Ethics- Flashcards
In what circumstances can you work with COI?
Informed consent – in writing by party if entirely transparent and
- All parties best served by doing so
Why do you want to be part of RICS?
- Professional recognition
- Mark of excellence
- Global reach – over 140k members in over 140 countries - cousin is MRICS
- Network
- Market advantage
Have you ever received any gifts?
Under our Savills £50 limit. Recorded it on the gifts register.
https://connect.savills.com/page/60723?SearchId=1146025
Lunch at a tenant’s (Dishoom) after – logged with my line manager and department head
What is a Royal Charter?
Royal Charter and Bye-Laws
We’re incorporated by Royal Charter, which sets out our objectives
Our Royal Charter requires us to promote the usefulness of the profession for the advantage of the UK public and in other parts of the world. In practice, the charter means that important changes to our constitution – its bye-laws – have to be ratified by the UK Government, through the Privy Council, even after they’ve been approved by a majority of our members voting at a general meeting.
The continued demand for royal charters, which may seem an antiquated concept, shows that they retain their cachet in the modern professional world as a “gold standard” of excellence and integrity.
When was the RICS founded?
Founded in 1868
When did the RICS gain its Royal Charter?
Royal Charter granted by Privy Council in 1881
What is the RICS mission statement?
Advancing the highest ethical and technical standards for professionals in land, property and the built environment. Protecting and providing benefits to consumers by enforcing standards and codes of best practice.
Are you aware of any RICS guidance on social media use?
- Use of social media guidance (regulation) – V2 – sep 24
- Same standards as rules of conduct (1,3,4)
- V2 specific guidance
RICS will investigate sm posts ivolving: - Discrimination
- Dishonesty
- Threatening/abusive behaviour
- Bullying harassment
- Pattern of frequent concerning comms
- Ignoring warnings/ advice about concerns
Unlikely to investigate: - Critical of org
- Use of professional respectful language
- Are removed when requested
RICS may take disciplinary action
- Tell me about the RICS guidance on Conflicts of Interest.
RICS PS: Conflicts of Interest 2017
- Member must not advise/represent client where
- Party conflict (two different parties)
- Own interest conflict
- Confidential information conflict (information wall)
Informed consent – given in writing by the party if entirely transparaent about material factors
RICS firms must have effective systems and controls
- What are the rules around use of the RICS logo and ‘Regulated by RICS’ designation?
Split into Rules of conduct for firms use of logo
- Guidelines for personal use of logo
- Both approved by Standards and Regulations Board
- Qualified RICS member you have right to use logo for personal use for example business cards and email signature
- Rules: master logo – font colour cannot be adjusted ; minimum clearance around logo equivalent to size of capital R in RICS
Who is the current RICS president?
President - Justin Sullivan
CEO – Justin Young
- What are the professional obligations of members and firms?
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.
The following professional obligations to RICS are mandatory for RICS members.
1. Members must comply with the CPD requirements set by RICS.
2. Members must cooperate with RICS.
3. Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
The following obligations are mandatory for RICS-regulated firms.
1. Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
2. Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS.
3. Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
4. Firms must cooperate with RICS.
5. Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
6. Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
7. Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms
- What disciplinary procedures can the RICS impose
- Undertaken by Standards and Regulatory Board
- Triggered by 1. Complaint to RICS an allegation by client . 3rd party OR from info received/ established by RICS
Three levels of disc action:
1. Action by Head of Reg
2. Disciplinary Panel
3. Appeal Panel
Head of Regulation:
Initial Investigation – after investigation:
1. Serve fixed penalty notice – fine and/or caution
2. Make Regulatory Compliance Order (minor breaches e.g. failure of CPD) – written document which states step must take and agreement to pay fine
3. Disciplinary Panel – more serious breaches (includes lay members- non RICS members)
Reg. compliance order
Reprimand
Fine – no limit but proportionate to offence
Expulsion- membership or firm
Unlimited fine (proportionate)
Publication on MODUS or website or local paper
- Refer to regulatory tribunal
Appeal panel can consider member’s /firm’s appeal – can vary the penalty imposed
- What is a Responsible Principal?
The Rules for the Registration of Firms (v7 effective from feb 2022), introduce the requirement for
all RICS regulated firms to appoint a responsible principal.
A responsible principal will have primary
responsibility for ensuring that RICS’ professional, technical and ethical standards are applied,
upheld and supported by an appropriate assurance framework within a regulated firm.
A Responsible Principal Application must be completed prior to registering your firm for RICS
Regulation
What is the aim of the RICS?
- to maintain the highest standards of education and training
2.To protect consumers through strict regulation of professional standards - to be leading source of information and independent advice on land. property construction and associated environmental issues
If someone sent you a case of champagne following a very large job that you had completed for them, what would you do then?
Timing & Proportionality are incredibly key in gifts. Although in theory there is a rule about not taking gifts, the key thoughts in your mind are about Timing and Proportionality.
Accepting a gift part way through a job is always a no, accepting a gift once you have completed a job if you’re not on the cusp of pitching for something else/could be viewed as a bribe, may be acceptable if it is proportional and if its really required.
What are the general principles around any sort of gifts?
Proportionality and timing
If not accepting a gift is really going to offend them what would you do?
Mention that you aren’t able to accept it, you are really appreciative, what you will do is auction it off in our next charity auction if that’s acceptable.
What are your CPD requirements once you have qualified? / before
20 hours per year, 10 hours at least needs to be formal.
Why is CPD important?
To keep up to date with the latest best practices and information in the industry -> to best advise clients and relates to ROC 2 professional competence and ROC 3 – good quality and diligent service
What else is required within your CPD? Ethics training?
To keep up to date with the rules of conduct and ethics training.
