Ethics Flashcards
Name rule 1 and an example
honestly, integrity, and comply with professional obligation
I do not mislead in marketing materials.
Transparent with fees
Rule 2 and example
maintaining and acting with competence
eg only accept work I am competent with, eg passing on Chelsea mix-use valuation
Rule 3
Providing good quality and diligent service
eg clearly defining scope of work, and ToE
Rule 4
Respect and encourage diversity and inclusion
eg we celebrate various religious holidays in the office (devarly)
Rule 5
Must act in the Public interest, take responsibility and maintain public confidence in the profession
eg act the same online as I do in person
Name an ethical dilemma you have faced?
Gifts
What was the Bichard Review
Lord Michael Bichard, commissioned by RICS in 2021 to investigate and reform its governance, purpose and strategy following concerns Levitt review over internal management and transparency.
36 recommendations:
-attract young people
-streamline RICS gov structure
-increase diversity
What is future foundations?
Follows Bichard review: to sets out the vision, purpose, and reform agenda for RICS to remain relevant, trusted, and effective in a fast-changing built environment sector.
5 things
What is the ethical decision tree?
tool to help you apply professional judgment and make ethical decisions in tricky situations.
eg Q: is it legal?
If you pass what will you bring to RICS
I’ll bring a commitment to upholding RICS’s values of integrity, professionalism, and acting in the public interest.
I’ve developed a strong technical foundation through my experience in commercial agency and disposals, and I aim to continue developing that with confidence and responsibility.
Order of important of RICS statements?
-Professional standards (man) eg Red book, rules of conduct,
-practice statements and guidance (advisory) eg Code of measuring practice
Limitations Act 1980
sets out the length of a legal claim (PII) 6 years
Principles of Bribery?
⚖️ Core Principles:
Proportionality: Actions should be appropriate to the size and risk profile of the business.
Top-level commitment: Company leadership must demonstrate a strong commitment to anti-bribery policies.
Risk assessment: Regular assessments to identify and manage potential bribery risks.
Due diligence: Proper checks on third parties, employees, and agents to ensure they comply with anti-bribery standards.
Communication and training: Ensuring everyone in the organization understands the anti-bribery policies.
Monitoring and review: Regularly reviewing the effectiveness of anti-bribery procedures.
Explain RICS guidance on corruption and AML?
3 parts
1: requirements eg KYC
2: guidance
3: extra guidane
Name the 6 steps in a risk assessment?
- identify risk
- Who’s at risk
3.Severity of risk
4.Risk assessment report
5.Share this
6.Review regulary
What are the steps with RICS disciplinary action?
- Review from head of regulations
- Panel
- Appeal
What are the control asbestos regulation 2012
States duty holder
register
managment plan
12 months imprisonment or £20,000
What do the Rules of conduct do?
Set 5 rules that firms and members must adhere to, ensuring high ethical and professional standards
Members obligations to RICS?
-20 hours CPD
-Cooperate with RICS
-Cooperate with relevant regulatory boards eg EA, Financial conduct authorities
Steps involved in
What is a small firm?
less thn 50 employees
What is a ‘claims made’ basis re. PII?
What is a conflict?
Any involvement with a party or property which may affect your impartiality
what are the 3 types of conflict?
-party
-personal
-confidential information
Definition of client money?
This refers to monies held by a RICS regulated firm not immediately payable eg rent, SC
RICS guidance on client money?
