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APC > Ethics > Flashcards

Ethics Flashcards

1
Q

What are the RICS rules of conduct for Members & Firms?

A

“Effective Feb 2022

5 Rules (HC/ MS / QS / RD / Pi RAPc)

  1. M+F honest, act with integrity and comply with their professional obligations, including obligations to RICS.
  2. M+F maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
  3. M+F provide good-quality and diligent service.
  4. M+F treat others with respect and encourage diversity and inclusion.
  5. M+F act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
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2
Q

Provide some examples of Rule 1 for members + firms

A
  • Members and firms do not mislead others by their actions or omissions, or by being complicit in the actions or omissions of others.
  • M+F identify actual or potential conflicts of interest through professional assignment.
  • Members and firms are open and transparent with clients about their fees and services.
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3
Q

Provide some examples of Rule 1 for Firms

A

”- Firms keep client money safe.
- Firms have a effective process to identify actual and potential conflicts of interest.”

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4
Q

Provide some examples of Rule 2 for members & firms

A

”- Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.
- Members identify development needs, plan and undertake continuing professional development (CPD) activities to address them and are able to demonstrate they have done so
- M+F stay up to date with relevant legislation, codes of practice and other professional relevant technical standards.”

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5
Q

Provide some examples of Rule 3 for members + firms

A

”- Members and firms understand clients’ needs and objectives before accepting any professional work.
- Members and firms communicate with clients and others clearly and in a way they can understand.
- M+F keep proper records of thier work and decisions to satisfy an audit.
- M+F encourage sustainable solutions that deliver balanced ESG benefits.”

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6
Q

Provide some examples of Rule 3 for firms

A

”- Firms inform clients they are regulated by RICS.
- Firms have effective quality assurance processes for their work.”

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7
Q

Provide some examples of Rule 4 for members + firms

A

”- Members and firms respect the rights of others and treat others with courtesy.
- Members and firms do not bully, victimise or harass anyone.
- Firms check supply chains do not involve modern slavery or abuse of workforce.”

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8
Q

Provide some examples of Rule 5 for members + firms

A

”- M+F question practices and decisions that they suspect are not right. Raise concerns with appropriate route.
- Members and firms respond to complaints made against them promptly, openly and professionally.
- M+F do not dissuade complainants from approaching ADR providers, RICs of other reg. body.
- Members and firms manage their professional finances responsibly.
- M+F take appropriate action when they consider rules have been breached.”

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9
Q

ROC: What professional obligations are mandatory to RICS Members?

A

“CCI

  1. Must comply with CPD requirements set out by RICS.
  2. Must cooperate with RICS.
  3. Must promptly provide all information reasonably requested by the Standards and Regulation Board.”
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10
Q

ROC: What professional obligations are mandatory to RICS-regulated firms?

A

“CPD CILR

  1. Firms must publish complaints-handling procedure, incl ADR provider approved by RICS and maintain a complaints log
  2. Must ensure all work is covered by PII and that cover meets standards approved by RICS.
  3. With a sole principal must make appropriate arrangements for the professional work to continue in the event of death.
  4. Must cooperate with RICS
  5. Must promptly provide all information reasonably requested by the Standards and Regulation Board.
  6. Must display their business literature in accordance with RICS published policy on designations.
  7. Must report to RICS any matter that they are required to report under the Rules for the Registration of Firms”
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11
Q

What are the Rules for the Registration of Firms?

A

“FRICE PROD DRLP

  1. Interpretation - definitions in the rules.
  2. Communication - how the RICS will communicate w/ firms.
  3. Firms are required to register for regulation by RICS.
  4. Identification of firm eligible to register for regulation.
  5. Registration of practice divisions
  6. Procedure for registration
  7. Responsible principal
  8. Obligations of registration.
  9. Deregistration.
  10. Review and appeal - durations for a review
  11. Limits for applications for registration and readmission.
  12. Publication of information on firms registration status.
  13. Fees - to the RICS & registration.”
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12
Q

What is meant by Ethics?

A

Ethics mean doing the right thing, even if it is not the easiest route to take

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13
Q

What are the principles of better regulation?

A

“PACTT
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency”

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14
Q

Why are the ethical standards important?

