 Agency Devon: How did you deal with the interested party? (STP Offer)

Answer 43

I informed them their offer had not been accepted and the reasons why. I informed them to let me know if they wished to make another offer.

I confirmed this via a follow up email.

Question 44

ETHICS LV2 Cornwall: What is Colliers gifts policy?

Answer 44

Must register and get approval for gifts within certain thresholds.

0-£29.99 - No action
£30 - £59.99 - Register on gifs register
£60 - £199.99 - Register and get line manager approval
£200 - Register and Compliance officer approval.

Always relate to how would the public view the gift.

Question 45

ETHICS: What are AML checks and what was the 2022 update?

Key Doc
Countering Bribery And Corruption, Money Laundering And Terrorist Financing, 1st Edition (2019)

Answer 45

Mandatory PROFESSIONAL STANDARD

Declaration of conflicts

Outlines a Risk based approach for ML & TF

Requires firms to conduct appropriate AML checks
-ID
-Address verified (3 months)

Undertaken on clients and purchasers for sale and letting purposes if letting over euros 10k per month.

Identification of beneficial party from a transaction.

2022 - Update with Sanctions list following Ukraine war

If you are acting or think you are acting for a party on the sanctions list you must report to Office for Financial Sanction

Question 46

ETHICS: Why are conflict checks undertaken?

Answer 46

To maintain the highest professional and ethical standards and to keep public trust within the Institution.

To ensure that the Surveyor is able to act objectively during an instruction.

Outlined within PS2 and VPGA2.

Question 47

ETHICS: What are the CPD requirements?

Answer 47

Maintain professional competence.

Min 20 hours at least 10 formal CPD.

Maintain an understanding of Ethical and professional standards on a rolling 3 year basis.

Question 48

What was the Levitt Review?

Answer 48

Independent Review was commissioned by RICS to investigate articles in the press that alleged that RICS ‘tried to supress a critical internal report into its finances.

The review focused on the lack of clarity and structure of the RICS.
Levitt called for a full independent review of the purpose, governance and strategy of RICS. RICS governing Council approved this and commissioned the Bichard Review.

2021

Question 49

When do firms need to register for RICS regulation?

Answer 49

Firms must register if:

-Firms undertaking surveying services to the public (If no RICS member cannot register)
- A firm is acting within a regulated area
-If 50% of principals provide surveying services and are RICS members it must be regulated. (25% for eligibility)

(Principals = sole practioneers, directors, partners or board members)

-Must nominate responsible principal who has to ensure systems are in place to abide with RICS requirements and report to them as required.
-Firms must annually make a return to RICS confirming their compliance with obligations

Regulation provides Gold standard of quality control for clients

Only registered firms can use RICS logo.

Question 50

What info is required from firms for RICS registration? and needs to be confirmed annually?

Answer 50

-Type of business
-Staffing details
-Name of responsible principal
-Nature of clients
-Complaints handling procedure details and records.
-PII details
-Whether the firm holds clients money.
-Statutory regulated activities provided

Question 51

What are the disciplinary procedures in place from the RICS?

Answer 51

Three Levels
1. Action by Head of Regulation
2. Disciplinary Panel
3. Appeal Panel

Question 52

Disciplinary: What can the Head of Regulation action?

Answer 52

Undertake a formal investigation and can action the following:

1. Serve fixed penalty notice (fine or caution)
2. Make regulatory compliance order
3. Refer to a member of the regulatory tribunal
4. Refer to disciplinary panel

Question 53

Disciplinary: What is a regulatory compliance order?

Answer 53

Used for low level breaches of rules which can easily be corrected.

Firm or member may need to take/desist from certain actions

Can be forced to pay fine or undertake relevant CPD.

Question 54

Disciplinary: What does action from the disciplinary panel entail?

Answer 54

Used for serious breaches of conduct.

Disciplinary panel also made up of non- RICS members

Penalties include:
-Reprimand
-fine / Unlimited fine proportionate to the breach
-Impose conditions of future RICS registration
-expulsion from membership or removal of firm
-Publication of result

Question 55

Disciplinary: What does the appeal panel do?

Answer 55

Consider the appeal and review the decision based on evidence previously presented and new evidence.
Panel includes non-RICS members

Question 56

What is Run off Cover?

Answer 56

Insurance for claims made against a firm after it has stopped doing business

Must be adequate and proportionate after the cessation of trading.

• Min of 6 years
  -Consumer claims min of £1m aggerate over the six years
  -Commercial claims - whatever a firm considers adequate and proportional.
• If firms cannot obtain it, can apply for coverage In RICS Risks Pool

Question 57

Handling clients money - what procedures need to be in place?

