Ethics Flashcards
What are the rules of conduct?
The fundamental expectations for the professional practice of members and firms set out by the RICS
Who do the rules of conduct apply to?
All individual members and firms who are regulated by the RICS
When did the new rules of conduct come into effect?
February 2022
What are the five rules of conduct?
- Members and firms must act with honesty and integrity and must comply with their professional obligations
- Members and firms must maintain their professional competence and ensure services are provided by competent individuals who have the necessary experience
- Members and firms must provide good quality and diligent service
- Members and firms must treat others with respect and encourage diversity and inclusion
- Members and firms must act in the public interest, take responsibility for their actions and act to maintain public confidence in the profession
Give an example of Rule 1 (acting with honesty, integrity and complying with professional obligations)
Not misleading others through your actions or omissions
Not allowing yourself to be influenced improperly by others
Being open and transparent with clients about fees and services
Have effective processes to identify actual or potential conflicts of interest
Give an example of Rule 2 (maintaining professional competence and ensuring services are provided by competent individuals)
Only undertake work that you have the knowledge, skill and resources to carry out competently
Check that subcontractors have the necessary knowledge, skill and resources to carry out their tasks competently
Stay up to date with the relevant legislation, codes of practice and technical standards
Maintain and develop your knowledge and skills throughout your career. Keeping up with CPD requirements set out by the RICS
Give an example of Rule 3 (providing a diligent and high quality service)
Understand your clients needs and objectives before accepting any work
Agree the scope of works, timescales and limitations with client at the outset
Seek clients agreement if the terms of engagement or costs have changed
Encourage sustainable solutions when advising clients about projects
Give an example of Rule 4 (treating others with respect and encouraging diversity and inclusion)
Treat everyone fairly and do not discriminate against anyone
Do not bully or harass anyone
Check that supply chains do not involve modern slavery
Develop an inclusive culture in the workplace - equal access and opportunity for all
Give an example of Rule 5 (members and firms must act in the public interest, take responsibility and maintain public confidence)
Question practices or decisions that you suspect are not right or ethical
Support any employee or client who has acted in good faith to report a concern
Manage professional finances responsibly
Take appropriate action when the rules have been breached and report suspected significant breaches to the RICS
What is a Royal Charter?
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
Our Royal Charter requires the RICS to act in the public interest
What is a bye law?
A bye law is a rule or law established by an organisation or community in order to regulate itself
What is the role of the RICS?
To advance the highest ethical and technical standards for professionals in land, property and the built environment
Protect and provide benefits to consumers by enforcing standards and codes of best practice
Provide expert impartial advice to governments, business and the public
Who is the current RICS president?
Ann Gray
Who is the current RICS CEO?
Justin Young
Give an example of an RICS bye law?
Members must conduct themselves in a manner befitting membership of the RICS
What does self regulation mean?
The RICS is self-regulating, meaning that it operates within it’s own published regulatory framework rather than being legislated by Government
Which documents have the new rules of conduct replaced?
- Rules for firms
- Rules for members
- Global ethical principles
What disciplinary actions can the RICS impose?
Less serious offences - impose a Regulatory Compliance Order to ensure future compliance, such as fines or conditions of membership
More serious offences - face a disciplinary panel and levy sanctions, including fines and expulsion
What money laundering and bribery legislation are you aware of?
Bribery Act 2010
Proceeds of Crime Act 2002
The Money Laundering, Terrorist Financing and Transfer of
Funds (Information on the Payer) Regulations 2017
What do you know about the Bribery Act?
It is legislation that makes bribery illegal for companies working in UK
It also holds UK companies accountable for failing to prevent such acts by those working for or on its behalf, no matter where the act takes place
What is the RICS requirements for professional indemnity insurance, including run-off cover and levels of cover?
Minimum level of indemnity:
Turnover of £100,000 or less - £250,000 min. cover
Turnover of £100,001 to £200,000 - £500,000 min. cover
Turnover of £200,001 and above - £1,000,000 min. cover
‘Each and every’ claim basis
Run off cover ensures firms, members and their customers are not exposed if a firm ceases to trade - min. run-off cover is 6 years
Use an RICS approved provider - RICS publishes a list
Where can you go if you can’t secure PII?
Assigned Risk Pool
ARP panel is a facility for trading members or firms who are unable to obtain insurance in the open market
It comprises a panel of a RICS chairman, members of the professional indemnity insurers and RICS members.
The initial period of cover is 12 months, to allow the firm time to return to the open PII market
What are the professional obligations of RICS members?
Annual CPD requirements - 20 hours (minimum 10 hours formal)
Co-operate with the RICS
Provide information to the RICS promptly when requested
What are the professional obligations of RICS-registered firms?
Have a complaints handling procedure
Have PII
Firms with a sole principal have arrangements for a Locum
Co-operate with the RICS
Provide information to the RICS promptly when requested
Must display ‘regulated by the RICS’ on their business literature
Why does the RICS have rules of conduct and why were they updated?
The previous rules had been in place since 2007
To provide a single document to enable greater clarity for RICS members and firms
There is now a greater focus on clearer example behaviours, tackling climate change and understanding evolving technology
What steps would you need to take when setting up a new practice/firm?
Inform the RICS that you are registering as a regulated practice
Notify companies house
Obtain PII (professional indemnity insurance)
Obtain employers liability insurance
Set up a client account for handling clients money
Appoint a Locum
Set up a complaints handling procedure
Set up arrangements for CPD and staff training
What are the requirements for handling client’s money?
Clients must always have access to their funds
Clients money must be kept in a separate account and be clearly identifiable
Interest on the account must be agreed with the client
Maintain a clear running balance of any transactions and advise the client on the details
Account must never be overdrawn
What sort of information do registered firms have to provide the RICS with annually?
