Ethics - Core Materials Flashcards
Why do RICS have professional standards?
To provide and expectation or regulation to M&F on how to provide service and outcome actions
What are the 3 key aspects of fee negotiations?
- Avoid price fixing
- Aggressive price cutting
- Collusion with competitors
What should fee negotiations be based and agreed upon?
Market based and agreed on an ad hoc fee basis. Must be transparent
When can a fee be negotiated?
After the initial fee is agreed
What must be stated in a terms of engagement?
Must state in writing that the client agrees the fee, payment of expense and a complaints handling procedure is available on request
What 3 steps must be followed in regards to terms of engagement?
- Competence
- No conflicts of interest
- Confirm toe in writing and get written approval from the client before you start on the instruction
Why can an instruction be declined?
- you are not competent
- don’t have sufficient facts
- client won’t sign toe/aml
- on UK gov sanction list
- cannot agree cap for PII
- for a friend
- conflict of interest
What is a conflict of interest?
A coi arises when a m/f independence or impartiality is threatened due to the existence of a conflict
What is conflict avoidance?
Means no. Don’t accept instruction
What is conflict management
Means yes. Instruction is accepted but steps are put in place to manage the conflict
What does the RICS Global Professional Standard, COI, 2017 state?
States m must not advise or represent a client where doing so would involve a coi, risk a coi, other where consent has been provided
What is informed consent?
May only be sought where m/f is satisfied that proceeding is in the interest of all those affected and not prohibited by the law
What are the types of coi?
Party, own interest, confidential information
What is an own interest coi?
- Arises when acting for a family member
- Must not let personal interest interfere judgement
- must declare facts promptly
What is a confidentiality coi?
- RICS ‘bye-laws’ states that client confidentiality must be maintained for all client affairs
- Files must be held for 6-years
What are some of the requirements of a complaints handling procedure?
- operate a complainants handling procedure
- details of chp issues at same time as terms of business
- complaints log must be maintained
- include an approved ADR in chp
Why and when must you notify PII insurers?
If a complaint is received immediately, as it could lead to a negligence claim
What are the two stages of complaints handling procedure?
Stage 1: in house, acknowledge in 7 days and resolved in 28 days
Stage 2: ADR
What is negligence?
It is a duty of care for clients, surveyor and 3 party using a reasonable skill and care. When it’s breached there is a loss and a claim for damage arises
When was the limitation act?
1980
What is the limitation act 1980?
Contract: 6y from negligent act or breach of contract
Tort: 6y from date that claimant suffered loss
How can you avoid negligence?
- understand client objectives and confirm in toe
- ensure competent
- detailed file notes
- up to day with legislation, CPD and market knowledge
What is professional indemnity insurance?
It protects clients, surveyors and third party against negligence when duty of care is breached. This is set out in the PII Requirements, April 2022. PII certification must be sent to RICS on annual basis
What are the minimum requirements of PII?
- less than £100,000, PII = £250,000
- between £100,001 - £200,000, PII = £500,000
- more than £200,001, PII = £1,000,000
