Ethics and Mandatory Flashcards
Why do you want to become a member of RICS?
Gold standard
I want to be a member of a professional body which promotes integrity and professionalism, which is recognised and valued by clients. I want to give back to the industry and be able to assist in making the built environment better.
What is the RICS motto?
‘Est Modus in Rebus’ - translates to ‘There is measure in all things’
What is the role/key functions/mission statement of RICS?
To qualify and equip their members to offer the highest professional standards
Protecting and providing benefits to consumers by enforcing standards and codes of best practice
Provide impartial advice and guidance
The importance of professional ethics?
Act as an anchor to appropriate behaviours
Ensure consistency and transparency
Members want to show they are acting and behaving ethically for their own benefit and to promote the profession (demonstrates to members of public that we follow a set of rules and regulations which should give them some security)
When was RICS founded?
1868
What is a Royal Charter?
Awarded in 1881 by Queen Victoria, to maintain and promote the usefulness of the profession for the public advantage.
What is a Bye-Law?
A regulation made by a local authority or corporation
Give an example of one of the RICS Bye-Laws.
Bye law 1 – application and definitions.
Bye law 2 – membership and registration.
Bye law 3 – designations
Bye law 4 – contribution to funds.
Bye law 5 – conduct.
How many Countries and how many Members does the RICS operate in and have?
over 130,000 members and more than 140 countries
What is Lionheart?
A benevolent fund dedicated to providing support and financial aid to current and past members and their families.
What are the rules of conduct?
Rule 1: Members and firms must be honest, act with integrity, and comply with professional obligations. (Honesty, integrity and professional obligations)
Rule 2: Members and firms must maintain professional competence and ensure services are provided by competent individuals (Maintaining and acting within competence)
Rule 3: Members and firms must provide good-quality and diligent service. (providing good quality service)
Rule 4: Members and firms must treat others with respect and promote diversity and inclusion. (Respect and encouraging diversity and inclusion)
Rule 5: Members and firms must act in the public interest, take responsibility for their actions, and maintain public confidence. (Public interest, responsibility and public confidence)
When was the RICS Rules of Conduct issued and when did the rules become effect?
Issued in October 2021 and effective from 02 February 2022
What changes were made to the Rules of Conduct 2022?
Provide a simpler structure
Give clear examples
Focus on respect, diversity and inclusion
Respond to evolving technology
Emphasize of members expertise in tackling global challenges
What did the RICS Rules of Conduct replace?
Up until the 1st February 2022 there were 5 Global Professional & Ethical Standards
From 2nd February 2022 onwards the Global Professional & ethical standards have been consolidated within the New Rules of Conduct 2022
Why do we need the Rules of Conduct in the industry?
Knowing chartered surveyors have to follow and abide by rules, gives both clients and the general public greater confidence in the profession. They know we would face disciplinary action should we fail to comply with these rules.
What are the mandatory RICS requirements for member?
Members must comply with CPD requirements set by RICS
Members must cooperate with RICS
Members must promptly provide all information reasonably requested by the standards and regulation board (or those exercising delegated authority on its behalf.
Obligations Mandatory for RICS-regulated firms:
Must publish a complaints handling procedure
PII
A locum
Must cooperate with RICS
Provide information requested by the standards and regulation board
Display on their business literature in accordance with RICS published policy on designations, a designation to denote that they are regulated by RICS
Report under any matter that they are required to report under the rules of for the registration of firms
ow would you define ethical behaviour for a chartered surveyor?
Acting in accordance with the 5 RICS Rule of Conduct
What is the RICS decision tree?
A flowchart to help members decide how to act in difficult situations where their professional ethics may be at stake.
What factors does the RICS decision tree consider?
- Do You have sufficient Facts?
- Is it Legal?
- Is it in line with the RICS Rules of Conduct?
- Have you consulted with the appropriate people to make an informed decision?
- Do you have clear reasoning?
- Is your decision informed & would you be happy for your actions to be made public
What is the RICS Governance Structure?
Privy Council (Grants/awards Royal Charter)
Governing Council (Manage and agree a strategy for RICS)
RICS Board
Standards and Regulation Board
What are the 5 principles of better regulation?
(PACTT)
Proportionality
Accountability
Consistency
Targeting
Transparency
What is the role of the RICS?
The RICS is a global leading professional body that promotes and sets a framework of the highest standards in the property industry for firms and members. It is a gold standard of professional regulation that promotes public confidence in the profession.
President of RICS
was Justin Sullivan. Acting president Nicholas Maclean, OBE, RD, FRICS
Who is the current president-elect of RICS?
Nicholas Maclean / Maureen Ehrenberg
Who is the CEO if the RICS
Justin Young
Who is the chair of the standards and regulation board?
Nigel Clarke
What is the structure of the RICS?
The Royal Institution of Chartered Surveyors has a hierarchical structure consisting of a Privy Council, Governing Management Board, Regional Boards and various committees and working groups.
Within the Governing Council, what are the four strategy seats?
