Ethics Flashcards
What are the RICS 5 Rules of Conduct?
1) Members and firms must be honest, act with integrity and comply with their
professional obligations, including obligations to RICS.
e.g Open and transparent with fees or do not mislead
2) Members and firms must maintain their professional competence and ensure
that services are provided by competent individuals who have the necessary
expertise.
e.g Only undertake work you have the knowledge, skills and resources to carry out competently (public house referral)
3) Members and firms must provide good-quality and diligent service.
e.g Communication with client
4) Members and firms must treat others with respect and encourage diversity and
inclusion.
e.g Work cooperatively with others.
5) 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.
e.g Managing your professional finances responsibly.
What are the CPD requirements for RICS member?
20 Hours of CPD 10 of which must be formal.
What are the New RICS document Types?
1) Professional Standards:
These are the documents which set requirements for competent and ethical practice e.g. our existing professional statements and guidance
2) Practice information
These documents provide advice or practice support to RICS members and firms.
What are the different publications provided by the RICS relating to ethical standards?
1) RICS Rules of Conduct
2) Complaints Handling 1st Edition (PS)
3) Client Money Handling 1st Edition (PS)
4) Conflicts of Interest 1st Edition (PS)
5) Countering Bribery And Corruption, Money Laundering And Terrorist Financing, 1st Edition
What legislation relates to ethical standards in the UK?
1) Bribery Act 2010
Makes it an offence for a UK national or person to pay or receive a bribe, either directly or in directly. Answer: I aired on the side of caution and declined the gift/Hospitality.
2) The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
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.
3) Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 (POCA) is UK legislation designed to combat money laundering and confiscate the proceeds of crime. It establishes powers for investigating, freezing, and recovering criminal assets. POCA also imposes obligations on businesses, particularly in property and finance, to report suspicious activity and conduct due diligence to prevent money laundering.
What is indemnity insurance and what are the RICS minimum requirements?
Professional indemnity insurance protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered.
Turnover £100k or less = min cover £250k
Turnover £100K-£200K = min cover £500K
Turnover £200k + = min cover £1m
What is your firms complaints handling procedure and where can it be found?
Located on our website, internal intranet and can be requested.
Arnolds Keys procedure sets out:
A) who the Complaints Officer is
B) Acknowledgement of complaint within 3 working days
C) Within 15 working days a writing response providing outcome of investigation and actions taken
D) If unsatisfied after the final in-house stage or after 8 weeks, you can request a free independent review.
The Property Ombudsman and Centre for Effective Dispute Resolution.
(RICS model CHP 7 day acknowledge / 28 day investigate response )
What should be enclosed within terms of business?
Firstly:
1) Are we qualified for the work?
2) Are we competent to do the work?
3)Do the services we offer meet the client’s needs?
4)Do we have any conflicts of interest?
Terms example:
1) Identity of the client
2) Identity of the staff and experience
3) Conflict of interest
4) Description and purpose of instruction
5) Relevant legislation
6) Scope of inspections, limitations
7) Assumptions
8) Information supplied
9) Limitations in liability to the client
10) Description of the deliverable
11) The basis of the fee
12) Follow-up work
13) Complaints- handling procedure
You mentioned you attended in house AML and the Bribery Act training, talk us through that?
The session covered: what to look out for in AML (unusual transactions, offshore accounts, or inconsistent financial behaviour)
Suspicious activity should be reported to the Money Laundering Reporting Officer (MLRO) within your organisation. The MLRO will assess the information and, if necessary, file a Suspicious Activity Report (SAR) with the National Crime Agency (NCA) in the UK.
We also looked at our in house bribery procedure, registering gifts, notifying senior members of staff and airing on the side of caution. How proportionate is the gift.
How would you go about setting up an RICS business?
1) Inform RICS
2) Register with RICS Regulatory Board
3) Choose Structure (sole trader etc)
4) Appoint contact Officer (RICS Member)
5) Have CHP and Client money procedure in place.
6) Appropriate insurance
7) Succession planning
8) RICS Branding
9) CPD programme
How would you close down an RICS practice?
1) Inform the RICS
2) Inform Client
3) Return Client money
4) PII with 6 years run off cover
5) retain client files for 6 years
6) Appropriately dispose of file that are not required.
what are member and firms professional obligations to the RICS?
Member
1) Comply with the CPD requirements
2) Cooperate with RICS.
3) Promptly provide all information reasonably requested by
Regulation Board
Firms
1) Publish a complaints-handling procedure, and log
2) Ensure appropriate PI cover
3) Ensure 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
6) Display on their business literature, in accordance with RICS’ published policy
7) Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
What were your AML checks that you carried out for your 2c Oval road Instruction?
1) Confirm the seller’s identity and address using official documents (passport, driving licence, utility bills, etc.)
2) Check beneficial ownership
3) Ongoing Monitoring
4) Retain all AML-related documents
What conflict of interest check did you carry out for 2C Oval Road?
1) I carried out Internal client relationship checks together with reviewing Internal past engagements
2) Due Diligence on Third parties
3) Disclosure if required
What advise did you give your prospective client who requested advise on letting a public House in Kings Lynn
After speaking with the client, I recognised this was out of our area of expertise, and recommended speaking to a firm that had the necessary skills to assist them (Fleurets or Christie and Co).
What advise did you give your client at Wayford Bridge Holiday Park?
I advised them them that our fees would be based on a % of a successful transaction.
After they decided not to sell, but required further advise, I suggested we move to an hour charge basis.
Types of Fees: Fixed, Hourly, %, Retainer, sliding scale.
What types of conflict of interest mitigation are there?
