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RICS APC 2024 > Ethics and Rules of Conduct > Flashcards

Ethics and Rules of Conduct Flashcards

1
Q

What is the RICS Motto? And what does it mean?

A

“Est Modus in rebus” - There is measure in all things.

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2
Q

Do you know what the royal charter is?

A
  • Granted by the monarchy in 1881
  • RICS royal charter requires us to promote the usefulness of the profession for the advantage of the UK public and other parts of the world
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3
Q

What are the byelaws?

A

Delegated legislation whereby the government grants power to an institution to create its own laws.

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4
Q

Who is the current president of the RICS?

A

Tina Paillet

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5
Q

Who is the president elect of the RICS?

A

Justin Sullivan

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6
Q

What year was the RICS formed?

A

1868

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7
Q

What are the 3 market sectors covered by the RICS

A
  • Land
  • Property
  • Construction
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8
Q

Do you know what the RICS Matrics is?

A

It is a support network dedicated to connecting and supporting young surveyors

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9
Q

What are the 4 levels of RICS Membership?

A
  • Fellow (FRICS)
  • Member (MRICS)
  • Associate (AssocRICS)
  • Student
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10
Q

What is the primary role and significance of the RICS?

A
  • To promote and enforce the highest professional standards
  • Promote the usefulness of the profession
  • Regulate firms and members
  • Ultimately protect clients / and benefit the public
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11
Q

What is the RICS governance structure?

A

o Privy Council which grant royal charter, then:
o Governing council , then:
o Regulatory board, then:
o Management board

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12
Q

How many professional groups are there – please name 6?

A
  • 18 professional groups; 6 examples:
    o Quantity Surveying and Construction
    o Building Surveying
    o Project Management
    o Commercial Property
    o Residential Property
    o Valuation
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13
Q

Why do you want to become a member of the RICS?

A

To become part of a global professional community and distinguish myself from others in the marketplace.

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14
Q

How does the RICS regulate its members?

A

RICS is self-regulated, it is done via the 5 Rules of Conduct for Members.

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15
Q

What are the Rules of Conduct for Members?

A
  1. Members must be honest, act with integrity, and comply with their professional obligations.
  2. Maintain professional competence, and ensure services are provided by competent individuals.
  3. Provide a good quality and diligent service
  4. Treat others with respect and encourage diversity.
  5. Act in the public interest, take responsibility for their actions, and maintain public confidence in the profession.
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16
Q

What are the 5 principles for better regulation?

A

PACTT
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency

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17
Q

What are the professional obligations for members?

A
  1. Comply with CPD requirements - 20 hours/year (10 formal)
  2. Cooperate with the RICS
  3. Provide information requested by the Standards and Regulation Board.
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18
Q

What are the professional obligations for firms?

A
  1. Publish a complaints handling procedure including a method of ADR.
  2. Obtain suitable levels of professional indemnity
  3. Appoint a loccum (arrangements in case of inability to work)
  4. Cooperate with the RICS
  5. Provide information requested by the Standards and Regulation Board.
  6. Display the on business literature that they are regulated by the RICS
  7. Report any matter to the RICS as required under the Rules of Registration of Firms.
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19
Q

What are the different RICS Professional Standards?

A
  • Professional Standards - These set out mandatory requirements
  • Practice Information - These set out best practice
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20
Q

Can you explain how you act with integrity?

A
  • Being trustworthy in all that I do
  • Being open and transparent
  • Respecting confidential information
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21
Q

Can you explain how you provide a high standard of service?

A
  • By ensuring that my client receives the best possible advice, support, and performance from me / in line with the services agreed
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22
Q

Can you explain how you promote trust in the profession?

A
  • Fulfilling my obligations / i.e., doing what I say I will - meeting promised deadlines
  • Acting in a professional and positive way (both in my personal and professional life)
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23
Q

Can you explain how you treat others with respect?

