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APC > Ethics > Flashcards

Ethics Flashcards

1
Q

What is required to set up an RICS Registered Firm as a sole practitioner?

A
  • Responsible Principal
  • Locum Agreement
  • Adequate PII
  • Complaints Handling Procedure
  • Handling Clients Money
  • RICS Logo
  • CPD Requirement
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2
Q

What is the RICS Motto?

A

There is measure in all things. (modus est rebus).

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3
Q

What are the PII turnover limits?

A

<£100,000 turnover = £250,000 cover
<£100,001-200,000 = £500,000 cover
<£200,001 = £1M cover

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4
Q

What is the role of the RICS?

A
  • Training and Education
  • Regulations
  • Leading Industry Source
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5
Q

What are the 5 Rules of Conduct 2021?

A
  1. Act with integrity.
  2. Competence.
  3. Good-quality and diligent service.
  4. Treat others with respect.
  5. Public interest and take responsibility.
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6
Q

What is your firms Complaints Handling Procedure?

A

Full response within 20 working day.

Inform my line manager who manages the initial complaint and response.

It can be escalated for an independent internal review on a more senior level within the department.

It can then go for a review by an independent team in MOD Head Office.

If still unhappy, you can contact the Parliamentary and Health Service Ombudsman via MP.

RICS Complaints Handling (2016):

  • Must have a redress system I.e. the Property Ombudsman.
  • Complaints Handling Officer.
  • Complaints Handling Log.
  • Sole traders can’t deal with complaints themselves.

Time limits:

  • Acknowledge in 7 days.
  • Respond within 28 days.
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7
Q

How often is the ethics module required to be completed as part of CPD?

A

3 Years

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8
Q

What are the CPD requirements?

A

20 hours minimum. At least 10 must be formal. All must be recorded by 31st Jan. Ethics must be undertaken every 3 years.

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9
Q

What is a Locum Agreement?

A

Ensures cover for long term illness, death, long term holidays, or unseen or unavoidable events.

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10
Q

What is the Ethics Decision Tree?

A

Framework of questions for when presented with an ethical dilemma. Considered the legality of an action. Clear reasoning for decision making. Ultimate test of whether content for decision to be made public.

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11
Q

What is conflict avoidance?

A

Not accepting an instruction.

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12
Q

What is conflict management?

A

Accepting an instruction but with mitigation. For example, information barriers. Information barriers can consist of a) restricting access to electronic documents; and/or b) separating personnel so that they are located on separate floors of the same office or in separate locations completely.

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13
Q

What is Informed Consent?

A

Should only be exercised when both parties are transparent and should only be sought when in best interest of each party.

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14
Q

What are the three types of conflict?

A
  1. Party Conflict = where duty to one client conflicts with duty owed to another client.
  2. Own Interest Conflict = when duty of a member acting for a client conflicts with that same members personal interests.
  3. Confidential Information Conflict = when the obligation to release information to one party results in the breach of keeping information confidential for another party.
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15
Q

Who is the current RICS President?

A

Tina Paillet

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16
Q

What is your firms gift policy?

A

DIO Gift Policy follows the Civil Service Code that all gifts should not be accepted as a Civil Servant as we act in the interest of the public. Line manager should be informed. All gifts must be recorded on the gift register whether accepted or not.

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17
Q

What is important when handling Client Money?

A
  • Kept separate and clearly identifiable with ‘Client Account’ in the title.
  • Client must have immediate access on demand.
  • Accurate records with running balance.
  • Annual audit by a certified accountant.
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18
Q

What is a Bribe?

A

Giving, offering, promising, or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust.

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19
Q

What are the four offences under the Bribery Act 2010?

A
  • Bribing.
  • Receiving a bribe.
  • Bribing a foreign official.
  • Failing to prevent bribery.
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20
Q

What do you understand by the term self-regulation?

A

An organisation that is responsible for regulating itself without intervention from external bodies.

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21
Q

What are the disciplinary procedures that can be imposed by RICS?

A

Imposed by the Standards and Regulation Board.

Decisions are made in the public interest.

  • Fixed Penalty Notices i.e., caution or fixed fine.
  • Regulatory Compliance Order i.e., impose conditions or undertakings.
  • Expel a member/firm.
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22
Q

What is Professional Indemnity Insurance?

A

Insurance that covers financial loss, personal injury and property damage resulting from your negligent act, error or omission in the course of your work.

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23
Q

What should you do if you recieve a PII Claim?

A

Notify the RICS and your insurers as soon as possible.

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24
Q

What is an information barrier?

A

Method of conflict management. They must be robust, ensure no information is passed between parties, physical separation, securely stored data, and clear audit trail kept.

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25
Q

What time period does PII cover?

A

Policy should cover any claim regardless of when it was made.

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26
Q

What Anti-Money Laundering provisions should be in place?