Can you give me the levels of turnover and PI cover that are required as a minimum?
£100,000 or less £250,000
£100,001 to £200,000 £500,000
£200,001 + £1 million
These have been around for a long term so out of date, most firms will have much higher
If you were going to set up by yourself in practice, what would you have to do?
RICS compliance:
- Inform RICS filling in Firm Details Form
- Appoint Responsible Principal
- Register with RICS for regulation of firm
- Arrange PII and send details to RICS
- Set up procedures for client money handling
- Register for VRS if undertaking valuations
- Obtain RICS approval for complaints handling
- Set up complaints log
- Appoint complaints handling officer
- Plan for succession
- Ensure CPD logged online
- Ensure completion of online RICS Annual Return at end of year
Statutory Compliance:
- Must disclose business name
- Insurance compliance for public and employer liability
- Disability Discrimination compliance (Equality Act)
- Financial services compliance
- Bribery Act 2010 compliance
- Appoint Money Laundering Reporting Officer (MLR 2017)
- H&S compliance (HS Act 1974 )
- Asbestos Register (Control A Reg 2012)
- Fire safety compliance
- Register for Data Protection (GDPR DPA 2018) - ICO
- Inform HMRC for VAT
- Ensure compliance with employment laws
- And insurance – employer liability, director
- Recruitment of staff (Don’t talk about this) -
What is the role of the RICS? - MPL
- Provide regulation
- Provide training and guidance materials
- Set the gold standard
What are the three stages of disciplinary procedures?
Action by Head of Regulation
Disciplinary Panel
Appeal Panel
What is informal vs formal CPD?
Formal – structured learning, organised.
Informal – personal study, podcasts etc.
What is Professional Indemnity Insurance and why is it important?
Protects firm, client and public against negligence
What is PII cover?
Professional Indemnity Insurance
what are the standards/ requirements for PII cover?
- Regulated
- Each and every claims basis (not aggregate)
- Run-off coverage in place
- Cover past and present employees – fully retroactive
- Turnover / indemnity limits
- Uninsured excess
What is an aggregate clause in insurance?
- Can agree with client to cover set amount in total or case by case
- whether underlying losses are grouped together to form a single claim
Why have cap in TOE
- lessens ambiguity
- lowers risk
- If your level of turnover is over £250,000, what is the level of indemnity required?
£1m
- What is run-off pool
When firm has no adequate cover and pool covers this (RICS pool)
- What is the risk pool?
risk pool is a form of risk management that is mostly practiced by insurance companies, which come together to form a pool to provide protection to insurance companies against catastrophic risks such as floods or earthquakes
- How long can a PII claim arise after the work is undertaken?
6 years
- Explain your understanding of the RICS Professional Standard Risk, Liability and Insurance (1st Edn).
Practice information 2023
Risk, Liability and Insurance: Top tips
describes court’s approach to professionals’ liabilities.
Liability caps – RICS recommends regulated firms use liability caps, where legally permissible and following the principles of good practice set out in the guidance note, as a way to manage the risk of their professional work, and to ensure that there is a fair allocation of risk and reward between members and their clients.
Third party reliance – Regulated firms need to be aware of third-party reliance and make clear in their contracts/engagement terms that their advice may only be relied upon by the named client, so as to ensure that they are aware of and have control over future requests for third party reliance.
Terms and conditions – There are at least three key terms that should be considered from a risk perspective in the context of every instruction that a surveyor undertakes:
the scope of the work
the basis on which the fee will be calculated and
the liability cap.
Professional Indemnity Insurance (PII) – PII is a key part of managing risk and in arranging PII, regulated firms should ensure that the amount of cover purchased is consistent with the nature of their practice, proportionate to the risks taken by the firm and consistent with the RICS PII requirements.
PII – Although larger firms sometimes have designated partners or employees who manage the firm’s insurance arrangements, it is important that all partners and senior members are involved to an appropriate extent and have at least a working knowledge of the firm’s professional indemnity insurance.
- Explain when you might agree a liability cap in relation to PII?
Liability caps – RICS recommends regulated firms use liability caps, where legally permissible and following the principles of good practice set out in the guidance note, as a way to manage the risk of their professional work, and to ensure that there is a fair allocation of risk and reward between members and their clients.
- What is Liability cap
- Cap level of claim so any claim does not go against you – regulates risk
What is Modus?
Modus is a digital publication from RICS, that brings you award-winning insight and opinion on the built environment from around the world. Topics covered include real estate, construction, sustainability, technology and urban planning
What is the RICS motto and what does it mean?
Est modus in rebus – there is measure in all things.
What are the RICS Rules of Conduct?
- Be honest and act with integrity
- Maintain professional competence
- Provide a good quality and diligent service
- Respect others and encourage D&I
- Act in the public interest, take responsibility to reduce harm and maintain public confidence in the profession
Give me examples of Rules of Conduct in your daily work
Take one Rule of conduct and show how you have displayed this recently
What is a conflict of interest?
Conflict of interest arises in a situation where there may be an actual, perceived or potential risk that the professional judgement of an RICS-regulated firm or member will be compromised when undertaking an assignment.
What is the (three step)process to handling a conflict of interest.
Step 1 – Conflict Avoidance
Step 2 – Written advice to both parties
- Disclose nature of conflict
- Be clear & let clients make their own decision
- Request written confirmation of their informed consent
Step 3 – Conflict management
- Information barrier
What is bribery?
is a criminal offence under the Bribery Act 2010, and involves offering,
promising, giving or accepting
any financial or other advantage: to induce that person or other person(s) to act improperly.
What are the six principles of the Bribery Act 2010?
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitoring and review
What are the 4 offences under the Bribery Act 2010?
