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APC- Commercial pathway > Ethics > Flashcards

Ethics Flashcards

1
Q

What are the benefits of being MRICS?

A

Status
Recognition
Market advantage
Knowledge
Network

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2
Q

What is the role of the RICS?

A

To promote the highest professional qualification and to promote and maintain the highest standards of education and training

To protect consumers through strict regulation of professional al standards

To be the leading source of information and independent advice on land, property, construction and associated environmental issues

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3
Q

What is Rule 1 of the Rules of Conduct?

A

Members and firms must be honest and act with integrity and comply with their professional obligations including their obligations to RICS

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4
Q

What is Rule 2 of the Rules of Conduct?

A

Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise

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5
Q

What is Rule 3 of the Rules of Conduct?

A

Members and firms must provide good quality and diligent service

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6
Q

What is Rule 4 of the Rules of Conduct?

A

Members and firms must treat others with respect and encourage diversity and inclusion

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7
Q

What is Rule 5 of the Rules of Conduct?

A

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

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8
Q

What can trigger disciplinary proceedings?

A

Someone complaining to the RICS

An allegation by a client/3rd party

Information received or established by RICS

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9
Q

What disciplinary procedures can RICS impose?

A

Action by the head of regulation: a formal investigation takes place which can trigger: a fixed penalty, a regulatory compliance order or the matter gets referred to regulatory tribunal or the disciplinary panel

Action by disciplinary panel: for more serious breaches of conduct

Appeal panel: appeal against a disciplinary decision

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10
Q

What are the professional obligations of members?

A

Members must comply with CPD requirements

Members must cooperate with RICS

Members must provide all reasonably requested inormation by the standards and regulatory board

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11
Q

What are the CPD requirements and why is this important?

A

20 hours of CPD- 10 of which must be formal

CPD is important as it is a commitment to RICS members to continually update their skills and knowledge in order to remain professionally competent

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12
Q

How do you set up an RICS regulated firm?

A

Contact RICS for guidance and company start up pack
Inform RICS and register for regulation
Appoint a regulatory principle (contact officer)
Prepare complaints handling procedure
Get P I I
Abide by the rules of conduct
Use regulated by RICS in all material

To register, at least 25% of principles must be qualified as RICS professionals. You MUST register when this is 50%+

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13
Q

What information do registered firms need to send to RICS

A

Annual returns. It includes:
Type of business and staffing
Nature of clients
Training provisions
Complaints hanging procedure details and records
P I I details
If the firm holds client money

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14
Q

Why does RICS have rules of conduct?

A

To provide a framework that we can all work towards and so the clients knows they are getting a set level of service

The rules are an important tool for the institution and a useful guide for individual members

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15
Q

Define the types of RICS core material

A

Professional Standards: a set of requirements or expectations for members and firms about how they provide services or the outcomes of their actions. They MUST be complied with.

Practice information: information to support the practice, knowledge and performance of members and firms. They can include good practice, information insights and processes. They do not contain advice.

Practice Alerts: new web page published in August 2023 to collect key tools for warning or alerting the profession to emerging risks that concern RICS

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16
Q

What is P I I?

A

Professional Indemnity Insurance

This is mandatory insurance for surveyors working in practice as it protects client, surveyors and third parties against negligence claims when a duty of care as been breached and a damage claim arises. It protects the firm from financial loss and allows the client to recover their financial losses. All policies must be underwritten by an RICS approved insurer.

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17
Q

How would you close down an RICS regulated firm?

A

The firm must inform RICS and deregister
Clients must be I formed at the earliest convenience
Handover arrangements must be made
Client money gets returned
Insurers are informed and PII run off covet is procured
Client files must be retained for at least 6 years

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18
Q

Explain your understanding of Complaints Handling Procedure?

A

CHP details should be issued when a complaint is received from someone a firm owes a duty of care to. Details of the CHP officer must be included in the CHP and the complaint must be in writing. The complaint must be acknowledged within 7 days and investigated within 28 days.

If the complainant is not happy with the review they can progress to using an independent redress scheme (chosen by the firm) such as RICS Dispute Resolution Services or The Property Redress Scheme or The Centre for Effective Dispute Resolution (CEDR)

RICS only get involved if a member fails to respond to the complainant and prevents them gaining access to an independent redress mechanism

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19
Q

What steps should be followed when taking on a new instruction?

