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APC Land and Resources > Ethics L1 part 2 > Flashcards

Ethics L1 part 2 Flashcards

1
Q

What steps need to occur prior to undertaking an instruction?

A
  1. Check professionally competent.
  2. No conflicts of interest / personal interests
  3. Confirm terms of engagement in writing and get written approval from client before work is started on the instruction.
    - Copy of firms complaints procedure available on request
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2
Q

Why might you decline an instruction?

A

Reasons for declining an instruction

  1. Not competent to undertake the work
  2. Not enough information/facts on the issue
  3. Client will not sign the ToE / agree to AML checks
  4. PII cap cannot be agreed
  5. Potential client is included in the UK Government sanctions list
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3
Q

When does a conflict of interest arise?

A

A conflict of interest arises when a member or a firms interdependence and impartiality is threatened due to the existence of a conflict between a client and a member – any financial interest, a personal interest, commercial relationships, acting on both sides of the transaction

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4
Q

Define conflict management

A

Instruction is accepted, and steps are agreed and put in place to manage the conflict such as an information barrier with written agreement from all parties

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5
Q

Name the professional standards relating to conflicts

A

RICS Global Professional Statement on Conflicts of Interest, 2017

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6
Q

Name the three types of conflicts

A

Party Conflict – relating to work on the same or related instruction for two different parties
Own Interest Conflict – relating to a personal interest
Confidential Information Conflict – relating to work between two parties which is confidential

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7
Q

How can conflict of interests be managed

A

Require informed consent from both parties
• Disclose the nature of the conflict, and set out the proposals of how the firm plans to deal with the conflict i.e. information barrier
• Request written confirmation of their informed consent that your firm can act in accordance with the provisions of the procedure proposed

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8
Q

Name the RICS professional statement relating to client money

A

RICS PS Client Money Handling, 1st edition, 2019

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9
Q

Information within RICS PS Client Money Handling

A

information on holding client money, providing information to clients, receipts of client money, payments from clients accounts, accounting records and control, compliance.

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10
Q

Main requirements when handling clients money

A
  • Client accounts must be kept separately and clearly identifiable. The name ‘client’ must be on the bank account
  • A client must be able to have their monies on demand
  • Accurate records should be kept with a running balance available
  • Two signatories should be agreed with staff for payments
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11
Q

When starting a new practise, what things are required from the RCS

A
  • Inform RICS of your new practise by completing a Firm Detail Form
  • Appoint a responsible Principal for all RICS
  • Register with RICS for regulation of the firm (Registration Guidance on Regulation)
  • Arrange PII and send details to RICS
  • Set up procedures to address handling clients money
  • Register for the RICS Valuer Registration Scheme if undertaking Red Book Valuations
  • Obtain RICS approval for CHP and set up a complaints log and appoint a Complaints Handling Officer
  • Staff training plan
  • Completion of RICS Annual Return at end of each year
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12
Q

When starting a new practise, what statutory compliance information should you be aware of

A
  • Equality Act 2010
  • Bribery Act 2010
  • Health and Safety Compliance – Health and Safety Act 1974
  • Inform the HMRC for VAT and Tax registration
  • Ensure compliance with current employment law – National Living Wage, working hours etc
  • Register for data protection (GDPR 2016 and Data Protection Act 2018)
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13
Q

What to do when closing a business

A
  • Inform RICS of closure of the practise
  • Ensure clients are informed and return any monies held by clients to their own accounts
  • Inform your insurers and procure PII run off cover for a minimum of 6 years from the expiry of the policy in force at the time of cessation in accordance with RICS requirements
  • Retain a copy of client files for at least 6 years
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14
Q

Name the Act relating to bribery

A

Bribery Act 2010

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15
Q

What is the main purpose of the bribery act

A

Aims to reduce bribery in business in the UK/abroad, came into force July 2011

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16
Q

Define a bribe?

A

Is the giving, offering, promising or recieving of an advantage such as a payment, gift or service for an action which is illegal or a breach of trust

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17
Q

Name the 4 offences relating to the Bribery Act 2010

A

Bribing, Recieving a Bribe, Bribing a foreign official, failing to prevent bribery

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18
Q

Key principles of the Bribery Act 2010

A

Proportionality, top level commitment, risk assessment, due dilligence, communication, monitoring and review

19
Q

Penalties under the Bribery Act 2010

A

10 years imprisonment / unlimited fine

20
Q

When can gifts/hospitality not be classed as an offence under the Bribery Act 2010

A

Reasonable and proportionate hospitality - meals / sporting events

21
Q

Name examples of possible bribes

A
  • The offer or receipt of cash inducements or other “kickbacks”
  • Payments for lavish or inappropriate entertainment
  • Favours including offers of employment.
  • Arrangements which may personally benefit, directly or indirectly, a member of staff or their family, friends, associates or acquaintances.
22
Q

Describe CJ Gifts and Bribes Policy (BOP60)

A
  • You may only offer or accept gifts and hospitality that are customary and reasonable in terms of value and frequency. You must never offer or accept any gift or hospitality if it may improperly influence a business decision or impair independence or judgment or give the appearance of doing so.
  • Accept without declaration – ad hoc gifts below £50 (bottles of wine, chocolate, flowers, lunch/dinner less than £50 per head)
  • Gifts / hospitality upto £500 must be declared in the Risk Register on the CJ Loop – sporting events, cases of wine, lunch/dinner