- Receiving a bribe
- Offering a bribe
- Failure to prevent a bribe
- Bribing a foreign official
What is the Bribery Act 2010 and what is its aim?
Aims to reduce bribery in business in UK and abroad – bribe is giving, offering, promising or receiving advantage / benefit for an illegal or in breach of trust action
What procedure does your company have for reporting Bribery
‘Safecall’ – hotline
- What are some of the key requirements of the RICS guidance relating to bribery, corruption and money laundering? 2019
- Verify identity
- Do not facilitate
- Written risk assessments
- Have systems and training in place
- Appoint senior person to be responsible for AML checks
Who is MLRO?
Christine Cox (Chris Lee deputy)
How to raise Suspicious Activity Report?
Contact MLRO / on connect intranet
- What are your firms whistle blowing policies?
safeline
What are the penalties for bribing?
Policed by the Serious Fraud Office
Max penalty of 10 years imprisonment and/or unlimited fine for company/individual.
Who would be responsible for the employees corrupt act
The company, unless they could show they had adequate policies and procedures in place to combat bribery.
What does the Bribery Act 2010 say about hospitality?
The Government guidance states that hospitality is not prohibited under the Act. Offering a client reasonable and proportionate hospitality will not constitute as an offence, such as tuckets to a major sporting event or taking a client for meals.
Must be accurately recorded on gift/hospitality register.
- Tell me about an instance of when you have been offered a gift or hospitality by a client.
restaurant under £50, did not deem it to affect my position
What is the RICS Guidance on Bribery?
RICS Professional Standard, Countering Bribery, corruption, money laundering and terrorist financing, 2019.
What are the requirements on Bribery within the RICS Professional Standard – Countering Bribery, corruption, money laundering and terrorist financing?
Firms:
- Not offer, accept anything that could constitute a bribe
- Have plans to comply with laws and ensure they are followed
- Report activity
- Act with due diligence and carry out the right levels of due diligence
- Retain info on how the firm has met requirements.
Members:
- Not offer or accept anything that could constitute a bribe
- Adequate knowledge of bribery and corruption to comply with requirements
- Report any activity that breaches.
- Explain your understanding of the RICS Scheme Rules relating to client money protection.
- ROC 1
- Rules for holding client money
- Info to clients
- Receipts of client money
- Accounting records and controls
- Compliance
- What are types of Alternative Dispute Resolution?
- Arbitration, mediation,
- Adjudication
- Expert determination
- litigation
- Most expensive dispute resolution
Litigation
- What can you do with client interest in account
return to client, it cannot be kept unless confirmation by client
- Which dispute resolution measures are legally binding?
litigation
- AI qs:
- Copyright
- legality
- How would you keep clients money securely and safely held?
in a discrete bank account in the client’s name
- How do you ensure you comply with money laundering regulations?
- How do you ensure you comply with your firms bribery and gifts policy?
follow AML guidelines,
What is money laundering?
use of illicit funds that are then cleansed via legitimate businesses or puchases
Why are Money Laundering regulations in place
to counter money laundering
What are the Money Laundering Regulations 2017?
WIAP PHARN
- Written ML & Terrorist financing Risk assessments
- Implement systems, procedures, protocols and controls
- Adopt appropriate internal controls
- Provide staff training
- Comply with the regulations on PEPs
- High risk situations – high risk 3rd Countries
- Record keeping, procedures, protocols
- AML chekcs to confirm identity of proposed purchaser and source of funds before contracts exchanged
- Include additional high-risk factors when assessing - enhanced due diligence and simple DD.
Estate agent legal obligations
- Lettings agents must register w HMRC if letting individual properties over £10k EUR/ month
Firms must have policies to identify and scrutinise strange transactions
DD checks:
- Customer DD – ID, if company on companies house,
- EDD – more detailed examination of background and purpose of transaction and increased monitoring
Other:
- 10k limit EUR for cash
- Ongoing business relationship of client should be monitored
- Detailed record keeping
- Senior staff member responsible for compliance
- Nominated person MLRO must be appointed to report to NCA of Suspicious Activity Report
- Firms maintain records min. 5 years
What amount of cash can you accept without having to register with HMRC?
You may have to register with HMRC if your business operates as a high value dealer. A high value dealer under money laundering regulations is any business or sole trader that accepts or makes high value cash payments of 10,000 euros or more (or equivalent in any currency) in exchange for goods.
What are the regulations relating to anti-money laundering?
Money Laundering Regulations 2017?
- What due diligence should you undertake in relation to anti-money laundering checks?
- ID – is person who they say they are
- PEP?
- Source of funds
What are estate agents legal obligations with Money Laundering?
Estate agent legal obligations
- Lettings agents must register w HMRC if letting individual properties over £10k EUR/ month
What are the different levels of due diligence?
DD checks:
- Customer DD – ID, if company on companies house,
- EDD – more detailed examination of background and purpose of transaction and increased monitoring
What is a PEP
Politically Exposed personsSomeone who has been entrusted with prominent public function – higher risk for involvement in bribery and corruption
What could be some red flags?
Large amounts of cash
Change of business entity mid way through a transaction
Not using a solicitor
Offering to pay large amounts up front
Rushing a transaction
Lack of ID
Foreign bank account
If client acts suspiciously when asked for proof of funds
Who might Enhanced Due Diligence be required for?
PEP
What is EDD?
enhanced due diligence
Firms must have policies to scrutinise what types of transactions?
Firms must have policies to identify and scrutinise strange transactions
What are the penalties for non compliance with the Money Laundering Regulations?
Max 14 years prison and/or unlimited fine for assisting with money laundering
Max 5 years prison sentence and/or unlimited fine for tipping off a person and informing them they are under suspicion.
