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APC 2024 > Ethics > Flashcards

Ethics Flashcards

1
Q

Why do you want to be part of the RICS?

A

It will give clients confidence in me, market advantage against non-qualified professionals, network, knowledge and training

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2
Q

What are the RICS 5 Rules of Conduct 2021?

A

1.Members and firms must be honest, act with integrity and fulfil obligations.
2.Maintain professional competency.
3.Provide good quality and diligent service.
4.Treat each other with respect and encourage diversity and inclusion.
5.Act in the public interest, take responsibility and prevent harm, maintain confidence in the profession.

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3
Q

Is hospitality always prohibited?

A

No but must consider timing and proportionality

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4
Q

What is the role of the RICS?

A

To maintain highest standards of training and education, Regulate the profession, leading source of information and advice,
Bichard Review of June 2022 clarified more focus needed on
1. The public interest
2. Increased D&I across the profession
3. Showing greater leadership on matters which effect society, like climate change.

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5
Q

What is the global structure of the RICS?

A

Governing council, 2 boards the RICS Board and the Standards & Regulation Board with various committees and panels, chair of governing council is Martin Samworth

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6
Q

Who is the UK CEO?

A

Justin Young

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7
Q

Who is the president of the RICS

A

Tina Paillet

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8
Q

What are the biggest challenges facing the RICS?

A

Sustainability, data, diversity

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9
Q

What is your ultimate obligation as a surveyor?

A

To act in the Public Interest, as in keeping with the Royal Charter which binds surveyors to act in the public interest.

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10
Q

Can you give an example of an International Standard

A

Mandatory compliance level - The Red Book or IPMS

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11
Q

Can you give an example of a Professional Standard

A

Mandatory compliance level - Countering Bribery: corruption money laundering and terrorist financing OR Comparable Evidence in real estate valuation.

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12
Q

Can you give me an Example of Practice Information

A

Discounted Cash Flow Valuations

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13
Q

What is Rule 1 of the Rules of Conduct and one example of when you acted in accordance with it?

A

Members and firms must be honest, act with integrity and fulfil obligations.

My client requested I attend a unit which they sublet to a third party to request keys back from the subtenant who was in breach of their lease due to not paying their quarterly rent. I ensured that I represented my client, the landlord, with honesty and integrity whilst being respectful to the occupier who was in a state of anxiety.

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14
Q

What is Rule 2 of the Rules of Conduct

A

Maintain professional competency.

Fulfil my CPD requirements and attend as much formal CPD as possible.

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15
Q

What is Rule 3 of the Rules of Conduct

A

Provide good quality and diligent service.

Whilst working in EMEA Occupier Services, my client asked me to provide project management services on the installation of a window into the frontage of a retail warehouse unit. I understand the limits of my professional knowledge and realised that this was outside my area of expertise. Therefore, I referred them to my firm’s building surveyors who would be better placed to provide advice.

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16
Q

What is Rule 4 of the Rules of Conduct

A

Treat each other with respect and encourage diversity and inclusion.

My client requested I attend a unit which they sublet to a third party to request keys back from the subtenant who was in breach of their lease due to not paying their quarterly rent. I ensured that I represented my client, the landlord, with honesty and integrity whilst being respectful to the occupier who was in a state of anxiety.

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17
Q

What is Rule 5 of the Rules of Conduct

A

Act in the public interest, take responsibility and prevent harm, maintain confidence in the profession.

Whilst in the valuation department I was sure to deliver the valuation reports within the timescales set out in the Terms of Engagement with the client

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18
Q

What would you do if you were required to hold clients money?

A

Refer to Professional Standard on ‘Client Money Handling’ 2019 – money must be kept separately and clearly identifiable, word client if on bank account and cheque book, accounts must be kept in credit, payment of interest agreed with client, an accurate record must be kept.

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19
Q

How does RICS ensure members abide by Rules of Conduct?

A

Head of regulation investigates claims of misconduct, RICS has three levels of disciplinary action (head of regulation, disciplinary panel and appeal panel).
Head of regulation can give a fixed penalty, a Regulatory compliance Order, action by a disciplinary panel, and an appeal panel.

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20
Q

Why must a chartered surveyor undertake CPD?

A

Because of Rule of Conduct number 2 which mandates that members and firms not only have but also maintain their competency.

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21
Q

What info must you provide to RICS when setting up a new practice?