R&D, Residential, Urbanisation and planning, Academia and Education, Capital Markets and Valuation, Land.
Approx how many member of the RICS?
Over 130,000 member globally
Levels of Disciplinary process:
Conduct committee (can serve a fixed penalty notice or make a consent order)
Disciplinary Panel (can issue caution, impose a fine, expel) - This is for more serious breaches
COMPLAINTS HANDLING
RICS PROFESSIONAL STANDARD Complaints handling (July 2016)
Please can you talk me through Workman’s complaints handling procedure?
If unable to resolve this matter in the first instance with a member of staff
The CHP is accessible to everyone and should be provided with Terms of engagement
Upon receipt of the complaint the firm will contact them within 7 days to note that the complaint has been registered on the complaints log and provide a formal final repone where possible.
Within 28 days of receiving the complaint a final response will be provided or an update on the progress and timeframe to expect a final response (no later than 8 weeks for the date of the complaint)
If dissatisfied, can contact an independent redress scheme (independent 3rd party) listed on CHP.
What would you do if receiving a complaint?
Acknowledge complaint and forward to the designated complaints handler
Highlight the importances of informing our PII provider
What is the purpose of the RICS Guidance Note on Complaints Handling?
The RICS guidance note on complaints handling provides a framework for RICS professionals to handle complaints in a fair, transparent and effective manner. It aims to enhance the quality of service provided by the RICS professionals and maintain public confidence in the profession.
When was the RICS Guidance Note on Complaints Handling Issued and when did it become effective?
Issued July 2016
Effective July 2016
What is a complaints log?
Documenting complaint, what went wrong, what actions were taken, and any improvements to processes that would mitigate future risk of this complaint.
Complaints log will help firms identify whether there are any patterns in complaints.
How do you ensure that the complaint handling procedure is fair and impartial?
Appointing an independent and impartial person to investigate the complaint, conducting a thorough and objective investigation, considering all the evidence and arguments presented by both parties and making an informed decision . The decision making process should be transparent and well documented to help mitigate against the need for referral to ADR.
CONFLICT OF INTERST
RICS PROFESSIONAL STANDARD Conflicts of interest (Effective 2018)
What are the 3 principle Conflicts of Interest types?
Party Conflict (a situation in which the duty to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another client or (party in relation to the same or a related professional assignment.)
Own Interest Conflict (arises in any situation where your duty to act in the best interests of a client in relation to a matter conflicts, with your own interests in relation to that or a related matter)
Confidential information Conflict (a conflict between the duty of an RICS member to provide material information to one client, and the duty of that RICS member to another client to keep that same information confidential.)
What is your firms policy on Conflicts of Interest?
Anyone who finds themselves in a conflict situation must declare and disclose it for consideration by partners and the advisory board
Immediately disclose all actual and potential conflicts they identify
Avoid any situation that might give rise to an actual or potential conflict
Withdraw from a situation that develops into a conflict or a potential conflict, until the situation has been considered and resolved
Comply with the firms instructions and any controls imposed following the disclosure of a conflict of interest
Monitor the actual and potential conflict identified and update the conflicts of interest database as necessary
How can you identify a conflict of interest ?
Before taking on new client or instruction, ask yourself if you ability to act in the best interest of your client could potentially be impaired by:
Any financial interest
A personal relationship
Commercial relationship
Interests of your firm
If you believe your impartiality could be compromised in any way then it is likely that there is a CONFLICT OF INTEREST
Please can you outline how you would carry out a conflict of interest check?
There is internal conflict of interest database
Only Partner in Charge can get access to this
In what circumstances could you proceed with an instruction?
If received prior informed consent from all parties in writing
What are the CPD requirements for RICS members?
All members must undertake a minimum of 20 hours CPD each calendar year (January to December). Of the 20 hours at least 10 hours must be formal CPD. The remainder can be informal CPD.
Members must undertake learning on the RICS ethics on a rolling 3 year period.
Members must record their CPD activity online by 31 January via the RICS on-line management system
How do you differentiate between different categories of CPD?
Refer to CPD decision tree
Examples of CPD activities members can undertake:
Courses , seminars
Personal and informal learning
Professional work based activities and training
What is Professional Indemnity Insurance?
PII 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.
What is negligence?
Failure to provide the duty of care that is owed.
What is the purpose of PII for firms and individuals?
- Protect firms from financial loss if they cannot meet the claim from their own resources
- Protects the insured member or firm against the consequences of its liability to pay damaged to a third party for breaches of professional duty
- Ensures that firms clients can recover their financial losses.
What are the minimum levels of indemnity?
Firms turnover in the preceding year / Minimum limit of indemnity (this is for each and every claim)
£100,000 or less = £250,000
£100,001 to £200,000 = £500,000
£200,001 and above = £1,000,000
Minimum level of uninsured excess:
Limit of indemnity / Max uninsured excess
Up to and including £500k = The greater of 2.5% of the sum insured or £10K
Over £500K = 2.5% of the sum insured
What is run off cover?
