Ethics Flashcards
What are the RICS 5 principles of better regulation?
- proportionality
- Accountability
- Consistency
- Targeting
- Transparency
What are ethics?
Moral Values
What is rule 1 of the New rules of conduct?
Members and firms are to be honest and act with integrity, and comply with their professional obligations, including obligations to the RICS.
What is rule 2 of the New rules of conduct?
Members and firms are to maintain thei professional competence and ensure that services are provided by competent individuals who have the knowledge and experience.
What is rule 3 of the New rules of conduct?
Members and firms must provide a good quality and diligent service
What is rule 4 of the New rules of conduct?
Members and firms must treat others with respect and encourage diversity and inclusion
What is rule 5 of the New rules of conduct?
Members and firms must act in the public interest and take responsibility for their actions. They must act to prevent harm and maintain public confidence in the profession.
When did the rules of conduct change?
2nd February 2022
Why did the rules change?
They had been in place since 2007, Members voted to create one single document, now a greater focus on evolving technology and tackling climate change.
What are the professional obligations of members?
Comply with CPD requirements (20 hours, 10 to be formal)
Must cooperate with RICS
Must provide all information reasonably requested by the standards and regulation board.
What are the professional obligations of firms?
- Must publish a complaints handling procedure, which includes and alternative dispute resolution provider approved by RICS and maintain a complaints log.
- All previous and current professional work is covered by professional indemnity policy
- Firms witha sole principal must make arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
- Must cooperate with RICS
- Must provide any inforamtion reasonably requested by the standard adn regulations board
- Must display they are regulated by the RICS
- Must report any matter as required by the rules for the registration of firms
What are the steps of the ethics decision tree?
Do you have sufficient facts
-Is it legal
-Does it comply with the rules of conduct?
Have you condulted the appropriate people?
Do you have clear reasoning?
Would you be content for your actions to be made public?
Why does the RICS have rules of conduct?
To provide a framework that we can all work to and so the client knows he is getting a set level of service
-As well as being an important tool for the institution, the rules of conduct are also a useful professional guide for individual institution members.
In the case of a breach of a rule of conduct what is the procedure?
Not every shortcoming will neccesarily give rise to proceedings
- A formal investigation by the Head of regulation
- RICS can request information and investigate compliance
- members must cooperate fully with any enquireies
How can a disciplinary proceeding be triggered?
- Someone complaining to the RICS
- An allegation by a client or third party
- Information received or established by the RICS
What are the three actions that can be imposed after the investigation stage?
-fixed penalty
-consent order
-Disciplinary panel
What are fixed penalties?
A fine set by the RICS
What are consent orders?
A written agreement between the RICS and a memeber containing corrective actions and restrictions from taking certain actions.
When is a disciplinary panel applicable?
More serious breaches of conduct, usually held in public, a balance of probabilities is used.
What breaches would explusion be suitbale for?
persistent failure to comply with RICS rules of conduct, Fraud, Dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, missappropriation of a clients money.
What procedures should you follow if you are starting up a new practice?
-Contact the RICS and register for regulation
-Appoint a Contact office for all RICS communication
-Prepare a complaints handling procedure
-Obtain professional indemnity insurance
-Use ‘regulated by RICS’ on all material
Can you advertise your new company in the press?
Yes in a responsible manner
What insurances would you need to set your own firm up?
- Professional indemnity
- Employers liability
- Public liability
- Buildings insurance of the office premises
What information do registered firms have to send to the RICS anually?
Annual return including:
- type of business and staff levels
- nature of clients
- training provisions
- Complaints handling procedure
- PI insurance details
- whether the firm holds clients money
What processes are required when handling clients money?
- Secure accounting systems
- Client money to be kept seperate
- client must always have access to funds
- Must maintain a client ledger and be able to provide a running balance
- only competent and knowledgeable staff are to process clients money
What is meant by the term negligence?
Failure to provide duty of care
What was the MERITT V BABB case?
2001
-surveyor sued for negligence by former client
-Highlights the importance of having run off cover
-surveying firm was no longer in existence so the individual survyeyor was pursued for damages succesfully
What limitation periods are associated with underhand and deed forms of contract?
6 years when executed under hand
12 years when executed as a deed
What must a complaints handling procedure include?
RICS provide a model form
- must include a redress mechanism
- details of the policy should be issued with the terms of business
- must be clear, quick and transparent
- Complaint must be investigated within 28 years
- Whole process must be recorded
- PI insurers must be informed of any complaints
- Must have 2 stages
What is an independent redress scheme?
consumer scheme designed to handle small issues that would be expensive to take to court
-RICS firms must specify which redress scheme they want to use e.g. ombudsmon or arbritation
What are the CPD requirements?
Members must undertake and record lifelong learning
- On request they must provide evidence they have carried out CPD to maintain and improve their levels of professional competence
- 20 hours 10 formal
How many CPD hours must you do?
A minimum of 20 hours, 10 must be formal
- members must undertake learning on the standards expected around RICS ethics on a rolling 3 year period
- All CPD must be recorded via the RICS on line management system
What activities are included within CPD?
must have a clear learning objective
-Formal training must have a structured assesment, formal seminar or providing training to others
What does PII stand for?
Professional indemnity insurance
What is the purpose of Professional indemnity insurance?
To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty
What benefits does PII provide to a professional?
The professional is protected from financial losses
The firm does not have to meet the claim from their own assets
What benefits does PI provide the client?
They are able to recover their financial losses
On what basis is it underwritten in the uk?
On a claims made basis
What does claims made basis mean?