What are the typical requirements for ML checks for CDD for different types of organisation?
Politically exposed person, family member of a politically exposed person, high risk third country.
What is unconscious bias?
Unconscious bias is when we make judgments or decisions on the basis of our prior experience, our own personal deep-seated thought patterns, assumptions or interpretations, and we are not aware that we are doing it.
What is an example of unconscious bias?
ageism - disregarding someone’s view due to their age perhaps older or younger - ‘boomer’ or gen z
What is a Bye-Law?
They provide the power for Head of Regulation and Regulatory Tribunal to make disciplinary and regulatory decisions including issuing disciplinary penalties and costs.
Can you name some of the RICS bye-laws?
There are 10 Bye-Laws, which include:
Bye-Law 1 – Application & Definitions
Bye-Law 2 – Membership & Registration
Bye-Law 3 – Designations
Bye-Law 4 – Contribution to Funds
Bye-Law 5 – Conduct
Bye-Law 6 – Governing Council, Officers and Staff
Bye-Law 7 – Subordinate boards, committees and groups
Bye-Law 8 – Annual General Meeting
Bye-Law 9 – Accounts and Audit
Bye-Law 10 - General
Who do the bye laws apply to?
Member
Firm
Regulated non member
Person covered by an agreement made under article 20 of the Charter.
How can we overcome unconscious bias?
Encourage people to be open to recognising and managing biases.
Training to make people aware of it and what we can do as a business to prevent it.
Training can help to develop the empathy that
combats bias, diversify their networks and commit to improvement.
How does Savills prevent modern day slavery?
At a minimum all our policies comply with local legislation in the jurisdictions we operate in. We have a number of internal policies one of which that deals with anti-slavery and human trafficking
Carry out appropriate due diligence/vetting and investigation of our supply chain (contractors, sub-contractors etc.
Paying all staff at least the minimum wage
Encouraging staff to report their concern (Group speak up policy)
Not knowingly supporting of dealing with any business involved with slavery or human trafficking
.
What is meant by self-regulation?
That the RICS operates within its own published regulatory framework, rather than being legislated by the Government.
Why do you want to become a member of the RICS?
Gold standard
Professional Development
Professional recognition
Opportunity to promote and contribute to the RICS, for example on DEI
What ethical principles are the rules of conduct based on?
Honesty, integrity, competence, service, respect, and responsibility.
Disciplinary Procedures – what is the RICS responsible for?
Regulating the surveying profession in order to
Protect the Public
Uphold public confidence in the profession
Uphold professional standards
Who are disciplinary procedures undertaken by?
Standards and regulatory board
What are the triggers of disciplinary procedures?
Someone complaining to the RICS
Allegations by a client or 3rd party
Information received by the RICS
Do all shortcomings get investigated?
Not all, but failure to follow any RICS guidance will be considered.
What is the RICS guidance?
RICS Regulatory Decision Making 2022 – provides out line of the approach by the RICS.
Where can you find the disciplinary process?
In the RICS Regulatory Tribunal Rules 2022.
What are the three levels of disciplinary action?
Action by head of regulation
Disciplinary Panel
Appeal Panel
What are the four actions the Head of Regulation may take on completion of their investigation?
- Serve a fixed penalty notice
- Make a regulatory compliance order
- Refer the matter to a single member of the regulatory tribunal for consideration
- Refer matter directly to disciplinary panel
What is a fixed penalty?
- For low level breaches, may include a fine/caution
- For breaches of the Rules relating to the supply of info by the RICS
What is a regulatory compliance order
- Used for low level breaches, that can be easily corrected
- Written doc states the action the member or firm must take and agreement to pay a fine
- May cover issues as failure to comply with CPD
What is a disciplinary panel?
- More serious breaches
- Includes lay members
- Penalties available may be:
Fines
Expulsion from RICS
Made public on Modus/RICS Website
What is the appeal panel?
- Where a member/firm can appeal against a review of decision
- Also includes lay members
- Evidence previously presented and new representations
- Explain what your understand of the RICS Levitt review.
The Independent Review contains 18 specific recommendations. These are set out in detail here. These include recommendations on governance, executive remuneration, whistle blowing and legal advice.
RICS commissioned a Treasury Management audit in 2018.
Four non-Executive Board members of RICS then raised concerns that the audit had been suppressed and were subsequently dismissed from the Management Board.
RICS Governing Council commissioned the Independent Review in January 2021, which was initially dealt with by Peter Oldham QC and later passed to and published by Alison Levitt QC.
The terms of reference for the Independent Review set out three core objectives:
To consider the way in which the internal report was commissioned and dealt with and to determine whether there were any shortcomings
To consider whether any shortcomings represented a failure of governance
To make recommendations for the future.
- Explain what you understand by the RICS Bichard Review.
Lord Michael Bichard has published his independent Bichard RICS Review which was commissioned by the RICS Governing Council to review the Institution’s purpose, governance and strategy
- Explain some of the recommendations of the Bichard Review.
36 recommendations and suggests a phased timetable for implementation. The report’s recommendations include: A renewed and increased focus on the public interest remit of RICS, including amending the Royal Charter and creating a public interest panel to advise Governing Counci
Set up your own practice
RICS compliance:
- Inform RICS filling in Firm Details Form
- Appoint Responsible Principal
- Register with RICS for regulation of firm
- Arrange PII and send details to RICS
- Set up procedures for client money handling
- Register for VRS if undertaking valuations
- Obtain RICS approval for complaints handling
- Set up complaints log
- Appoint complaints handling officer
- Plan for succession
- Ensure CPD logged online
- Ensure completion of online RICS Annual Return at end of year
Statutory Compliance:
- Must disclose business name
- Insurance compliance for public and employer liability
- Disability Discrimination compliance (Equality Act)
- Financial services compliance
- Bribery Act 2010 compliance
- Appoint Money Laundering Reporting Officer (MLR 2017)
- H&S compliance (HS Act 1974 )
- Asbestos Register (Control A Reg 2012)
- Fire safety compliance
- Register for Data Protection (GDPR DPA 2018) - ICO
- Inform HMRC for VAT
- Ensure compliance with employment laws
- And insurance – employer liability, director
- Recruitment of staff (Don’t talk about this)
What happens with breach of ROC?
