Ethics Key Lists and Q&A Flashcards
What are the 5 Rules of Conduct?
Members and firms must…
1. Be honest, act with integrity and comply with their personal obligations, including obligations to RICS.
2. Maintain their professional competency and ensure services are provided by competent individuals who has necessary expertise.
3. Provide good-quality and diligent service.
4. Treat others with respect and encourage diversity and inclusion.
5. Act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in their profession.
Tell me the 7 areas for improvement outlined in the Bichard Review
- P - Renewed focus on the public interest, including amending the Royal Charter and creating a public interest panel to advise Governing Council.
- I - Maintaining self-regulation – greater independence for regulatory functions.
- D - Increased focus on diversity and inclusion
- S - Greater support for members, focusing on young members.
- S - A new simplified, clear, accountable governance structure.
- S – Greater leadership on issues like sustainability / climate
What is the RICS Ethics Decision Tree?
Provides a framework of questions which members should ask themselves when faced with a potentially unethical situation.
What are the 5 Future Foundations following the Bichard Review?
- Vision – Sustainable built environment – inclusive for all
- Mission – To inspire members and advance knowledge.
- Goals – D&I, Sustainability, Member engagement.
- Values – Professional, Collaborative, Inclusive, Ambitious
- World Class – Effective, efficient and inspiring body
What are the Members Rules of Conduct? (2017)
- C - Comply with CPD
- C - Cooperate with RICS
- R - Provide information reasonably requested by Standards and Regulations Board.
What are the Firms Rules of Conduct? (2017)
- Publish complaints handling procedure, which includes alternative dispute resolution provider, and maintain complaints log.
- Ensure current and previous work is covered by PII.
- If sole principal, make appropriate arrangements.
- Cooperate with RICS
- Provide information reasonably requested by Standards and Regulations Board.
- A designated denote for RICS on all business literature.
- Report any matter to RICS under Rules for the Registration of Firms
Give me 10 things that you need to do or have to start your own RICS practice
- Inform RICS
- Register with RICS regulatory board
- Nominate responsible Principal
- Make sure to be registered if over 50% of employees are RICS members. (if 25% to 50% they could be regulated).
- Complaints Officer and Log, Complaints handling procedure
- Clients’ money procedures
- PII
- Arrangements for succession
- Logo Kit
- CPD log and training
What is the STATUTORY requirement to start your own practice?
- Business Names Act 1985
- Equality Act 2010
- Financial services Act 2012
- Bribery Act 2010
- Money Laundering Regulation 2007 – appoint MLRO
- Health & Safety Act 1974
- Control of Asbestos Regulations 2012
- Fire safety reform
- Data protection Act 1998
- Inform HMRC – VAT threshold = £85k
What do you need to do to close down your practice?
- Inform RICS
- Inform clients
- Return clients’ money
- PII – 6 years runoff – minimum £250k
- Retain clients’ files – 6 years
What is included in the RICS annual return?
- Type of business / staff details
- Statutory regulated activities
- Nature of clients
- Complaints handling procedure
- PII details
- Client money details
Minimum PII cover
- Turnover £100,000 or less = £250,000
- Turnover £100,001 - £200,000 = £500,000
- Turnover £200,001 and above = £1,000,000
Uninsured Excess?
Firms Turnover in Previous Year
Up to £1,000,000 Greater of 2.5% or £10k
Over £1,000,000 No set limit
4 Levels of RICS membership?
FRICS,
MRICS,
AssocRICS,
Trainee/Student
What are the 3 main roles of the RICS?
1) R – Regulation – Protect consumers through strict regulation of professional standards.
2) A – Advice - Leading source of information and independent advice on land, property, construction and associated environmental issues
3) T – Training - Maintain the highest standard of education and training.
Talk to me about the 3 disciplinary procedures at the RICS
- Action by Head of Regulation – serve a fixed penalty notice, make a consent order, refer matter to a disciplinary panel
- Disciplinary Panel – more serious breaches, Lay members on panel
- Appeals Panel – regard to new evidence previously presented and any new representations –Lay members
Tell me about the RICS guidance on the use of Social Media?
RICS will investigate concerns over posts, where they involve:
* Discrimination
* Dishonesty
* Bullying, Abusive or Threatening behaviour
RICS will not investigate, where they involve:
Professional and respectful language and critical views
What are the 4 offences of Bribery?
4 offences:
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent bribery
Definition of Bribery?
Giving or receiving a payment / gift for an illegal action or breach of trust.
Key factors for Handling Clients Money
Key factors:
1. Keep accounts separate / identifiable (use word “client”)
2. Client must be able to have monies on demand
3. Agree interest payment procedures
4. Keep accurate records
What is a Conflict of Interest
- Independence and impartiality is materially affected
Types of Conflicts?
- Financial / Personal / Commercial RS / Dual agency (never!)
How do you handle a conflict?
Can be Avoided or Managed – (Require informed consent before continuing):
1. Avoidance
2. Written advice to both parties – nature and proposals, clear and concise, request permission
3. Set up conflict management procedures
* Firms must have effective conflict checking and handling systems in place
RICS Conflicts of Interest – UK Commercial Property Market Investment Agency Professional Statement 2017
- Dual agency prohibited
- Multiple introductions allowed if on “non-exclusive basis” – informed consent given from all clients
- Incremental advice allowed, information barrier must be in place
- Personal interests must be declared (s21) of the Estate Agency Act 1979.
Talk to me about negligence
- Surveyors have a duty of care to clients and parties
- Must use “reasonable care and skill”
- Negligence = breach of this where damages arise
- Limitation Act 1980 = 6 years from date of negligent act / 3 years from date of knowledge / 15 years long stop date
- Margin of Error can vary – Singer/Freelander v JD Wood 1997 / KS Lincoln vs CBRE = 10% margin for commercial property
Talk to me about Fee Negotiation
- Avoid pricing fixing, cutting or collusion
- Market-based and agreed on an ad-hoc basis
- Consider level of service when negotiating
- Be completely transparent (e.g. if a referral fee is involved)
- Consider the Bribery Act 2010 and the RICS Rules of Conduct
Terms of Engagement Must Include…
- C – Check Competence
- I – Independence
- T – Terms in Writing and approved
- Proposed fee basis
- Scope of work
- Copy of the complaints handling procedure
- PII cover
Needs to be signed and returned before undertaking any work
Talk to me about Complaints Handling Procedures (CHP)
RICS Guidance Note on Complaints Handling 2016
Notify PI insurers and CHP must be approved by the RICS
Whenever the firm receives a complaint from who they owe a duty of care
STAGE 1 – In House
CHP details issued, clear procedure, impartially implemented complaints handling office, submitted in writing
Acknowledged within 7 days and Investigated within 28 days
STAGE 2 – ADR, 3rd Party
If unresolved, appropriate redress mechanism must be provided
Property Redress Scheme and the RICS Dispute Resolution Service
What is the Limitation Act 1980
Contract - 6 years from date of negligent act / 3 years from the date of knowledge / 15 years long stop date
Tort – 6 years from the date the claimant suffered the loss
