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APC Revision > Ethics > Flashcards

Ethics Flashcards

1
Q

What are the 5 principles of RICS regulation for members and firms?

A

PACTT:

  1. Proportionality: making the penalty proportional to the breach
  2. Accountability: to all members and the public
  3. Consistency: treating all members the same
  4. Targeting: serious breaches
  5. Transparency: to all members, clients and the public
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2
Q

What does the Ethics Decision Tree include?

A

Framework of questions members should ask themselves

Encouraged members to consider the legality of their action and the consistency with the RICS Global and Professional Ethical Standards

Ultimate question is whether members would be content to have their decisions or actions made public

RICS Regulation Confidential Hotline offers further assistance to members with any ethical issue

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3
Q

What is the UK Structure of the RICS?

A

4 National Associations
10 Regional Boards
Local Associations

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4
Q

What are the International Ethics Standards, 2016?

A

Ethical framework for the global property market

Published by the International Ethics Standards Coalition

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5
Q

What relevance do the International Ethics Standards, 2016 have for the RICS?

A
  • Did not originate from the RICS but are promoted by the RICS
  • RICS are currently reviewing the Global Professional and Ethical Standards, 2015 and may extend them to reflect the International Ethics Standards more closely
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6
Q

What are the 5 core RICS values?

A

Act with Integrity
Always provide a high standard of service
Act in a way that promotes trust in the profession
Treat others with respect
Take responsibility

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7
Q

What are the RICS Rules of Conduct?

A

for members;

3 - Ethical behaviour (integrity, avoid conflicts of interest)
4 - Competence (due skill, care, diligence, technical knowledge)
5 - Service (timely manner, service standards and customer care)

for firms includes;

CPD
Solvency
Information to RICS
Co-operation (with RICS)

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8
Q

What legislation governs health and safety?

A

Health and Safety at Work act 1974

Act places a general duty to ‘ensure so far as is reasonably practicable the health, safety and welfare at work of all their employees’

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9
Q

What do you understand by RICS Dispute Resolution Service?

A

RICS Dispute Resolution Service (DRS) is the world’s oldest and largest provider of alternative dispute resolution (ADR) services in the land, property and construction industries.

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10
Q

What are the types of ADR (alternate dispute resolution)?

A

mediation
arbitration
third party resolution

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11
Q

How do you set up a regulated firm?

A

RICS Firm Details Form
Appoint Contact Officer for all RICS communications
Register for RICS Regulation
Register for RICS Registered Valuer scheme
Send PII details to RICS
Get RICS approval for Complaints Handling Procedure (& appoint CPH)
Make arrangements for succession (if sole practitioner)
Set up procedures for clients’ money
RICS logo kit

Statutory compliance required:
Business Names Act 1985 & Companies Act 1985
Equality Act 2010
Financial Services Acts (2000, 2012)
Bribery Act 2010
Money Laundering Regulations 2007
Health & Safety Act 1974 (as amended) + Fire + Asbestos Regs
Data Protection Act 1998
GDPR
Estate Agents Act 1979; Misrepresentation Act 1967; Consumer Protection Regulations 2008
HMRC – VAT and Tax registration

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12
Q

What changes are you aware of in regard to the RICS Rules of Registration for Firms 2020?

A

Now mandatory as of March 2020

Guidance on the new Rules for the registration of firms and Rules for the use of the RICS logo and designations by firms [with effect from 1 April 2020]

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13
Q

What are the benefits of regulation for firms?

A

Confidence (for clients - regulated firms subject to RICS Regulation)
Professionalism (firms have to give clear, impartial expert advice)
Security (recognised complaints procedure, free indep. redress, PII)

N.B. WAS surveying service with 50% or more Chartered Surveyor principals – NEW 25% rule from 2020

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14
Q

What are the rues of conduct for firms?

A 
Professional Behaviour
Competence
Service
CPD
Complaints handling
Clients’ money
PII
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15
Q

What is indemnity insurance?

A

RICS GN –PII, Risk, Uncertainty and Insurance in Valuation Work 2013

Mandatory - protects surveyors, clients and 3rd parties against negligence claims when duty of care breached and claim for damages

Minimum level of PII based off a Firm’s turnover.

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16
Q

What would you do in the event of closing down a practice?

A

Inform the RICS

Inform clients and make had over arrangements to the new firm

Return any monies held by clients

Inform your insurer and procure professional indemnity insurance run off cover for a minimum 6 years and £250,000 cover (but RICS recommends 15 years)

Retain copy of client files and records for a minimum of 6 years

17
Q

How long are you required to have PII after closing a practice?

A

Minimum of 6 years as per the Limitations Act 1980, RICS recommends 15 years however.

18
Q

Tell me about Complaints Handling, what does your firm have in place?

A

CH procedures must be approved by RICS

Procedures must be captured in client Terms of Engagement

Use of complaints log

Stage 1: In House (Sole Practitioner? Nominate CHO surveyor in other firm)

Stage 2: ADR – Third party resolution (such as The Property Ombudsman;
Ombudsman Services; RICS Dispute Resolution Service)

VOA has Tier 1 (Business Stream); Tier 2 (Agency CIT); then as a govt body certain matters can be referred to an Ombudsman

19
Q

What are the 6 principles of the Bribery Act 2010?

A 
Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitoring and Review
20
Q

What constitutes a bribe?