A

Check you are professionally competent
Check there are no conflicts of interest
Confirm terms of engagement in writing, get written approval and agree fees

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20
Q

When does a conflict of interest arise?

A

A conflict of interest arises when a member or firms independence or impartiality is threatened due to the existence of a conflict between two parties

Professional statement (2017): do not offer any advice or represent a client/s if doing so leads to a conflict except where there is written, informed consent

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21
Q

What are the types of conflict of interest?

A

Party: duty of care to one client affects providing a duty of care to another client in the same/another assignment

Own/Personal: duty of care to your client affects you personally e.g. family member

Confidential information: duty to provide material information to one client conflicts with the duty to keep said information private for another client

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22
Q

How do you handle conflicts of interest?

A

Conflict avoidance: if it is irresolvable due to compromised impartiality then say no

Conflict management: agree with both parties in writing by disclosing the nature of the conflict then instill an information/ ethical barrier. The conflicting surveyors must not be physically close (not work in the same building). All files etc must be password protected and the same personnel must not be used as resources on both assignments

23
Q

What is double dipping (dual agency)?

A

This arises when the same surveyor represents both the buyer and seller in relation to a real estate investment sale and collects fees from both

It has been banned since January 2018

24
Q

What is multiple introductions?

A

It is also a form of double dipping. This is when an agent acts for multiple buyers in a real estate opportunity. If they’re acting on an exclusive basis, the agent must lost all other clients. If acting on a non-exclusive basis, the agent must obtain written consent from the other clients then put in place information barriers

25
Q

What is incremental advice?

A

It is when an agent is approached by another party to provide advice e.g. one client asks the agent to conduct a valuation/building survey/planning relating to the purchase/disposal of a property they are selling for another client. This is said to be incremental to the existing instruction

26
Q

What is the difference between a bribe and a gift?

A

The givers intent- a gift is something of value given without any expectations. It is given to make the recipient feel valued/appreciated/build trust

A bribe is something of value given to induce a person to act improperly or to reward someone for acting improperly

27
Q

What are the penalties for accepting a bribe?

A

Bribery Act (2010) is policed under the Serious Fraud Office. Breaching the act will get you a maximum of 10 years imprisonment and an unlimited fine

28
Q

What money laundering legislation/regulation are you aware of?

A

Legislation: Money Laundering, Terrorist Financing and Transfer of Funds Regulation (2007)

RICS Professional Standard: Countering Bribery, Corruption l, Money Laundering and Terrorist Financing (2019)

Part 1: ensures individuals are not complicit in money laundering or terrorist financing. It ensures firms have system in place to comply with the law. Any suspicions must be reports. Risks presented must be evaluated and reviewed

Part 2: Guidance- have a written policy in place, publish a code of behaviour, encourage transparency, set up a gift register and keep up to date with legislation

Part 3: supplementary guidance- establish a. Risk based approach, dealing with PEPs (politically exposed persons) and the need to identify beneficial owners of a company

29
Q

What constitutes a money laundering offence?

A

Legitimising the proceeds of criminal activities by disguising or converting them to realised legitimate assets. Failure to carry out appropriate Customer Due Diligence checks can lead to aiding in money laundering

30
Q

What is the penalty for being involved in money laundering?

A

For assisting: a maximum of 14 years imprisonment and/or an unlimited fine

For tipping off: maximum of 5 years imprisonment and/or an unlimited fine

Firms can be let off with proof they have anti money laundering practices in place

31
Q

What is a Responsible Principle?

A

This is a person appointed by an RICS regulated firm who will have primary responsibility for ensuring that RICS professional, technical and ethical standards are applied, upheld and supported by an appropriate assurance framework

32
Q

Do you know any RICS guidance for social media?

A

RICS Guidance Note: Use of Social Media (2021)

It sets out the same standards as in the RICS Rules of Conduct and reminds members that communication doesn’t change just because it’s not face to face etc

33
Q

When can RICS investigate a social media post made my a member?

A

If the post is:
Discriminatory
Dishonest
Abusive or threatening
Likely to cause significant harm/distress/offence

34
Q

What types of due diligence do estate agents need to conduct?