Above £500, gifts have to be approved by compliance or finance director

23
Q

Define money laundering

A

Money laundering means exchanging money for assets that were obtained illegally, for money or other assets that are “clean”. In the context of our business, money laundering is the use of property (or land) to “clean” money so that it cannot be traced to its source. (financing terrorism)

24
Q

Name regulations relating to money laudering

A

Money laundering and terrorist financing (amendment) regulations 2019 - came into effect, 10th January 2020

25
Q

Describe the key provisions of the Money laundering and terrorist financing regulations, 2019

A
  • Requirement to conduct a written money laundering risk assessment for the firm
  • Implement policies and procedures to address money laundering and terrorist financing
  • Provide staff training on AML
  • AML checks to confirm the identity of the proposed purchaser and the source of funds
26
Q

Describe letting agent obligations under the Money laundering and terrorist financing regulations, 2019

A
  • It expands the scope of the current anti money laundering regulations to include Letting Agents so that the customer due diligence requirements will apply to transactions for the letting of property (including land) for a term of one month or more, where the monthly rental is €10,000 (£8500) or more
  • CDD checks on LL/tenants for new lettings and reletting and EDD checks if red flags occur
27
Q

Describe Customer Due Diligence and Enhanced due diligence checks

A

Customer Due Diligence (CDD) - Identify client via sources such as passport, driving license, bank statements.

Enhanced due diligence (EDD) – additional procedures are required for transactions or business relationship involving a person in a high risk third country or politically exposed person

28
Q

What is the maximum amount of cash that can be accepted

A

£10,000 euros

29
Q

Penalties for money laundering

A

14 years imprisonment and unlimited fine for assisting in money laundering
5 years maximum for tipping off a person by informing them they are under suspicion of money laundering.

30
Q

Describe Proceeds of Crime Act 2002

A

sets out the legislation for the recovery of criminal assets with criminal confiscation being the most commonly used power. Offences – concealing criminal property, arrangements or acquisition use and possession

31
Q

Name the RICS Professional Statement on bribery/money laundering

A

Countering Bribery, corruption, money laundering and terrorist financing 2019

32
Q

What is the purpose of the Countering Bribery, corruption, money laundering and terrorist financing 2019 Professional Statement

A

Sets out mandatory requirements for members and firms on bribery, corruption, money laundering and terrorist financing – September 2019
1. Mandatory guidance of AML, bribery and terrorist financing
– have procedures in place to comply with the law, report any suspicion to relevant authorities, retain records to show firm has met requirements of PS
2. Guidance setting out supporting good practise
3. Supplementary guidance on Parts 1&2

33
Q

How to avoid a negligence claim

A
  • Understand the clients objectives, confirm instructions in writing
  • Ensure you are comptent to undertake the instruction
  • Work in accordance to RICS Standards and Guidance Notes
  • Cap the Professional Liability Excess on your PII policy in ToE
34
Q

Define the CPD requirements under the RICS

A
  1. Members must undertake a minimum of 20 hours of CPD per year, 10 hrs must be formal CPD (structured training, courses, seminars)
  2. Must maintain a relevant and current understanding of RICS Professional and Ethical Standards
  3. CPD recorded in RICS CPD Management System
35
Q

Describe basic procedures for complaints procedures under the RICS Guidance Note on Complaints Handling, 2016

A

Complaints handling procedure must be approved by the RICS
• PII insurers notified of potential claims as soon as possible, as could lead to a negligence claim
• CHP should be handed to clients / made aware of alongside ToE

36
Q

Define a complaint

A

• A complaint is any criticism however made which implies that any person is less than satisfied with a policy being operated by Carter Jonas

37
Q

How do you deal with complaints if you are a sole practicioner

A

• Sole practitioner must nominate a surveyor in another firm to act as a Complaints Handling Officer

38
Q

How do you deal with complaints informally

A
  • Be receptive and responsive to any issues irrespective of how they are raised – verbal, email or letter.
  • Ensure the Office Head and/or Line Manager are kept informed of the situation and also to get another view.
  • Ensure that all communication from us is courteous and prompt and responses are recorded and kept on file including notes of telephone conversations.
  • You should acknowledge the receipt of the complaint promptly and certainly within 3 working days at the latest.
39
Q

Describe CJ formal complaints procedure

A

Managed inhouse by complaints handling officer
• All complaints that have the potential to become a claim must be referred to compliance as soon as they are identified, otherwise they may not be covered under CJs PII
• Compliance acknowledges receipt of complaint within 3 working days and enclose the CHP
• Complaint logged in Complaints Register
• Complaint response to complainant within 15 days, if the complainant does not agree, 15 further days to review circumstances.
• Third Party Resolution - If the complainant does not agree with our conclusions, they have the right to refer the matter to the property Ombudsman or RICS DRS / The Centre for Effective Resolution

40
Q

Describe PPI

A

Insurance to protect clients, surveyors, and third parties against negligence claims when there is a duty of care breached and a claim arises for damages

41
Q

Describe rics guidance on PPi

A

RICS Professional Indemnity Insurance Requirements, v7, May 2020

42
Q

What determines the minimum PII cover set by a firm

A

Due to the turnover of a firm -
£100,000 or less - £250,000
£100,000 - £200,000 - £500,000
£200,000 and above - £1,000,000

43
Q

Describe PII cover for CJ

A

• CJ PII Cover from Millers – Standard Instructions £5,000,000 (total cover is £50,000,000)

CJ Insurance policy – Written on any one claim and in the annual Aggregate Plus unlimited round the clock reinstatements (7 layers to reflect insurer appetite)

APC Land and Resources (14 decks)

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