Ethics Flashcards
1
Q
What are the five rules of conduct?
A
Members and Firms must:
1. Be honest and act with integrity
2. Maintain their professional competency
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 and act to prevent harm and maintain public confidence in the profession
2
Q
Can you provide an example for Rule 1?
A
Act with honesty and integrity – not changing a valuation for a client without market evidence.
3
Q
Can you provide an example for Rule 2?
A
Maintain their professional competency – identify a limitation in my ability to complete an instruction and seek advice or pass on the instruction to someone more competent.
Stay up to date with legislation- RICS content and CPD to address development needs.
4
Q
Can you provide an example for Rule 3?
A
Provide good quality and diligent service – establishing my client’s needs & objectives at the beginning of an instruction- scope of service outlined in ToE.
5
Q
Can you provide an example for Rule 4?
A
Encourage diversity and inclusion – a member of the LGBTQ+ committee.
6
Q
Can you provide an example for Rule 5?
A
Act in the public interest and maintain public confidence in the profession – work in alignment with all legal and RICS regulations. Inspection, saw something fall down, notified the Property Manager on site to protect the public.
7
Q
What can happen if someone complained to the RICS regarding professional standards?
A
A disciplinary procedure – won’t give rise to it every time.
8
Q
What are the three levels of disciplinary action?
A
- Action by Head of Regulation (RICS)
- Disciplinary Panel
- Appeal Panel
9
Q
Can you outline the step by step process of the Action by Head of Regulation?
A
Action by Head of Reg:
- Initial investigation stage (formal investigation)
Initiate if they feel action is required:
• serve a fixed penalty notice (relevant for breaches of the Rules relating only to the supply of information to the RICS by firms and members)
• make a regulatory compliance order (relevant for low level breaches – a written doc. Eg failure to undertake CPD)
• Refer the matter to a single member of the Regulatory Tribunal for consideration (more serious breaches).
10
Q
Can you outline the scenario for Disciplinary Panel?
A
Refer the matter directly to disciplinary panel (more serious breaches).
11
Q
What are some of the consequences of a tribunal panel?
A
- Issue regulatory compliance order
- Reprimand
- Fine
- Impose conditions on future RICS reg
- Expulsion from membership
- The results of the hearing MUST be publicised in the local area to the firm.
12
Q
What is available to members in relation to social media?
A
Use of social media: Guidance for RICS Members, 2021.
13
Q
When would the RICS become involved in a social media post?
A
- If discriminatory, bullying or threatening to a firm or individual = disciplinary action
- Posts can be critical of people or institutions; as long as language and context are professional and appropriate, RICS will not get involved.
14
Q
What is PII?
A
Professional Indemnity Insurance – based on a firm’s turnover.
15
Q
What is negligence?
A
Losses or damages resulting from negligence claims.
16
Q
Who does negligence protect?
A
Clients, surveyors and third parties against negligence claims.
17
Q
What constitutes negligence and how can negligence claims be mitigated?
A
RICS Guidance Note on Risk, Liability and Insurance (2021):
- Surveyors have a Duty of Care to clients and 3rd parties – must use ‘reasonable care and skill’.
Negligence = any act or omission which falls short of the standard to be expected by a reasonable person.
For a negligence claim:
1. Establish that a duty of care was owed by the defendant to the claimant.
2. Establish that the duty was breached.
3. Establish that the claimant’s loss was caused by the breach of duty, fell within the scope of duty and was foreseeable consequence.
18
Q
What are the limitation periods for negligence and how can negligence be avoided?
A
Contract: 6 years or 3 years from date of knowledge (15-year longstop).
Tort: 6 years.
Negligence avoidance:
- Confirm objective of instruction with clear ToE.
- Ensure you are competent.
- Undertake work in line with RICS material.
- Detailed notes/ photos.
- Cap professional liability excess on PII policy.
19
Q
What are the minimum requirements for firm insurance?
