Ethics Flashcards
1
Q
What does the acronym RICS stand for?
A
Royal Institution of Charted Surveyors
2
Q
When was the RICS Founded?
A
1868
3
Q
What created the present structure of the RICS?
A
Agenda for Change 1998
4
Q
What sets out the governance of the Institution?
A
RICS Royal Charter
5
Q
Who granted this charter?
A
The privy council
6
Q
What does a Royal Charter promote?
A
Usefulness of surveying profession for the advantage of the public
7
Q
How does the RICS benefit the public?
A
Self regulatory
Gold standard of excellence
8
Q
What are the RICS Bye-Laws
A
Set out the governance of the RICS
9
Q
How many Bye-Laws are there?
A
10
10
Q
Name 3 Bye-Laws
A
Membership and Registration
Designations
Procedure for general meetings
11
Q
How long does the chair of the governing council act for?1
A
Up to 6 years
12
Q
How many seats are currently in the governing council?
A
50
13
Q
What are the current 5 RICS priorities
A
Influential Leader
Trusted by our stakeholders and society
RICS professional qualifications remain in demand
Sustainable 21st century professional body
14
Q
What are the 4 levels of RICS membership?
A
FRICS
MRICS
AssocRICS
Trainee/Student
15
Q
What is the definition of RICS Fellowship?
A
“An honoured class of membership awarded on the basis of individual achievement within the profession”
16
Q
How does a MRICS become a Fellow?
A
- Evidence of achievement of 4 Fellowship characteristics; champion, expert, influencer, role model)
- 5 or more years as MRICS
- Leadership role
- Professional/technical achievement
- Raising the profile of the RICS
- Portfolio of professional achievement
- CPD record must be up to date
17
Q
What is the RICS governance structure?
A
- Privy Council
- Governing Council
3a. Regulatory Board
3b. Audit Committee
3c. Management Board - Professional Group Board
18
Q
Who is the current president of the RICS
A
Timothy Neal
19
Q
Who is the current CEO of the RICS
A
Sean Tomkins
20
Q
Who is the president elect
A
Kath Fontana
21
Q
What is the RICS motto
A
There is measure in all things
22
Q
How many professional group boards are there>
A
17
23
Q
What is the purpose of a professional group board
A
An elected board who are responsible for outlining standards of competence and practice for that area
24
Q
What is the UK Structure of the RICS
A
4 National associations
9 Regional Boards in England
Local associations
25
What are the major challenges facing the RICS
To understand and use data effectively
Including privacy of that data
Technology changes
26
What is the role of the RICS
Regulation
Advice
Training
27
What are the benefits of being an RICS member
```
Status
Knowledge
Recognition
Market advantage
Network
```
28
What are the 5 principles of RICS regulation
```
Proportionality
Accountability
Consistency
Targeting
Transparency
```
29
What are the benefits of regulation
Quality assurance for competence, enhancing members status by providing confidence to consumers
30
What are the RICS Ethical Standards
```
Service
Trust
Integrity
Respect
Responsibility
```
31
What is the link between the professional standards and the bye laws
Bye Law 5 - refers to members conducting themselves in a manner in alliance with RICS and Rule 3 of behavior of firms and members
32
What helps members to make the right choice
Ethical Decision Treet
33
What are the Rules of Conduct for Members
Part 1
Definition
Communication
```
Part 2
Ethical Behaviour
Competence
Service
CPD
Solvency
Information
Co-Operation
```
34
What are the Rules of Conduct for Firms
Part 1
Definition
Communication
```
Part 2
Professional Behaviour
Competence
Service
Training & CPD
Complaints Handling
Clients Money
PI
```
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Part 3 - Firm Registration
Advertising
Solvency
Incapacity of sole practioner
Designation
Information
Co-operation
```
35
How many firms are RICS registered
More than 10,000
36
Benefits of being RICS registered
Confidence and transparency
37
When is a firm required to register for RICS
When more than 50% of members are RICS members
38
What is required for firm to be regulated by RICS
Adequate PII
Complaints Handling Procedure
Training programme for employees
39
What is the cost of registering a firm
no cost
40
How can the disciplinary procedure be triggered?
Someone complaining to RICS
Allegation by a client or third party
Because of information received by the RICS
41
What rules govern the RICS discipline?