Only serious breaches of the rules are likely to result in disciplinary action; minor breaches can be dealt with through self-correction or firms’ processes. RICS disciplinary processes are not intended to replace other processes for resolving fee disputes or compensating for poor service or mistakes.
closing a practice
- Inform RICS
- Ensure clients informed
- Return monies held by clients
- Inform insurers and procure PII runoff for min 6 years
- Retain copy of client files and records for min. 6 years
What are disciplinary measures?
Action by Head of Regulation
Disciplinary Panel
Appeal Panel
What measures do you need to take if a conflict of interest is present?
Step 1 – Conflict Avoidance
Step 2 – Written advice to both parties
- Disclose nature of conflict
- Be clear & let clients make their own decision
- Request written confirmation of their informed consent
Step 3 – Conflict management
- Information barrier
What are some of the terms for client money handling?
PS: Client Money handling 2019
- Rules for holding client money
- Info to clients
- Receipts of client money
- Accounting records and controls
- Compliance
Main points:
- Client accounts separate and identifiable
- Name client must be on bank account
- Client must get monies on demand
- Payment of interest is agreed and accounts must be kept in credit
If you were to set up your own firm, what information would you need to provide to the RICS? If you were to set up your firm for property management specifically, what information must also been included?
RICS compliance:
- Inform RICS filling in Firm Details Form
- Appoint Responsible Principal
- Register with RICS for regulation of firm
- Arrange PII and send details to RICS
- Set up procedures for client money handling
- Register for VRS if undertaking valuations
- Obtain RICS approval for complaints handling
- Set up complaints log
- Appoint complaints handling officer
- Plan for succession
- Ensure CPD logged online
- Ensure completion of online RICS Annual Return at end of year
Statutory Compliance:
- Must disclose business name
- Insurance compliance for public and employer liability
- Disability Discrimination compliance (Equality Act)
- Financial services compliance
- Bribery Act 2010 compliance
- Appoint Money Laundering Reporting Officer (MLR 2017)
- H&S compliance (HS Act 1974 )
- Asbestos Register (Control A Reg 2012)
- Fire safety compliance
- Register for Data Protection (GDPR DPA 2018) - ICO
- Inform HMRC for VAT
- Ensure compliance with employment laws
- And insurance – employer liability, director
- Recruitment of staff (Don’t talk about this) -
What are the 5 rules of conduct? Can you give me an example of when you have shown integrity in the workplace?
- Be honest and act with integrity
- Maintain professional competence
- Provide a good quality and diligent service
- Respect others and encourage D&I
- Act in the public interest, take responsibility to reduce harm and maintain public confidence in the profession
If somebody made a complaint against you, what steps would you take? If they still weren’t happy with the response given, then what would you do?
- understand what the complaint is
- acknowledge the complaint and ensure this is done within 7 days
- escalate to line manager
- 2 rounds of review by directors
- finally offer to go to CEDR centre of effective dispute resolution
What legislation do you have consideration to for Bribery?
Bribery Act 2010
- Can you name 3 of the Rules of Conduct?
- What were the key recommendations of the Bichard RICS Review?
36 recommendations
: A renewed and increased focus on the public interest remit of RICS, including amending the Royal Charter and creating a public interest panel to advise Governing Council.
most recent Governing Council meeting, RICS said 30 out of 36 Bichard Review recommendations were now complete, with three more partially completed.
It said a “full top-down review “of the structure and organisation would now take place in 2025, three years after the Bichard Review, and then every five years after that. The continuing development of Matrics, the early career community, will
- Why was the Birchard Review undertaken?
The aim of the Bichard Review was to ‘create a new sense of purpose and direction so that RICS can once more stand tall as an exemplar professional institution, capable of tackling the challenges which will shape the way we all live in the years to come’
- What was a key learning that you took from the RICS Professionalism Module?
to consider rules of conduct and how these relate to ethics in everyday life and work
- What type of conflict of interest did you come across?
- Party
- own interst
- confidential information
‘own interest; relating to my relationship with potential client
- What procedures do you have in place to manage and avoid conflict?
- with written agreement of all parties,
- information barrier
- Is it acceptable to accept an instruction where a conflict of interest exists?
- only if written informed consent is provided with full transparency and
- when all relevant parties are best served by doing so
- You mention various elements of terms of engagement, can you talk me through what is included?
TOE:
name of client, address, etc.; name of property, address; currency; bases of value; scope of work; title interests; date of valuation, fee amount
title name
- Why is transparency important?
so that all parties are clear and know where they stand this is especially important to avoid future conflicts and, if this does happen there is a recorded document to show the facts
- What RICS document sets out good practice for handling of client money?
Client money handling 2019
- Why should you not allocate to the latest arrears?
usually will allocate to the oldest
- What is the importance of written confirmation of actions?
to avoid disputes in the future
Can you describe a time when you had to apply ethical principles in a challenging situation with a client?
How do you approach the issue of gifts and hospitality in your practice to avoid unethical influence?
timing and proportionality
£50 and under
no registration but
However, must be notified in writing to your Head of Office / Manager within 3 days of receipt, stating the name of the giver, a description of the gift, an assessment of value, the business relationship between the giver and Savills, and the personal relationship between the employee and the giver.
