Ethics Flashcards
When was the RICS founded?
1868
When was the RICS Royal Charred granted by the Privy council?
1881
What is the rics motto?
Es modus in rubus (there is measure in all things)
Roughly how many rics members are there?
Over 140,000
What is the RICS governance structure?
Governing Council runs the RICS. The Standards and Regulation board and the Management Board report to the Governing Council. There are then 17 specialist professional groups covering different specialisms.
Who is the RICS CEO?
Justin Young
Who is the RICS president?
Justin Sullivan
What are the Roles of the RICS?
- Maintain high standards of education and training
- Protect consumers through strict regulation of professional standards
- To be the leading source of information and independent advice on land, property, construction, and associated environmental issues.
Why did the Bichard Review occur?
Followed an independent review carried out by Alison Levitt, and aimed to clarify the purpose of the RICS.
How many recommendations did the Bichard Review make?
36
What are some key areas of the Bichard Review?
- Show more leadership on sustainability
- A more simplified governance structure
- Increased focus on diversity
- Renewed focus on younger members
What are the 5 benefits of being an RICS member?
- Status
- Recognition
- Market advantage
- Knowledge
- Network
What % of principles who are rics members mean it must be regulated?
50% and above
What % of principles who are rics members mean they can apply to be regulated?
25% and above (up to 50%)
What is a Principal?
Someone able to act without supervision in a firm (e.g sole practitioners, directors, partners, board members)
What is a Responsible Principle?
A nominated person who makes sites steps are taken to ensure compliance with RICS requirements
Who handles disputes associated with firm registration?
Standards & Regulation Board
What information is needed to register as a company with the rics?
- Type of business
- Name of Responsible Principle
- Statutory regulated activities (e.g financial services
- Nature of clients
- Complaints handling procedure
- PII
- Whether the firm holds client money
What are the RICS rules of conduct?
Single set of rules that apply to firms and individuals.
What amendments were made to the rics rules of conduct in 2024?
Amendments relating to diversity and inclusion, sustainability, technology, and data management
What amendments were made to the rics rules of conduct in 2024?
Amendments relating to diversity and inclusion, sustainability, technology, and data management
When was the Rics rules of conduct published and when we’re they effective?
Published in 2021, effective from 2022
What is rule 1 of the rics rules of conduct?
- Members and firms must be honest, act with integrity and comply with their personal obligations
What is rule 2 of rics rules of conduct?
Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
What is rule 3 of the rics rules of conduct ?
Members and firms must provide good quality and diligent service.
What is rule 4 of the rics rules of conduct?
Members and firms must treat others with respect and encourage diversity and inclusion
What is rule 5 of the rics rules of conduct?
Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
What 3 professional obligations are there for rics members?
- Comply with cpd
- Cooperate with the rics
- Provide any necessary information to Standards and Regulation Board
What professional obligations are there for rics registered firms?
- Public complaints handling procedure
- Ensure adequate PII cover
- If sole practitioner, have inactivity plans
- Cooperate with rics
- Provide any info to Standards and Regulation Board
- Denote they are regulated by the rics
- Report to rics any necessary matters
What is the purpose of the ethics decision tree?
Acts as a framework of questions members should act themselves in situations they are unsure it is ethical.
What service is there if members cannot make a decision after using the ethics decision tree?
Rics regulation confidential hotline
What are the 3 levels of disciplinary procedures?
- Action by head of regulation
- Disciplinary panel
- Appeal panel
What are the possible disciplinary outcomes initiated by Head of Regulstion?
- Fixed penalties
- Regulatory compliance order
- Referral to regulatory tribunal
- Action by disciplinary panel
What are the reasons for discipline?
- Complaint from individual
- Complaint from client
- Complaint from rics
What are the 3 reasons for regulation?
- Upholding professional standards
- Protect the public
- Uphold public confidence in the profession
What is the key publication on social media?
Use of Social Media: Guidance for RICS Members, 2021
Why might the rics investigate social media?
Bullying, harassment, discrimination etc
What are Professional Standards?
Set of requirements or expectations for rics members and regulated firms
What is RICS practise information?
Information to support practise, knowledge and performance of rics members
What are rics practise alerts?
Alerts for emerging areas of risk to members
What must rics members avoid when negotiating fees?