A

Create a clear and streamlined guide to members to ensure that clients and anyone else who deals with the RICS has confidence in the profession

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15
Q

What are the 5 RICS Professional and Ethical Standards:

A

“1. Act with Integrity
2. Act in a way that promotes trust within the profession
3. Always provide a high level of service
4. Take responsibility
5. Treat others with respect”

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16
Q

What is meant by ‘treat others with respect’?

A

Be courteous, polite and consider cultural sensitivities and business practices. Never discriminate, encourage the fair and respectful treatment of clients

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17
Q

What is meant by ‘act with integrity’?

A

“Being honest and trustworthy in all that I do
Transparent, respecting confidential information, not taking advantage of anyone, not allowing bias or pressures affect my judgement or obligations, not accepting gifts or hospitality that might suggest an improper obligation, acting in the interest of the public”

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18
Q

What is meant by ‘take responsibility’?

A

“Be accountable for my actions and don’t blame others if things go wrong.
Always act with skill, care and diligence, respond to complaints in the appropriate professional manner, prepare to question things that don’t seem right”

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19
Q

What is meant by ‘provide a high level of service’?

A

“Ensuring the best possible advice, support or performance is given to my clients
Be clear about the service being provided, act within my scope of competence, transparent about fees and any other costs or payments, communicate with clients in a way that allows them to make informed decisions”

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20
Q

What is meant by ‘promote trust within the profession’?

A

“Act in a manner, both in professional and private life, that promotes me and my firm in a positive way
Promote the highest standards globally, amending behaviour to suit others, fulfil obligations”

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21
Q

How would you define ethical behavior for a chartered surveyor?

A

Acting in accordance with the 5 RICS professional and ethical standards

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22
Q

What is the RICS Decision Tree?

A

Flowchart to help members decide how to act in difficult situations where their professional ethics may be at stake

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23
Q

What factors does the RICS Decision Tree consider?

A

“Sufficient facts
Legality
Ethical standards
Consultation of appropriate people
Clear reasoning
Impact if actions made public”

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24
Q

Give some examples of how you reflect the RICS ethical standards in your work.

A

“Goldman Sachs - visibility of competition and COI
Undertaking CPD
Taking the time to explain cost updates to stakeholder not familiar with construction.”

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25
Q

What is the central purpose of the RICS?

A

“1. To maintain the highest standards of education and training
2. To protect consumers through strict regulation of professional standards
3. To be the leading source of information and independent advice on land, property, construction and associated environmental issues”

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26
Q

“What are the different status types of RICS documents?

A

“Mandatory (Information standards, professional statements)

Recommended best practice (RICS guidance note, Code of practice)

Information only (RICS information paper, RICS insight, RICS economic report, research)”

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27
Q

How does the RICS ensure members abide by the Rules of Conduct for Members, 2007 (as amended 2013)?

A

“Head of Regulation at the RICS investigates claims of misconduct. They have the power to:
1. Serve a Fixed Penalty notice
2. Make a Regulatory Compliance Order
3. CPD sanctions
4. Refer to a Disciplinary Panel
Member has right to appeal decision made at a Disciplinary Panel by going to an Appeal Panel”

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28
Q

Why do you want to be a member of the RICS?

A

”- I want to become a member of an internationally recognised and respected professional group.
- It will provide me with significant career opportunities, continuous professional development and networking possibilities.”

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29
Q

What does the RICS stand for?

A

The Royal Institution of Chartered Surveyors

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30
Q

“Who is the president of the RICS?
Who is the vice president of the RICS?
Who is the senior vice president of the RICS?
Who is the CEO of the RICS?”

A

“Tina Paillet
Nicholas Maclean
Justin Sullivan
Justin Young

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31
Q

Do you know what Lionheart is?

A

LionHeart is an independent charity specifically designed for past, present and future RICS professionals and their families.

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32
Q

What does LionHeart do?

A

“Their aim is to support members through difficult times, whether personal or professional, from the beginning of their career as an APC candidate or apprentice, right through to retirement.

Support is offered through:
- Finance
- Health & Wellbeing
- Family related support
- Work-related support and many more.”

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33
Q

Can you describe the RICS governing structure to me?

