Ethics Flashcards
Why does your firm have PI insurance?
To protect surveyors, clients and third parties against negligence claims where there is a duty of care breached and a claim for damages arises.
What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?
a. The scope of the work
b. The basis on which the fee will be calculated
c. The liability cap
How do you avoid negligence?
a. Clearly understand client’s objectives and confirm precise instructions in writing.
b. Ensure you are competent to undertake the instruction.
c. Ensure work is undertaken in accordance with the relevant RICS Standards and Guidance notes.
d. Ensure good records are kept with a sufficient level of detail
How is the RICS governed?
Through constitutional documents such as:
a. Royal Charter granted by Privy council 1881
b. Governing council
c. Standard and regulation board and management board
d. Bye-Laws and Regulations
e. Led by Standards and Regulations board (SRB)
What is the Royal Charter?
a. Granted by the monarchy and advised by the Privy Council (originally in 1881)
b. This defines its objectives
c. And enables the RICS to govern its own affairs
What is RICS guidance on Complaints Handling Procedures?
a. A firms CHP must be approved by RICS and attached to terms of engagement
b. A firm must maintain a complaints log
c. Must notify PII insurer as soon as possible
Why do you want to join the RICS?
SKN
a. Status - professional credentials provides client confidence
b. Recognition - Professional excellence recognised in many countries.
C. Market Advantage - Understanding of RICS standards gives competitive advantage
d. Network - 142,000 professionals worldwide
e. Member of well regarded professional body
f. Align with my belief and commitment to Continued Professional Development
g. Providing a Public service
What are the RICS document types?
a. International Standards - IPMS
b. RICS Professional Standards – Conflicts of Interest 2017
c. RICS Guidance Notes – Complaints Handling 2016
d. RICS Code of Practice – Code of Measuring Practice 2015
What is money laundering?
It is when proceeds of criminal activity are disguised or converted into legitimate assets.
What are the key pieces of legislation for Money Laundering?
a. Proceeds of Crime Act 2002
b. Terrorism Act 2000
c. The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
When was the RICS founded?
1868
What are the types of RICS membership?
- FRICS
- MRICS
- AssocRICS
- Trainee/Student
What is the role of the RICS?
- To maintain the highest standards of education and training.
- To protect consumers through strict regulation of professional standards.
- Leading Source of information and independent advice on land, property, construction and associated environmental issues.
ICS - Information, Consumers, Standards
What are the benefits of a firm being regulated by the RICS?
CPS
1. Confidence - it provides to clients
2. Professionalism - firms will provide clear, impartial and expert advice
3. Security - Firms have access to complaints procedure, independent redress and PII cover.
What is required by the RICS within an annual return?
- Type of Business and Staffing Details
- Statutory regulated activities - e.g financial services
- Nature of clients
- Complaints handling procedure details and records
- PII
- Whether the firm holds clients money
RICS Rules of Conduct 2021 - What are the 5 rules?
- Be honest, act with integrity, and comply with personal/RICS obligations.
- Maintain professional competence.
- Good quality and diligent service
- Treat others with respect and encourage diversity and inclusion.
- Act in the public interest, take responsibility for your actions, maintain public confidence.
What do you do when you are faced with an ethical decision?
- Consult the Ethics Decision Tree
- Call RICS Regulation Confidential Hotline.
What are the three levels of disciplinary action by the RICS?
- Action by the Head of Regulation
- Regulatory Tribunal
- Appeal Panel
What are the 4 actions the Head of Regulation can take following a formal investigation?
- Fixed penalty notice
- Regulatory Compliance Order (steps to take for minor breaches)
- Regulatory Tribunal
- Refer directly to a Disciplinary Panel (includes non-RICS members).
What are the penalties available to the Regulatory Tribunal Disciplinary Panel?
- Regulatory Compliance Order
- An unlimited fine per breach (proportionate to breach)
- Impose conditions upon future continued RICS registration.
- Expulsion from membership or remove a firm.
- Publication of the hearing results on: RICS Modus, RICS website, local newspaper.
What are Enhanced Due Diligence checks? and what situations are they used in?
Used in High Risk situations - PEPs (Politically Exposed Persons) and PSC (Persons of Significant Control).
Information such as bank statements, trust deeds or evidence of a bonus payment may be needed and in turn may bring about further questioning.