The insurance policy that is in place at the time the breach is discovered is responsible for providing the indemnity, not the insurance policy in place when the breach was made
What are the requirement for professional indemnity set by the RICS?
The policy cover must be made on an ‘each and every’ claim basis
The RICS sets out the minimum levels of indemnity
The rics sets out the maximum levels of uninsured exess
Run off cover must be in place for at least 6 years
The policy should include cover for past and rpesent employees, director and partners
What are the new RICS minimum levels of indemnity
Turnover up to £100k- £250k minimum indemnity
£100k to £200k- £500k minimum limit
£200k+ minimum limit of £1 million
What are the RICS new levels of maximum level of uninsured excess?
Turnover £10 million or less- greater of 2.5% of insured sum or 10k- £10 million and aboce no limit set
How do you differentiate between the different categories of CPD?
You can use the RICS CPD decision tree
What are the main elements included within a fee proposal?
-Terms and conditions
- scope of services
- exclusions
- assumptions
What is a conflict of interest?
Where someone s in a position of trust has competing personal or professional interest so they cant fulfill their duties impartially
- An existing relationship is an example
How could the conflict of interest be managed internally if two departments were working for the same client?
- Seperate communication lines
- secure data storage
- sign up to non disclosure agreements
What are the main principles of the bribery act?
making a bribe
Recieving a bribe
Failure of a coparate entity to prevent bribery on its behalf
Bribery of a foreign public official
What prevention should companies have in place to stop bribery?
1 proportionate procedures
2 top level commitment
3 risk assesment
4 due dilligence
5 communication
6 monitoring and review
Under the bribery act, under what circumstance is a facilitation payment permitted?
When you are under duress e.g. there is a risk or danger to life- make the payment and then report the matter imediately
what year did the money laundering regulations come into place?
1994
What are money laundering red flags?
- Cash buyers,
- unusual prices,
- Payments from multiple sources.
What is money laundering?
Concealing the source of criminal activity to disguise illegal origin
What is the status of a rics professional statement?
mandatory to all rics - members and firms, including trainees
What is a locum agreement?
When someone is a sole practitioner they must have appropriate arrangements in place in the event of a death or extended absence.
What are the different RICS documents?
Rules of conduct
professional statements
Guidance notes
Code of practice
Jurisdiction guides
Why do you want to become chartered?
best standard of my profession
guidance and support from rics
-commited to continued learning and development
-Help other surveyors become chartered
What status is the RICS PI requirements doc?
Regulation document
How many years after an instruction can a PI claim be made?
15 years
Why are ethics important?
Ensure consistency, clarity and ensure appropriate behaviour
What money laundering checks do you need to do for private limited companies?
Certificate of incorporation
Full name
Registered Office
Registered number
Business address
Name of all shareholders with over 25% stake.
(report discrepancies to Companies House)
What is PII?
Personal Indemnity Insurance
Who is PII there to protect?
CLIENT - prevent financial loss as a result of a breach of professional duty
What is run-off Cover?
Run-off cover is insurance for claims made against a law firm after it has stopped doing business. It makes sure that: clients can be compensated for claims made after a firm has closed.
If you are at the pub and a friend asks you for a rental valuation of his shop what advice would you give him?
Due to conflict of interest, would not provide valuation. I would suggest going to the RICS website to find a qualified valuer/regulated firm and arranging terms of engagement.
What info is exempt under FOI?
Anything confidentially sensitive or any personal information.
Can you tell me about gcc complaints handling procedures?
GCC 2 stage.
Stage 1: front line resolution - decision in 5 or less working days, if cant resolve explanation and suggest stage 2.
Stage 2: Investigation - ack in 3 days full response in 20 working days
Further step would be to go to SPSO - Scottish Public Services Ombudsman
What is a conflict of Intrest?
Where someone is in a position of trust has competing personal or professional interests so they cant fulfil their duties impartially
Who is the current president of the RICS?
Tina Paillet FRICS (Aug 2024)
Do you know what the red book is?
RICS Valuation - Global Standards
New edition Effective from 31 Jan 2025
It is split into two main parts isn’t it? What are they? Are they mandatory?
3 main parts
Professional Standards (PS) - Mandatory
Valuation Technical and Performance Standards (VPS) - Mandatory
Valuation Practice Guidance Applications (VPGA) - Advisory
What are the 5 New rules of conduct
- Be honest and act within integrity
- Maintain Professional Competence
- Provide Good -Quality and Diligent service
- Treat others with respect and encourage diversity and inclusion
- Act in public interest and take responsibility.
What is a Chinese Wall?
A Chinese wall or ethical wall is an information barrier protocol within an organization designed to prevent exchange of information or communication that could lead to conflicts of interest.
What are the Professionals Obligations for Members?
- Must comply with CPD Regulation
- Must co-operate with the RICS
- Must promptly provide all information reasonable requested by the Standards and Regulation Board or those exercising delegated authority on its behalf
What are the Professionals Obligations for Firms?
- Must Publish a complaint handling procedure, alternative dispute resolution and maintain complaints log.
- Must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standard approved by RICS.
- Firms with sole principle must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
- Must cooperate with RICS.
- Must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
- Must Display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
- Must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
What are the steps of the ethics decision tree?
Do you have sufficient facts
-Is it legal
-Does it comply with the rules of conduct?
-Do you have clear reasoning?
-Would you be content for your actions to be made public?
When do you not have to use the red book?
- Internal purposes
- personal finance planning
- non market valuations
- public sector valuations
- unregulated property transactions
