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APC > Ethics > Flashcards

Ethics Flashcards

1
Q

What is the Role of the RICS?

A

-maintain highest level or service through education and training
-protecting consumers through strict regulation
-leading source of land and property information

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2
Q

How is the RICS Structured?

A

Governing Council (strategy and vision)
RICS Board & Standards and Regulation Board

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3
Q

What are the main elements within a fee proposal?

A

-TOE
-Scope of works
-inclusions/exclusions
-fees

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4
Q

What are the three steps to follow when completing TOE?

A

C.I.T (competence, conflict of interest, TOE in writing before you start work)

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5
Q

What do you avoid when negotiating fees?

A

Aggressive fee cutting, collusion with competitors.

Healthy competition is ok.

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6
Q

What are the CPD requirements?

A

20 hours- 10 must be formal
48 as a grad
31st Dec (complete) /31st Jan (submit)
formal- structured learning outcomes/objectives
informal- private study

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7
Q

What would you do if a client gave you a large sum of money and then went away?

A

Put it in a separate account
name the account client account
arrange draw down of funds as agreed.

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8
Q

What is your company policy for handling clients money? Do you accept cash?

A

LSH has a no cash policy

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9
Q

Are there any other laws for money laundering?

A

Proceeds of crime act (2022)- CONCEALING CRIMINAL PROPERTY, ARRANGEMENTS AND ACQUISITION.

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10
Q

What are some ML Red Flags?

A

-unusual transactions
-unusual currencies
-changes to parties
-unwilling to show ID

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11
Q

What is money laundering?

A

When money that is made through crime is disguised as clean money

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12
Q

What are the AML Penalties?

A

Assisting- 14 years/unlimited fine

Tipping- 5 years/ unlimited fine

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13
Q

When do you need to carry out an AML check?

A

Any freehold purchase, lettings over £8.5k.

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14
Q

What is your companies AML procedure?

A

Surveyor fills out AML form- checks are undertaken by compliance team

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15
Q

What do the AML regulations cover?

A

Estate Agency and relevant business financial work inside + outside the UK.

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16
Q

What are the key requirements of the AML regulations?

A

-10,000 euro cash
-monitored
-record keeping of any procedures undertaken
-nominated person to be appointed to report any suspicious activity with an SAR (suspicious activity report) to NCA.
-firm to maintain records for 5+ years and report to companies house any discrepancies

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17
Q

What are the levels of due diligence checks?

A

-Customer Due Diligence- passport, name, directors,
-Enhanced Due diligence- PEP/High risk individual/gov sanctions list- more detailed background examination

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18
Q

What are the typical ML checks for Customer Due Diligence?

A

-Type of organisation and evidence required

Individual- passport, bank statement, credit card, utility bill

Private limited- certificate of incorporation, directors with <25% share, address, name of company

Public limited – evidence of London stock exchange listing

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19
Q

What are LSH’s obligations to AML?

A

-Complete AML checks
-records, policies and procedures
-due diligence and additional risk factors for CDD
-staff training
-comply with PEP requirements

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20
Q

What is the key AML legislation?

A

Money Laundering, Terrorist Financing and Transfer of Funds (2017)

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21
Q

Why did the rules of conduct change?

A

2007 (long time)
Focus Diversity and inclusion
Evolving technology
Simpler structure – 12 case studies

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22
Q

If you dealing with client money, and find account is money is ‘short’ then what you do? I.e money is missing?

A

-Block account
-Understand Why
-Inform RICS

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23
Q

Can you reduce your fee?

A

Depends on the situation. If the scope of works had changed, yes. If works have stayed the same you should not cut fee.

Avoid aggressive fee cutting

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24
Q

You’ve set up your practice and offered a service to a client however the client has come back and said they have found someone cheaper and have asked you to match the price what would you do?

A

Depends on the amount- if it was a big fee cut no. Firms should avoid, price fixing, aggressive fee cutting and collusion with competitors

25
Q

In terms of PI cover what limits do you need?

A

Up to £100,000 = £250,000
£100,000-£200,001 =£500,000
£200,000+ = £1,000,000

26
Q

What is the uninsured excess for PII?

A

Uninsured excess-
Up to 10 million- 2.5% of annual turnover or £10,000
Over 10m- no limit

27
Q

You qualify today and you decide to set up today your own practice what would you need to do?

A

Contact RICS for guidance
Inform RICS and register for regulation
Appoint contact officer
Prepare a CHP
Obtain PII
Abide by Rules of conduct
Destination ‘regulated by the RICS’
Set up complaints log
Plan for CPD to be logged online management system

28
Q

You’ve been invited out to a dinner in a 5-star hotel by a client what would you do?

A

Assume the meal would be over 5 stars- offer to pay.
RICS guidance states that hospitality is not seen as offense- must log in gift register
Only after fees / TOE agreed and job has been completed

29
Q

What are the benefits of being a chartered Surveyor and RICS member?