A

”- Privy Council: Which grants and awards the royal charter. Makes any changes to the Royal Charter and Bye-Laws
- Governing Council: meets twice a year to discuss strategy and exercise oversight. Delgate to the Standards & Regulation Board.
- Management Board: implement day to day performance and delivery of the business. Also includes the Knowledge board, finance committee, world regional boards and remuneration committee.
- Regulatory board: Reports solely to the governing council on its activities.”

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34
Q

Can you name some of the professional groups of the RICS?

A

”- Quantity Surveying & Construction
- Project Management
- Building Surveying”

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35
Q

What is our motto?

A

Est modus in rebus (there is measure in all things)

36
Q

What are the three market sectors covered by the RICS?

A

Land, Property & Construction

37
Q

What is the background to the RICS?

A

“Founded in 1868
RICS has a Royal Charter, granted by Privy Council in 1881
RICS Regulations and Bye-laws set out the governance of the institution”

38
Q

Where is the RICS HQ?

A

Parliament Square, London.

39
Q

What are the FOUR levels of membership for the RICS?

A

“FRICS
MRICS
AssocRICS
Trainee/Student”

40
Q

What are fixed penalties and when are they issued?

A

“A fixed penalty is an administrative fine and/or caution issued by RICS when a Regulated Member fails to provide us with information that we have requested.
This information can include: a firm or value submitting their annual return record, updating CPD records or payment of regulatory fees.”

41
Q

What does a regulatory compliance order consist of?

A

“1) Caution
2) Reprimand
3) A requirement that the Regulated Member gives one or more undertakings as to future conduct
4) A requirement that the Regulated Member takes or stops taking certain actions within a specified period of time
5) Conditions on the Regulated member’s continued membership of RICS
6) Conditions on a Regulated Members registration for regulation
7) A requirement that the Regulated Member pays a fine.”

42
Q

What are consent orders?

A

”- Formal written agreements between the RICS and members / firms that require the member / firm to refrain from taking actions for a specific period
- Used for minor breaches and can be applied when the member / firm does not contest the complaint”

43
Q

What are sanctions?

A

”- They can be a fine up to £2,000 per breach and/or costs
- Include
o Caution
o Unlimited fine
o Expulsion from RICS”

44
Q

What are the THREE benefits of regulation for firms?

A

“CPS:

  1. Confidence - for client as regulated firms are monitored by RICS regulation
  2. Professionalism - firms have to provide clear, impartial and expert advice
  3. Security - firms have to have recognized CHP, access to ADR and PII cover”
44
Q

How is the RICS regulated?

A

“The regulatory functions of RICS are delegated from RICS’ Governing Council to the independently led Standards and Regulation Board (SRB)

The role of the SRB is to build and maintain trust and confidence in the profession for the public advantage”

45
Q

What is a bribe?

A

The exchange of something of value in return for someone doing or agreeing to do something improper in a business context

46
Q

What are the penalties under the current bribery legislation?

A

A maximum 10 years’ imprisonment and/or an unlimited fine

47
Q

What procedures should RICS corporate members follow in relation to preventing bribery?

A

“RICS corporate members should follow the 6 principles in preventing bribery practices:

  1. Proportionate procedures - procedures should be proportionate to the bribery risks the company faces
  2. Zero tolerance to bribery
  3. Risk assessment - the company should periodically assess the internal and external risks of bribery
  4. Due diligence - systematically investigate employees and business partners (the level of which should be informed by the risk assessment)
  5. Communication (including training) - communicate policies, operate confidential whistle-blowing service, provide training
  6. Monitor and review - periodically review procedures and make improvements where necessary”
47
Q

What considerations should RICS members have in relation to offering or accepting gifts and hospitality?

A

“Only offer or accept gifts and hospitality that are customary, proportionate and reasonable in terms of value and frequency.

Never offer or accept any gift or hospitality if it may improperly influence your decisions/judgement or give the appearance of doing so (e.g. consider the timing of the gift).

Only offer or accept gifts and hospitality that you would be happy for others to know about.

Follow the policies and procedures of your employer in relation to gifts, hospitality and promotional expenditure.”