A
Firm Turnover Minimum level required
0 – £100k £250k
£100 – £200k £500k
£200k + £1m
20
Q
What is run-off cover?
A
Ensures firms, members and clients are not exposed to financial detriment following the closure of a firm.
21
Q
What level of run-off cover is required by RICS?
A
Adequate and appropriate run off cover. Claim for negligence.
Minimum requirements:
Consumer claims - £1m over minimum of six years.
Commercial claims – ‘adequate and appropriate’ for six years.
22
Q
Is firm insurance needed for unpaid work?
A
Appropriate PII cover for pro-bono work.
23
Q
What is available for firms who cannot arrange run-off cover?
A
RICS assigned risk pool – available to RICS regulated firms who cannot get adequate PII cover.
24
Q
What is the RICS guidance relating to PII?
A
RICS Guidance note: Risk, Liability and Insurance (2021).
25
What is the difference between a liability cap and PII limit?
Liability cap:
- Agreement between a member and their client, fixed, when they enter into an engagement.
- Must be incorporated into contract and reasonable.
PII Limit:
- Maximum amount the firm’s insurers will pay in any claim, stated within the insurance policy.
26
Why do surveying firms have PII cover?
Protect clients, surveyors and 3rd parties against negligence claims when there is a duty of care breached and a claim for damages arises.
27
How does your firm handle PII with clients?
We have liability caps in place which are determined on a case-by-case basis.
28
What are your firm’s liability caps?
Case by case basis.
However, general rule: 50 times fee or £1m, whichever is higher.
29
What relevant guidance notes are there on PII?
RICS Guidance Note: Risk, Liability and Insurance 2021.
Advice:
- Have liability caps.
- Clarify only client reliance in ToE, not third parties.
30
What are the limitation periods of negligence?
Outlined in the Limitations Act 1980:
- 6 years from the date of the negligent act OR
- 3 years from the date of knowledge of the damage subject to the 15 years long stop from the negligent act or omission.
31
Why is client money handling important?
Underpinned in the rules of conduct which require firms keep monies safe.
32
What guidance is available for client money handling and what does this entail?
RICS Professional Standard ‘Client Money Handling’ 2019.
Showcases 6 main areas of good practice to keep client money safe and use client money accounts for appropriate purposes only.
33
What procedures are required when handling client money?
6 main areas:
1. Holding client money (separate, designated, immediately available)
2. Providing info for clients (disclose commissions, unidentified £)
3. Receipts of client money (account for interest, prompt, charity)
4. Payments from client accounts (permission for direct debits)
5. Accounting records and controls (reconciliations, systems)
6. Compliance (AML, RICS PS: Countering Bribery etc.)
34
What happens if a firm loses a client’s money and can’t pay it back?
Can use the RICS Client Money Protection Scheme.
35
Would you accept a fee in cash?
Legislation states – YES, acceptable up to £10,000.
Knight Frank – NO, cannot accept cash.
36
What is required for starting up a new practice?
Confirm if RICS Compliance or Statutory Compliance.
RICS:
1. Inform RICS
2. Appoint Responsible Principal for all RICS communications
3. Register with RICS
4. Arrange PII and inform RICS
5. Set up Client Money handling procedures
6. Register for RICS Valuer Registration Scheme
7. Obtain RICS approval for CHP, appoint CHO, complaints log
8. RICS designation logo kit
9. Plan for succession (sole practitioner)
10. Log CDD on RICS Management system
11. Complete annual return for RICS each year.
Statutory:
1. Disclose business name
2. DDA compliant (Equality Act 2010)
3. Financial Services Compliant
4. Bribery Act (2010) Compliant
5. Appoint Money laundering reporting officer
6. Health and Safety Complaint (H&S Act 1974)
7. Asbestos Register (Control of Asbestos Regulations 2012)
8. Fire Safety Compliant
9. Register for Data Protection (GDPR 2016 & DPA 2018)
10. Estate Agency Compliant (Estate Agents Act 1979)
11. Inform HMRC for tax registration
12. Employment Law Compliant (Living wage, pay gap report)
13. Insurance compliant
14. Responsible principal, new firm form, PII, CHP, Register with RICS.
37
What are the RICS compliance requirements for closing a practice?