A

Inform RICS and register for regulation, appoint responsible principal, appoint MLRO (money laundering reporting officer), arrange PII (professional indemnity insurance), CHP (complaints handling policy, CHO (complaints handling officer), complaints log, client money, arrangements for sole practitioner, obtain logo kit, register for RICS VRS (valuer registration scheme) If undertaking RB valuations.

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22
Q

What info must be included in the annual return and for RICS registration?

A

Type of business, statutory regulated activities, nature of clients, name of responsible principle, CHP, PII, Whether the firm hold client money.

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23
Q

What are the benefits of regulation to a firm?

A

Confidence for clients, professionalism, security for clients

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24
Q

How many principals in a firm have to be RICS members for a firm to be regulated?

A

If over 50% of the firm’s principles are chartered a firm must be regulated; and if over 25% then it can apply.

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25
Q

What is PII?

A

Professional Indemnity Insurance - Professional Indemnity Insurance Requirements Standard

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26
Q

Why is PII important?

A

Protects clients, firms and individuals against negligence claims

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27
Q

What is money laundering?

A

When the proceeds of crime are realised into legitimate assets

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28
Q

What countries have been identified as high-risk countries?

A

Countries on the UK Sanctions List, most relevantly Belarus and Russia.

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29
Q

How do you establish whether you are competent?

A

Review my skills, understanding and knowledge

30
Q

How do you act in accordance with the RICS Professional Standard on Conflicts of Interest 2017?

A

Undertake conflict of interest checks ahead of instructions, disclose conflicts to clients, explain how conflicts can be managed, proceed if received informed consent, set up necessary conflict management procedures e.g. information barriers

31
Q

When would you decline an instruction?

A

If I was not competent, if the client would not sign Terms of Engagement or undertake AML checks, if the liability cap could not be agreed, if there was a client that could not be managed

32
Q

What client due diligence do you undertake?

A

Depends on type of client:
Need to identify beneficial owners of company. Would request proof of address (less than 3 months old) and proof of identity before business relationship entered into. If a company, would request the incorporation certificate, and their company number.

33
Q

Can you rely on due diligence checks undertaken by a solicitor?

A

Yes, but only if confident regarding third party source – firm policy to undertake own due diligence

34
Q

What is the ethical decision tree?

A

Framework of questions for surveyors to refer to when faced with an ethical dilemma
Do you have sufficient facts – is it legal – in line with RICS Rules – Consulted with the appropriate people – clear reasoning – Informed decision – Press Test – Act and Record.

35
Q

What are the key provisions of Money laundering regs 2017?

A

Written risk assessment, appropriate policies and procedures in place, staff training, Customer Due Diligence and Enhanced Due Diligence, keep records, AML checks, appoint MLRO

36
Q

What are the penalties for breaking money laundering regs 2017?

A

Unlimited fine and/or 14 years in prison or 5 years for tipping off

37
Q

Is your firm able to accept cash payments?

A

No, my firm does not accept cash but I am aware that the RICS states cash payments can be accepted up to 10,000 EUR

38
Q

What are the six principles of the Bribery Act 2010?

A

Proportionality, top level commitment, monitor and review, communication, due diligence, risk assessment.

39
Q

What are the offences of the Bribery Act?

A

Giving a bribe, receiving a bribe, bribing a foreign official, failing to prevent bribery.

40
Q

What are the penalties for breaching the Bribery Act?

A

10 years in prison and/or unlimited fine (policed by the serious fraud office)

41
Q

Who is responsible for an employees’ corrupt actions under the Bribery Act 2010?

A

The firm is not responsible if it can prove it has the appropriate policies and procedures in place

42
Q

What is your firm’s gift policy?

A

Do not accept cash or vouchers, can accept gifts but different actions are required based on the size of gifts involved.
0-30 No action
30- 60 Input on Gift Register
60-200 Input on Gift Regist and Line Manager Approval
200+ Register, Line Manager and Compliance Director Approval in Advance.

43
Q

How can you avoid negligence claims?

A

Clear terms of engagement, ensure competence, use of early warning signs, keep detailed notes and records, clear communication, understand client objectives.

44
Q

What timescales are set out in Limitations Act 1980?

A

Contract: 6 years from negligent act or 15 years longstop or 3 years from negligent act (section 14A), Tort: 6 years

45
Q

What are the bands of PII?

A

If turnover is less than £100,000 – PII should be at least £250,000
If turnover £100,001-£200,000 – PII should be at least £500,000
If turnover over £200,000 = PII should be £1m
If new firm, turnover should be estimated and adjusted in due course

46
Q

What is the maximum level of uninsured excess?

