Ethics - L3 Flashcards
How many different types of RICS document statuses are there ?
There are a number of document types. This includes (can be found within the first few pages of many RICS documents) :
• Rules of conduct for members and firms, updated Feb 2022
• International standards - High-level standard developed in collaboration with other relevant bodies
• RICS professional statements (PS) - Mandatory requirements for RICS members and regulated firms
• RICS guidance note (GN) - A document that provides users with recommendations or an approach for accepted good practice as followed by competent and conscientious practitioners
• RICS code of practice (CoP) - A document developed in collaboration with other professional bodies and stakeholders that will have the status of a professional statement or guidance note
• RICS jurisdiction guide - This provides relevant local market information associated with an RICS international standard or RICS professional statement. This will include local legislation, associations and professional bodies as well as any other useful information that will help a user understand the local requirements connected with the standard or statement. This is not guidance or best practice material, but rather information to support adoption and implementation of the standard or statement locally
What is the status of a RICS professional statement ? who does it apply to ?
Mandatory
RICS trainees, members, regulated firms
How does your behavior differ professionally and personally ?
My approach and behaviour does not change.
What information is required by the RICS for registration and in the annual return?
• Type of business and staffing details
• Statutory regulated activities - such as for financial services
• Nature of clients
• Complaints handling procedure and records
• Professional indemnity insurance certificate
• Whether the firm hold clients’ money
Why do you want to become chartered ?
• Gold standard in my profession
• Offers guidance and support from RICS
• Designation will help my career
• I am committed to lifelong learning
• I want to give back to the up and coming surveyors
What is the RICS ethical decision tree?
The RICS decision tree assists me in making informed decisions , confirming my actions are ethical and legal.
What are ethics?
Moral principles that govern an individuals behaviour.
What are the three types of due diligence?
• Simplified Due Diligence – Where you determine the business relationship is low risk of money laundering/terrorism
• Enhanced Due Diligence – for high risk customers and transactions with greater threat to financial sector
• New Customer Due Diligence – doing the checks to ensure your client is who they say they are.
What are the three benefits of regulation for firms?
CPS:
• Confidence - for client as regulated firms are monitored by RICS regulation
• Professionalism - firms have to provide clear, impartial and expert advice
• Security - firms have to have recognised CHP, access to ADR and PII cover
Why does you firm have Terms of Engagement? What should be included in Terms of Engagement?
Creates a contract with the client and clear definition of what is expected and on what terms etc.
Sets out the proposed fee basis, payment of expenses and that a copy of the firm’s complaints handling procedure is available upon request.
How would you close down a practice?
• Inform the RICS
• Inform clients and arrange for them to be handed over to a new firm
• Return any clients’ money
• Set-up professional indemnity run-off cover for a minimum of 6 years
• Retain a copy of client files and record for a minimum of 6 years
How long should files be kept for?
• A minimum of 6 years before disposing and destroying them securely (although can be sued for negligence for up to 15 years)
What do the new rules state about the use of the RICS logo and designation?
• Use of the RICS logo has been restricted to members and regulated firms only
• The ‘regulated by RICS’ designation must be displayed clearly to ensure visibility
• Prescribed text that must be included in the terms of engagement
• Companies are only allowed to use ‘chartered surveyor(s)’ designation in trading name and not company name
How would you limit the risk of working with a client or contractor who may be financially unstable ?
• Screening process:
• Dun & Bradstreet credit check
• Company search (Account information from Companies House)
• Internet search (Client website for additional information judgement on reliability)
If your client asked you to lower your fees because of their limited funding, what would you do ?
The client would have to pay the required price for the level of service required or reduce the scope of works involved. I could consider if the scope of work could be reduced however on the client request i would not just lower my fees.
How do you know you are competent ?
Having the knowledge and skills to undertake an instruction. If you have dealt with that type of property and location and you’ve carried out that task, you are deemed as competent. This can be defined as :
• Skills
• Knowledge
• Attitude
• Training
• Experience
If faced with a situation that you felt was unethical, how would you proceed?
Using the decision tree:
• Do I have sufficient facts?
• Is the matter legal?
• Is it in line with RICS Professional and Ethical Standards?
• Have I consulted with appropriate people?
• Do I have clear reasoning in reaching my decision?
• Would I be content for my actions to be made public?
If answered no to any of the above, I would not proceed with the situation alone and would consult senior staff with direction on how to proceed.
What are the CPD requirements?
• Qualified/MRICS member – 20 hrs per year, min 10 hours formal
• Student member – 48 hrs per year (Min 24 formal)
What is the difference between formal and informal training ?
Formal has a learning objectives and a defined learning outcome, i could reference the CPD decision tree for further guidance.
What is a complaints handling procedure?
A procedure to allow and define the procedure for clients to raise a complaints. This may include ADR and relevant timescales for the process.
What must a complaints handling procedure include ?
The procedure must include an Alternative dispute mechanism approved by the standard and regulation board. The procedure can be based on the RICS forms. Issued with terms of engagement, nominated person also details investigated within 28 days, record the complaints, advise PI insurers of complaint etc.
What options are available if you couldn’t resolve the complaint?