- Price fixing
- Collusion
- Aggressive fee cutting
Can you drop fee quotes and level of service provided?
Yes, as long as the client agrees to this and professionalism is maintained and rules of conduct are still applied
Where must there be a statement that the CHP is available?
Terms of engagement
What is included in terms of engagement?
- Client details
- Scope of work
- Fees
- Timelines
- CHP link
What must be checked prior to accepting work?
- Professionally competent
- No CoI
- CDD
- Signed terms of engagement (before starting)
What are the types of Conflict of interest?
- Party conflict
- Own interest
- Confidential information
What is the key publication on conflict of interest?
Rics global professional standard: conflict of interest, 2017
What is informed consent?
Consent to proceed with an instruction despite a known CoI. Must be given in writing.
What are the steps of handling a potential CoI?
- Conflict avoidance - first port of call
- Informed consent - if proceeding
- Conflict management - on going management of the conflict following acceptance of instruction
What is the key method CoI management?
Information barrier
What steps must be undertaken in an information barrier?
- Physical separation
- IT barrier
- Maintain clear audit trail
When was dual agency (acting on buy and sell side) banned?
2018
What must be done if multiple introductions are made on a property?
When ToE are signed, it must state whether the client is acting on a exclusive or non-exclusive basis.
Under what circumstances is incremental advice allowed?
If consent is gained, and an information barrier is set up
How long must files be stored for before being securely destroyed?
6 years
What must be done if confidential information is received in error?
Dispose of this securely
What are the key aspects of a complaints handling procedure?
- Requirement for rics regulated forms
- Must be clear in ToE
- PII insurer must be notified of possible claims
- Must include ADR
- Complaints log maintained
- Must have nominated Complaints Handling Officer
How is CHP handled if sole practitioner?
Advised to nominate a surveyor at another firm to be the Complaints Handling Officer
What are the steps for in-house complaints handling?
- Issue CHP
- Issue details of nominated person who will investigate the claim
- Ensure complaint is made in writing
- Complaint must have acknowledged within 7 days and investigated within 28 days
- Remain point of contact for individual and Complaints Handling Officer
How long until a complaint must be acknowledged and investigated?
Acknowledged - 7 days
Investigated - 28 days
What can an individual do if they are unhappy with in-house dispute resolution?
Alternate dispute resolution (for property related disputes)
Property redress scheme (for non practising disputes)
What are members cpd requirements annually and when is it due?
10h formal (min)
10h informal
Due by 31st Jan each year
Must also maintain an understanding of the Rules of Conduct on a rolling 3 year basis
What is negligence?
When there is a breach of duty of care leading to loss and damages
Who does a duty of care exist to?
Clients and 3rd parties using ‘reasonable care and skill’
What is the Limitation Act 1980?
Sets timelines for the period an individual or company can be negligent.
Contract - 6 years from date of negligent act OR long stop of 15 years from negligent act under S14A
Tort - 6 years from the date the claimant suffered loss
What steps can be undertaken to help avoid negligence?
- Understanding client aims
- Ensuring competence prior to accepting instruction
- Keep detailed notes and photographs
What is professional indemnity insurance?
Cover that protects against negligence claims. It is mandatory for surveyors.
What are the key aspects of PII?
- Must be underwritten by an rics approved insurer
- If a new business, PII must be based on estimated turnover and adjusted over time
- Needed for unpaid work
- Rics recommend liability caps
What is run off cover?
Covers negligent claims following ending trading
How much run off cover is needed?
Min of 1M aggregate cover over 6Y period - amount and time can increase depending on type of work
What can be done if unable to acquire run off cover?
Use of the rics run off pool (at a cos)
What are the 6 key areas of the RICS professional standard: client money handling (2019)?
- Handling client money
- Providing information to clients
- Receipts of client money
- Payments from client accounts
- Accounting records and controls
- Compliance
What are the procedures for handling client money?
- Clients accounts must be separate
- Have the word ‘client’ on the bank account
- Clients must be able to have their money on demand
- Payment of interest is agreed with the client
- Two signatures required
- Annual audit and reporting obligations by certified accountant
What service is available if an rics regulated firm is unable to repay client money?
Use of the RICS Clients’ Money Protection Scheme
What are the necessary steps for opening a new practise?