A

Firms Turnover – Maximum uninsured excess
Up to 10 Mil – the greater of 2.5% of the sum insured or £10,000.
Over 10 Mil – no set limit.

47
Q

Who must PII policies be written by?

A

RICS approved insurers e.g. Axa, Allianz, Aviva

48
Q

What is the document issued by RICS on PII called?

A

RICS Professional Indemnity Insurance Requirements 2022

49
Q

What level of run off cover is required following the cessation of trading?

A

Consumer claims: min £1m aggregate cover over min. 6 yr period
Commercial claims: must be adequate and appropriate for min. 6 yr period (RICS recommends run off cover for 15 yrs)

50
Q

Who can members apply to if they cannot arrange PII?

A

RICS Assigned Risk Pool

51
Q

Who can members go to if they are facing personal negligence claims for work carried out by a former employer who did not have PII cover?

A

RICS Members Support Service

52
Q

How do you become FRICS?

A

Leadership role, academic achievement, professional achievement, promote the industry, must be MRICS for 5 years

53
Q

Can you give me an example of conflict you have managed?

A

Have never managed a conflict, got close to it for a dilapidations instruction but in the end decided to reject instruction.

54
Q

Who regulates the RICS?

A

The RICS are self-regulated

55
Q

What is a bye-law?

A

Laws established under the Royal Charter

56
Q

What are the key provisions under the RICS Professional Statement on Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019?

A

Sets out mandatory requirements for RICS members and firms and is divided into 3 parts: Part 1 – bribery and corruption, ML and terrorist financing Part 2 – guidance and Part 3 – supplementary guidance
(covers reporting suspicions, dealing with Politically Exposed Persons, procedures to have in place etc.)

57
Q

Any extra CPD requirements for members?

A

Members must do an Ethics event every 3 years.

58
Q

On complaints what are the advised timelines on receiving a complaint and then dealing with it

A

0-7 days to acknowledge. In 7-28 working days the firm must respond to the complaint.

59
Q

What is the DRS

A

The RICS Dispute Resolution Service.

60
Q

What is Colliers Professional Indemnity Insurance cover

A

That is professionally sensitive information, however I can inform you that it would be within the range of 4-12 Million.

61
Q

What is the assigned risk pool?

A

The pool is a collective scheme run by the RICS in collaboration with RICS approved and regulated insurers. Temporary PII cover to get firm through temporary turmoil with significant number of claims when they cannot get cover elsewhere.

62
Q

What must Sole Traders have in place to set up a firm.

A

Sole Traders must have a locum agreement or succession plan in place. Cover for long term sick, death, long holidays more than a month, unseen or unavoidable events.

63
Q

What do you need to register as a regulated Firm?

A

May I ask whether this is in relation to RICS requirements or Statutory UK requirements.
For the Data Protection Act, you must register with the Information Commissioner’s Office (ICO).
Register with HMRC and Companies House. Have a registered address.
I am not planning to have staff but if I were to expand I would ensure there would be a CPD training suite, if you have a premises you would need Buildings and Contents insurance.

64
Q

What are Colliers Values

A

Be enterprising to exceed expectations.
Collaborate to drive exceptional results.
Invest in relationships to deliver enduring value.
Be experts to lead our industry into the future.
Do what’s right for our clients, people and communities.

65
Q

What are some of the recommendations of the Bishard Report?

A

A renewed focus on the Public Interest, amending the Royal Charter and creating a Public Interest Panel to advise the Governing Council.

Showing greater leadership on issues that matter to society, Climate change and sustainability.

66
Q

Any RICS guidance for Social Media use?

A

Use of social media: Guidance for RICS Members, 2021. Reminds members of high standards of social media use. Posts including dishonesty, discrimination, abusive behaviour, bullying of individuals will be investigated by the RICS.

67
Q

According to the RICS professional statement: conflicts of interest - UK commercial property market investment agency 2017, what is Dual Agency

A

An agent has a contractual relationship with the buyer and seller on the same transaction.

68
Q

According to the RICS professional statement: conflicts of interest - UK commercial property market investment agency 2017, what is Multiple Introductions

A

It is where an agent has several competing contractual relationships on the same sale of letting.

69
Q

According to the RICS professional statement: conflicts of interest - UK commercial property market investment agency 2017, what is Incremental Advice?

A

Where an agent is approached by another party to deliver professional work where they are already involved in the transaction on another side.

70
Q

If a complaint is not satisfactorily handled in the opinion of the client which redress mechanism schemes can they apply to?

A

The centre for effective dispute resolution or the RICS dispute resolution service

APC 2024 (17 decks)

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