A

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

21
Q

What types of bribery are you aware of?

A

Certain types of lavish corporate entertainment could be classified as bribery

But offering a client reasonable and proportionate hospitality will not constitute an offence as long as this is accurately recorded in a gifts / hospitality register; e.g. sporting tickets; a meal

Never accept gifts/hospitality from a 3rd party supplier or contractor

Cash? Money Laundering Regulations 2007 (as amended) – no cash payment in excess of 10,000 Euros.

22
Q

What is client’s money?

A

Tenants’ deposits; Arbitration fees; Service charges

Fee money taken in advance; Sale proceeds; Rents

Money held by members appointed as a Receiver

Interest (if in an interest bearing client account)

Clients’ money held but due to be paid to contractors

23
Q

What RICS guidance is available in regard to client money?

A

RICS Professional Statement: Client money handling (1st edition, October 2019) Effective 1st January 2020

Rule 8 of the RICS Rules of Conduct for Firms states: ‘A firm shall preserve the security of clients’ money entrusted to its care in the course of its practice or business.’

24
Q

What obligations do you have when handling client money?

A

Obligation to keep client accounts (separate & identifiable)
Obligation to keep accurate records
Reporting obligations (regular bank reconciliation & audit)
Payment of interest
Protect Clients’ Money against: insolvency; misappropriation by any party; death of a sole practitioner

25
Q

What’s required for client accounts?

A
  • Keep client money in designated accounts
  • Include the name of the firm and the word “client”
  • Obtain bank confirmation of account conditions
  • Agree terms of account handling in writing with client
  • Ensure sufficient funds available for payments

• Obtain clients’ written approval to make payments from their
accounts

26
Q

What regulations are in place in regard to money laundering?

A

Fifth Money Laundering Directive;

Effective date 10 Jan 2020

Enhanced Due Diligence

Enhanced Customer Diligence

Transparency of beneficial ownership

Implemented by The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (MLR 2019

27
Q

What is GDPR?

A

Government data protection regulations;

25th May 2018
Protection of personal data
Personal data: any information relating to an identified or identifiable living individual
Includes the address of a property and unique reference numbers
HMRC Data Protection Officer (DPO) responsible for VOA, assisted by team oDPO (ILD liaison)
HMRC Privacy Notice covers HMRC and VOA (HMRC is also the data controller for the VOA)

28
Q

What is a conflict of interest?

A

Situation in which a person is in a position to derive personal benefit from actions or decisions made in their official capacity.

29
Q

What is the RICS’ 3 step process to handling COI?

A

Conflict Avoidance (irresolvable conflict which either cannot be properly managed or where you would not wish to proceed)

Written advice to both parties (and written response required)

Conflict Management

30
Q

What RICS guidance is available regarding Conflicts of interest?

A

RICS professional statement ‘Conflicts of Interest’ (1st Edition - March 2017)

Effective from 1st January 2018

Identifies several different forms of potential conflict

Requirement for Record Keeping

Requirement for Informed Consent

An RICS member or regulated firm must not advise or represent a client where doing so would involve a Conflict of Interest or a significant risk of a Conflict of Interest; other than where all of those who are or may be affected have provided their prior Informed Consent.

31
Q

What are the 4 types of conflict of interest?

A

Own Interest Conflict of Interest (personal)

Party Conflict of Interest (professional) - When providing services to more than one untied client

Party Conflict of Interest (professional) - Between untied work and statutory / regulatory work

Confidential Information Conflict of Interest

32
Q

How do you carry out a conflict of interest at your firm?

A

Initial search at Case Registration to determine whether VOA is currently acting, or has previously acted, with regard to the property for another client

Caseworker completes excel spreadsheet check for files

History Working Sheet check

Importance of ongoing communication between valuers to help identify clashes

Notify Team Leader and Sector Leader(s) in first instance

33
Q

Give me an example of an information barrier?

A

Also known as ‘Chinese Wall’. Strict test for Information Barriers walls – taking
‘reasonable steps’ is not sufficient. Needs to be an established part of a firm’s
culture.

Must be robust enough to offer no chance of information passing through it.

Individuals (& support staff) acting for conflicting clients must be different

Physical separation (different parts of building)

Information held must be inaccessible to “the other side”

Must be actively monitored

34
Q

What is the role of expert witness, what guidance is available?

A

RICS Surveyors acting as expert witnesses (2014 - 4th edition)

it is the duty of experts to help the court with matters within their expertise

An expert also owes his client a duty to act with reasonable skill and care

35
Q

What is the role of advocate and what guidance is available?

A

‘Surveyors acting as advocates’ 2017 edition.

Surveyor is representing their client at the judicial hearing / tribunal, promoting their case and interests

Surveyor’s duty is solely to the instructing client

Surveyor must act in a manner that maintains integrity of the judicial process

Advocate must not express expert opinion

36
Q

What are the minimum levels of indemnity insurance required?

A

Firm Turnover say £100,000 = £250,000 PII level required

Firm turnover say £100,001 - £200,000 = £500,000 PII Level required

Firm turnover say £200,001 above = £1,000,000 PII level required

37
Q

Could you act for both a landlord and tenant?

A

Yes, as single independent valuer, not acted in the role myself but colleagues have. Ensure written consent to proceed, make sure all communications are sent to parties at the same time i.e. email both rather than favouring one party.

APC Revision (11 decks)

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