Ethics Flashcards

Question

What percentage of members determine if a company can be a RICS regulated company?

Answer 1

"- 50% or more principles M/FRICS (MUST) - 25% - 50% (MAY) - Under 25% (CAN’T)"

Answer 2

"1. Comply with the CPD requirements 2. Cooperate with the RICS 3. Promptly provide all information reasonably requested by the Standards and Regulations Board, or those exercising delegated authority on its behalf "

Answer 3

"Members must undertake and record appropriate lifelong learning and, on request, provide evidence that they have done so to maintain and improve levels of professional competence introduced in Jan 2013 ▪︎ Members must undertake a minimum of 20 hours CPD per year ▪︎ Of the 20 hours at least 10 hours must be formal ▪︎ Members must maintain a relevant and current understanding of RICS Rules of Conduct during a rolling 3 year period ▪︎ CPD must be recorded using the RICS CPD Management System available online in the RICS Website. "

Answer 4

"1. Publish a complaints handling procedure 2. Ensure all work is covered by Professional Indemnity Insurance 3. If having a sole principal have appropriate arrangements for their professional work to continue in result of their death [Locum Agreement] 4. Cooperate with the RICS 5. Promptly provide all information reasonably requested by the Standards and Regulation Board or those exercising delegated authority on it behalf 6. Display their business literature, in accordance with the RICS published policy on designation, designation to denote that they are regulated by the RICS 7. Report to the RICS any matter they are required to under the Rules for the Registration of Firms ."

Answer 5

"1. Confidence - for clients as regulated firms are monitored by RICS Regulations 2. Professionalism - firms will have to provide clear, impartial and expert advice 3. Security - firms have to have a recognised complaints handling procedure, access to free independent redress and PII cover (RICS, 2007)"

Answer 6

"▪︎ It is called annual return and done online. Failure to do so leads to a fixed penalty. ▪︎ Type of business and staffing ▪︎ Nature of clients ▪︎ Training provision ▪︎ Complaints handling procedures details and records ▪︎ PI insurance details ▪︎ Whether the firm holds clients’ money "

Answer 7

"▪︎ The RICS provides a model form ▪︎ Must include a redress mechanism ▪︎ Details should be issued to the client with the Terms of Business ▪︎ It must be clear, quick, transparent and impartial and free of charge ▪︎ Names and contact details of the nominated investigating person must be stated ▪︎ The complaint must be investigated within 28 days ▪︎ All complaints, their progress and outcomes must be recorded ▪︎ Note the need to advise PI insurers of a complaint ▪︎ Must have two stages as a minimum: ▪︎ Consideration of the complaint by a senior member of the firm ▪︎ If not resolved, referred to an independent third party with the authority to award redress "

Answer 8

"* Record all details on the C&W complaints database * Acknowledge within 7 days and investigate within 28 days * Notify PII insurers * EMEA legal team assigns an internal investigation partner and informs insurers * Investigation partner ensures that corrective action is taken to resolve the complains * If complainant disputes the finding, then they will need to consider mediation from an independent redress scheme i.e Centre for Effective Dispute Resolution (CDR) or from Ombudsman Service."

Answer 9

"To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty e.g. neglect, error or omission "

Answer 10

"▪︎ I could not offer advice on my own without PI insurance. ▪︎ If I did have my own PI insurance I would ensure that the information given was subject to the thorough checking process given to all information prior to issue regardless of who it was to. ▪︎ Inform them they can contact you during working hours to discuss T&Cs of appointment. ▪︎ If you are not comfortable acting for them, advise them to use the RICS “find a surveyor scheme” ▪︎ Adhere to rules of conduct. "

Answer 11

"▪︎ The professional is protected from financial loss ▪︎ Does not have to meet the claim from their own assets and resources "

Answer 12

"▪︎ On a claims made basis which means that it is the insurance policy that is in place at the time the breach is discovered that is claimed under NOT the insurance policy in place when the breach was made. "

Answer 13

"Facts ▪︎ Court case in 2001 ▪︎ Babb had done a valuation as an employee of a company for a house purchased by Merrett ▪︎ Valuation later found to be negligent ▪︎ The original company no longer existed ▪︎ Court ruled Merrett could pursue the individual – Babb – for the losses ▪︎ Big shock in the industry Significance ▪︎ Considered if a professional employee was vulnerable to claims brought directly against them for advice given on behalf of their employers ▪︎ Highlights importance of run off cover ▪︎ Professional individuals and firms must ensure that run off cover is in place after they leave or their firm’s employment or a firm ceases trading ▪︎ Individuals should ensure that their ex company keeps up this cover on their behalf "

Answer 14

"Depends on the type of contracts the professional has been involved with ▪︎ Usually 6 years if contract executed under hand ▪︎ 12 years if executed as a deed RICS Recommeds 12- 15 years"