A
  • Written money laundering and terrorist financing risk assessment.
  • Implement systems, policies and controls, proportionate to type of work the firm does including adopting appropriate internal controls and staff training.
  • Appropriate record keeping of suspicious activity, kept confidential.
  • AML checks to confirm the identity of purchaser and source of funds/beneficiary.
  • Appoint a senior person to be responsible for AML.
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27
Q

What is the limit of income before estate agents must register with HMRC, and why?

A

Letting individual properties over €10,000 per month.

HMRC are the supervisor for AML activity in the property sector.

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28
Q

What is involved in Customer Due Diligence checks?

A
  • Identity client and verify I.e passport or driving licence.
  • Identify beneficial owners of client.
  • Property / company details registered office.
  • Purpose / intention of business relationship.
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29
Q

What are the six principles of prevention of the Bribery Act 2010?

A
  • Proportionality
  • Top Level Commitment
  • Risk Assessment
  • Due Diligence
  • Communication
  • Monitoring and Review
30
Q

What are the penalties for Bribery?

A
  • Unlimited fine.
  • 10 Years in prison.
31
Q

What are the penalties for failure to comply with money laundering?

A
  • 14 Years in prison or unlimited fine for assisting.
  • 5 Years in prison or unlimited fine for tipping off/informing a person under suspicion. Or failing to report suspicion.
32
Q

How do you avoid a claim for negligence?

A
  • Understand clients objectives through terms of engagement.
  • Competent to undertake instruction.
  • Follow relevant professional standards and practice information.
  • Detailed file notes.
  • Market knowledge through CPD.
33
Q

What process should be followed for conflict of interest checks?

A
  • Terms of Engagement
  • Ethics Decision Tree
  • Sufficient Facts
  • Competent
34
Q

What is unconscious bias?

A

Term for associations we hold, outside our conscious awareness and control. Usually a stereotype of a group of people i.e., race or gender.

35
Q

Tell me about a time when you have acted with integrity.

A

Complimentary museum tickets offered by tenant. I had ongoing instructions with the tenant which could present a conflict if I accepted the gift. Did not accept the gift in line with the Civil Service Code. Registered the offer on the electronic gifts register.

Other examples may be:
- Do not be influenced improperly by others i.e., gifts.
- Identify actual and potential conflicts of interest, and follow the Conflicts of Interest professional statement.

36
Q

How do you ensure that you always maintain your professional competence?

A
  • Only undertake work that they have the knowledge, skills, and resources to carry out competently.
  • Stay up to date with relevant legislation, codes of practice, and other relevant standards.
37
Q

Tell me about a time you have provided a good-quality and diligent service.

A

Introductions to clients. When I meet new clients I communicate my scope of services and advice by phone knowing that my clients are not familiar with real estate. I follow this up with an email and provide simple definitions of real estate such as lease/licence.

Other examples include:
- Understand client needs and objectives before accepting an instruction.
- Agree scope of works including limitations and timescales.

38
Q

When is a time you have demonstrated an inclusive culture?

A

Recruitment panel. We remove identifying information of the applicant to prevent unconscious bias when assessing for interview. It ensures everyone is treated fairly and is not discriminated against.

Other examples include:
- Do no discriminate and treat everyone fairly.
- Inclusive culture and address unconscious bias.

39
Q

Tell me a time when you have taken responsibility in the interest of the public.

A

Abbeywood nursery when my client wished to waive marginal costs. I advised it would breach internal policy and set a dangerous precedent. I advised my client of the risk but my client insisted. I raised concerns to senior management about my client’s decision to waive marginal costs and how this could impact on the wider reputation of MOD.

  • Question practices and decisions if they think they are not right.
  • Respond to complaints made against them promptly and professionally.
40
Q

What professional obligations are mandatory for RICS Members?

A
  • CPD Requirements.
  • Cooperation with RICS.
  • Provide information requested by the Standards and Regulation Board.
41
Q

What professional obligations are mandatory for RICS Firms?

A
  • Complaints handling procedure.
  • Professional Indemnity Insurance (PII).
  • Locum Agreement if sole principal.
  • Cooperation with RICS.
  • Provide information requested by the Standards and Regulation Board.
  • Display RICS logo in accordance with RICS standards.
42
Q

What is the maximum uninsured excess?

A

For larger companies with a turnover in excess of £10M, there is no maximum limit of uninsured excess.

For £10M or less, the maximum uninsured excess is 2.5% of the sum insured or £10k.

43
Q

What are the general requirements regarding PII set by the RICS?

A
  • Policy cover must be on an ‘each and every’ claim basis.
  • RICS set out the minimum levels of indemnity.
  • Policy must be fully retroactive.
  • RICS sets out maximum levels of uninsured excess.
  • Run off cover must be in place.
  • Policy should cover past and present employees, directors and partners.
44
Q

Talk us through your understanding of the changes to the Rules of Conduct 2021?

A

It overhauled the previous separate documents for members and firms, and ethics, and consolidated them.

Intention was to simplify the structure, give clearer example behaviours, focus on diversity and inclusion, and respond to evolving technology.

45
Q

Who is your duty of care to as an RICS Member?

A

Duty of care extends beyond your client, to the wider public.

46
Q

What is a Professional Standard?