Practice statement - Client Money Handling 2019
1 - Outlines rules for safeguarding client money
1 – Keep client money safe
2 – Use only for appropriate purposes
3 – Four mandatory requirements (4) i holding ii receiving in iii sending out iii keeping accurate accounting records and ensuring monies are securely controlled and protected
4 – Examples of securely controlled and protected monies (2) i Hold all client monies in an exclusive controlled/segregated money account ii ensuring the account name has the word client and name of firm
5th Money Laundering Directive (2020) / HMRC (3)
1 – Must carry out Customer Due Diligence (CDD) when property is let for a term > 1 month and name of firm
2 – Equivalent to >/= €10,000 per month
3 – Need to carry out DD if cash >/= €10,000 per month
CHP
1 – A firm must have a Complaint’s Handling Procedure and a Complaint’s Log
2 – A copy of the CHP should be provided with the firms TOE
3 – In the event of a complaint it will be addressed by a complaint’s handling officer or a senior person
4 – The CHP is free to the claimant and once submitted must be acknowledged within 7 days and addressed within 28 days by firms
5 – In the event it cannot be resolved it can be referred to independent third party
5 principles of CHP
-agreed with PII broker
-fit for purpose
-understood
-available
-readily shared
-regularly reviewed
3 stages CHP
- acknowledge within 7 days
- respond within 27 days
- referral to ADR
*RICS only become involved when its matters which concern public interest
Define bribery
where you accept money, gifts or favours for payment or reward
Corruption definition
Where you abuse of power for private gain
Define terrorist financing
Where you collect funds to support terrorism
PS Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)
1 – must check potential customers or clients are under any relevant sanctions that prohibit establishing a business relationship with them.
2 – Structure i P1 Mandatory ii P2 Guidance iii P3 Supplementary
3 – P1 for bribery and corruption (5) i do not accept bribes or bribe others ii comply with laws iii report to police and serious fraud office iv evaluate v audit trail
4 – p1 for money laundering and terrorist financing (5) i do not facilitate ii report as suspicious activity report or to national crime agency iii evaluate iv carry out checks (CDD, SDD, EDD) v audit trail
5 – P2 for bribery and corruption (3) i written policy (and behaviour) ii gift register iii appoint ethics champion iv carry out checks/DD
6 – P2 for ML and TF (4) i written policy (PEP, PSC) ii train staff iii appoint senior person iv carry out checks (CDD, SDD, EDD)
What are the 6 principles of the bribery act?
1 – Communication
2 – Proportionality
3 – Due diligence
4 – Top level commitment (of management or board)
5 – Risk assessment
6 – Monitoring and review
What constitute a bribe?
1 – Bribing
2 – Receiving a bribe
3 – Bribing a foreign public official
4 – Not reporting a bribe
Penalties of a bribe?
Regulated by Serious Fraud Office, breach is max. 10 yrs in prison, unlimited fine
The 2022 Money Laundering and Terrorist Financing (Amendment) (No.2) Regulations, effective from 1 April 2023 (4)
1 - Will require businesses subject to the MLRs to conduct checks of the Register of Overseas Entities (ROE) at Companies House for dealings with corporate entities.
2 - For dealings with trust entities, businesses subject to the MLRs will have to comply with checks of the trust registration service (TRS) maintained by HM Revenue and Customs (HMRC).
3 - These changes are intended to improve transparency and combat money laundering and terrorist financing.
4 - Failure to comply with these requirements could result in significant penalties for businesses
What is RICS?
a professional body that sets standards and regulates the practice of land and property. RICS is designed to ensure effective governance, operational efficiency, and high professional standards.
Current president?
Nicholas Mclean
RICS founded?
1868, royal charter 1881
Are professional standards mandatory?
Yes set out ‘must’ follow
What are practice information?
advisory / guidance ‘should’ follow
What’s RICS purpose?
1 - maintain highest standards of education and training
2 - Protect customers though strict regulation of professional standards
3 - Leading source of info and advice on property and land issues
why do you want to be a charted surveyor?
-status
-knowledge
-network
-market advantage
Disciplinary?
1 – Disciplinary process can be through the conduct committee or disciplinary panel
2 – Conduct committee can issue a fixed penalty notice (FPN), or a consent order
3 – The disciplinary panel can issue a caution against repetition of the conduct in question, reprimand or severely reprimand, require an undertaking against future conduct, issue a fine, or expel (5)
4 – The appeal panel relates to three levels of disciplinary procedure i fixed penalty notice ii disciplinary panel iii registration panel
What are the key functions of RICS?
To maintain highest ethical standards of education and training, protect consumers through strict regulation of professional standards, to be leading source of info and independent advice on land, property and construction
What is the role of RICS?
Regulate, promote professional standards. Sets the highest ethical standard professional practice, competency. Provide qualification and accreditation.
Can you tell me what you understand by the principles of better regulation?
PACTT
proportionality
accountability
consistency
transparency
targeting
Explain to me the new RICS Rules of Conduct-what do they replace?