Answer 15

"▪︎ Must be made on an ‘each and every’ claim basis ▪︎ Sets out minimum levels of indemnity ▪︎ Sets out maximum levels of uninsured excess ▪︎ Run off cover must be in place for at least 6 years ▪︎ Should include cover for past and present employees, directors and partners "

Answer 16

"Minimum Levels of Indemnity ▪︎ This depends on the firm’s turnover ▪︎ If turnover is £100k or less it is £250k ▪︎ If turnover is £100 - £200k it is £500k ▪︎ If turnover is above £200k it is £1m Maximum Levels of Uninsured Excess ▪︎ Depends on the level of indemnity ▪︎ Liability of up to £500k(turnover up to £10m) = 2.5% of insured sum or £10,000 (what ever is more) ▪︎ Liability of over £500k = 2.5% of the insured sum Turnover greater than £10m no limit set "

Answer 17

lesser of 5x fee or £2m

Answer 18

"▪︎ Keep full and detailed records of meetings, conversations etc ▪︎ Record recommendations and advice given ▪︎ Use proper letters of engagement, scope of services and terms of engagement ▪︎ Don’t advise on a specialism outside your field of experience ▪︎ Use RICS guidelines ▪︎ Avoid poor management and excessive workloads "

Answer 19

"▪︎ If project requirements (services, scope, value) have increased, then would go back to client for more fees ▪︎ But if remained the same, it is a mistake so deal with it and get it right next time. ▪︎ Do not reduce level of service you offered originally. "

Answer 20

"Est Modus In Rebus (Latin for there is measure in all things) "

Answer 21

"Following the Independent Review of internal governance failings within the RICS carried out by Alison Levitt QC in 2021 Lord Bichard was commissioned by the RICS to undertake a further review to: 1. Clarify the purpose of the RICS, including its responsibility to act for the public advantage 2. Make recommendations on its governing structure to deliver that purpose and 3. Provide proposals for the incoming leadership and governing body on the future culture and strategy of the institution "

Answer 22

"The Review, published in June 2022, made 36 recommendations in seven key areas relating to the purpose and governance structure of RICS, providing advice on values, culture and strategy. RICS has accepted all the recommendations 1. A renewed and increased focus on the public interest remit of the RICS, including meaning the Royal Charter and creating a public interest panel to advise Governing Council 2. Maintaining self-regulation, through greater independence for regulatory functions 3. Increased focus on diversity and inclusion across the profession and within RICS governance 4. Empowering and enabling members though greater support for regional boards, alongside increased member engagement, with renewed focus on younger members 5. Undertaking an independent review of the RICS governance and effectiveness at delivering against its Charter for the public advantage once every 5 years 6. A new simplified, clear , accountable governance structure 7. Showing greater leadership on issues that matter most to society, such as sustainability and climate change "

Answer 23

"* Governing Council will implement a new composition of Council to better reflect the geographic location and disciplines of members * As many Council seats as possible will be directly elected by members: members will elect Governing Council seats covering the professional disciplines (7), geographic regions (13), and the community of younger members (1). * Governing Council has asked the Nomination and Remuneration Committee to review the election process for Governing Council seats. This will see Governing Council elections reformed and simplified to encourage a broad and diverse range of applicants from across the profession. * Finally, Governing Council has confirmed that the RICS President will also Chair the Governing Council for the duration of their one year presidential term, in line with Lord Bichard recommendations. Under the new arrangement, the current President, Clement Lau FRICS will serve until 31st December 2022 – extending his office by a few days – before being succeeded by President elect, Ann Gray FRICS on 1st January 2023. *RICS has made the first of its new governance appointments for an Interim Senior Independent Governor, to which Lord Michael Bichard has been appointed"

Answer 24

"1) Application and Definitions 2) Membership and Registration 3) Designations 4) Contributions to Funds 5) Conduct 6) Governing Council, Officers & Staff 7) Subordinate Boards, Committees and Groups 8) Procedure for General Meetings (Annual general meetings, Ordinary general meetings and extraordinary general meetings) 9) Accounts & Audit 10) General "

Answer 25

"A bribe can be the giving, offering, promising, or receiving of an advantage such as a payment, gift, or a service for an action which is illegal or a breach of trust. Based on SIX principles: [PTR DMC] 1. Proportionality 2. Top level commitment 3. Risk assessment 4. Due diligence 5. Monitoring and review 6. Communication FOUR offences include: 1. Bribing 2. Receiving a bribe 3. Bribing a foreign public official 4. Failing to prevent bribery If the act is breached there is a maximum penalty of 10 years imprisonment and or an unlimited fine for individuals, companies face and unlimited fine. "

Answer 26

"1. Identify client and verify their identity based on passport or driving licence 2. For a company the name, company number and address of registered office are required 3. Names of directors are required unless the company is listed on a regulated market 4. Obtain information on the purpose and intended nature of the business relationship and proposed funding Enhanced Due Diligence in place for people from a high risk third country or a politically exposed person "

Answer 27

If you are found to be assisting in the laundering of money you can face up to 14 years in prison and an unlimited fine. If you fail to report money laundering, and or tip someone off that they are under investigation for money laundering you can also face up to 5 years in prison and an unlimited fine.