Regulatory Tribunal Rules
42
When were the rules for firms and members updated?
2020 to reflect the new Regulatory Tribunal Rules
43
What discipline processes are there?
Fixed penalty reviewers (Head of Regulation)
Regulatory Tribunal (made up of the following)
Disciplinary Panel
Registration Panel
Appeal Panel
44
What does the disciplinary panel do?
Hears disciplinary cases
45
What does the registration panel do?
Reviews decisions relating to the registration or members
46
What does the appeal panel do?
Hear appeals arising from disciplinary and registration panel decisions?
47
What does the fixed penalty reviewer do?
Review administrative decisions to issue Fixed Penalty Notices
48
What is a fixed penalty
a caution or a fine for breaching the rules; rule 6, rule 8, rul14, rule 10 (registration)
49
What are regulatory compliance orders
For breaches in Rules of Conduct - used where member admits the breach and is willing to cooperate with RICS
- Refrain from certain actions for a period of time
- Pay a fine if appropriate
50
What sanctions can the disciplinary and appeal panel enforce?
```
Caution
Reprimand
Fines
Conditions of continued membership
Conditions of firm's registration
Expulsion of member
Removal of firm's registration
```
51
What penalties are there for CPD breaches
First breach - fixed penalty (caution)
Second breach within 10 years of caution - fixed penalties (caution and fine)
Third breach within 10 years of caution - presumption of expulsion
52
What must be included on a firm's annual return?
Type of business and staffing details
Statutory regulated activities
Nature of clients
Complaints handling procedure details and records
Professional indemnity insurance details
Whether firm hold's clients money
53
What types of RICS material are there?
```
Practice statements
Guidance notes
Codes of practice
Information papers
Help sheets
Consumer guides
```
54
What is crucial in fee negotiations?
Do not undercut
Do not collude
Must be market based
If a fee cut is asked for should adjust the scope of work as required.
55
What must be considered in regards to Referral Fees
Could be misconstrued as a bribe
| Best to agree how these will be treated up front in TOE
56
What are the steps before taking on any job?
- Check competent
- Carry out AML checks as necessary
- Carry out conflict checks
- Confirm ToE and get these signed
57
Why might you decline an instruction?
- Not competent
- Client won't sign ToE
- Client won't complete AML checks
- There is a conflict of interest
- PII insurance cap cannot be agreed
58
What is a conflict of interest?
A situation which may compromise your ability to be objective and impartial?
59
Examples of a conflict of interest?
Financial interest
Personal interest
Acting on both sides of the transaction
Other parties in your firm acting on the same property
60
How to handle conflicts of interest?
1. Conflict avoidance
2. Informed consent
3. Conflict management
61
When might you adopt conflict avoidance as a solution to a conflict of interest?
Where it is not possible to properly manage the conflict
62
How do you receive informed consent?
Disclose nature of conflict to both parties
Set out proposals of how will manage conflict
Inform to seek independent advice as required
Request written confirmation
63
How can you manage conflicts?
Information Barriers
Separate support staff
Physically seperated
Password protected files
64
Who oversees conflict processes?
Firm's compliance officer
65
What RICS guidance is there for conflicts of interest
RICS Professional Statement on Conflict of Interest 2017
66
What types of conflict of interest are there?
Party Conflict
Own Interest Conflict
Confidential Information Conflict
67
Can members provide incremental advice?
Yes if consent is given and an information barrier in place
68
What legislation deals with bribery?
Bribery Act 2010
69
What are the 4 offences under the bribery act?
Giving a bribe
Receiving a bribe
Bribing a foreign official
Not having systems in place to prevent bribery
70
What principles is the Bribery Act based on?
```
DR PT MC
Due Diligence
Risk Assessment
Proportionality
Top Level Commitment
Monitoring and review
Communication
```
71
What must you do if gifts/hospitality are offered?
Register in the gifts/hospitality register
72
Who polices the Bribery Act
The Serious Fraud Office
73
What penalties are there for bribery?
Individuals - max 10 years in jail and or unlimited fine
| Company - unlimited fine
74
What are the 3 areas of offence under the Proceeds of Crime Act 2002?