Registration: Required
Gifts over £50 should be declined however if a gift over £50 has been accepted you must, in addition to the above, log the gift in the gift register including detail of what action has been taken (e.g., raffle the goods for charity, or share amongst the team).
Can you provide an example where you had to maintain confidentiality despite external pressures to disclose information?
Valuation - client pressured to provide information on a deal they knew my team was working on - I politely refused
if pressed further I would relay to my line manager
How do you ensure that you and your firm remain compliant with professional regulations and ethical standards?
Can you give an example of when you provided advice to a client or colleague on an ethical dilemma? How did you ensure the solution was in line with RICS standards?
Have you ever had to advise a client on an ethical issue, such as a conflict of interest or the importance of professional independence? How did you handle it?
Can you describe a time when you had to advise your firm on compliance with RICS ethical standards? What was the outcome of your advice?
How have you advised a client or your firm on ensuring fair and transparent business practices in a real estate transaction?
Can you provide an example where you offered advice on best practice to maintain high professional and ethical standards?
Can you explain how you have guided a client or colleague in understanding the implications of breaching ethical standards, and what steps were taken to prevent it?
Have you ever had to challenge unethical behavior in a colleague or a client? How did you manage the situation, and what was the outcome?
A colleague is involved in a transaction where they have a personal interest that could lead to a conflict. How would you handle this situation to ensure ethical practice?
You are advising a client on a deal, and they ask you to withhold critical information from other stakeholders. How would you respond, and what ethical principles would guide your actions?
During a valuation, you realize that a client is pressuring you to inflate the property value to secure a higher loan. How would you handle this situation and ensure ethical compliance?
A client offers you a substantial gift after a successful property transaction. How do you handle the situation in line with RICS ethical guidelines on gifts and hospitality?
1.2 Members and firms do not allow themselves to be influenced improperly by others (as a result
of, for example, giving or receiving work referrals, gifts, hospitality or payments) or by their own selfinterest
- consider timing and proportionaliyu
You discover that a senior colleague has violated ethical guidelines in handling a client’s funds. How would you address this internally, and what steps would you take to ensure the situation is properly managed?
client is found to be involved in fraudulent activities related to property transactions. What ethical steps would you take to address the situation and ensure compliance with both legal and professional standards?
Why is RICS important?
provides standards to members, upholds public interest, provides training for members
what curent issues affect the profession?
Impact of Artificial Intelligence on the Industry.
Harris Debate 2024, Ethics in The Age Of AI.
RICS Professional Fee Updates.
RICS 2024 Sustainability Report.
RICS Leadership Updates.
RICS Rules of Conduct Updates.
Labour Government Impact on the Industry.
RICS Business Plan.
AI, sustainability, Diversity, skilled employees
Are you aware of any guidance that applies to RICS Members when using Social Media?
- Use of social media guidance (regulation) – V2 – sep 24
- Same standards as rules of conduct (1,3,4)
- V2 specific guidance
RICS will investigate sm posts ivolving: - Discrimination
- Dishonesty
- Threatening/abusive behaviour
- Bullying harassment
- Pattern of frequent concerning comms
- Ignoring warnings/ advice about concerns
Unlikely to investigate: - Critical of org
- Use of professional respectful language
- Are removed when requested
RICS may take disciplinary action
When would the RICS investigate a Social Media post made by one of its members?
Discriminatory.
Dishonest.
Abusive or threatening.
Likely to cause significant harm, distress or offence to a person.
Shows a pattern of frequent or large number of concerning communications.
Ignores previous advice or warnings about concerns.
Please explain your understanding of the RICS Business Plan for 2024?
Matrics Expansion into South Asia – The Governing Council is prioritising support for the next generation of early career professionals with Matrics networks expanded to South Asia, Greater China and Southeast Asia and Australia markets.
Sustainability Leadership – RICS aims to lead on global issues such as decarbonisation, climate resilience, biodiversity, and the circular economy. This involves strengthening carbon measurement standards, influencing policymakers, and equipping members with training and tools to address sustainability challenges.
Attracting Diverse Talent – Efforts are underway to attract a wider range of individuals into the profession. This includes modernising the assessment process, increasing support for early-career professionals, and creating grants and bursaries for underrepresented groups.
Enhancing Member Engagement – The RICS is working on improving the value and experience for its members. This includes better understanding of their needs through data insights, creating stronger connections among members and promoting their work and professionalism publicly.
Strengthening Trust – The institution plans to enhance public trust by refining its regulatory processes, ensuring transparency, and maintaining high standards for ethical and technical practices.
Can you please explain your understanding of the recent RICS Fee changes?
The RICS has announced a 3.5% increase in professional subscription fees for 2025, marking the first adjustment in five years. The decision was made to address rising operational costs and inflation, which RICS had been absorbing. A new subscription framework has also been introduced to create a fairer and more regionally equitable system, taking into account member grades, benefits, and local economic conditions. For example, UK-based professional members will pay £558, while fellows will pay £681. The framework is designed to reflect affordability, with fees varying internationally based on local market conditions and exchange rates. In some regions, like parts of Africa, fees have decreased to enhance affordability. Members under two years and those pursuing qualifications will see tiered rates depending on their status.
What is the RICS doing to improve Diversity & Inclusion?
The RICS has setup ‘Diversity & Inclusion leadership’ which is a knowledge hub allowing the RICS to share ideas on how and why diversity & inclusion is so important to the RICS. This has included initiatives such as:
International Women’s Days celebrating the achievement of Women in our profession.
Pride 2023: LGBTQ+ equality pledge focusing on the importance of LGBTQ+ representation in the profession.