1. Inform RICS
2. Inform clients (at earliest opportunity)
3. Make handover arrangements to a new firm
4. Return client monies
5. Inform insurers
6. Procure PII run-off cover for min 6 yrs (RICS 15 yrs)
7. Retain client files for min 6 yrs.
38
What level of turnover is required for a firm to have to pay VAT?
£85,000 minimum threshold.
39
What would you do to be able to close a practice and in what order?
• Inform RICS
• Ensure clients are informed at the earliest opportunity with hand over plans actioned
• Return any monies to the clients
• Inform insurers and procure PII run-off cover for a min of 6 years.
• Retain a copy of client files for min 6 years.
40
What is the key legislation in relation to gifts, bribery and corruption?
Bribery Act 2010 and Proceeds of Crime Act 2002.
41
What is a bribe?
To influence the actions of an individual.
The receiving, offering or giving of anything of value to secure a business advantage.
42
What is the main legislation relating to bribery, and what does it cover?
Bribery Act (2010).
Aims to reduce bribery in UK businesses – bribe is the giving, offering, promising or receiving of an advantage (payment, gift) for an action which is illegal or a breach of trust.
If breached:
- Individuals: unlimited fine and or up to 10 yrs in prison
- Companies: unlimited fine.
43
What are the key principles of the Bribery Act 2010?
6 key principles:
1) Proportionality
2) Top level commitment
3) Risk assessment
4) Due diligence
5) Communication
6) Monitoring and review.
4 offences:
1) Bribing
2) Receiving a bribe
3) Bribing a foreign public official
4) Failing to prevent bribery.
44
What are the four offences relating to Bribery?
- Bribing
- Receiving a bribe
- Bribing a foreign official
- Failing to prevent a bribe.
45
Describe the key elements of the RICS 2019 Bribery Professional Standard?
- Avoid bribery
- Be knowledgeable
- Report breaches
- Check clients
46
Who is responsible for a surveyor’s corrupt acts?
The Firm
47
What are the rules surrounding hospitality?
Certain forms of lavish entertainment can be deemed bribery.
However does state that offering a client reasonable and proportionate hospitality will not constitute an offence, such as tickets to a major sporting event so long as it is accurately recorded in the gifts register.
48
What are the penalties?
Policed by the serious fraud office - max penalty of 10 years imprisonment or unlimited fine.
49
Have you ever been offered a bribe? What did you do?
Yes, I thanks the client for their offer but politely declined the bribe and outlined my behaviour in accordance to the bribery act 2010.
50
Would you let a client buy you dinner? And how would you ensure you are not breaking the law?
As long as it was reasonable and proportionate. And that it is registered on the gift/hospitality register
51
Have you ever received a gift? How did you manage that?
No but if I had I would have ensured it was reasonable and proportionate, and then registered it on our gifts register.
52
As I’m sure you are aware, it is common in some areas such as office agency for individuals to be given gift vouchers, would you accept these? Is this a form of bribe?
My firms policy is no acceptance of cash or cash equivalents so I do not accept these in line with this.
Can accept cash up to E10,000 for a piece of work.
53
So are you saying that all other agents are accepting a bribe?
No. Different firms have different policies in place which may allow acceptance as deemed reasonable and proportionate.
It is also market practice to give these at launch events.
Also are not given in relation to a specific instruction so not in exchange for a specific advantage.
54
Why is it important for members to be solvent?
As if not, they are more susceptible to a bribe. Also, more likely to mishandle clients money
55
You’ve seen some suspicious activity in your small firm, what do you do?
Inform assigned AML compliance officer at another firm. Report via Suspicious Activity Report to the National Crime Agency
56
If you suspected someone of bribery in your firm, what would you do?