48
Q

What are the SIX principles of the Bribery Act 2010?

A

“1. Proportionality
2. Top level commitment
3. Risk assessment
4. Due diligence
5. Communication
6. Monitoring and review”

48
Q

What are the FOUR offences under the Bribery Act 2010?

A

“1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent bribery”

49
Q

What should a surveyor do if a conflict of interest arises?

A

”- Should be dealt with by implementing openness and transparency.
- Declare any conflicts of interest clearly to all parties ASAP and offer to stand down from acting for any party. All parties can then decide how they wish to proceed and if there are any objections you must stand down”

49
Q

Give some examples of where conflicts of interest may arise.

A

”- Acting for two different parties with competing interests at the same time
- Financial interests (e.g. gaining over and above your normal fee)
- Personal relationship
- Confidential Information.”

50
Q

What is the Modern Slavery Act?

A

“UK regulation surrounding combating Slavery.
Introduced in 2015.”

50
Q

Why might the construction industry be affected by Modern Slavery?

A

As the industry is fragmented through the use of numerous supply chains and high demand for migrant workers

51
Q

What is a conflict of interest?

A

A situation which effects the impartiality of one party. Anything that impedes or might be perceived to impede an individual’s or firm’s ability to act impartially and in the best interest of a client.

52
Q

What are the three types of conflicts of interest?

A

”- Party conflict: duty of an RICS member or regulated firm conflicts with a duty owed to another client or party in relation to the same or a related professional assignment
- Own interest conflict: Duty of an RICS member or a regulated firm to act in the interest of a client in a professional assignment conflicts with the interests of that same RICS member or firm
- Confidential information conflict: Conflict between the duty of an RICS member to provide material information to one client, and the duty of that RICS member or regulated firm to another client to keep that same confidential information”

53
Q

Describe a conflict of interest you have experienced and how it was resolved.

A

Goldman Sachs - Holding equities and being forthcoming with that information.

53
Q

“What is informed consent?

A

“Consent willingly given by the parties affected by a conflict of interest that demonstrates that they understand:
o A conflict exists or is at risk of existing
o The facts that are material to the conflict
o What the conflict is or might be
o That the conflict may affect the ability of the member or regulated firm to advise or act fully in the interest of the client”

54
Q

What is PII and what is its purpose?

A

“Professional Indemnity Insurance (PII):

Protects firms & individuals against losses resulting from professional negligence, errors and/or omissions which cause financial loss to a third party
Ensures a firm’s clients do not suffer financial loss which the firm cannot meet”

55
Q

If you were self-employed, would you consider adjusting your PII to carry out a piece of work or decline to do the work?

A

“Commercial decision based on the opportunity and risk

Never proceed without the sufficient level of PII”

56
Q

Can you list any insurances a cost management firm would need?

A

“Professional Indemnity insurance
Public Liability
Employer’s liability
Building Insurance”

57
Q

Explain the term ‘claims made basis’.

A

“The policy at the time the claim is made will respond, not the policy in place at the time of the negligence.
Insurer will only pay out if the policy was within the period of the insurance, not after, unless there is run off cover.”

57
Q

What does the RICS state about PI insurance?

A

obligations are mandatory to RICS-regulated firms - Must ensure all work is covered by PII and that cover meets standards approved by RICS.

58
Q

What should a PII policy contain?

A

“1) Must be on a claims made basis
2) Must be on an each and every claim basis
3) Policy wording is written on a full civil liability basis
4) Underwritten by a listed insurer
5) Covers past and present employees
6) Run-off cover
7) Minimum level of indemnity required by the RICS”

59
Q

How would you determine what is sufficient in terms of PII runoff cover?

A

Should be for a minimum of 6 or 12 years, depending on how the contract was executed, however negligence claims can be made up to 15 years after work was undertaken - advice from an insurance broker should be sought as to whether to maintain for the full 15 years

60
Q

How would you determine what is sufficient in terms of PII runoff cover?

A

Should be for a minimum of 6 or 12 years, depending on how the contract was executed, however negligence claims can be made up to 15 years after work was undertaken - advice from an insurance broker should be sought as to whether to maintain for the full 15 years

61
Q

What is generally excluded from PII cover?