The McGregor-Smith Review – aiming to develop black and ethnic minority talent within the profession.
Please explain your understanding of how the RICS define Professional Standards vs. Practice Information?
Following the Birchard Review and its recommendations the RICS have introduced two new definitions for Professional guidance which are now split into Professional Standards and Practice Information. These supersede the former definitions including Professional Statements, Guidance Notes and Codes of Practice.
Professional Standards – set out requirements or expectations for RICS members and regulated firms with a focus on baseline expectations for competence and ethical behavior. They contain mandatory requirements that surveyors must follow, where the word ‘must’ is used with best practice that surveyors should follow, where the word ‘should’ is used.
Practice Information – set out supporting guidance to advise surveyors in delivering specific services or working in specific areas of practice. The guidance is not mandatory and does not provide explicit recommendations. Practice Information can refer to processes, toolkits, checklists, insights, research and technical information or advice.
Please explain your understanding of Rule Number 1?
Having reviewed the example behaviours in adhering to Rule 1 RICS Members and firms should not allow themselves to be influenced improperly through the acceptance of work referrals, gifts or hospitality. Members and Firms must also be sure to identify conflicts of interest and not provide services or advice where these conflicts of interest occur. This could be a scenario where you have reduced impartiality due to an existing relationship, for example being friends with a Main Contractor who has subsequently been selected to submit a tender would form a conflict of interest.
What impact will the Labour government election have on the Property & Construction Industries?
Election of the Labour government may have the following impacts:-
House Building Targets – Labour has pledged to build 1.5 million homes over the next parliamentary term, reinstating mandatory housing targets and updating the National Planning Policy Framework (NPPF).
Infrastructure Projects – Significant funding is planned for public infrastructure, including transportation networks, renewable energy projects, and urban development. This will create opportunities for large scale construction projects, likely driving economic growth and job creation.
Sustainability Focus – Labour has committed to embedding green practices across the industry, with policies focusing on eco-friendly materials, retrofitting existing buildings for energy efficiency, and integrating biodiversity in urban planning. This could lead to increased demand for sustainable construction practices through regulations such as MEES.
Skills Development – Labour plans to address the construction sector’s skill shortages through youth training initiatives and improved working conditions, such as banning zero-hour contracts. This could create a more skilled and stable workforce but will require significant investment to meet labour demands.
What impact will the 2024 US Election results have on the Property & Construction Industries
Currency fluctuations – The value of the US dollar often fluctuates sharply during and after an election. These shifts directly affect the exchange rate between the dollar and the pound, which in turn impacts the attractiveness of UK property to overseas investors. A weaker pound against the dollar could mean heightened interest from the US and other international buyers, particularly in prime markets like London driving higher property prices.
Impact on Interest Rates – The US election influences the Federal Reserve’s economic policies, which in turn affect global financial markets. Changes in US monetary policy could lead to adjustments by the Bank of England. For UK property, interest rates are crucial as a rise could dampen demand by making mortgages more expensive. Conversely, if rates stay low, the market could remain buoyant, with borrowing costs staying affordable for longer.
Supply Chains and Construction – Changes in US trade policy or tariffs could ripple through the global economy affecting the cost of materials like steel and timber. Higher costs for builders could slow the pace of new developments or push prices higher for buyers in England.
Tech Development & Remote Working – If the election results encourage further growth in the tech sector & remote working, it could bolster demand for homes in England’s regional cities, which have become increasingly popular with remote workers seeking affordability and a better work-life balance.
What impact is hybrid working and working from home having on the property sector?
Please explain your understanding of what happened at COP29?
COP29 was held in Baku, Azerbaijan in November 2024 and focused on addressing the climate finance gap through the loss and damage fund, designed to support vulnerable nations. Other key takeaways include:-
Some progress was made on working towards a global carbon market where the buying and selling of carbon emissions is facilitated to help reduce global emissions. This market would incentivise lower global emissions for companies, countries and other entities.
By putting a price on carbon, it incentivises industries to innovate and invest in cleaner technologies, helping to reduce the global carbon footprint.
Progress was made on the NCQG or New Climate Finance Goal to replace the previous $100bn Goal. This is intended to ensure that sufficient financial resources are mobilised to support developing countries to address the impacts of loss and damage from climate-related disasters. A consensus on the amount and scope of the funds required was discussed.
) Please provide a high-level overview of the 2024 RICS Sustainability Report?
The RICS Sustainability Report 2024 provided a detailed analysis of the current state of sustainability within the built environment sector. The key findings include:-
Identification of an increase in market demand for green buildings however the adoption of sustainable practices remains limited.
High upfront costs and insufficient government incentives form significant barriers to widespread implementation of greener building methods.
The report highlighted a need for consistent sustainability measurement across projects. Tools like the RICS Whole Life Carbon Assessment (WLCA) standard aim to address this issue by providing a unified framework for assessing and reducing carbon emissions.
The RICS emphasises that the level of commitment and action needs to increase substantially to achieve 2050 net-zero targets.
RICS continues to play a pivotal role in shaping sustainability policies and standards globally. Its involvement in initiatives like the UN’s Buildings Breakthrough highlights the importance of harmonising sustainability standards worldwide.
- Conflict of interest – explain a time when there was a conflict of interest
o Is there any scenario where you could have taken this job on?
o What if this ended friendship?
Please explain your understanding of the term ‘Carbon Life Cycle’?
Carbon life cycle is a holistic view of the carbon footprint of a building. This considers the carbon impact from:-
Material extraction.
Manufacturing.
Transportation.
Construction works.
Maintenance.
Repairs or replacement of materials.
Consumption of energy.
Carbon use at the end of the buildings life.
The represents a shift in simply selecting low carbon building products and encourages a longer term view during the building design process.