In line with policy:
- If safe/suitable to do so, I would speak to person in question
- Inform best practice team
- Also global confidential whistleblowing hotline
57
If you went abroad, would this all still apply?
Align with local legislation as this trumps RICS
However, would also align with RICS guidance where possible.
Most important: to maintain ethical behaviour and act inside the law and ethically, objectively and with competence.
58
What is money laundering?
When proceeds of crime are disguised or converted and then realised as legitimate assets.
59
What is the relevant guidance surrounding money laundering?
UK Gov: Money Laundering, Terrorist Financing and Transfer of Funds Regulations, 2017
Proceeds of Crime Act 2002
RICS Professional Statement: Countering Bribery, Corruption, Money Laundering and Terrorist Financing, 2019
60
What are the purposes of the legislation – Proceeds of Crime Act (2002)?
PCA empowers enforcement authorities to recover money and other assets deemed to be proceeds of crime.
PCA creates AML offences:
1. Concealing Criminal Property
2. Arrangements (facilitation)
3. Acquisition
61
What does the Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2017) legislation require:
1) Written money laundering risk assessment
2) Systems/ policies/ controls/ procedures to address money laundering and terrorist financing
3) Staff training
4) Comply with the due diligence requirements (enhanced for new customers)
5) Appropriate record keeping
6) AML checks to confirm identity of proposed purchasers of property and check source of funds before exchange
7) EDD if Red flags occur
62
How do you and your firm work towards anti-money laundering?
My firm has a CDD process which includes identification of the client and the beneficial owners, for a firm the company number, address and name are required, and clarifying the nature of the business due to be undertaken
63
Please explain your firms AML and TF process in more detail?
RICS recommends:
- Reading the guidance – Anti-money laundering sanctions update 2022.
- Review Sanctions List (PEP) – use software
- Understand risk factors and red flags
- Check high risk individuals against HMRC’s consolidated list
- Check existing clients regularly where they are higher risk
CDD: Verify identity of client (passport), and identify beneficial owners (can refer to People with Significant Control list)
EDD: High risk third country or PEP list – more detail, e.g., sanction screening check (world check one)
64
What are some red flags of money laundering?
- Paying well above the odds
- Rare currencies/funds originate from country of concern
- Cash payments
- Sudden change of personnel
- Transfer of funds from multiple accounts
- Countries on the sanctions list
- The instruction is unrelated business activity
- Parties not willing to provide information
65
What are the penalties for money laundering?
- Unlimited fines
- 5 years in prison for tipping off someone they are under investigation
- 14 years in prison for assisting in money laundering
66
What are the maximum levels of uninsured excess required by RICS?
Firm turnover in preceding year < £10m
= greater of 2.5% of sum insured or £10,000
Firm turnover in preceding year > £10m
= No limit
67
What are estate agent’s legal obligations?
* Letting agents to register with HMRC within 12 months of May 2020 if they let individual properties for more than the equivalent of 10,000 euros a month
* Individuals and businesses need to be HMRC approved to trade
* CDD checks on vendors, purchasers, landlords and tenants will have to be undertaken on new sales and any letting or reletting as above
* EDD checks will need to be undertaken if red flags occur
* Firms must have policies in please for out of the ordinary transactions
68
What is the relevance of sanctions?
There was a new update to Anti-money laundering sanctions March 2022 – in light of the Ukraine conflict.
69
What are the levels of due diligence and the steps associated with each?
1. Customer Due Diligence
2. Enhanced Due Diligence
70
What are some other key requirements of the regulation?
* Limit of 10,000 euros for acceptance of cash
* Detailed record keeping
* Senior staff member must be appointed to Money Laundering Reporting Officer
* Maintain records for 5 years
* Report anything suspicious to NCA
71
What are the penalties?
14 years in prison / unlimited fine for assisting in money laundering
5 years in prison / unlimited fine for tipping off
72
What are the typical requirements for money laundering checks for CDD?