A

Sets out the ‘must do’ obligations of an RICS Member and Firm.

They are mandatory and set best practice.

47
Q

What is Practice Information?

A

This is supplementary guidance on specific areas of interest. It is not mandatory and does not make recommendations.

48
Q

What are red flags when it comes to AML?

A
  • Large cash payments.
  • Foreign bank accounts.
  • Multiple bank accounts.
  • Virtual wallets.
49
Q

Who is protected by PII?

A

Three main purposes of holding PII:

  • Firm is protected from financial loss.
  • Firms clients (public) are protected from financial loss.
  • Insured member is protected against the ‘consequences of its liability to pay damages to third parties for breaches of professional duty that it commits through its professional activities’.
50
Q

What does RICS stand for?

A

Royal Institution of Chartered Surveyors

51
Q

What is the Royal Charter and when was it published?

A

Published in 1881 with the purpose of promoting the usefulness of the profession for the advantage of the public.

52
Q

What does the RICS Bye-Laws (2020) do?

A

They are the skeleton of what the RICS can and cannot do including the issuing of disciplinary penalties and costs.

53
Q

What are the RICS Regulations (2023)?

A

Set of 10 regulations that produce more detail about how the RICS should operate.

54
Q

What is money laundering?

A

Money laundering is how criminals change money and other assets into clean money or assets that have no obvious link to their criminal origins.

55
Q

Why is real estate a target for money laundering?

A

Property purchases can be used to launder money due to the amount of money that can be cleaned in a single transaction.

56
Q

What actions would you need to take if you need to close your own firm?

A
  • Inform the RICS.
  • Report any outstanding issues to the Regulation and Standards Board.
  • Ensure that any outstanding clients were passed to another firm.
  • Return and clear all client accounts.
57
Q

What is a risk pool?

A

The RICS provide a risk pool for those firms that are unable to obtain their own insurance so can apply for coverage from the run-off pool.

58
Q

What is KYC?

A

Know Your Client

59
Q

What are the regulations relating to anti-money laundering?

A

The UK Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations (2017). They set out the obligations on businesses and firms to prevent their services being used for money laundering, terrorist financing or proliferation financing purposes.

60
Q

What is a PEP?

A

Politically Exposed Person such as an MP.

61
Q

What would you do if you felt an instruction was outside the scope of experience or knowledge?

A
  • Speak to my line manager to discuss the matter.
  • Inform the client I was not able to accept the instruction.
  • Where possible, refer the client to another employee within the firm with the expertise.
62
Q

Explain when you might agree a liability cap in relation to PII?

A

A liability cap refers to the level of claim a client can make. Often agreed where you might have multiple work ongoing with the client to limit liability so that it is of equal benefit to the client and surveyor.

63
Q

Tell me about the RICS guidance on Conflicts of Interest.

A

Professional Standard 2017 sets out guidance on types of conflict, how to avoid and manage these. States that an instruction must not be accepted where a conflict exists unless informed consent is given.

64
Q

What are the rules around the use of the RICS logo and ‘Regulated by RICS’ designation?

A

Mandatory requirement to display ‘Regulated by RICS’ on all business literature. The logo must not be altered in any way without prior permission as it is a registered trademark. The logo must appear on the firms letterhead, website, and terms of engagement and complaint handling processes.

65
Q

Explain your understanding of the RICS Scheme Rules relating to client money protection.

A

RICS operate a CMPS in the UK providing protection in instances where a regulated firm is unable to repay a client’s money, up to the limits and exceptions set out in the scheme rules. Per claim limit of £50,000 and must be claimed within 12 months of loss occurring.

66
Q

Explain what your understanding of the RICS Levitt review is.

A

Commissioned to look into the governance of the RICS. Recommended:
- Greater oversight of the Governing Council such as minutes of meetings to be published.
- Better auditing.
- Legal panels to be reviewed every 3 years by tender.
- Recommended principles of good governance, RICS structure and professional ethics.

67
Q

Explain what you understand of the Bichard Review and its recommendations.

A

Commissioned to clarify the purpose of the RICS focusing on its responsibility to act for the public advantage. Recommends:
- Better access to free CPD for members.
- Greater focus on diversity and inclusion.
- Greater support for regional boards.
- Independent review of governance to take place every 5 years.
- Greater leadership on sustainability and climate change.

68
Q

Explain your understanding of the RICS Professional Standard on Risk, Liability and Insurance.

A

Key document relating to PII and provides best practice on risks and liabilities when providing professional services. Guidance on negotiation of equitable contracts with clients including liability caps where appropriate.

69
Q

If you were to set up your own practice, tell me about the types of insurance you would need.

A

PII
Public Liability
Employers
Building and Contents

70
Q

If a tenant tried to pay in cash, would you accept this?

A

Under the RICS PS on Client Money Handling, I could accept the cash payment in theory with the correct procedures in place. However, in my firm due to the large amounts of money handled, I would politely decline and refer them to the BACS payment in line with company policy as large sums of cash is a red flag for money laundering.

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