Ethics Flashcards
When was the RICS founded
1868
Why do you want to become a chartered surveyor
As it would provide me increased credibility in the eyes of my client and peers. It would help me further my professional competency and provide me with access to a network of professional membersWhe.
When did the RICS get it’s Royal Charter
1881
How do you become a fellow of RICS
You must submit evidence of achievement of four fellowship characteristics, which are:
(1) 5 years or more as a MRICS
(2) A leadership role in the industry (3) Professional Technical Achievement (4) Academic Achievement (5) Raising the profile of the RICS
Who is the current president of the RICS
Tina Pailett
Who is the current CEO of RICS
Justin Young
What is the governing structure of RICS
Governing Council is in charge
Three boards report to it
1) Regulatory Board
2) Audit Committee
3) The Management Board
What are the 4 membership levels
Trainee Member
AssocRICS
MRICS
FRICS
What are the 5 Global Professional and Ethical Standards (2015)
STIRR
(1) Always provide a high standard of Service,
(2) to act in a way that promotes Trust in the profession,
(3) Act with Integrity
(4) to treat others with Respect,
(5) take Responsibility.
When were the RICS bye laws last updated
Effective Feb 2020
Give me an example of a bye law
Designations - I.e. who can use initials etc
Who is the RICS president elect
Justin Sullivan
What is the role of the RICS according to the professional and ethical standards
1) High Standards of education and training
2) Protect Consumers through regulation
3) Leading source of information
What are the 5 principles of the RICS Regulation for Members and Firms (2007)
1) Transparency
2) Proportionality
3) Accountability
4) Consistency
5) Targeting
What are the benefits of being an RICS regulated Firm
1) Confidence
2) Professionalism
3) Security
When are firms required to register for RICS registration
- Provide surveying services to public
- Over 50% of principles are RICS members
What information does the RICS require from a firm for registration
1) Type of business and staffing details
2) Statutory regulated activities
3) Nature of clients
4) CHP
5) PII
6) Client’s Money handling
If a breach were to be reported to the disciplinary hearing, what penalties can be imposed on the breaching party
- Consent order
- Unlimited (but proportional) fine
- Conditions for continued membership
- Expulsion
- Publications of results of hearing in modus magazine
What levels of RICS Regulation are there
- International Standards (Mandatory) – E.G. IVS
- Professional Statements (Mandatory) – E.G. Conflicts of Interest – UK Commercial Property Market Investment Agency, (2017)
- Practice Statements (Mandatory) – E.G. Very Few of these (Home Buyer Report (2016) for example)
- Guidance Notes (Voluntary) – Surveying Safely (2018)
- Codes of Practice (Mandatory or Recommended Practice)
What is to be included in TOE when starting work on an instruction
- Written agreement with client on fee due
- Confirmation in writing firms CHP will be available on request
What 3 things should you do prior to undertaking an instruction
1) Check for Conflict of Interest
2) Ensure competence
3) Confirm TOE
What has the RICS published on Conflict of Interest
RICS Professional Statement on Conflicts of Interest (2017)
What types of conflict of interest are there
Own interest
Party
Confidential information
How would you manage a conflict via informed consent
Receive written confirmation from all parties that you can proceed with the instruction despite the identified conflict/
Put information barriers in place, keeping all information secure and parties physically separate
How long should you retain clients files before destroying them
6 years
How many hour of CPD should a member do p/a
20 hours p/a (10 formal)
What RICS guidance/statement relates to Money Laundering
RICS Professional Statement – Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)
What is the penalty from Bribery
Up to 10 years in prison
Unlimited fine
What are the penalties under Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) 2017?
Assisting in money laundering
- Up to 14 years in prison
- Unlimited fine
Tipping off in money laundering
- Up to 5 years in prison
- Unlimited fine
What is the limit on money acceptance under Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) 2017?
10,000 Euros innit
What is a PEP
Politically exposed person
At higher risk of being involved in bribery or corruption due to their position
Require enhanced due dillegence
What is your companies policy on bribery
Have a gift register with guidelines
- Never give/receive cash/vouchers
- Gifts up to £50
- £125 per head for client meals
What are the 6 Key Principles of the Bribery Act
1) Proportionality
2) Top Level Commitment
3) Risk Assessment
4) Due Diligence
5) Communication
6) Monitoring & Review
What are the four offences under the bribery act (2010)
- Bribing
- Receiving a bribe
- Bribing a foreign public official
- Failing to prevent bribery
What are the requirements for a client account
- Must have client money in name
- Funds must be readily available for the client on request
- All interest paid to client
- Only client monies held, if mixed monies other monies to be
released immediately - Funds deposited within 3 days of receipt
- Draw down schedule must be agreed
What client money protection scheme is Workman registered with?