Annual return
Nature of clients
Complaints procedure and up to date log
PII details
Details on whether any clients money is being held
What are the main components of a complaints handling procedure?
Two stage process
Stage one - your company reviews the complaint in full and attempts to resolve
Stage two - if one if unsatisfactory to the client then they have the opportunity for the complaint to be reviewed by an independent RICS-approved party
Listen to the complaint, take any many details as possible and try to resolve with the client - acknowledge receipt of complaint within 7 days and give full response within 28 days
Inform your PII providers of the complaint
What are the five principles of better regulation?
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
What does RICS stand for?
Royal Institution of Chartered Surveyors
What are the various RICS membership statuses?
Trainee
Student
Graduate
Assoc RICS
Member RICS
Fellowship RICS
What is the RICS black book?
A collection of technical practice documents which covers all processes throughout the construction project life cycle - more specific to quantity surveying
Are RICS guidance notes compulsory to follow?
No - they are a recommendation or an accepted good practice. You need to have a good reason to not be following a guidance note (especially if something goes to court!)
Are RICS practice notes compulsory to follow?
Yes - Professional statement are also mandatory
What is an RICS professional statement?
A mandatory requirement for RICS members and regulated firms
What is PII?
Professional indemnity insurance. It protects you and your business from the cost of compensating a client if you make a mistake in a piece of work for a client that causes them reputational or financial loss
What are the levels of PII cover? - as advised by the RICS
£100k or less turnover - £250k PII
£100k to £200k turnover - £500k PII
£200k and over turnover - £1m PII
RICS advise that the cover should be on an ‘each and every claim’ basis
What is the Assigned Risk Pool?
A facility for trading members or firms who find themselves unable to obtain insurance in the open market - it is collectively underwritten by all RICS listed insurers
What is run-off cover?
Run off cover ensures firms, members and their customers are not exposed if a firm ceases to trade - min. run-off cover is 6 years
What is the name of the RICS journals?
Modus
What is the RICS motto?
Est modus in rebus
There is measure in all things
What is a conflict of interest?
Anything that may impede (or be could be seen to impede) the ability of a firm or an individual to act impartially and in the best interest of the client
When was the RICS founded?
1868
What is your firm’s complaints handling procedure?
A senior director is appointed to take charge
We are committed to acknowledging any complaint within 3 days
We request a written statement from the client, this is reviewed by the senior director and they provide a response within 7 days of receipt of the statement
Clients who are still dissatisfied can contact our CEO who will then undertake another review
We maintain a complaints log to learn from mistakes and take corrective actions
What is an NDA?
Non-disclosure agreement - a legally binding contract that establishes a confidential relationship which is usually based upon sensitive information
What is Lionheart?
A charity and support organisation for past and present RICS members and their families. Provides financial support, health and well-being support and counselling
What is the junior branch of the RICS called and what does it do?
Matrics - it provides educational support and networking activities for students and surveyors (including chartered surveyors) with less than 10 years post-qualification experience
Can you give an example of a conflict of interest?
Being approached to represent a tenant in a dilapidations claim against a landlord who is former/current client in another capacity
3 types of conflict are party (acting behalf of two business with the same interests - like 2 supermarket chains), own interest (your own personal interests conflict with the clients - including personal relationships) and confidential information (where the obligation to provide information to one party conflicts with confidential agreements of another)
How do you manage a conflict of interest?
Surveyors must check they have no conflicts of interest before accepting client instructions
TFT carry out a check of the client’s identity, property ownership and whether we have had any previous involvement with the client
Need to be open and transparent - if a conflict is identified then the RICS professional standard should be followed and the instruction is to be declined if necessary
We would need to obtain informed consent from the client in order to proceed if our process has highlighted a conflict
May need to set up an information barrier within the company
Who does professional indemnity insurance protect?
The client and my employer - in the event that I make a mistake which leads to a financial loss
What impact has Brexit and Covid-19 had on surveying ethics?
Brexit - changes to UK GDPR rules that members need to be aware of
Covid - put pressure on businesses to act responsibly around staff safety and working remotely
What is the RICS guidance regarding accepting gifts and hospitality? What is your firms policy?
You must not accept gifts or hospitality from anyone which might reasonably be seen to compromise your judgement or integrity
Any gifts are recorded and declared in order to manage any possible conflict of interest
TFT rule - modest is good. Low value or company branded items are likely to be acceptable eg. lunch or social event where the host is present. Anything more expensive than a bottle of wine is likely to be unacceptable
If ever in doubt - a polite but firm refusal is the right action and speak to your senior director
What needs to be in place if a business is to cease trading?
PII run off cover
Return any client money
Hold client files for minimum 6 years
Hand over work to another company to ensure continuity of work
What would you do if you suspected money laundering?
Report it to a senior manager or compliance officer
Notify the PII provided and police if necessary
What is the difference between ethics and rules of conduct?
Ethics are a set of moral values
Rules of conduct are a framework that we work to
Why is client care important?
Surveying practices that provide excellent client care are likely to retain existing clients and develop new business leads by receiving positive testimonials
A failure to provide good client care is likely to lead to client dissatisfaction, complaints and in the worst-case scenario, Professional Indemnity insurance claims for professional negligence
What is a client brief?
A formal statement of the objectives and functional/operational requirements of the finished project
An essential reference for the project team - it provides a foundation for the initiation of the project and needs sufficient detail to allow a specification or design to be built around it
How would you limit the risk of working with a client who may be financially unstable?
Have a screening process and carry out a credit check