A

‘demonstrates the kite mark of excellence in the interest of consumer protection’

-Status, Recognition, Network, Knowledge, Market Advantage

30
Q

What are the international ethical standards?

A

RICS part of WC that developed IES- underpinned the ROC
IES underpinned by ROC - CHRRIS.

31
Q

If you get a complaint, but your in your own firm, what must do you do?

A

you should have appointed a CHO from another firm.

32
Q

If you are dealing wit client money, and find account is ‘short’ what can you do?

A

Block account and understand why its short- tell the RICS.

33
Q

How have you acted in accordance with ROC:

A

1: applied my own values, not values client wanted me to use
do not proceed if conflict
2: school valuation- not in my competence. only undertake work within competence.
-Stay up to date with current regulations
-CPD events
3: case study!
-make sure data is accurate and up to date, kept securely and legal rights to use it.
-communicate with clients clearly
4: pronouns, encouraged people to speak up in working groups
5: public interest

34
Q

What are some of the AML red flags?

A

unusual transactions
unusual currencies
changes to parties
unwilling to show ID

35
Q

What are the professional obligations of a RICS registered firm?

A

cooperate
CHP
PII
designation
report required matters

36
Q

What are the professional obligations of a RICS member?

A

cooperate
comply CPD
provide info

37
Q

The Ethics Decision Tree- what is the purpose?

A

framework of Q’s for members to follow when faced with an situation that they may act in unethical way.

ensures legality and consistency with ROC.

facts, legal, ROC, consulted appropriate people, clear reasoning.

38
Q

If you breach the ROC, who carried the disciplinary board out?

A

Standards and Regulatory Board

39
Q

why might the S & R board carry out an investigation?

A

someone complaining to RICS
an allegation by a client

40
Q

what are the three levels of a disciplinary procedure?

A
  1. Initial review- action by head of regulation
  2. disciplinary panel
  3. appeal panel
41
Q

What is a conflict?

A

when a member/firms impartiality/independence is threatened due to existence of conflict between two clients.

42
Q

What does the RICS PS Conflict of Interest 2017 say?

A

must not proceed with a conflict, only if informed consent is provided

43
Q

How could you manage a COI internally?

A

-exclusivity of staff procedures
-avoid cross over between departments
-separate communication lines
-separate locations
-NDA
-monitor conflict- keep client informed

44
Q

If a client was insistent you worked for them, despite COI, what would you do?

A

-check clients understanding
-aware of reduced impartiality
-written consent
-management steps

45
Q

What must you include in a CHP?

A

-RICS provides model form
-redress mechanism
-details of policy issued with TOE
-clear, quick and transparent
-free of charge
-name/contact details of client
-recorded
-notify PII insurers
-7 days acknowledged/ 28 days dealt with

46
Q

What is an independent redress scheme?

A

consumer scheme, small issues, dis proportionally expensive to take to court.

47
Q

you receive a complaint, what do you do?

A

-7 days/28 days
-CHO
-provide additional info
-PII insurers

48
Q

what are the 2 stages of a complaint?

A

-In house
-Alternative Dispute Resolution

49
Q

Why might you decline an instruction?

A

-RICS ETHICS TREE- facts, not content for actions to be made public
-COI
-TOE not signed
PII cover

50
Q

What steps must you take for handling clients money?

A
  • clients must have access to funds
    -separate / identifiable account
    -‘client’ on account name
    -interest on account agreed
    -running balance on transactions
    -agree terms + give client bank details
    -must not be overdrawn (stop immediately, identify source and inform RICS)
51
Q

What is the client money protection scheme?

A

-run by RICS
-provides any member of public to be reimbursed for direct loss of funds
-RICS insurance policy

52
Q

if a client wanted to pay for services in advance, how would you ensure this is dealt with?

A

-separate client account- clearly named
-provide client with account statement
-send statement with how much is to be drawn + associated feeds
-send updated accounts
-once complete show final statement

53
Q

why might you hold a clients money?

A

-Service charges
-rent
-holding deposits
-retention

54
Q

what info do registered firms have to send RICS annually?

A

annual online return

type of business / staff

nature of clients

training provisions

CHP/PII

if firm holds clients money

55
Q

What are RICS bye-laws?

A

provide the power for Head of Regulation and Regulatory Tribunal to make disciplinary and regulatory decisions including issuing disciplinary penalties and costs.

56
Q

Your closing a practice- what must you do?

A
  • Inform RICS
  • Inform Clients- handover arrangements to new firm
  • Return Money
  • Inform Insurers - procure PII run off for 6 years.
  • Maintain copy of clients files for 6 years
57
Q

What constitutes a bribe?

A

giving/offering/promising/receiving an advantage such for an action which is illegal/breach of trust.

58
Q

What are the main principles of the Bribery Act (2010)?

A

Proportionate Procedures
Commitment
Risk Assessment
Due Diligence
Communication
Monitoring Review

59
Q

What can companies do to prevent a bribe?

A

-Identify Risks
-Provide Training
- Provision of clear policies
- Reviews

APC (12 decks)

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