RICS Client Money Protection Scheme for Surveying Services
What RICS documentation relates to client money handling
RICS Professional Statement on Client Money Handling 2019
What happens if you have surplus money in client account
If after 6 years no one has been claimed, and EVERY EFFORT has been made to identify the claimant it can be donated to registered client
If not go to Lionheart
Charity to provide indemnity if claimant comes forward at later date
Summarise Limitations Act 1980
Governs how long claims can be made against surveyor for breach
Contract = 6 years
S14A = Can be 15 years if claimant only had “knowledge” to bring claim within last 3 years
What is the RICS requirement for run off cover once firms closes
At least £1 million of aggregate cover for at least six years
How might you avoid claims of negligence made against you?
- Have clear understanding on clients requirements
- Clearly outline requirements in scope of works and TOE
- Ensure competency
What levels of PII are required
- £0 -> £100k = At least £250k per claim
- £100k -> £200k = At least £500k per claim
- +£200k = At least £1 million per claim
What is the legal margin of error in property valuation
K/S Lincoln et al vs CB Richard Ellis (2010)
- 5% for single resi properties
- 10 % for single commercial properties
- 15% for complex holdings
What are the Three Objectives of Client Money Handling (2019)?
(1) Keep Client’s Money Safe
(2) Client accounts are used appropriately
(3) RICS – regulated firms have appropriate procedures in place to ensure best practice.
What are the 8 Mandatory Requirements of Client Money Handling (2019)
(1) Confirm that client’s money is to be held in a client account (including bank account details), that the firm has exclusive control over.
(2) Ensure client money account contains no other funds, and funds withdrawn in error are replaced.
(3) Not to hold office money in the account, unless it is in receipt of mixed monies
(4) All client money accounts include the word “client” in the name.
(5) Ensure money held in a client account is immediately available even at the sacrifice of interest.
(6) Only withdraw out of a high interest (penalty-bearing account) with written consent from the client.
(7) Confirm account operating conditions with bank (No set-off for other firm accounts, no mixing of funds)
(8) Ensure that when a client requests it, money is held in an account that the firm and client have access to. (Has to be an account established by the client, not the firm).
How would you carry out a conflict of interest check
Use internal software search for any instructions using following keywords:
- Address
- Client name
- Tenant name
- Name of borrower
When starting a new business, what would you do relating to VAT
Inform HMRC for VAT registration
- Current turnover threshold is £90k
What are the key elements of the RICS Professional Statement on Countering Bribery, Corruption and Terrorist Financing (2019)
- Not to offer or accept anything that could constitute a bribe.
- Having procedures in place to comply with the law.
- Report suspicion to the relevant authority.
- Perform periodic written evaluations of the risks the firm faces.
- Retain records to show the firm has met the requirements of
the Professional Statement.
What are the statutory requirements when setting up a firm
- A. Declare Business name
- Register with HMRC for VAT registration
- Ensure compliance with employment law
- working hours
-Living wage etc
. Ensure insurance compliance - public/employer liability - Compliance with Equalities Act (2010)
- Compliance with H&S at Work Act (1974)
- Disability Discrimination Compliance
What are the five rules of conduct (2021)
1) Members and firms must be honest and act with integrity
2) Members and firms must maintain their professional
competence
3) Members and firms must provide good-quality and diligent
service
4) Members and firms must treat others with respect and
encourage diversity and inclusion
5) Members and firms must act in the public interest
What is the purpose of the new rules of conduct
- Simpler structure with clear examples
- Focus on D&I
- Understanding of importance of technology and risks and
benefits
Examples of rule 1
- Not to take advantage of others
- To prevent others from being misled
- To keep client money safe and have appropriate accounting controls
Examples of rule 2
- Only to take on work you are competent for
- Supervise employees undertaking work and ensure they have
the necessary skills
Examples of rule 3
- Understand needs and objectives of client
- Communicate with client in clear ways they can understand
Examples of rule 4
- Respect the right of others
- Do not bully, victimise or harass
- Work cooperatively with others
Examples of rule 5
- Respond to complaints made against them promptly openly
and professionally - Do not dissuade complaints from approaching an ADR or other
regulatory board
What is your Understanding of the Bichard Review
Conducted June 2022
36 recommendations in 7 key areas
Use examples
Renewed focus in public interest
Increased focus on D&I
Undertaking independent review of RICS every 5 years
1) Renewed interest in public interest
2) Maintained self regulation through greater independence for
regulatory functions
3) Increased focus on D&I
4) Enabling & empowering members through better support
5) Understanding an independent review of the RICS