1) Conflict Avoidance e.g Decline instruction
2) Conflict Management e.g Chinese wall
What is the relevant RICS documentation / UK legislation relating conflict of interest?
RICS Conflict avoidance and dispute resolution in construction RICS (PI) 1st Ed 2012
RICS Conflicts of Interest (PS) Global 2017
Surveyors Acting as Expert witness 2020 (PI)
Arbitration Act 1996
Independent expert determination 2016 (PI)
If you noticed suspicious activity when carrying out a transaction what would you do?
A) Notify a senior member of staff
B) File a Suspicious Activity Report (SAR) with the National Crime Agency
What is your understanding of the term conflict of interest?
Where someone in a position of trust has a competing personal or professional interest making it difficult for them to fulfil their duties impartially.
how could the conflict of interest be managed internally if two separate departments were working for the same client?
Ensure exclusivity of staff to each department
Separate communication lines
Separate locations
non disclosure agreement
Secure storage of data
If a client is insistent that you worked for them despite an existing conflict of interest, how would you proceed.
Ensure the client understand the conflict
Make them aware of the reduced impartiality
Request a letting of instruction
Talk through the working procedures to manage the conflict
Are you aware of any guidance from the RICS about the level of professional indemnity a regulated firm requires?
Covered under the RICS Professional indemnity
insurance requirements document. form.
What are the maximum levels of uninsured excess?
Depends on the firms turnover in the proceeding year.
If the turnover is £10m or less, the maximum uninsured excess is the greater of 2.5% of the sum insured or £10k
If the turnover exceeds £10m or above, there is no set limit
What sort of insurances do Chartered surveyors need to have?
Professional Indemnity
Buildings insurance
Contents Insurance
Run-off cover
why did the previous rules of conduct change?
Previous rules had been in place since 2007.
Following consultation with members and firms, voted to replace
Aim was to provide greater clarity
Great focus on example behaviours understanding evolving technology and tackling climate change
what are the main principles of the Bribery Act?
A) Offences (making a bribe, receiving a bribe and bribery of a foreign public official)
Applies to all UK entities
includes associated persons
What are the six principals of bribery prevention?
1 - Proportionate procedures
2 - Top level commitment
3 - Risk Assessments
4 - Due Diligence
5 - Communication
6 - Monitoring and review
Under the Bribery Act, under what circumstances is a facilitation payment permitted?
Only when under duress (risk of life, limb or liberty)
A client takes you out for lunch after a business meeting, where they continue to discuss business. The bill for the lunch comes to £200. What should you do now?
The lunch has a legitimate business purpose, so its fine to accept.
However, the client should have considered the £200 bill and how this could be perceived.
The lunch should be declared on the hospitality register and line manager to be notified.
Can you tell us about the Merrett v Babb Case Law?
Court case in 2001
To do with run off cover
Valuation was found to be negligent
The original company no longer existed
The court ruled Merrett could peruse the individual - Babb - for the losses
This case law highlights the importance of run off cover.
How long should a company have run off cover for?
6 years if under hand
12 years if executed as a deed (written contract).
What are the requirements regarding PI by the RICS?
Must be made on an ‘each and every’ claim basis
Sets out min level of indemnity
Sets out max levels of uninsured excess
Run off cover 6 years
Should include cover for current and past employees
What measures should be taken to try and avoid PI claims?
Keep full record of meetings and conversations
Record advice given
Use RICS guidelines
Avoid excessive workloads
Are you familiar with the term limit of liability?
Used to place a cap on the level of exposure a business signs up to.
Assuming you were successful with becoming chartered, how would you deal with a situation such as a friend who asks you to provide them with commercial advice?
Explain that I could not offer advice on my own without PI insurance
If I did have cover, I would need to be sure it was subject to a thorough checking process
Or if not comfortable, advise them to use ‘RICS find a surveyor’ Scheme ‘
Can you give me two examples that you have demonstrated two of the 5 Global Professional and Ethical standards on your case study project?
1 - I ensured that I was competent to act, ensuring that I had the necessary experience to cover all aspects of the instruction.
2 - I also acted with integrity when negotiating the lease, being transparent with all parties.
What was the Carlberg Report 2005?
Thorough internal review of the RICS regulations
A response to members general dissatisfaction with aspects of the RICS Regulation.
Key recommendations = A conduct board, regulate firms and members, review of CPD
What are the 5 principals of better regulation?
PACTT
Proportionality
Accountability
Consistency (treat everybody the same)
Targeting
Transparency (regulations kept simple)
RICS is self regulated, this sets out how the RICS regulates itself, maintaining professionalism and integrity
Name some topics on which the RICS publishes help sheets and policy documents?
CPD
Handling Clients money
Complains Handling procedures
What steps must you take for the handling of Client money?
Client must always have access to funds
Client money must be kept separate and clearly identifiable
Include client in the name
Interest on the account must be agreed with the client
Maintain ledge on running balance
Agree terms and advise client on bank details
Must not be overdrawn
What is the clients money protection scheme?
Run by the RICS
Provides member of the public to be reimbursed for loss
Provided by RICS insurance policy.
What information do registered firms have to send to the RICS annually?
Annual return online
Type of business and staff levels
Nature of client
Training provision
CHP and records
PI insurance details
whether the firm holds client money
Why are the RICS bye-laws?
Application and definitions
Membership and registration
Designations
Contribution to funds
conduct
governing council
Subordinate boards
procedures for general meetings
Accounts and audit
general
What is GDPR?
The EU General Data Protection Regulations.
Protect personal information.
How does GDPR affect surveying practices?
Storing clients details
Data in valuation systems
HR data
emails
How do you comply with GDPR?
Knowledge of the data
Where is it sorted
know how it is being used
can be deleted