A
  • I treat everyone I interact with, with courtesy, politeness, and respect
  • I do not discriminate against anyone
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24
Q

Can you explain how you take responsibility?

A
  • Always being accountable for my actions
  • If I think something isn’t right, then I’ll act
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25
Q

What is the “Decision Tree”

A

The decision tree provides step-by-step practical advice on how to deal with an ethical issue you are not sure on

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26
Q

How many questions are there in the “decision tree” and what are they?

A
  • 6 Nr -
    o Do you have sufficient facts on the issue?
    o Is it legal?
    o Is it in line with the RICS global professional and ethical standards?
    o Have you consulted with appropriate people to make an informed decision?
    o Do you have clear reasoning in reaching your decision?
    o Would you be content if your actions were made public?
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27
Q

Can you give me an example of when you’ve promoted trust in the profession?

A
  • When analysing tender returns with the client’s team I advised the client that it would not be suitable for the qualitative evaluation panel to have access to the tender prices.
  • They respected my advice and complimented me on my professional behaviour.
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28
Q

What would happen if a member didn’t follow the RICS guidance notes?

A

Not a mandatory requirement, however; this will be taken into consideration in a claim of negligence.

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29
Q

So, you are in a meeting with a client, the client asks you a question you don’t know the answer to – what would you do?

A

State that I would have to check and get back to them outside of the meeting

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30
Q

You are out on a Friday night, one of your friends turns to you and asks you for cost advice, how would you respond?

A

Decline and refer them to come to you in the morning during business hours – would have to be by formal appointment (come back to you as a business)

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31
Q

What RICS Guidance is relevant under complaints handling?

A

The Professional Standard - Complaints Handling

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32
Q

Can and would you ever accept a gift or hospitality from a Contractor and Client?

A

Yes - but I would not accept any gifts or hospitality that would imply an improper obligation.

I would also ensure it is in line with my company’s policy on gifts and hospitality.

33
Q

What should you consider when making a decision when to accept gifts or hospitality?

A
  • The value (is it disproportionate?)
  • The timing of the gift (has the gift been presented before a tender award or final account negotiation?)
  • Will it impact on my decision making / my ability to act impartially?
  • Is it proportionate to gifts being offered to others?
  • Who else received the gift (i.e., just me?)
34
Q

What is your company’s policy on gifts and hospitality?

A
  • We can accept gifts/hospitality if in doing so we do not gain/ or the other party does not gain a business advantage:
  • It does not include cash or cash equivalent:
  • Its appropriate, openly given, and logged in the company gifts and hospitality log
35
Q

Can you talk me through your company’s complaints handling procedure?

A

Yes, it is a two-stage procedure whereby the first stage is dealing with the complaint internally through our nominated complaints handler.

If this is insufficient, then the second stage is to go to a third party (Surveyors Ombudsman Service).

I ensure the complaint is acknowledged in 7 days and investigated in 28 days.

36
Q

Where would you refer to, in order to understand the RICS rules on “disciplinary action” in connection with complaints on members’ conduct?

A

RICS Regulation: Complaints and taking disciplinary action

37
Q

Say you have received a complaint, should you notify insurers?

A

Yes, as soon as possible.

A firm is obligated under its professional indemnity insurance to insurers anything that may give rise to a claim.

38
Q

If you were found guilty of committing low-level breaches, what could happen because of this?

A

May be necessary for the Head of Regulation may impose a Regulatory Compliance Order, a fine, or referral to the Disciplinary Panel.

39
Q

What are some of the penalties that can be levied for more serious breaches?

A

Following a referral to the Disciplinary Panel, more serious breaches may result in a fine or expulsion from the charter.

40
Q

When does a firm become mandatorily regulated by the RICS?

A
  • the Firm provides surveying services to the public, and:
  • at least 50% of the Firm’s Principals are RICS Members
41
Q

When is a firm eligible to register to become regulated by the RICS?