governance every 5 years
6) New simplified, clear and accountable governance structure
7) Show greater leadership on issues which matters to society,
What are the RICS Rules for the Registration of Firms (2022)
I.e. when do firms have to register, or when are they eligible to register
Required to register if
- The firm provides surveying services to the public and at
least 50% of the firms principles are RICS members
Eligible to register if
- The firm provides surveying services to the public and at
least 25% of the firms principles are RICS members
What information is required by RICS for registration
- Type of business and staff detail
- Statutory related activities e.g. financial services
- Nature of clients
- Complaints handling procedure and records
- Professional indemnity insurance and details
- Whether the firm holds clients money
Mandatory obligations for firms
- Publish CHP
- Ensure all work is covered by PII
- Sole principal to make arrangements for work to continue in
case of incapacitation - Cooperate RICS
- Provide information requested by standards and information
board - Report to RICS
What are considerations from Ethics decision tree
- Do you have sufficient facts on the issue
- Is it legal
- Is it in line with the RICS Rules of Conduct
- Have you consulted with appropriate people to make an
informed decision - Do you have clear reasoning in reaching your decision
- Would you be content for your actions to be made public
What are the three levels of Disciplinary Procedure
1) Action by head of regulation
2) Disciplinary panel
3) Appeal panel
What are the requirements for PII
- Written on full civil liability basis with min level of indemnity
- Comply with max level of uninsured excess
- Full retroactive
- Underwritten by RICS listed insurer
- Cover all past and present employees work
What is the max level of uninsured excess required for PII
- Turnover of £10m or less
- Greater of 2.5% of sum insured or £10k
- Over £10m turnover
- No set limit
Name some money protection schemes
- Client money protect
- Money Shield
- Property Mark
What information is required in an annual return
- Firm details
- Address
- VAT reg
- Services provided
- Designation details
- Offices
- Principles details
What are the offences under the proceeds of crime act (2002)
- Concealing Criminal Property
- Arrangement
- entering into arrangement which person knows involves
criminal property
- entering into arrangement which person knows involves
- Acquisition use or possession of criminal property
What support do RICS offer for PII
- RICS Assigned risk pool (run off
cover) - Members support service
- For members facing claim
for work where employer is
in admin
- For members facing claim
- RICS Low Earners Scheme
- For retired part time workers
What steps would you take in due diligence for a customer
- verify identity (passport etc)
- Identify owners of companies (check companies house)
- For a company, name, company
no, registered address is
required.
What are the three sections of RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing (2019)
- Mandatory requirements
- Guidance
- Supplementary guidance
What is the max level of PII excess
If Turnover is £10 million or less = Greater of £10k or 2.5% of sum insured
If Turnover is + £10 million = No set limit
When was the Money Laundering, Terrorist Financing & Transfer of Funds Regulations (2017) last updated
January 2024, to reflect changes in higher risk countries
What action can the head of regulation impose
- Fixed penalty notice
- Regulatory Compliance Order
- CPD Sanctions
- Refer to disciplinary panel
What action can the disciplinary panel impose
1) Regulatory Compliance Order
2) Unlimited fine per breach
3) Conditions for future membership
4) Expulsion
5) Publication of results on modus and/or local newspaper
Who is the third party redress scheme used by Workman for complaints
CEDR - Centre for Effective Dispute Resolution
Name some key provisions to the AML Act
- Have a written AML RA
- Provide training and have controls in place
- Comply with due diligence requirements
- Keep records
- Limit of 10k euros cash acceptance
- Have a nominated senior member of staff to ensure compliance
What is the punishment if a firm is found guilty of bribery
Unlimited fine
Define money laundering
Disguising or converting proceeds of criminal to be realised as legitimate assets
What is the role of the standards and regulation board
Responsible for strategy, policy & admissions in the profession
What are the claim limits for the RICS client money protection scheme
- £50k per claim
- £10.3 million p/a
What information is required in an annual return
- Firm details
- VAT reg
- Services provides - Designation details
- Offices
- Principles details
- RICS member employees
What are the five advantages of being an RICS member
- Status
- Recognition
- Market advantage
- Knowledge
- Networking
When did the RICS last update their disciplinary panel rules
October 2019
Why is CPD important
Helps remove gaps in knowledge and keeps me up to date within industry changes
Who is a responsible person
A person who is responsible for ensuring the RICS standards are upheld
What is a confidential information conflict
Conflict of duty of an RICS member to BOTH
- Provide material information to one client
- Keep same information confidential to another
client