Rules of conduct 2021, replaced 2015 rules of conduct; condensed into one doc for member and firms and provided examples
What’s a bye-law and give an example
rules and regulation created by RICS to govern the profession eg membership and registration, rules of conduct
What are the 6 ethical principles that the Rules of Conduct are based on?
Act with integrity, provide high standard of service, promote professional, act competent, respect, support sustainability.
Firms obligations to RICS?
CHP, PII, locum, cooperate with RICS, RICS literature, provide all information to boards, report matters to RICS
What disciplinary procedures can the RICS impose?
- Action by head of regulation – eg service penalty, refer them to tribunal, disciplinary panel eg minor thing such as CPD, late payment of fees
- regulatory tribunal – more serious, panel includes a lay member, eg fine, explosion, these require to be published. Eg inflating property values, not disclosing personal interests in a sale, not handling client money correctly
- appeal tribunal. – this is an appeal against the regulatory tribunal,
When did RICS last update their disciplinary panel rules?
RICS regulatory decision making – version 4 (2022)
What are the different levels of action within these procedures?
Initial investigation stage by head of regulations, who then imposes one of 4 requirements; fine, regulatory compliance order, refer matters to tribunal, or dis panel.
What do you understand by the term professional practice?
refers to the ethical, legal, and technical standards that RICS members must adhere to when carrying out their duties as surveyors. Eg Ethical Standards & Professional Conduct
What money laundering regulations or legislation are you aware of?
The money laundering, Terrorist financing and transfer of funds regulation, 2017 amended 2022.
And RICS prof statement: bribery, corruption, money laundering and terrorist financing (2019).
What bribery legislation are you aware of?
Bribery Act 2010
Penalties of a bribe?
Criminal offence, 10 years imprisonment, unlimited fine
Money laundering penalties?
14 year in prison, unlimited fine, max 5 years tipping off
What constitutes an offence under the current money laundering regulations?
Facilitating, disguising, tipping off
How long should you keep anti money laundering records for
min 5 years
RICS requirements for PII?
min threshold
run off cover 6 years
What is a PII aggregation clause?
An aggregation clause determines whether multiple claims arising from the same or related circumstances will be treated as a single claim for the purposes of the policy’s limit of indemnity.
What does ‘claims made’ mean in terms of PII?
policy have in place the time of the claim
PII excess usually paid for per claim?
£10m or less = greater of 2.5% of sum insured or 10k
£10m = no set limit
What changes did RICS recently make to the Minimum Approved PII Wording?
Addition to fire safety coverage and cyber security
Explain PII requirements relating to fire safety cover and cybercover
Mandatory Fire Safety Coverage for Five-Storey & Higher Buildings and Removal of RICS-Specific Cyber Exclusion Clause RICS no longer requires a specific cyber exclusion in PII policies. Instead, insurers can use the International Underwriting Association’s (IUA) model clause for cyber risks.
What is the RICS run off Pool (ARP)?
RICS availability for PII, if unable to obtain
Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance (1st Edition)
provides practical advice for RICS-regulated members and firms on how to identify, manage, and mitigate professional risks in line with ethical and regulatory obligations.
Give me an example of when you have acted with integrity?
Advising a prospective tenant who had never leased a commercial unit before asked for lease advise and if he should instruct a lawyer, I suggested a lawyer and also referred him to the code for leasing premises.
Tell me about when you have provided a high standard of service
Leasing of unit 6 Stephendale yard, found a tenant however she backed out after signing HoT due to timings, I understood her reasoning and spoke with the client to find a solution which the client was happy with as well as the tenant. The move in date was pushed back slightly and the rent free reduced. The deal was agreed.
Explain how you have taken responsibility in your current role
Tideway, marketing campaign
If you were to set up in practice on your own, tell me about the types of insurance you would need.
-PII
-Employers liability insurance
-office insurance
-content insurance
-vehicle insurance
-cyber insurance
What are the membership levels?
Fellow
Member
Associate
Trainee/student
How do you become a fellow?
four fellowship characteristics
-5 years member
-leadership or academic achievement
-raising profile of RICS
-portfolio of prof achievements
What is the governance structure?