Please explain your understanding of the term ‘Placemaking’?
Placemaking is a holistic approach to the development of public spaces that considers planning, design, implementation and management. This aims to deliver public spaces that offer unique value to their occupants such as:-
A greater sense of belonging.
Increased security.
A unique atmosphere.
Inspiration and experience.
A sense of pride in community.
This concept is thought to result in an improved quality of life to occupants, greater happiness, better work productivity and a possible increase in property values.
- Why is COI check important?
o How would you complete this check?
o If it were a small company how would you complete this check?
o What are your company’s Terms of Business and why is this important?
o What are the key points in a Terms of Engagement – what if they weren’t signed?
o What portfolio of properties was this?
(Answer: offices in London)
Please explain your understanding of Green mortgages?
lower rate for meeting certain esg targets e.g. EPC B or above
- If you overcharged and the tenant wanted this returned, what would you do? o What if they refused?
(answer: recommend that it is returned to client)
- Why could you not allocate monies directly without tenant approval?
(answer: ethics) – acted with integrity
What must members and firms abide by
RICS Members:
1. Comply with CPD requirements
2. Cooperate with RICS
3. Provide all info reasonably requested by Stands and Regulation Board
Firms:
1. Publish complaint handling procedure
2. Ensure all previous and current professional work covered by PII
3. If sole principal, make appropriate arrangements for their professional work to continue in event
4. Cooperate with RICS
5. Provide all info reasonably requested by Stands and Regulation Board
6. Display in business literature, in accordance with RICS published policy on designations
7. Report to RICS any matter that they are required to report under Rules for Register
How often do you need to complete the Ethics + Professionalism module?
Within 1 year of submission of APC . After qualification once every 3 years
I’ve advised my client on the market rent for their property, but they want me to make an opening offer in negotiations with the other party that is higher, even though the tenant is a charity. Can I do this under the Rules?
- RICS members can negotiate on behalf of clients.
- Be clear about when you are giving professional opinion and when you are acting as an advocate.
- Don’t bully the other side or take unfair advantage of vulnerability.
- In the absence of any provision in legislation in a specific circumstance, clients who own property in a market economy are entitled to ask any rent they consider appropriate from a tenant.
- There is a public interest in those clients being advised by an appropriately qualified professional as this protects the client and other stakeholders.
- Professional work should be done diligently in accordance with a client’s instructions.
Rules 1,3,4,5
Do I have to refuse to act for a developer seeking to build where the local community objects to the project because I need to act in the public interest?
- RICS members can negotiate on behalf of clients.
- Be clear about when you are giving professional opinion and when you are acting as an advocate.
- Don’t bully the other side or take unfair advantage of vulnerability.
- In the absence of any provision in legislation in a specific circumstance, clients who own property in a market economy are entitled to ask any rent they consider appropriate from a tenant.
- There is a public interest in those clients being advised by an appropriately qualified professional as this protects the client and other stakeholders.
- Professional work should be done diligently in accordance with a client’s instructions.
Rules 3 + 5
Professional competence?
What is your company PII cover?
Red book reports: 1/3 of value
I’m aware our standard level is between £7-£12m but I have been asked not to divulge this as it is commercially sensitive
How would you close a practice?
- Inform RICS
- Ensure clients informed
- Return monies held by clients
- Inform insurers and procure PII runoff for min 6 years
- Retain copy of client files and records for min. 6 years
Who does PII protect primarily?
- The client against financial loss that the firm can’t or won’t pay, also surveyors and third parties
- RICS Professional Indemnity Insurance Requirements Jul 2024 – assigned risk pool now call run-off pool ; policy wording must be written on full civil liability basis
- RICS PI – Risk, Liabilirt, Insurance 2023: recoomends liability caps to manage risk ; be clear reliance can only be by client named in TOE
PII requirements ?
- All members must ensure appropriate level of insurance:
Firm TO/ in previous year : Min level
£100k or less: £250k
101-200k : 500k
Over 200k: £1m
Max level:
Up to £10m to: greater of 2.5% of sum insured of £10k
Over 10m: no set limit
what is a firm principle and who is your company’s firm principle
Nicola Mcginnis , CFA
When does a firm need to be rics registered?
What is a responsible principle?
What is the information required by the R I. C. S for registration?
What are evels of disciplinary procedures?
This is undertaken by the standards and Regulation Board.
First, action by the head of regulation. Second, Disciplinary Panel. Third, Appeal Panel.
1, serve a fixed penalty notice.
2, make a regulatory compliance order.
3, refer the matter to a single member of the Regulatory Tribunal for consideration.
4, refer the matter directly to a disciplinary panel.
How can a discipline procedure be raised?
First, by someone complains the RSS. Second, an allegation by clowns or third party. Third, because if information received or established by the RCS.
Once disciplinary action is possible.
Fixed penalty notice. This is used for breaches of rules relating only to the supply of information directors by firms and members. This consists of a fine and or a caution.
Regulatory compliance orders. This is for low-level breaches of the rules. It’s a written documents which states the terms number of firm must take or desist. You can cover issues such as non compliance with roles, including failure to undertake appropriate CPD. This can lead to further sanctions, such as fixed penalty and disciplinary panel action resulting in expulsion.
Action by disciplinary panel. This is for more serious breaches of conduct ahead of regulation can consider hearing is required under the disciplinary rules. This membership includes lay members and the penalties can be issued. Regulatory Compliance order, reprimand. Caution, fine unlimited amount appropriate and proportionate to offense, impose conditions upon future continued registration, expulsion or removal of firm, and requirements publication of resource in Modus Magazine, Rick’s website. All local newspaper publication.
Appeal panels can consider appeals against the decision.
