Ethics Flashcards
What are the five rules of conduct?
Honesty
Professional competency
Good quality and diligent service
Respect and encourage diversity
Act in the public interest
Can LSH handle clients’ money?
Yes – but no cash policy
What transactions do anti-money laundering checks apply to?
Any freehold transaction and all leasehold transactions equivalent to €10,000 (£8,500) pcm. It applies to lease renewals but not rent reviews.
Can you give me an example of a conflict?
Conducting a loan security valuation of a property in which a member of your family owns/an agent acting for both the seller and buyer at the same time/a valuer from a firm being asked to value a building in which another member of the firm is acting on to sell.
If there had been a conflict, what would you have done?
Informed the client and politely turned down the instruction. If I deemed it in the best interests of both parties and it was legal, I could have sought written consent from both parties. If they were both happy, I could have continued and created an information barrier.
If a gift is worth more than the company threshold, what would you have done?
I would need to fill in a gift disclosure form within 28 days which would then be forwarded to the Finance Director and added to the gift register. If the value is deemed not proportionate to what would be expected from that business relationship, then it should immediately be reported to the finance director and refused.
Can you give me an example of when you have used the Ethics Decision Tree?
When a long-standing client contacted me saying they had been approached by a prospective tenant that had no representation and suggested due their lack of expertise, I would be able to get desirable terms. I consulted the decision tree and determined I had all the facts and it was legal. However, it would go against the rules of conduct (rule 1 and rule 5). I consulted with line manager to get second opinion and therefore had clear reasoning to make decision I could not do it as RICS guidance in the code for leasing business premises requires me to suggest they get representation.
What would you do if someone came in and tried to pay you with £5,000 in cash?
LSH has a no cash policy. Although there is nothing illegal about it as money laundering checks are only required above £10,000, I would ask them to go to the bank and then pay through bank accounts. At last resort, it could be accepted.
Tell me some money-laundering prevention outlined in the Terrorist Financing and Transfer of Funds regs 2017 amended 2023
-Written money laundering and terrorist financing risk assessment,
-Implement systems, policies, controls and procedures to address money laundering and terrorist financing risk
-Adopt appropriate internal control,
-Provide staff training,
-Comply with new customers, enhanced and simplified DD requirements,
-Comply with requirements relating to politically exposed persons (PEPs),
-Ensure appropriate record keeping,
-AML check undertaken,
-Include additional high-risk factors when assessing need to enhanced DD.
What are the potential re-structruing of the RICS Red Book Global Standards effective 31/01/2025?
Simplification and streamlining- simpligy language and streamline content
Enhanced guidance- improved guidance on emerging issues in property vals
Updated methodologies- updated methodologies and approaches to reflect changes in tech, market conditions and stakeholder expectation
Expanded scope- cover broadder range of property types and valuation
Stakeholder engagement-gather feedback and ensure the standards remain relevant
Tell me the steps you would undertake if there was a COI?
“I would consider transparency and openess and these three steps:
Conflict avoidance- managed and maintaining transarency and openness, decide whether you want to accept or decline the inspection from client A or B
Written advice to both parties- in writing: disclose nature of conflict, clear as possible, request written confirmation from both clients of their informed consent
Conflict management- once recived written consent set up info barrier in accordance with both parties.
In regards to a COI who has a connected interest?
Property, client, applicant
In regards to the Development Opportunity, Gatwick you provided a fee quote on “based on your experience”. What do you mean?
I provided a fee quote based on my experience on my previous experience in carrying out similar work. I was completely transparent.
What is Official Sensitive?
Information is of a particularly sensitive nature. Used in limited circumstances where there is a clear and justifiable requirement to reinforce the ‘need to know’
In regards to the valuation, Braintree who is the applicant and who is the client?
The applicant was the freehold owner of the property and the client was the Bank. My responsibility was to the Bank and as such I made sure to keep all information confidential and I informed the Bank of the client’s intentions
Who is your duty of care to?
A duty of care exists when breached and there is a loss and a claim for damagies arise. Yianni v Edwin Evans 1981- Resi valuer istructed by mortaggor leading instruction could owe a duty of care in tort to a mortage purchaser relying on val.
Tell me about the compalints handling process (CHP)?
Complaints Handling 2016-
Firms CHP must be approved by RICS.
Notify PII insures as soon as possible if complaint.