Answer 28

They would produce a Suspicious Activity Report (SAS) and would send it to the National Crime Agency.

Answer 29

10,000 euros

Answer 30

Money Laundering Reporting Officer

Answer 31

"* Inability or unwillingness of parties to prove identity documents * Changes to parties involved in the transaction * Unusual transaction features e.g. unexpected urgency required by both parties, potential loss making or an unusual transaction for a client * Using unusual currencies RICS had a red flag indicator document "

Answer 32

"1 Mandatory requirements for anti-bribery and corruption and for anti-money laundering and terrorist financing 2 Guidance setting out supporting good practice for anti-bribery and corruption and for anti-money laundering and terrorist financing"

Answer 33

"The MLR 2017 sets out the additional obligations of private sector firms working in areas of higher money laundering risk. They aim to stop criminals using professional services to launder money by requiring professionals to take a risk-based approach. Firms must put measures in place to identify their clients and monitor how they use their services. 1. Requirement to have a written money laundering and terrorist financing risk assessment 2. Implement systems, policies, controls and procedures to address money laundering and terrorist financing risks and meet the requirements under the MLR 2017 3. Adopt appropriate internal controls 4. Provide training to staff 5. Comply with new customer due diligence, enhanced due diligence and simplified due diligence requirements 6. Comply with requirements relating to politically exposed persons 7. Make sure your record keeping and data protection systems, policies and procedures meet the requirements of the regulations 8. AML checks must be inplace to confirm the identity of the proposed purchaser of a property and check the purchaser's source of funds by the vendor's agent before contracts are exchanged 9. Include additional high risk factors when assessing the need for enhanced due diligence and seek additional information and monitoring certain cases eg transactions between third countries "

Answer 34

You are still required to draw up terms of business, and you still need Professional Indemnity Insurance, which would be stated therein.

Answer 35

Yes, there is a duty of care, and this was established in Yianni v Edwin Evans (1981). However, if the advice is in respect of a buy-to-let purchase, then it may be argued that there is an obligation on the “commercially astute” borrower, as established in the Court of Appeal case; Scullion v Bank of Scotland (2010).

Answer 36

"1. Client Engagement 2. Definitions 3. Fees, expenses 4. Client Obligations 5. Measurements 6. Confidentiality 7. Data Protection and Data Handling 8. Documents and Reliance 9. Service Quality 10. Conflicts of Interest 11. Liability and insurance 12. Complaints Handling Procedures 13. Termination "

Answer 37

"Using my firm internal software called BAIT which keeps a log of all previous jobs done and will check of there any conflicts with the address, the name of Client, the Tenant, and the name of the Borrower. If I was at a small company that didn't have this software I would send round a company email and check historic records"

Answer 38

"* Avoidance is saying no e.g a client wouldn't sign terms * Management is saying yes but putting protocols in place e.g would continue with management procedures if two c&w parties acting and you put info barriers in place "

Answer 39

"1. ‘Party Conflict’ relating to work on the same or related instruction for two different parties e.g. vals or agency or both sides transaction 2. An ‘Own Interest Conflict’ relating to a personal interest 3. 'Confidential Information Conflict’ relating to work between two parties that is confidential e.g. if signed NDA to sell a building, and asked to value ensure the NDA information is not shared with the valuers "

Answer 40

"Status of valuer, Client, Asset, Currency, Purpose of valuation, Basis of value, Valuation date, Assumptions / SA, Conformation of Red Book compliance, Fee basis "

Answer 41

Ensuring you were competent to complete the instruction and the team had capacity to do so

Answer 42

"The Misrepresentation Act exists to protect consumers from false or fraudulent claims that induce you into buying something or entering into a contract. I comply with this by double checking all information provided by the vendor used in brochures or other marketing material"

Answer 43

"C&W Misrepresentation Notice - All the information and descriptions (whether in the text, plans or photographs) are given in good faith but should not be relied upon as being a statement of representation or fact. - Any areas, measurements or distances referred to are approximate only. - Include date of issue "

Answer 44

Yes it is possible to act on both sides of a letting if both clients agree in writing (give informed consent)....

Answer 45

"1. Disclose the nature of conflict (Party conflict) 2. I was clear and made sure both made their own decision 3. Requested written information from the clients of their informed consent that my firm could act for "

Answer 46

"Spoke to both parties and advise joint agent to act for LL I received written informed consent from both parties Joint agent and LL had communion on that deal Occupier needs agency representing their best interests LL needs best deal on the lease Acted with integrity by allowing the joint agent "

Answer 47

Yes - when new comparable evidence is presented

Answer 48

I would outline the previous valuation figure alongside the new comparable evidence I had regard to when changing the valuation and report the new value