Ethics Flashcards
Background information on the RICS?
- RICS founded in 1868
- Given a royal charter by the privy council in 1881
- RICS regulations and bye-laws set out the governance of the RICS
- There are currently 137,500 members at different levels
Why do you wish to be a member of the RICS?
A RICS qualification is globally recognised for integrity and professionalism by a range of potential clients around the world. I appreciate this is quite a niche pathway but I’m passionate about sustainability, and when 25% of UK emissions comes from the built environment, I believe there is scope for change. Also, connecting with a whole new network to learn from is crucial to research and staying current
What are the different levels of being a RICS member?
o MRICS
o AssocRICS
o FRICS (To become a fellow you need to show characteristics e.g. four or more years, a leadership role, raising the profile of RICS, etc)
o Trainee or student
What is the governance structure of the RICS?
- The governance structure is done by various internal councils, boards and associations
o Currently 21 members in the Governing Council
o 17 specialist groups covering all the topics – each has its own board
o President is Tina Paillet – she chairs the Governing Council too
o CEO is Justin Young - UK Structure consists of
o 4 national associations
o 10 regional boards
o Local associations like Matrix
What were the findings of the Levitt Review 2021?
This was very public and called for a full independent review of the “purpose, governance and strategy” of RICS. This became the Bichard Review in 2022
What were the findings of the Bichard Review?
Lord Bichard made 7 key recommendations in June 2022 e.g. a new, simplified and clear governance structure
* The Bichard Review provide a quick and phased approach, including recruiting a new Management Board and Standards and Regulation Board, and holding key elections for RICS roles
* All changes in the review are being undertaken
What is the role of the RICS?
‘To promote and enforce the highest professional qualifications and standards in the development and management of land, real estate, construction, and infrastructure’ - RICS, 2020
What are the three main roles of the RICS?
- To maintain the highest standard 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, construction and environmental issues (RICS, 2015)
What are the benefits of becoming an RICS member?
- Confidence in your abilities – solid status/trust for clients
- Recognition of your promotion
- Market advantage – competitive edge
- Increased knowledge with lots of CPD
- Opportunities and a wide network across the globe
What are the benefits of becoming an RICS registered firm?
- Confidence and security for clients as they know the firm adheres to RICS regulations
- Increased professionalism
- Security as firms have a complaints handling procedure, access to PI cover, etc
Firms must register if they are surveyors for the public as there is a benchmark for quality. To register, at least 1 member must be a RICS member.
These firms must annually make comments to RICS about their compliance.
How can firms register with the RICS? What information is needed?
- Type of business and staffing detail
- Name of the RB – responsible principal
- Statutory regulated activities e.g. what the firm does for financial services
- Nature of the clients
- Complaints handling procedure and records
- PI details
- Whether or not the firm holds client money
What does the RICS ‘Rules for the regulation of firms’ state?
- If 50% of principals are RICS members, the firm must be registered, if 25% are RICS members than a firm can apply
o Each firm must nominate a ‘responsible principal’ who is obliged to ensure all steps and systems are in place for their firm to align with RICS requirements - Only RICS registered firms and members can use the logo – April 2020
o Requirement for regulated firms to have explanatory text regarding what being a member of the RICS means
What are the 5 Rules of Conduct?
- Members and firms must be honest, act with integrity and comply with their personal obligations, including obligations to RICS
- Members and firms must maintain their professional competency and ensure that services are provided by competent individuals who have the necessary expertise
- Members and firms must provide good quality and diligence 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 prevent harm and maintain public confidence in their profession
How does each Rule of Conduct relate to your role?
- Rule 2 - Not acting outside of my competence on RTwin
- Rule 1 – Transparent about pros and cons of methodologies used on RTwin – honest
- Rule 3 – Explaining data to MSG about scope 3 accounting and what the data is based on – good quality service
- Rule 4 – Resourcing accessible venue for champions forum
- Rule 5 – Taking time off when sick, not making others unwell - responsibility
What must RICS members do?
- Comply with all CPD requirements and keep an up to date log
- Cooperate with RICS
- Always promptly provide information requested by the Standards and Regulation Board
What must RICS regulated firms must do?
- Publish a complaints handling procedure, which includes ADR and a complaints log
- Ensure all previous and current professional work is covered by adequate PI cover
- If they have a sole principal, ensure the work could continue in an event of their incapacity
- Cooperate with RICS
- Always promptly provide information requested by the Standards and Regulation Board
- Display on business literature the relevant RICS published policy
- Report to RICS anything which they are required to under the Rules for the Registrations for Firms
What is the RICS ethics decision tree?
The ethics tree reminds RICS members of questions they should be asking themselves
The final frontier is where RICS members would be happy if their actions were made public
When does a disciplinary procedure take place? And by who?
Disciplinaries are undertaken by the Standards and Regulatory Boards.
They occur after someone complains to the RICS, an allegation is made by a client or third party or because of information received by RICS. These are investigated and then will be decided whether disciplinary action should be taken. Sometimes the RICS will ask for justification as why RICS guidance was not followed
The disciplinary process is set out in the ‘RICS Regulatory Tribunal Rules’ 2020
What are the levels of disciplinary action which the RICS can take?
There are 3 levels of disciplinary actions:
- Action by Head of Regulation
- Disciplinary Panel (drawn from the independent Regulatory Tribunal)
- Appeal Panel
What is the order of a disciplinary?