Standard minimum procedures of the handling complaints:
-Stage one (In house)- CHP should be issued when firm receives complaint. procedure must be quick, clear and transparant. Details of Complaints Handling Officer. Complaints must be made in writing. Complaints acknowledged with 7 days and investigated within 28 days.
-Stage two (ADR- 3rd Party resolution)- independent redress scheme that firm has chosen. Name of relevant appropriate redress mechanism.
RICS only invloved if member fails to respond to compalint.
Sole practitioner must nominate a survyeor in another firm to act as thier complaints handling officer.
How did you explain your calculations to your client in regards to the Industrial units, Newham?
Clear and transparently makes sure that my client understood all processes.
Role of the RICS
Maintain highest standards
Protect consumers through strict regs
Leading source of information
5 Benefits of being RICS member
Status
Recognition
Market advantage
Knowledge
Network
Steps in the Ethics Decision Tree
- Do you have sufficient facts?
- Is it legal?
- Is it in line with the RICS rules of conduct?
-Have you consulted with appropriate people to inform decision
-Have clear reasoning in reaching your decision?
What are red flags for money laundering?
-Not able to give personal information
-Payment of fees in unusual currencies
-Odd transaction e.g. large transactions for a small business
-Unexpected urgency
What is an inclusive environment?
One that is designed and managed to expect anyone
What are the hierarchy of RICS Standards?
Internal Standards
Professional statements
Guidance notes
Information papers
Rules of Conduct
RICS Valuation- Global Standards (Red Book)
what do you need to do if you are setting up as a lone practitioner?
-Inform RICS to complete firm detail form
-Appoint a responsible principal
-Register with RICS for regulation of the firm by the Reg Board
- Get PII
- Set up procedures for requirements for Client Money Handling
-Register for RICS Valuer Registration Scheme (VRS)
- Obtain approval for complaints handling officer
-Set up complaints log
-Appoint complaints handling officer
-Completion of RICS Annual Return
What are the THREE levels of disciplinary action?
- Action by Head of Regulation
- Disciplinary panel
- Appeal panel
When was the RICS founded
1868
When was the Royal Charter awarded to the RICS
1881
What are the six areas of information required in an annual return for RICS registration?
-Types of business and staffing details
-Statutory regulated activities - such as financial services
-Nature of clients
-Complaints handling procedure details and records
-Professional indemnity insurance details
-Whether the firms holds clients’ money
When is it acceptable to accept a facilitation payment?
It is not acceptable, except in extreme situations that involve safety or coercion.
What is the maximum penalty of Money Laundering?
Unlimited fine and 14 years imprisonment
You are invited to a client event where a raffle is being held, you win first prize which is a new Apple Watch, how would you proceed?
I would polity decline and suggest the watch is donated to charity
When would you use an advanced due diligence check?
-High-risk clients
-Politically exposed persons
-Unusual or suspicious activity
-High-value transactions
-Anonymous or unclear beneficial ownership
-Transactions involving high-risk sectors
Talk me through what you would do if you were retiring and you were shutting you Surveying practice?
-Inform RICS of retirement
-Ensure clients are informed and handover arranged
-Return any monies held by clients
-Inform insures and procure PII off cover for min 6 yrs
-Retain copies of client files and records for min 6 yrs
What is the long stop period for tort law?
Standard limitation period- 6 years
Long stop period for tort claims- 15 years
You are bidding for a piece of work, your client informs you that you can guarantee the instruction if you reduce your proposed fee by 30% (as this would undercut your competitors) how would you proceed?
- Firms shoudl avoid price aggressive fee cutting
- Fees should be market based
- Not to undercut another firms
- Complete transparency
What is the current governing structure?
-Govered by Royal Charter, various internal councils, boards and associations
-Governing council has 25 members
-Various boards report to governing council
-17 specialist groups covering property, land and construction
-Tina Paillet FRICS President
What are the 6 key principles of bribery act 2010
-Proportionality
-Top level commitment
-Risk assessment
-Due diligence
-Communication
-Monitoring and review
What are the key themes of the RICS governance
-People
-Culture
-Values
-Strategies
-Member service
What is dual agency?
-Where agents has contractual agency relationship with both seller and buyer at same time
-“practice must not be undertaken in any circumstance from 01/01/2018 by any member.”