- Inform the rics
- Appoint Responsible Principle
- Register with RICS for regulation
- Arrange PII
- Arrange procedures for handling client money
- Set up complaints log
- Appoint complaints handling officer
What is the statutory compliance that an rics registered firm must comply with?
- Equality act (2010)
- Bribery act 2010)
- Fire safety
- Inform HMRC and Tax registration
- Ensure insurance compliance
- Appoint money laundering officer
What steps must be undertake to close a registered practise?
- Inform RICS
- Inform clients
- Return client money
- Inform insurers
- Hold client docs for min of 6 years
What are the 6 key principles the Bribery Act (2010) is based upon?
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitoring and 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 possible outcomes of bribery?
- Max penalty of 10 years and / or unlimited fine
What are the key publications relating to AML?
Terrorist Financing and Transfer of Funds Regulations (2017)
RICS Professional Standard; Countering Bribery, Corruption, Money Laundering, and Terrorist Financing (2019)
What are the key elements of Terrorist Financing and Transfer of Funds Regulations (2017)?
- Requirement to have written money laundering and terrorist financing risk assessment
- Implement controls and policy (e.g CDD)
- Staff training
- Comply with requirements relating to Politically Exposed Persons (PEPs)
- Include additional high risk factors and seek additional info on these (e.g transactions with high risk countries)
What are the key things needed for customer due diligence?
- Identify client and verify their identity
- Try to identify the owner of the client
- If the client is a company, it’s name, company number, and address of registered office
When is enhanced client due diligence necessary?
- Dealing with person from high risk country
- Politically exposed persons
When is enhanced client due diligence necessary?
- Dealing with person from high risk country
- Politically exposed persons
What is the maximum amount to accept in cash?
10,000 euros
What is the penalty for partaking in money laundering?
14Y prison sentence (max) and / or unlimited fine
What is the penalty for tipping someone off / not reporting money laundering?
5Y (max)
What is the necessary CDD to complete for a PLC?
Their London Stock Exchange listing details
What is the necessary CDD for a publicly accountable body?
Details of government ownership / control
What are the typical CDD requirements for a private company
Certificate of incorporation, name, registered address, registered number
What is the typical requirements for CDD for a private individual?
Passport, drivers license, copy of bank statement showing address (no more than 3 months old)
What are the key things to refer to if asked about acceptance of cash, gifts, or hospitality?
- Bribery act 2010
- Rics professional standard
- KF procedures
- Professional objectivity & transparency
- Proportionality
What are the levels of RICS membership?
- Student/graduate
- AssocRICS - about demonstrating a specific competence (can apply for MRICS after)
- MRICS
- FRICS - need to show leadership, academic achievement, and 5+ years at MRICS level
What are the steps of the ethical decision tree?
- Sufficient facts?
- Legal?
- In line with rules of conduct?
- Have I consulted sufficient people?
- Clear reasoning?
- Would I be happy if it went public?
What is the key publication on PII?
RICS Professional Indemnity Insurance Requirements 2022
How much PII is needed for a turnover of £100,000 or less per year?
Min of £250,000
How much PII is needed for an annual turnover of £100,001 - £200,000?
Min of £500,000
How much PII is needed for an annual turn over of £200,001 - upwards?
Min of £1M
What is the minimum level of uninsured excess for an annual turn over of up to £10M?
Greater of 2.5% of the sum or £10,000
What is the min level of uninsured excess for a turnover over £10M?
No set limit
Who polices the Bribery Act 2010?
Series Fraud Office
Who policies the Terrorist Financing and Transfer of Funds Regulations 2017?
National Crime Agency
What do you do if money laundering is suspected?
1 report to money laundering reporting officer
2 MLRO compiles Suspicious Activity Report
3 This is sent to National Crime Agency
What are money laundering red flags?
Unwillingness to provide identity docs
Changes to parties
Unexpected urgency
Strange purchases / price offered
What is the key publication for the RICS regulatory approach?
RICS Regulatory Decision Making (2022)
What is the investigation process for disciplinary procedures?
- Investigation by head of regulation
- Head of regulation can initiate 4 actions
When might it be appropriate to decline an instruction?
- Not competent
- Doesn’t have sufficient facts
- Doesn’t pass CDD
- Not in line with Rules of Conduct
What is the RICS Bye Law?
Client confidentiality must be maintained for all client affairs
