Ethics

Question 1

What are the RICS CPD requirements?

Answer 1

1. 20 hours per year for chartered members, 10 formal minimum.
2. 48 hours per year for non-chartered members, aiming for their chartership.

Question 2

What are the RICS Bye Laws?

Answer 2

The RICS Byelaws provide the power for Head of Regulation and Regulatory Tribunal to make disciplinary and regulatory decisions including issuing disciplinary penalties and costs. There are 10 Byelaws i.e. membership and fees and accounts and audit. Used for regulation.

Question 3

Are you aware of Lionheart? What is their aim?

Answer 3

LionHeart is an independent charity specifically designed for past, present and future RICS professionals and their families.

Question 4

What is the RICS structure?

Answer 4

1. Founded in 1868.
2. Royal Charter granted by Privy Council in 1881.
3. Self-regulated so not by Government or external parties.
4. Byelaws determine how it is regulated.
5. Governing Council manage & agree strategy.
6. RICS Board and Standards & Regulation board are beneath GC and execute the strategy.

Question 5

Can you name some of the documents the RICS offers?

Answer 5

1. Professional Standard
   a. Set requirements or expectations for RICS members and regulated firms about how they provide services or the outcomes of their actions.
   b. Mandatory requirements.
   c. Best Practice.
   d. i.e. Rules of Conduct, Conflict of Interest, Bribery documents etc.
2. Practice Information
   a. Supplementary guidance to support surveyors in delivering specific services or working in specific areas of practice.
   b. Not mandatory and does not provide explicit recommendations.
   c. Definitions, processes, toolkits, checklists, insights, research and technical information or advice.
   d. RICS black book etc.

Question 6

What are the 5 Rules of Conduct? HICSRR

Answer 6

Members & Firms must:
1. Be honest, act with integrity and comply with their professional obligations, including obligations to the RICS.
2. Maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
3. Provide good quality and diligent service.
4. Treat others with respect and encourage diversity and inclusion.
5. Act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.

Question 7

What is bribery?

Answer 7

Giving someone an advantage in return for a reward or advantageous treatment.

Question 8

What is the Bribery Act 2010?

Answer 8

1. The UK’s main anti-corruption law.
2. Has extra-territorial reach (i.e. can occur abroad if company does business in UK).

Question 9

What are the key offences of the Bribery Act 2010?

Answer 9

1. Active bribery – offer to or giving a bribe to another person.
2. Passive bribery – accepting or requesting a bribe.
3. Bribery of a foreign official – a bribe intended to influence a public official.
4. Consent by a director or senior company officer of a bribe.
5. Failure by an organisation to prevent a bribe on its behalf.

Question 10

What principles can you undertake to ensure you do not commit bribery?

Answer 10

1. Proportionality – ensuring actions are proportionate to the potential risks.
2. Top level commitment – senior management setting a good example and showing no tolerance.
3. Risk assessment – considering the risks we might face.
4. Due diligence – knowing who we are dealing with.
5. Communication – through policies and procedures.
6. Monitoring and review – keeping an eye out for changes in legislation.

Question 11

Are you aware of any other legislation for bribery?

Answer 11

Yes – the ‘Money Laundering and Terrorist Financing Regulations 2022’.

Question 12

What is the MLR 2022?

Answer 12

1. Money laundering – disgusing money to appear as it came from a legitimate source.
2. Terrorist financing – solicitation of funds with intention on supporting terrorist activities.
3. Applies to private sector businesses with higher risk of money laundering, such as accountancy, real estate, and letting agencies.

Question 13

What is your companies gift policy?

Answer 13

1. Gift register – all gifts must be logged onto the register.
2. Considers the Bribery Act, Rules of Conduct and decision tree.
3. Considers cultural differences and donating gifts.
4. 4 key recommendations from RICS; proportionality, value, impartiality, and timing.

Question 14

What RICS documents are you aware of for bribery?

Answer 14

1. I am aware of the RICS Professional Standard (mandatory requirement) called ‘RICS countering bribery and corruption, money laundering, and terrorist financing’.
2. Split into 3 parts

a. Part 1: Definition and mandatory rules.
i. Members = don’t accept / be complicit with bribery or ML.
ii. Members = have knowledge of laws and requirements.
iii. Members = report suspicious activities.
iv. Firms = adequate training for staff.
v. Firms = plans and policies in place.
vi. Firms = due diligence and recording information.
vii. Firms = identity checks on clients.

b. Part 2: Guidance
i. Members = comply with employer policies, attend training, declare gifts, keep reports confidential.
ii. Firms = proportionate controls, compliance officer, qualified personnel undertaking checks.

c. Part 3: Supplementary Guidance

3. Update provided in March 2022 from the RICS for anti-money laundering sanctions update (following Ukraine / Russia conflict).