A
  • the Firm provides surveying services to the public, and:
  • at least 25% of the Firm’s Principals are RICS Members
42
Q

What information would you need to provide the RICS if you were setting up a firm?

A
  • Nature of clients and business
  • Whether firm handles client money
  • Meet the requirements of the Rules for firms i.e.
    o Insurance (PI, public liability, employers liability, building),
    o CHP,
    o locums,
    o designations etc.
43
Q

What RICS Standards of Conduct / Professional Statement is relevant under Conflict of Interest?

A

The Professional Statement 1.1 - “An RICS member or regulated firm must not advise or represent a client where doing so would involve a Conflict of Interest”

44
Q

What is a conflict of interest?

A

It is anything that impedes an individuals or firm’s ability to act impartially and, in the best interest of the Client

45
Q

What are the 3 types of conflict of interest?

A
  1. Party Conflict
  2. Own Interest Conflict
  3. Confidential Information Conflict
46
Q

Can you talk me through the process you’d follow should you recognise a conflict of interest on one of your schemes?

A

Be open and transparent by disclosing the potential conflict to all parties.

Offer to remove yourself from the situation to allow the client to make an informed decision.

47
Q

If you are advising a client that a potential conflict of interest may arise but they are still insisting on using you, what would you do?

A
  • Formally write to the client advising them of the conflict of interest and ask that they acknowledge this notification
  • Obtain their instruction for me to proceed in writing
  • Notify RICS
  • Implement information barrier protocol
  • Stand down if it proves too difficult to manage
48
Q

Are there any Guidance Notes relating to insurance?

A
  • Yes, the Practice Information “Risk, liability and insurance” 2021
49
Q

What insurances would a chartered surveying practice require?

A
  • Professional indemnity insurance
  • Public liability insurance
  • Employers liability insurance
  • Building insurance
50
Q

What is professional indemnity insurance and who does it cover?

A

Insurance to cover the firm and individual against claims of negligence

51
Q

How do you assess which levels of PI are required?

A

It is linked to the previous years turnover -

£100,000 or less = £250,000 of indemnity
£100,001 to £200,000 = £500,000 of indemnity
£200,001 or above = £1,000,000 of indemnity

52
Q

What is the maximum level of uninsured excess? i.e the part of each claim the firm must pay itself?

A

If the companies turnover is up to £10,000,000 then the maximum uninsured excess is the greater of 2.5% or £10,000

If the companies turnover is over £10,000,000 then the maximum uninsured excess is no limit

This was recently updated in 2022.

53
Q

If you were setting up a new business with no trading history, how would you determine the level of PI?

A

Based on a forecast of the turnover

54
Q

What should be in place to protect a client should a firm go bust?

A

Run off cover

55
Q

How long should run off cover be in place

A

Depends on the contract -

  • Underhand = 6 years
  • As a deed = 12 years
56
Q

What measures would you take to try and avoid negligence and professional indemnity claims?

A
  • Follow the RICS standards, including the professional statements and guidance notes
  • By not offering advice outside of my area of expertise
  • Good record keeping (including advice given)
  • Set a clear scope of service with the client
  • Avoid poor management and excessive workloads
57
Q

How would a “net contribution” clause effect PI cover?

A

Means that the consultant will only be liable for the work they have done or influenced

58
Q

On the theme of professional indemnity, are you familiar with the term “limit of liability?”

A

The total amount the insurance is capped at

59
Q

What is meant by “proportionate liability”?

A

A consultant may seek to add in a clause in the engagement letter which states, in the event of their negligence, the extent of the member’s liability is restricted to the loss which can properly be said to have been caused by that negligence

60
Q

Why should you not advise on an area outside if your expertise?

A
  • To avoid giving clients wrong advice
  • To avoid disputes and PI claims
  • It wouldn’t be covered under the PI insurance
61
Q

How might a business arrange cover in the event of a death or incapacity of a sole practitioner?