Governed under royal charter - Privy council
governing council has 20 members and runs RICS who provide management and direction
Standards and regulation board and management report to governing council
17 specialist professional groups, each has an elected board
Current CEO, Justin Young
Current president, Nicholas Maclean
What was the outcome of the Levitt review?
Public exposure of lack of clarity, structure, purpose
Levitt calls for full independent review of purpose and governance and strategy
what is the role of RICS?
1 - maintain highest standards of education and training
2- protect consumers
3- leading source of information and advice
What was the Birchard review?
Independent review on the purpose of RICS in 2022
36 recommendations in 7 key areas
-increased focus on public interest
-increase focus on diversity and inclusion
-engagement with younger people
What are the 5 key themes from the Birchard review?
governance
strategy
people
culture
values
what are the categories of RICS material?
Professional standards - mandatory
Practice information - advisory
what are the 3 types of conflict?
-party, relating to work on the same or related instruction for 2 parties
-own interest conflict
-confidential information conflict
what is the max level of uninsured excess?
turnover up to 10m, greater of 2.5% of the sum insured or £10,000?
Over £10m, no set limit
Any case law on negligence?
burgess v lejonvan (2020)
pro bono work without contract, owe a duty of care and skill
what is the limitation act 1980
6 years from date of negligence to make a claim
PS client money handling, what are the main points?
- holding client money
2.providing info to clients - receipts of client accounts
- payment of client accounts
- accounting records and control
6.compliance
What are the 6 principles of bribery?
CPD TAR
-communication
-proportionality
-due diligence
-top level commitment
-risk assessment
-monitoring and review
What are the 4 offences of a bride?
Making
Receiving
Bribing a foreign official
failing to prevent
Penalties for a bride?
Serious fraud team
Max 10 years in prison, unlimited fine
Define money laundering?
Proceeds of criminal activities are disguised or converted into legitimate assets
What are the regulation for money laundering?
Terrorist financing and transfer of funds regulations (2017)
What are the key provisions of money laundering regulations?
- written risk assessment
- implement systems, policies and controls
- adopt internal controls
- staff training
- new customer DD
- comply with PEP
- record keeping
- enhanced DD
- identify checks undertaken eg on purchaser
Estate agents money laundering obligations?
-Register with HMRC if over 10k euros per month
-business approved and registered with HMRC
-CDD
-EDD
-firms have policies in place
-firm must have training
Talk me to about enhanced DD?
additional procedures
PEP or high risk country
-additional evidence and monitoring
Who do you report money laundering to?
Initially my company officer who reports suspicious activity report (SAR) to NCA
How long do you keep money laundering docs?
min 5 years
Penalties of money laundering?
14 years
unlimited fine
5 years for tipping off / unlimited fine
What is the Proceeds of Crime Act 2002?
provides powers to uk authorities to recover assets and money
RICS statement on AML?
RICS professional statement: countering bribery, corruption, money laundering and terrorist financing 2019
-sets mandatory requirements for members and firms
3 parts:
1. mandatory requirements about bribery & corruption and money laundering & terrirst financing
2. Guidance eg written policy, gift register
3. Supplementary guidance eg PEP
What was the Levitt review 2021?
Independent review into treasury management issues during 2018-19
Four non-Executive Board members of RICS then raised concerns that the audit had been suppressed and were subsequently dismissed from the Management Board.
A key contributing factor was a lack of clarity around the roles and responsibilities of the various RICS Boards, senior leadership and management
18 recommendations include recommendations on governance, executive remuneration, whistle blowing and legal advice.
how long do documents need to be kept for?
6 years
deed 12 years
How long do AML doc needs to be kept for?
5 years
What is a conflict of interest?
ability to act in best interest of client is impaired
-financial
-personal
-commerical
Example of acting with integirty? or rule 1?
Gifts
What is a bribe?
an offer, promise or giving of a financial or other advantage to another person with the intention of inducing them to act in-properly
Who policies bribery act 2010? and penalities?
serious fraud team
10 years in prison
unlimited fine
What is the bribery act 2010?