1. Identity the client
2. Identify the beneficial owners of the client
3. For a company, confirm its name, company number and address of registered office
4. Names of directors
5. Understand information o the purpose of the transaction
73
How are AML/CDD checks carried out at your firm?
Input company registered name number and address into a questionnaire which is completed and will highlight any areas of concern. Then circulated to our CDD who complete the process.
74
Who is your AML officer?
Jayna Hirani
75
What Knight Frank’s AML policy?
Aligns with the legislation requirements
KYC:
o Require suitable checks of true identity and address for clients & companies and any beneficial owners
o check suitable database via CDD team
o Any suspicions reported to head of department and AML officer
76
What does enhanced due diligence involve (at your firm?)
Further background checks on funding sources, history and identity checks, especially for PEPs, and well as more extensive monitoring
Specific actions: requesting details of
-UK solicitor: should be able to verify (or not) as will also have carried out their own CDD
-details of verified UK bank account
77
What would you do if your AML highlights some red flags/suspected of money laundering?
Carry out EDD
If reg flags remain: Report to money laundering compliance officer, who will escalate appropriately
78
Do you have to ever carry out further AML for certain types of instructions?
In transactional instructions, you undertake counterparty CDD
Buyer/tenant’s agent (but landlord’s agent too): at point of going UO. Hard line: before contracts are signed
L&L: minimum threshold of £8,450 to have to carry out CDD
79
How often do you have to check/repeat CDD for a retained client or long term instruction?
No set requirement from RICS – whatever is deemed reasonable and appropriate.
At KF: annually
80
What allows recovering of money and assets that are deemed to be proceeds of crime?
Proceeds of Crime Act 2002
81
What are the criminal offences intended to combat money laundering from this legislation?
* Concealing criminal property
* Arrangements
* Acquisition use and possession
82
What facilitates the provision of identity for those involved in sanctions? Or helps to carry out Unexplained Wealth Orders (UWOs)?
Economic Crime Act 2022
83
What RICS guidance is available for AML?
RICS Professional Statement – Countering bribery, corruption, money laundering and terrorist financing, 2019
84
How is the RICS Professional Statement- Countering bribery, corruption, money laundering and terrorist financing (2019) structured?
Part 1 - Mandatory requirements
Part 2- Guidance on good practice
Part 3 - Supplementary guidance
85
Regarding the RICS professional guidance on countering bribery, corruption, money laundering and terrorist financing (2019) – what does it state that firms must do?
Part 1:
B&C – Firms must:
* Not offer or accept a bribe
* Have procedures in place to comply with the law
* Report suspicion
* Evaluate risks
* Retain records
ML & TF – Firms must:
* Not facilitate or be complicit in ML and TF
* Systems in place
* Report suspicion
* Evaluate risks presented to the firm
* ID checks on clients
* Try to understand purpose of the transaction
86
What is an example of where RICS standards ensure consumer protection?
RICS professional standard for Countering corruption, bribery etc.
87
What is a responsible principal?
Someone who is obliged to ensure systems are in place to ensure compliance with regulations and RICS requirements
KF: Phil Gardner
88
For your retained clients, how often do you do AML?
Minimum every two years or if any details change but we do more regularly
89
Can you accept cash payments?
In line with Anti Money Laundering, Terrorist Financing and Transfer of Funds Regulations – Yes, up to 10,000 euros
However:
-subject to AML checks having been completed w/o red flags. I strongly recommend/request to cash it in a bank instead, to then transfer
At my firm: have flat rule of accepting no cash, viewed as a red flag and so wouldn’t accept
Also instant red flag in itself: I would notify my compliance team to be aware of this party, and if already instructed, carry out EDD
90
Name two professional statements?
Countering Bribery, Corruption, Money Laundering & Terrorist Financing, 2019
Property Measurement
91
Name two guidance notes?
Complaints Handling
Surveying Safely
92
What is the updated status regarding documentation/standards/guidance from the RICS?