A

Customer Due Diligence: identify the cient using a reliable independant source. E.g.: passport, identify beneficial compay owners (via companys house)

Enhanced Due Diligence: to be conducted if red flags came back from CDD or for any transaction or business relationship involving an estabished person from a high risk 3rd country/politically exposed person (PEP)/PEP family member

35
Q

What are the 6 areas of good practice as per RICS Professional Stardard: Client Money Handling (2019)?

A
  • Providing information to clients
  • Payments for client accounts
  • Receipts of client money
  • Holding client money
  • Accounting records and control
  • Compliance
36
Q

What is the Limitations Act 1980?

A

It is a statute of limitations which provides timescales suggesting which actions may be taken for breaches of the law.

Negligence: 6 years from date of the negligent act/breach of contract/omission (Tort). 3 years from the date of knowledge of the damage (s14A)

37
Q

What is Run Off Cover?

A

This is required if firms cease trading. This is a minimum of £1m cover over 6 years.

If firms can’t get run off cover from their insurers, they can apply for coverage to the RICS run-off pool

38
Q

What are the main principles of the Bribery Act

A

Making a bribe
Receiving a bribe
Bribery of a foreign public official
Failure of a corporate entity to prevent bribery on its behalf

39
Q

What are the six principles of prevention of a bribe

A

Proportionate Procedures
Top Level Committment
Risk Assessmentt
Due diligence
Communication
Monitoring and review

40
Q

How is RICS structured?

A

Privy council: awards grants and royal charter

Governing council: manage the strategy for RICS

Regulatory board, management board and audit committee- execute the strategy

41
Q

What are the RICS 5 principles of better regulation?

A

PACTT

Proportionality
Accountability
Consistency
Targeting
Transparency

42
Q

What is a bye-law?

A

A rule or regulation to determine how it regulates itself as an independant body

RICS bye-laws provide the power to Head of Regulation and the Regulatory Tribunal to make disciplinary and regulatory decisions including issuing disciplinary penalties and costs

Bye-laws:
2. Membership and registration
3. Designations (and how they’re used)
4. Contribution of funds (such as fees and subscriptions)

43
Q

What is the difference between Morals and Integrity

A

Morals: the categorisation of intentions, decisions and actions into those that are proper/right and improper/wrong (personal beliefs that guide an individuals behavioir)

Integrity: being honest and showing a consistent and uncompromising adherence to strong morals and ethical principles/values

44
Q

What actions can be imposed after a disciplinary investigation?

A

Fixed penalty notice (fine)
Regulatory compliance order (written agreement containing corrective actions and restrictions)
Referral to the disciplinary panel

45
Q

What processes are required when handling client money?

A

Secure accounting systems
Client money kept separately
Client must always have access to funds
Must maintain a client ledger and be able to provide a running balance
Only competent and knowledgable staff process clients money

46
Q

What limitation periods are in place for PII

A

Under hand: 6 years
Deed: 12 years

47
Q

What is an independent redress scheme?

A

A scheme designed to handle small issues that would be expensive to take to court

E.g RICS Dispute Resolution Services
Centre for Effective Dispute Resolution

48
Q

What are some red flags associated with money laundering?

A

Inability/unwillingness to provide identity documents
Changes to parties involved in the transaction
Payments (fees/rent/transaction) in unusual currencies
Unusual transaction features e.g. urgency

49
Q

What document is relevant for opening a firm under RICS?

A

Rules for registration of firms (2022)

50
Q

What information does Rules for Registration of firms (2022) include?

A

Mandatory:
50%+ principles are RICS members
Provide surveying services to the public

Eligible:
25%-49% principles are RICS members

51
Q

RICS Conflict of Interest- UK Commercial Property Market Agency (2017)

A

A mandatory UK only professional statement advising members and firms who act on open market sales or acquisitions of commercial investment real estate. Mentions:
Dual agency
Multiple introductions
Incremental advice

52
Q

What is meant by the term self regulation?

A

Self-controlling.

This means RICS are responsible for their making their own decision and taking responsibility for their members actions in accordance with RICS guidance

53
Q

What is a Bye-law and give an example

A

A rule or regulation made by an institution to determine how it reglates itself.

RICS bye-laws give the Head of Regulation and Regulatory Board the power to make regulatory and disciplinary decisions including issuing disciplinary penalties

E.g. Bye-law 2: Membership
Bye-law 3: Designations and when they can be used
Bye-law 4: Contribution to funds- fees and subscriptions

APC- Commercial pathway (12 decks)

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