UK legislation that sets out criminal offences relating to bribery, aims to promote ethical business practice
Definition of client money?
monies held by a firm that’s not immediately payable
eg rent, SC, interest
Professional standards client money handling
-outlines rules for safeguarding client money
-used for appropriate purposes
holding, receiving, sending out, accurate
What is the money laundering directive?
-carry out CDD 1 month
-10k euro a month
-DD is cash 10K euro
PS complaints handling procedure 2016 what are the 5 princples?
-agreed with PII broker
-fit for purpose
-understood
-available
-readily shared
-regulary reviwed
Time period of complaints?
7 days to acknowledge
28 days to respond
3rd party
RICS only involved when concern of public interest
Purpose of RICS?
-highest standard of education and training
-protect customers
-leading course of information and advice
What is the role of the regulatory board?
- Role: The Regulation Board oversees the regulatory functions of RICS, ensuring that
members adhere to the professional standards and ethics. - Independence: It operates independently to maintain objectivity and integrity in the regulation process.
What are firms obligations to RICS?
-CH_
-PII
-sole principal eg locum
-cooperate with RICS
-provide info to regulatory board
-display literature ‘in accordance with RICS’
-report matters to RICS
Who policies the bribery?
serious fraud team
10 years or unlimited fine
Can you tell me what you understand by the principles of better regulation?
PACTT
-proportionality
-accountability
-consistency
-transparency
-targeting
What are the 6 ethical principles that the Rules of Conduct are based on?
honesty
integrity
competence
service
respect
responsibility.
Explain to me the new RICS Rules of Conduct-what do they replace?
replaced separate rules for Members and Firms
What is a PII aggregation clause?
determines whether multiple related claims are treated as one single claim (aggregated) or as separate claims for the purpose of applying the policy limits
Explain your understanding of the RICS Guidance Note Risk,Liability and Insurance
(1st Edition)
advice on:
Understand and manage professional risk
Limit or apportion liability
Ensure appropriate insurance arrangements are in place
understand how to proactively manage professional risk. key risks, using terms of engagement to limit liability, and maintaining appropriate PII
promotes clear client communication, proper documentation, and internal risk control processes.
What do you understand by the term professional practice?
refers to the standards of behaviour, competence, and ethics that RICS members and regulated firms are expected to uphold in the delivery of their surveying services.
What money laundering regulations or legislation are you aware of?
Proceeds of Crime Act 2002 (POCA)
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended in 2019 & 2022)
What was the Bichard review?
independent review of the RICS’ purpose, governance and strategy.
Commissioned following Levitt review (treasury)
There are 36 recommendations
-diversity
-young people
-improve tech
What was the Levitt review?
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.
A key contributing factor was a lack of clarity around the roles and responsibilities of the various RICS Boards, senior leadership and management.
Hackett review?
Fire safety post Grenfell
Five principles of CHP?
-agreed with PII broker
-fit for purpose
-understood
-available
-readily shared
-regularly reviewed
any case law for negligence?
Merrit V Babb
-surveying firm closed down, surveyor was pursed for damages
What was the update regarding PII?
fire safety post grenfell, limited exclusion in order for businesses to get insurance
What is the RICS inclusive employer quality mark?
RICS scheme designed to improve diversity and inclusion
requires firms to pledge commitments on 6 principles;
eg recruitment, staff development, staff retention
difference between professional standards and practice information?
following bichard review
PS - contain mandatory requirements
PI - supporting guidance to advise surveyors
Are you aware of RICS business plan?
4 main areas:
-sustainable leadership
-attracting diverse talent
-enhancing member engagement
-strengthening trust
What is RICS futures report?
2015, highlighted challenges in property industry such as urbanisation, big data, technology and climate crisis
Explain your understanding of the harris debate?
organised annually by RICS, provides a platform to address ethical concerns
2024 - ethics in the age of AI and its impact on valuation practices
Amount of run off cover?
£1m min for 6 years
What is negligence?
fails to take proper care or act responsibly, leading to harm or damage to another person or their property.
Difference between negligence and being wrong?
Negligence occurs when a person fails to take reasonable care in their actions or decisions, resulting in harm or damage to another person or property.
Being wrong simply means making an incorrect decision or conclusion, without necessarily failing in your duty to act with reasonable care.