A

“1) Material damage
2) Theft
3) Personal injury
4) Damage to third party property
5) Work carried out prior to the inception of the policy
6) Insured v insured claims (i.e. a company suing an employee for professional negligence)
7) Insolvency”

62
Q

What are the minimum levels of PII required?

A

“1) £100,000 or less turnover = min. £250,000 indemnity
2 )£100,001 to £200,000 turnover = min. £500,000 indemnity
3) £200,001 and above turnover = min. £1,000,000 indemnity”

63
Q

What should you do in case of a potential claim on your PII?

A

“Must notify insurer in the event of:

An actual claim
A written or verbal threat of a claim
Any circumstance that the firm has reason to believe may result in a claim
Any complaint notified via the firm’s CHP”

64
Q

Do you know what the excess means?

A

“It is the uninsured amount, so if the company was to make a claim they would have to pay this amount.
RICS provide guidance:
- if the insured amount is £500k or less, the excess should be 2.5% of the insured amount of £10k (whatever is more).
- If the insured amount is £500k or more, the excess should be 2.5%”

65
Q

Is PI insurance claimed on aggregate amount or each and every claim? What does this mean?

A

”- Each and every claim
- The full amount of insurance can be claimed on every claim”

66
Q

What is the limitation period within which an action can be brought for negligence?

A

Dependent on the way that the contract is executed. If under hand then prudent to maintain run off cover for longer, and if executed as a deed then 12 years but prudent to maintain run off cover for minimum of 6 years and maximum of 15 years after cessation of practice.

67
Q

What is run-off cover and what is the cost of run-off cover?

A

“Run off cover is a PI policy which comes into effect when a business stops trading and any claims made under it will relate to work carried out before trading stopped.
Reduces over time, the first year will be the same as the previous, but decreases around 15% per annum.”

68
Q

What is the RICS Assigned Risk Pool?

A

“1) Insurance facility for regulated firms that find themselves unable to obtain PII in the normal market
2) Firms can remain in the ARP for a maximum of 3 years, where they will be audited and guided in how to amend their business procedures/practices ready to obtain market PII again”

69
Q

Why is it important to consistently undertake CPD?

A

It is a commitment by all RICS members to continually update their skills and knowledge, in order to support them with remaining professionally competent and in touch with the changing needs of the fields they operate in

69
Q

How many hours of CPD do you have to undertake? What are the rules?

A

Minimum of 20 hours of CPD per year, of which at least 10 hours must be formal

70
Q

What is the difference between formal and informal CPD?

A

“Formal - any form of structured learning that has clear learning objectives and outcomes,
Informal - self-directed learning that’s relevant to a professional role and contributes to a person’s skills and knowledge”

71
Q

What would you expect a company to have in place when holding client’s money?

A

”- Money to be held in a separate account
- Robust book keeping practice
- Client should have access to the bank account
- Money should be deposited into the bank account within 3 days of receipt”

71
Q

Does the RICS provide guidance on how to handle the client’s money?

A

“Yes – it ensures that the client’s money is protected from
o Insolvency
o Misappropriation
o Death of a sole practitioner
o Transfer to another organization”

72
Q

Why might we hold client’s money?

A

”- We may receive money for fees in advance, or may hold it for future payments to a contractor
- Within 3 days of receipt of funds they should be deposited into the account”

73
Q

Can you tell me how you handle client’s money?

A

”- Client’s money should only be handled by trained and competent staff
- There should be a strict accounting procedure in place
- Money should be deposited into the bank account within 3 days of receipt”

74
Q

What is money laundering?

A

Money laundering is the concealment of origins of illegally obtained money

75
Q

What needs to be avoided when handling client’s money?

A

”- Money must be tracked at all times
- Should not be kept with any other money”

76
Q

What would be some warning signs of money laundering?

A

”- If the client is secretive or evasive about who they are or the source of the funds
- If the parties or representatives reside in a high risk country
- If a transaction has unusual features such as size, nature, frequency or manner of execution”

77
Q

What must firms do in order to prevent money laundering?

A

”- Conduct a money laundering and terrorist financing risk assessment
- Implement systems and policies to address money laundering”

APC (17 decks)

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