A

A Locum Agreement

62
Q

What is included within a fee proposal?

A

1) The total fee for the services
o Sometimes with a fee schedule (split across say the RIBA stages)
2) Clear scope of services
3) Terms and conditions
4) Assumptions and Exclusions

63
Q

If you put together a fee proposal but after a couple of months you realise that you under forecast your resources; would you go back to the client and ask for more money?

A

No -
* Unless there is a variation to the scope; I would not request additional money and learn from my mistake
* Irrespective of the fee being under-priced; this should not impact on the services being required

64
Q

What RICS Standards of Conduct / Professional Standard is relevant under Client’s Money?

A

The Professional Standard - Client money handling

65
Q

What systems do you have in place for holding clients’ money?

A

1) Keep in a designated account which is identified with the word ‘client’ that exclusively has only the client funds in.
2) Obtain bank confirmation of account conditions
3) Agree in writing the account handling with the client
4) Obtain clients written approval for making payments from the account
5) Nominate authorised staff to handle money
6) Have an audit trail of all transactions
7) Ensure the money is always immediately available

66
Q

What RICS Guidance Note / Professional Standard is relevant under Bribery?

A

“Countering bribery and corruption, money laundering and terrorist financing” (it is a Professional Standard)

67
Q

What are the obligations for RICS members under Client Money Handling?

A

1) Ensure compliance with anti-money laundering legislation and RICS Professional Stanadards
2) Follow your firms procedures for handling client money
3) Make appropriate disclosures to senior managers or a regulator if you become aware of any misappropriation of clients money

68
Q

What does “Client’s money” cover / how should a firm ensure the security of it?

A
  • Essentially where the client gives you authority to manage their money
  • It must be in a separate bank account + the account must be clearly labelled with “client” in the account title
  • To help protect in the event of business insolvency
  • It should be immediately available on demand for the Client
69
Q

What legislation would you refer to for Bribery?

A

Bribery Act 2010

70
Q

What are the 4 offences under the bribery act?

A

1) Give a bribe
2) Receive a bribe
3) Bribe a foreign public official
4) Fail as a commercial enterprise to prevent bribery (i.e., whistle blowing policy)

71
Q

How exactly would a firm prevent bribery?

A

A firm should have a clear “anti-bribery” policy

My company’s policy states “an employee may not accept any gift or hospitality if it is in cash, or there is any suggestion that a return favour will be expected or implied”

72
Q

What RICS Standards of Conduct / Professional Statement is relevant under Money Laundering?

A

“Countering bribery and corruption, money laundering and terrorist financing” (it is a Professional Statement)

73
Q

As a building surveyor, how are you at risk in becoming involved in Bribery?

A

Because I process large amounts of money and influence client’s decision making with regards to appointing contractors & agreeing variations/final accounts.

74
Q

What are the warning signs of money laundering?

A

1) Client is overly secret or evasive about where the money has come from
2) Client does not want to be named
3) Previous convictions
4) Unusually large transactions

75
Q

What are the Three levels of disciplinary action?

A
  1. Action by the Head of Regulation
  2. Disciplinary panel (drawn from the independent regulatory tribunal)
  3. Appeal
76
Q

What sort of information do registered firms have to send to the RICS annually?

A

Annual Return - includes type of business, nature of clients, training provision, complaints handling procedures, PI details, whether the firm holds client money.

If not provided then a fixed penalty is issued.

77
Q

What must a complaints handling procedure include?

A

RICS provides a model form:
1. A redress mechanism
2. Must be clear, transparent, and free of charge in the first stage.
3. Name and contact details of investigating person

78
Q

What are the two forms of information provided by the RICS?

A

Professional Standard - Set requirements or
expectations for RICS members and regulated
firms about how they provide services or the outcomes of their actions.

Practice Information - Information to support the practice, knowledge and performance of RICS members and regulated firms, and the demand for professional services.

RICS APC 2024 (24 decks)

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