Tipping off someone who is under suspicion
Assisting a criminal obtain hide or invest funds
Failing to report knowledge or suspicion
75
How do you report money laundering?
Report via Money Laundering Reporting Officer to the National Crime Agency
76
What legislation covers money laundering?
Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
77
What is money laundering?
When proceeds from criminal activities are disguised or converted and then realised in legitimate assets
78
What must companies do in relation to money laundering?
- Have a written money laundering and terrorist financing risk assessment
- Have internal controls
- Staff training
- Comply with DD requirements
- Appropriate record keeping
79
What are the 3 levels of money laundering due diligence?
- Simple DD
- Customer DD
- Enhanced DD
80
What does Simple DD entail?
Lowest form of DD - not done in property
| Where there is low risk of money laundering
81
What is required for Customer DD -publicly accountable body?
Evidence of government ownership/control
82
What is required for Customer DD - public limited company?
Stock exchange listing
83
What is required for Customer DD - private limited company
```
Full name
Registered number
Registered address
Name of all directors
Name of all shareholders with 25% or more holding
Identify if is a high risk client
```
84
What is required for Customer DD - private individual
Valid passport or driving licence
| Proof of address not more than 3 months old
85
What is enhanced DD
Where additional procedures are required for High Risk countries or PEPs
86
When do you have to carry out money laundering checks for a commercial tenant?
Where in any month of the term more than £10,000 is paid in rent
87
How to report money laundering?
Report to the National Crime Agency by submitting a suspicious activity report?
88
Who issues money laundering penalties
HMRC
89
What money laundering penalties are there?
Assisting with money laundering - max 14 years prison and unlimited fine
Tipping off a person - max 5 years prison and unlimited fine
90
What CPD is required by RICS
When qualified need 20 hours a year with at least 50% formal CPD
91
What is formal CPD
Structured training with clear objectives?
92
What is the RICS recommended complaints handling procedure?
Acknowledge in writing complaint within 7 days
| Investigate complaint within 28 days
93
What is CBRE's complaints handling procedure?
Notify compliance officer
They will acknowledge in writing complaint within 7 days
Investigate complaint within 20 days
94
What if a complaint cannot be settled through investigation?
ADR - Third Party
95
What are the 3 options for ADR with regards to complaints?
The Property Redress Scheme
RICS Dispute Resolution Service
The Centre for Dispute Resolution
96
What is the permissable margin for error for valuations according to case law?
K/S lincoln vs CB Richard Ellis 2010
- standard residential +/- 5%
- commercial property +/10%
- more complicated commercial property +/-15%
97
When do claims arise?
When a duty of care has been breached and there has been a loss
98
What is PII
There to protect surveyors and third parties against negligence claims
99
What are the minimum PII requirements
Turnover
Less than £100k - Min = £250k
£100k-£200k - Min = £500k
£200k + - Min = £1m
100
What is the maximum level of uninsured excess required by RICS
Liability Cap
- less than £500k = greater of 2.5% of sum insured or £10,000
- more than £500k = 2.5% of sum insured
101
What runoff cover is required?
Consumer claims - minimum £1m for minimum of 6 years
| Commercial claims - what is reasonable for minimum 6 years - often better for 15 years.
102
What does the RICS offer for firms that cannot obtain run-off cover?
RICS run-off pool
103
What does the RICS offer for firms that can't arrange PII cover
RICS assigned risks pool
104
What is the member's support service (MMS)
scheme run by RICS for members who face claims for work carried out by an employer who has gone into administration.
105
What is CBRE's general liability cap
lower or £20m or 25% of market value
106
How do you deal with client money?
```
Keep client accounts seperately
Word client must be on the account
Keep accurate records
Only withdraw if properly required
2 signatories are required for actions with clients money
```
107
What RICS scheme is in place where firms cannot repay client's money
RICS Clients Money Protection Scheme
108
What is required to set up a new practice
Notify the RICS through firm detail form
Arrange PII cover
Set up procedure for handling client's money
Set up complaints handling procedure and appoint Complaints handling officer
Ensure statutory compliance too
109
How to close a practice?
```
Notify RICS
Notify Clients and arrange handover to new firm
Return client money
Arrange PII run off cover
Retain records for minimum of 6 years
```