New form of documentation changing from professional statements and guidance notes to professional standards and practice information
Professional standards:
-set requirements for competent and ethical practice. -Replace current professional statements and guidance notes
-mixed mandatory and guidance, clearly stated
Practice information
-provide advice & practice support
-not mandatory
93
What have you recently read in Modus?
What have you recently read in Modus? An article written by Justin Sullivan about skill shortages and gaps in workforce for the build environment / real estate sector.
Estimated that over 225,000 additional works are needed by 2027, and the impact of this on delivering 1.5 million new homes.
94
Would you carry out different COI checks for different types of work, e.g Loan Security vs Valuation?
Yes, more rigorous checks for Loan Security Valuation – specific risks and potential conflicts can vary significant depending on nature of the valuation- higher financial implications for lenders involved
95
What is integrity?
Being honest and straightforward in my actions
96
When may it be appropriate to decline an instruction?
* Not competent
* don’t have sufficient facts
* client wont sign ToE or complete AML
* conflict of interest
* PII cap cannot be agreed
* Pro bono basis work that doesn’t have correct PII cover
* Client is on a Sanction list
97
What RICS guidance is available relating to conflict of interest?
RICS Professional Statement: Conflict of Interest (2017)
98
Outline some Conflict management procedures that can be adopted?
Critical to ensure separation:
1. Physical
o Different surveyors
o Different support teams
o Different building
2. Technological
o Secure filing systems
99
How do you ensure you have the necessary level of expertise to undertake an instruction?
1. Familiar with relevant legislative requirements and RICS professional statements/guidance notes
2. Consider whether there is another team wihtin my firm which is better places to provide advice
3. CPD learning
100
Provide an example of when you considered yourself to not have the necessary level of expertise?
Client requested investment advice on a Joint Venture student accommodation portfolio - although I could assist in an equity advisory capacity, the student capital markets team was better placed to provide specialist sector advice
101
What is a conflict of interest?
A member or firms independence and impartiality is threated due to the existence of a conflict between two parties
102
What are the different types of conflict of interest?
Party
* When the duty of an RICS member/firm to act in interests of one client conflicts with duty owed to another client
Own interest
* When the duty of an RICS member/firm to act in interest of one client conflicts with the same member or firms duty in relation to that client or instruction. Member or firms independence and impartiality is threatened.
Confidential
* When duty of RICS member/firm to provide information to one client conflicts with duty to another client to keep that same information confidential
103
Please give an example of a conflict relating to a party?
If cap markets sold a building, cannot value for 12 months. Having to have a 12 months cooling off period. Recommend to wait 12 months
104
Please give an example of a conflict relating to your own interest?
When accepting a valuation, I knew the occupant, so was not invovled in the job
105
Please give an example of a conflict relating to something confidential?
Working on a confidential instruction, which would impact another client, but must not breach the duty of care owed
106
What is the difference between conflict management and conflict avoidance?
Avoidance = decline the instruction
Management = information barriers in place and proceed. Informed consent.
107
What steps must be followed prior to accepting a client instruction?
CIT
Confirm…
- Professional Competence
- No conflicts of Interest or personal interest
- Confirm Terms of engagement in writing and get written approval from the client BEFORE you start work on the instruction.
108
Give an examples of when you encountered a conflict of interest, and how did you manage it?
A conflict arose when I was assisting on a valuation that our sales office were previously instructed on.
- I check my independence wouldn’t be compromised
- wrote to client to disclose nature of conflict, proposed process to manage: information barrier, and requested written confirmation from both parties
- received written informed consent
- implemented information barrier:
-written in ToE
-separate support teams
-password protected files
-clear record keeping
109
Could your firm sell a property if it was valued by your firm 18 months ago?
Yes, as greater than 12 months difference.
Also made client aware and gained their written informed consent
Stated this information in the terms of engagement
But, I would recommend a fire break valuation from a different firm as a good practice measure
110
What other legislation is relevant for agent conflicts of interest?