Describe a time you acted with honesty and integrity?
- For an agency instruction, I undertook a conflict of interest check to ensure that there was nothing that could impact my impartiality.
Describe a time you maintained your professional competence?
- While inspecting a property during a lease renewal instruction, I was queried about a defect to the roof of the property. I advised this was out of my area of expertise they should seek advice from a building surveyor.
Describe a time you provided good quality diligent service?
- I provided good quality and diligent services to a client during an agency instruction by clearly communicating with the client throughout and keeping them up to date.
Describe a time you treated others with respect?
- When out on inspections I treat everyone I meet with respect and courtesy.
Describe a time you acted in the public interest and took responsibility?
- I think about the consequences before posting on social media. E.g. LinkedIn.
Why did they change the rules of conduct?
- Consultation revealed members and firms voted to replace existing rules.
- To provide single set of rules that provides better clarity with clear examples of behaviours,
Introduces thoughts to diversity and inclusion , plus evolving tech.
What principles are the ROC based upon?
Honesty
Integrity
Competent Service
Respect
Responsibility
What is the RICS ethics tree?
- Decision tree providing framework for members facing a potential unethical matter.
- Encourages considerations for the legality of the action and if it aligns with the rules of conduct.
- Would you want the action to be made public?
What are some professional obligations for members?
- Comply with CPD requirements
- Cooperate with the RICS where necessary
- To provide all information when requested by the Standards and Regulations Board.
What are some professional obligations for firms?
- Publish complaints handling procedure and maintain a complaints log.
- Ensure adequate PII is in place.
- Report and cooperate to RICS.
- Display the RICS logo on Business literature.
What are some instances you might decline an instruction?
- Outside scope of competence
- Conflict of Interest
- Client not willing to sign ToE.
- Client not willing to undertake or fails AML check.
- Outside of PII cap.
What is a professional standard?
- Sets our requirements/expectations for members and firms.
- Principle based , set a baseline of expectations for competence and behaviour.
- “must” - mandatory requirement
- “should” - judgement based decision
- Conflicts of Interest 2017
What is a guidance note?
- Supplementary guidance to support surveyors.
- Not mandatory
- Includes definitions, toolkits, technical information and advice.
- Complaints Handling 2016
What steps do you need to take when setting up a practice?
- Inform the RICS
- Appoint a contact officer
- Register with RICS for regulation by the regulatory board
- Arrange PII
- Set up client account for handling client money
- Complaints handling procedure and office
- Valuation Register Scheme if undertaking red book vals.
- Ensure completion of RICS annual return at the end of each year.
- Locum if sole practitioner.
Steps to take if closing a practice?
- Inform RICS
- Ensure clients are told ASAP, and arrangements are made to pass across to new firm.
- Return monies held in client accounts.
- Inform insurers and ensure there is run off over for min 6 years.
- Retain files for min 6 years.
What sort of insurance do chartered surveyors need?
- PII
- Building and contents
- Employers’ liability
- Run off cover
When might a disciplinary procedure be needed?
- Following a complaint
- Misconduct
- Professional incompetence
- Criminal activity
What disciplinary actions can the RICS use?
- Fines
- Caution
- Compliance Order
- Regulatory Disciplinary Panel
What is a compliance order?
- Written document stating the terms upon which the member or firm must take to re-correct their wrongful actions and prevent it happening again.
- low-level breaches (CPD not met)
What is a disciplinary panel?
- More serious breaches (fraud, gross incompetence, discrimination)
- Penalties: Caution, fines, expulsion, conditions of continued membership
What is the RICS guidance on Conflicts of Interest?
- RICS Professional Standard - Conflicts of interest 2017
- Guidance on how to identify conflicts and to manage them
- 3 Parts: Mandatory guidance, two parts on how to apply the standards and meet obligations
What are the types of conflict?
- Party conflict - Firm/member acting for clients with conflicting interests.
- Own interest conflict - person interest such as family member.
- Confidential Information Conflict - relating to work between two parties that is confidential.
What do you understand about conflict of interests?
- Where someone in a position of trust has competing personal or professional interests making it difficult for them to fulfil their duties impartially.
- Ensure that you can act impartially and objectively, helps maintain integrity and trust within the profession as per the rules of conduct.