Answer 57

-Client accounts must be kept separate
-must have the word client in the name
-Must be able to access money on demand
-Payment of interest agreed with the client
-accounts to be kept in credit
-Regular bank reconciliation to check payments
-accurate record keeping
-annual audit by certified RICS accountant
-Money only be withdrawn if properly required
-signatories must be agreed and should be two
-Discrete accounts for single named clients only
-all firms handling client money must have procedures accessible on website.

Question 58

RICS Client money Handling 2019 - What are the key aspects of this professional Standard?

Answer 58

Firms must keep client money safe and have appropriate accounting controls.

(Rent, Service Charge, Holding deposits and retentions)

Best practice info for:
-Holding Client money
-Receipts of client money
-Payments from client accounts
-Accounting records and controls
-compliance

Question 59

What red flags are there associate with money laundering?

Answer 59

-Inability or unwillingness to provide ID
-Changes to the parties involved
-Unusual transaction features such as unexpected urgency
-payment in unusual currencies

Question 60

What is the The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and what does it require firms to have/do?

Answer 60

UK Regulations cover estate agency work

Requires:
-Have written ML and TF risk assessment
-Implement systems, policies and controls to address ML risks
-Provide staff training
-comply with DD checks
-Ensure accurate and appropriate record keeping
-AML checks on purchaser
-Firms must have polices to identify transactions which:
complex or unusually large without apparent economic or legal purpose
- A nominated person must report suspicions to the NCA.
-Firms to maintain records for 5 years

Question 61

What is Colliers ML Policy?

Answer 61

Complies with all aspects of the regulations set out from the HMRC.

States:
-AML checks must be undertaken on our clients at the outset of the transactional instruction and before marketing commences and on the counterparty before exchange of contracts.
-ensure that details of their transactional instructions, including details of any counterparty to the transaction, are put on Salesforce as soon as possible. This will then trigger the necessary AML processes which will be undertaken by the Compliance Department.

The Compliance Department operates procedures on identity checking and verification in accordance with legal requirements and guidance, taking into account relevant matters such as:
risk categorisations,
dentification of beneficial owners (those with 25% or more ultimate ownership),
sanctions and the presence of any politically exposed persons.

The Compliance Department uses a risk matrix to determine the risk category of a client/counterparty which informs whether simplified or enhanced due diligence is carried out on that party.

Any documents obtained by the Compliance Department as part of the AML processes will be held securely on its departmental drive and will be retained for periods which comply with law and the Company’s data retention guidelines.

-MONITORING AND SUSPICIOUS ACTIVITY REPORTS

At all times throughout a transaction, it is important to be alert for anything suspicious. The following are example red flags that you should be vigilant of:
* The client or counterparty is secretive or evasive
* The parties are incorporated in a high risk country
* The source of funds are unusual or irregular
* The transaction has unusual features such as size, nature, frequency or manner of execution
* The instructions from the client are constantly changing

If you have any suspicions or concerns about the nature of the transaction or the conduct of the
parties which could be indicators of money laundering or criminal behaviour, you must contact the Compliance Department immediately for advice. In certain circumstances, it may be necessary
for a suspicious activity report to be made to the National Crime Agency. Any such report will be made by the MLRO directly.
It is essential that, if you raise a suspicion to the Compliance Department, no note of that filing or the suspicion is advised to anyone else including the client or placed on the client file.

TIPPING OFF
You must therefore only contact the Compliance Department when you have such a suspicion and follow
their instructions to ensure our legal obligations are complied with.

TRAINING
Staff will be provided with anti-money laundering training at least every three years and mandatory for new joiners

PENALTIES
Assisting with money laundering or failing to report suspicions is a criminal offence and could result in unlimited fines with a prison term of up to 2 years.

Question 62

What are the general requirements of PII set by RICS?

Answer 62

Policy cover must be made on an ‘each and every claim’ basis

Min levels are set out

Policy must be fully retroactive

Run off cover must be in place

Max levels of uninsured excess set out

Policy should cover past and present employees.

Question 63

What is the RICS future foundation?

Answer 63

5 foundations
- Vision
Sustainable built environment inclusive for all
- Mission
Inspire members, advance knowledge, uphold standards
- Strategic Goals
Lead and influence sustainability
Attract diverse next gen
strengthen trust
- Values
Professional
collaborative
Inclusive
ambitious
- World class organisation
Efficient, effective and inspiring professional body

Question 64

What is the clients money protection scheme?

Answer 64

Run by the RICS to provide for any member of the public to be reimbursed their direct loss of funds if firm cannot pay.

Provided through the RICS insurance policy.

Question 65

How many bye-laws are there and what are they?

Answer 65

10
Application
Membership
Designations
Contributions
Conduct
Governing Council
Subordinate boards
Procedure
accounts
general