Run-off insurance is a form of professional indemnity insurance (PII) providing cover for the past liabilities of a business once it has ceased trading
How long does the RICS require firms and individuals to have run off cover in place?
6 years
What is PII and why is it important to have it as a professional offering services?
Type of insurance that provides protection against claims of professional negligence, errors or omissions. It is important to have PI insurance as it provides a safety net in case a client or third party makes a claim against you for damages resulting from a mistake or error in your work. PII also provides peace of mind and confidence to clients, who are more likely to trust your services.
When does your insurer first need to know if a complaint was made against your firm?
This depends on your policy and specific agreement with the insurers. However, usually as soon as the complaints handling procedure is triggered.
What steps should a member take if they are unable to obtain the required level of insurance cover?
They should contact the RICS as soon as reasonably practicable to discuss their situations. RICS may be able to provide guidance of support to help the member find appropriate insurance cover.
What measures should be taken to try and avoid PI Claims?
Keep full and detailed records
Don’t advise outside you area of competence
Use RICS guidance
How many years after an instruction has been completed can a Professional Indemnity Insurance claim be made?
15 years
OWN PRACTICE
Rules for the registration of firms (Version 7) 2022 - Regulation
What you need to do if you intended to set up a practice?
Contact RICS for guidance (Inform RICS and register for regulation)
Appoint a contact officer for all RICS communication
Obtain PII cover and other relevant insurances (Run-off cover in case I decided to cease practice)
Locum (A sole practitioner requires a locum. A locum is another professional who is appointed to ‘stand in’ for a surveyor if they are unable to work)
Prepare Complaints handling procedure, Anti-bribery policy, Money laundering policy
Use the designation ‘Regulated by RICS’ on all practice material
When must a firm register for regulation?
If the firm provides surveying services to the public
If the firm is operating in Regulated A Area
At least 50% of the firms principals are RICS Members
What are the registration eligibility criteria?
The firm provides surveying services to the public
At least 25% of the firms principals are RICS members
What insurances would you need if you were starting up your own firm?
Professional Indemnity Insurance
Employers Liability
Public Liability
Building Insurance of an office premises
How would you close down a regulated firm?
Inform RICS of closure
Inform client, arrange handover, and return of client money
Notify PII insurers and arrange run-off cover
Keep files for a minimum of 6 years before safely and securely destroying (can be sued for negligence up to 15 years)
What info do registered firms have to send RICS annually?
An annual return (failure to do so results in fixed penalty); CHP details and records, PII details, training provisions etc.
What would you do if a client wants to pay you cash?
RICS states you are able to accept up to a Maximum of 10,000 euros in cash, but only on the basis you have the appropriate money laundering check and anti-money laundering procedures in place and you can verify the nature and source of where that money has come from. However, I would choose not accept cash.
What should you do if you believe there is a conflict of interest?
Be open and transparent informing all parties of potential conflicts of interest - offer to stand down if necessary
Depending on the situation it may be manageable i.e. by having an information barrier
Money Laundering and Anti-Bribery:
Professional statement sets out mandatory requirements for RICS members and RICS regulated firms in relation to Bribery Corruption, Money laundering and terrorist financing (1st Sept 2019)
When deciding whether to accept or provide gift/hospitality consider:
The value of the gift
Who is the gift being given to
Is the gift hospitality reasonable and proportionate
When is the gift being given? i.e. close to re-tendering
What are the rules around the RICS logo and ‘regulated by RICS’ designation?
Rules for the use the RICS logo and designation by firms, February 2022, Version 6
Only RICS firms can display the RICS logo
The ‘Regulated by RICS’ designation must be displayed clearly on business literature
Only registered firms are able to display the designation
Anti Bribery
Bribery Act 2010, makes it an offence for a UK national or person located in the UK to pay or receive a bribe, either directly or indirectly
Professional standard: Countering bribery, corruption, money laundering and terrorist financing (2019)
How do you ensure that you comply with bribery legislation?
Ensure I follow my companies anti-corruption and bribery policy
I never accept cash or cash equivalent
All gifts and/or hospitality are registered on the gift/hospitality register to ensure transparent behaviour
How do you ensure you comply with your firms bribery and gift policy?
The giving or receipt of hospitality is acceptable if it complies with the law and is given openly and without the intention of influencing
All gifts and hospitality must be registered
How would you keep Clients money safely and securely held?
Client monies kept separate and clearly identifiable with the work ‘client’ included in the account name
Client money should be available on demand and should always be in credit
Maintain client ledgers
What is a bribe?
Something given in expectation of a change of behaviour.
What constitutes an offence under the bribery act?
Giving a bribe.
Accepting a bribe.
Bribing an official/foreign official.
Not having systems in place to prevent bribery.
Legislation for money laundering
Proceeds of Crime Act 2002 (POCA)
Current challenges facing RICS
Diversity
Price cutting
Sustainability
Penalties for bribery
10 years imprisonment and or unlimited fine