RICS Professional Statement: Conflicts of Interest – UK Commercial property market investment agency, 2017
Relatedly solely to investment agency work.
111
As an agent, are you allowed to have a contractual agreement with both the seller and the buyer at the same time?
No – Dual agency is NOT allowed as of 2018.
112
What is required if you are acting for a connected person?
- Must not let a personal interest interfere with or influence your professional judgement.
- FULL transparency is required
Declare facts promptly and in writing prior to accepting the instruction.
113
What is the RICS guidance on confidentiality?
RICS By-law – client confidentiality must be maintained for all client affairs.
- Old files held for min 6 years
- If overhear, must not use the information.
- Client / sender should be advised of the error. Matter should be recorded in a note to the firms compliance officer.
- Any material received in error should be disposed of securely.
114
What is money laundering?
Money Laundering = disguised criminal proceeds realised as legitimate assets
115
Why were the RICS Rules of Conduct introduced?
For a single set of rules, simple strcuture, clear examples, diversity and inclusion
116
Is there additional RICS mandatory information for Conflicts of Interest?
RICS Professional Statement: Conflicts of Interest- UK Commercial Property Market Investment Agency (2017)
- Relating to UK Commercial Investment Agency
- Addresses specific risk, including dual agency must not be undertaken
117
How would you deal with a complaint from someone to whom you owe a duty of care?
RICS Guidance Note on Complaints Handling (2016)
STEP 1 – Discuss with the client first and de-escalate if possible
STEP 2 – In-House
- Issue your firms CHP upon receipt of the complaint from a valid complainant to whom the firm owes a duty of care (quick, clear, transparent)
- To include procedures, timescales and contacts (acknowledge within 7 days, investigate within 28 days)
STEP 3 – ADR (3rd party resolution)
- Complainant not happy, use independent redress scheme
118
Describe the RICS position on client confidentiality?
Confidentiality must be maintained for ALL client affairs
- Must receive client approval if a 3rd party wants info
- Hold files for 6 years before disposing securely
- Cannot use info received in error for own purpose
119
Can you accept a client instruction where a Conflict of Interest has been identified?
Conflict Avoidance – do not accept instruction
Conflict Management – accept instruction if…
- Disclose nature of conflict and proprose measures for addressing (e.g., info barrier)
- Be as clear as you can so parties can make an informed decision
- Request written confirmation from both parties of their informed consent
120
What should be included in your standard Terms of Engagement?
1. Scope of services (premarketing DD, all inspections)
2. Timescales
3. Fees (% of equity raise or set FM cost)
4. Expenses (marketing, designer etc.)
5. Joint/Sole mandate
6. Offers received (written or verbal)
7. EOC (Landlord obligation prior to sale)
8. Money Laundering Regulations
9. Personal Indemnity Cover (£5 million)
10. Conflicts of Interest (Estate Agency Act 1979)
11. Services to prospective purchasers
12. Term (28 days notice)
13. Attach General T&Cs of Business
121
How should fees be negotiated?
Market-based, set on ad hoc basis
Avoid:
- Price fixing
- Aggressive fee cutting
- Collusion with competitors (4 Somerset Estate Agents prosecuted in 2017 for setting minimum commission rates)
122
What ethical principles are captured within the Rules of Conduct (2021)?
- Honesty
- Integrity
- Competence
- Service
- Respect
- Responsibility
123
Are all gifts and hospitality considered as bribes?
NO – although some forms of lavish entertainment are
It must be:
- Reasonable
- Proportions
- Recorded
124
What are the important considerations when offered a gift by a client?
Bribery Act (2010)
RICS PS: Countering B, C, ML, TF (2017)
Consider whether your impartiality is at risk
- Timing
- Reasonable
- Proportionate
125
What are your firms bribery policies and why are they important?
Gifts policy:
- Up to £200 is acceptable, above this must be approved
- Hospitality up to £1000, if above be approved
Companies are responsible for their employees’ corrupt acts, unless adequate anti-bribery measures in place – e.g., training, clear policies