Initial investigation stage
a. Formal investigation by the Head of RICS
b. Head of Regulation can initiate one of four actions:
i. Serve a fixed penalty notice
ii. Make a regulatory compliance order
iii. Refer the matter to a single member of the regulatory tribunal for consideration
iv. Refer the matter directly to a disciplinary panel
When is a fixed penalty given?
This is used for breaches to the rules relating to the supply of information to the RICS by its firms and members. They may give a fine and/or a caution
What is a regulatory compliance order?
This is the next step for low level breaches of the rules after a fixed penalty e.g. minor breaches which can be easily corrected
Examples of these include failing to fulfil CPD obligations, and other non-compliance issues
This is a written document which tells the firm or member what they need to do and it also has a fine
What is a disciplinary panel and when does it occur?
For the most serious of breaches of the rules of conduct
The Head of Regulation decides whether a hearing is needed
Membership of a disciplinary panel can be lay members e.g. non RICS members
Penalties at this level include:
o Issuing a regulatory compliance order (as above)
o Reprimand
o Fine
o Impose an unlimited amount of fine per breach (must be proportionate)
o Impose conditions on future RICS registration
o Expulsion or membership or fim
o Require publications of the results in the RICS Modus magazine, website and local newspaper to where the firm or member is based
What is an appeal panel?
Appeal panels review appeals to disciplinary decisions by reviewing the evidence submitted at the time/any new evidence too
What is the RICS’ stance on social media?
In the Guidance for RICS members 2021, the importance of social media is recorded. The RICS reminds members the high standards of professional behaviour expected, and that the Rules of Conduct are always relevant.
RICS will investigate social media posts for a variety of reasons including discrimination, dishonesty, bullying, or even if a post might ruin the reputation or trust in the profession.
What does the RICS state about fee negotiations?
At MSC, this is beyond my scope of involvement. However:
- RICS firms should not fix prices, or aggressively cut fees, or collude with competitors
o Fees should be market based and on ad-hoc basis with clients - You can enter into further fee negotiations after your initial fee proposal is submitted
- If renegotiating, you can change levels of services and the fees will reflect this
How should Terms of Engagement be written?
Terms of engagement must be written in the client’s agreement to the proposed fee basis, payment of expenses (and how calculated) and a copy of the complaint handling procedure. Then follow the CIT method:
- Check they are professionally competent
- No conflict of interests or personal interests
- Confirm terms of engagement in writing and get written approval from the client BEFORE you start instruction
They have a cooling off period of 14 days from the Consumer Rights Act 2015
What is a conflict of interest? What are examples?
A conflict of interest exists between two parties when a member or firm’s impartiality is threatened due to the existence of a conflict. An example would be:
* Any financial interests
* Personal interests
* Commercial relationships
* Acting on both sides of a transaction
What is the RICS approach to dealing with a conflict of interest?
RICS - ‘Members must not advise or represent a client where doing so would involve a conflict of interest or significant risk, unless there is informed consent’
Informed consent can only be sought where the RICS member or firm is satisfied that proceeding regardless of a conflict of interest is in the best interests for everyone
All conflicts must be managed according to the Professional Standard
All RICS firms must have in place effective systems and controls to ensure compliance
All firms must keep records to show their compliance
Conflict avoidance - Do not accept the transaction
Conflict management - Accept but have a management plan on how to manage the conflict
What are the different types of conflict?
- A ‘party conflict’ is relating to work on the same or related instruction for two parties
- An ‘own interest conflict’ is a personal interest conflict
- A ‘confidential information conflict’ is relating to work between two parties which should be confidential
What is informed consent?
Informed consent can only be given after the party has explained the position clearly to the client. Surveyors should only seek informed consent if others will benefit from doing so
How to handle a conflict of interest, according to RICS:
- Avoidance
- Written advice to both parties documenting the nature of the conflict and requesting informed consent
- Conflict management - ‘Reasonable steps’ must be taken to manage the conflict, surveyors must be physically sperate, information securely stored, audit trail
What is RICS’ view on confidentiality?
RICS bye-laws state that client confidentiality must always be maintained
o This includes historic information
o Information provided by a client prior to instruction
o If a third party wants access, they need the clients approval (unless it’s the police or HMRC, etc)
o All old files should be held for 6 years then destroyed appropriately
o If a RICS member or firms acquires confidential information, they cannot use it for their own purposes, but they must notify the sender and log it with the firm’s compliance officer
What is contained within the RICS Complaints Handling Procedure 2016?
o A RICS firms CHP must be approved by the RICS
o Always notify PI insurers as soon as there is a complaint possible to claim
o Details of my CHP should be issued to a client at the same time as terms of business
o A complaints log should be maintained
o Firms must have a RICS approved alternative dispute resolution (ADR) within the CHP
Details on a complaints handling policy
- Stage one (in-house)
a. Details of the CHP should be issues whenever the firm receives a complaint from someone whom the firm owes a duty of care
b. Procedure must be quick, clear and transparent
c. Details of the nominated person dealing with the complaint (the CH officer) must be available in the first instance
d. The complaint must be made in writing
e. A strict timeline should be recorded for the investigation
f. A complaint should be acknowledged within 7 days and investigated within 28 days - Stage two (ADR)
a. If the compliant is not happy with the review, the second stage of the review would be to readdress the complaint with a scheme the firm has chosen to use
b. The name of the relevant redress mechanism must be provided to the claimant, e.g. the centre for dispute resolution (CEDR) - Stage three (unlikely)
a. The RICS will become involved if it is not resolved e.g. a member fails to respond to a claim or prevents access to the ADR
b. If acting as a sole practitioner, you must nominate a surveyor in another firm to act as the complaints handling officer (CHO)