Question 15

What is a Conflict of Interest?

Answer 15

1. Party Conflict: A situation where an RICS member acts in the interest of another party in an assignment that conflicts with a duty owed to another party.
2. Own Interest Conflict: A situation where an RICS member or firm acts in the interest of another party in an assignment that conflicts with themselves or someone in the same firm.
3. Confidential Information Conflict: A conflict between the duty of an RICS member or firm to provide material information to one client, and the duty of the same RICS member or firm to keep the same information confidential to another client.

Question 16

What steps did you take once you realised there was a conflict of interest on the UCB battery tender? What type of conflict of interest was this?

Answer 16

I informed the Client that I could not disclose this information due to a conflict of interest with another party as the other party requested the information is kept confidential.

Confidential Information Conflict.

Question 17

How could a COI be managed internally if 2 separate departments were working for the same client?

Answer 17

1. Exclusivity of staff, avoid cross over of information, separate communication lines, separate locations and storage locations, NDA agreements and monitoring the COI.

Question 18

What is ‘Informed Consent’?

Answer 18

1. Consent given willingly by a party who may be affected by a COI, ensuring the party understands there is a risk of a COI, what a COI is, and that the COI may affect the ability to advise or act fully in the interests of a client.

Question 19

You mentioned a complaint was received during the Molson Coors project. What was the complaint? How did you handle this? Was it in line with your companies CHP?

Answer 19

1. The complaint received was in relation to the difference between the Interim Certificate value certified and the cash flow forecast.
2. In accordance with my companies 2 stage CHP process, I notified a partner and recorded the complaint within the register. Following this, I responded to the client quickly and set out the next steps including; providing additional information and notifying the companies PI insurers.
3. The 2nd stage was not utilised in this instance, as additional explanation was provided to the client for them to understand the cashflow differences and the complaint was withdrawn. However, I am aware if the issue was not resolved, the complaint would have been referred to an independent third-party redress scheme.

Question 20

Where can you find guidance on how to deal with a complaint?

Answer 20

1. My companies Complaints Handling Procedure.
2. The RICS Professional Standard document for Complaints Handling.

Question 21

What must a firm do to be regulated by the RICS?

Answer 21

1. Contact RICS for guidance and obtain a startup pack.
2. Inform the RICS and register for regulation.
3. Appoint a contact officer for all communication.
4. Prepare a CHP.
5. Obtain PII cover.
6. Abide by Rules of Conduct for Firms.
7. Use Regulated by RICS on all practice material.

Question 22

You mention a prospective client enquired whether you were a chartered surveyor and you responded saying your firm holds adequate and appropriate PI insurance.

1. What is PI insurance?

Answer 22

a. Professional Indemnity Insurance.
b. Provides financial cover in the event a client suffers a financial loss as a result of a breach of professional duty i.e. negligence, errors or omissions.

Question 23

You mention a prospective client enquired whether you were a chartered surveyor and you responded saying your firm holds adequate and appropriate PI insurance.

2. What are the RICS PI insurance value requirements?

Answer 23

a. Indemnity Levels
i. £100k or less turnover = £250k minimum PII.
ii. £100k to £200k turnover = £500k minimum PII.
iii. £200 or more turnover = £1m minimum PII.

b. Uninsured Excess
i. £10m or less turnover = 2.5% of the sum insured or £10k (greater of).
ii. £10m or more = No limit.

Question 24

4. What are the PI insurance requirements set by the RICS?

Answer 24

a. Policy must be made on an ‘each and every’ claims basis.

b. Fully retroactive run off cover must be in place for at least 6 years.
i. Retroactive means all former work carried out by the firm is covered regardless of when.
ii. Run off cover ensures firms are not exposed to financial detriment following a firm ceasing to trade.

Question 25

5. What other insurances must your company hold? Other than PII.

Answer 25

a. Professional Indemnity Insurance

b. Employer’s Liability Insurance
i. Covers the costs of employee claims for illness or injury caused by their work due to employers’ negligence

c. Public Liability Insurance
i. Protects businesses from the costs of compensation and legal fees if a third party claims they have been injured or their property damaged due to the business’s activities.

d. Building’s insurance of an office premises.