• Property Ombudsman
• RICS Dispute Resolution
• Escalation etc
Where would you find the RICS requirements for professional indemnity cover ?
• Professional indemnity insurance requirements
• Regulation Document
• Version 9 with effect from 1 April 2022
How many years after an instruction has been completed can a Professional Indemnity claim be made ?
15 years (Limitations Act)
What type of cover would you need to cover a claim brought after a firm or member ceases to trade ?
Run off cover
What cover do you need?
• PII insurance - Professional indemnity insurance covers financial loss, personal injury and property damage resulting from your negligent act or error while you’re working for a client.
• PLI insurance - Public liability insurance is there to protect you if a member of the public is injured (or their property is damaged) and your business is faced with a compensation claim as a result. It can cover you when you’re working at client sites or in public.
• Employers Liability Insurance - Employers’ liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you. It’s legally required of all businesses with one or more employees.
• Building Insurance (if you own your own premises)
Why do you need PII insurance?
Consultants provide expert advice and therefore face risks associated with making mistakes or errors in judgement that could cost a business in profits. When profits are lost due to any negligence or perceived negligence businesses often respond with lawsuits. It also protects the client, surveyor and firm.
What are the providers for PI insurance? Under RICS PII Requirements guidance – July 2019
Minimum levels of indemnity cover
• up to £100,000 = £250,000
• £100,001 - £200,000 = £500,000
• £200,001 + = £1,000,000 of cover
Run off cover
• Run off cover must also be held for a minimum of 6 years for a limit of £1million.
Maximum uninsured excess
• Up to and including £500,00 = the greater of 2.5% of the sum insured, or £10,000
• Over £500,000 = 2.5% of the sum insured
What status is the RICS Professional Indemnity Insurance Requirements document?
A regulation document
What is meant by each and every claim ?
• This is one of the two types of cover/policy
• Each and every is cover for each claim that does not add up, the opposite is aggregates, where the claims and added up to a certain agreed value.
• You could have each and very claim up to £100,000 per claim or you could have £100,00 aggregate(which is a lot lower cover)
What measures should be taken to try and avoid PI claims?
• Keep full and detailed records of meetings, conversations etc
• Record recommendations and advice given
• Use proper letters of engagement, scope of services and terms of engagement
• Don’t advise on a specialism outside your field of experience
• Use RICS guidelines
• Avoid poor management and excessive workloads
What if the loss exceeds the cover provided by the PII insurance?
The professional / firm is liable for the difference – in assets etc
What basis should PII be underwritten ?
On a claims made basis
What should a PII policy contain?
• Must be on a claims made basis
• Must be on an each and every claim basis
• Policy wording is written on a full civil liability basis
• Underwritten by a listed insurer
• Covers past and present employees
• Run-off cover
• Minimum level of indemnity required by the RICS
What does having the PII policy written on a full civil liability basis mean?
A full civil liability basis means if a claim isn’t specifically excluded, it’s included (as opposed to a ‘negligence only’ policy, where if a claim is not specifically included, it’s excluded)
What is meant by the term ‘maximum level of uninsured excess’?
The part of each claim the firm must pay itself
What year did the Money Laundering Regulations come into force in the UK?
1994
In the RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing February 2019 - RICS Members and Firms must do what in relation to bribery and corruption ?
In relation to bribery and corruption RICS-regulated firms must:
• not offer or accept, directly or indirectly, anything that could constitute a bribe
• have plans in place to comply with applicable laws governing bribery and corruption, and ensure that these are followed
• report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager
• act with due diligence to perform periodic written evaluations of the risks that face the firm and that may lead to the facilitation of bribery or corruption; in determining Countering bribery, corruption, money laundering and terrorist financing 6 RICS professional statement Effective from 1 September 2019 the appropriate level of due diligence, the firm may consider the type of business activities they engage in and the environment in which they operate
• retain information detailing how the firm has met the requirements of this professional statement.
In relation to bribery and corruption RICS members must:
• not offer or accept, directly or indirectly, anything that could constitute a bribe
• ensure that they have adequate knowledge of bribery and corruption to be able to comply with the requirements of this professional statement
• report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager.
Can you name any Money Laundering Red Flags?
• Cash-only buyers
• An unusual sale price (too low or too high)
• Payments from multiple/different source to counterparty
• Funds provided by unknown third parties
What due diligence do you apply in relation to money laundering ?
My company has a policy relevant to this, I would always air on the side of caution. For example as a business do not accept cash or cheque payments. Any red flag would be raised suitably.
What is money laundering?
Concealing the source of proceeds of criminal activity to disguise their illegal origin. This may take place through hiding, transferring and or recycling illicit money or other currency through one or more transactions, or converting criminal proceeds into seeming legitimate property.
If you ran your own firms who would you report suspicious activity to ?
• National crime agency(NCA)
• HMRC
• The Police
Can you rely on someone else’s due diligence ?
No it is your responsibility to ensure the checks are suitable and sufficient.
Give me some examples of how your firm might comply with the Money Laundering Regulations.
We report cash payments over £10K. Carry out risk assessments to make sure that we take the necessary procedures when working with clients from high risk countries or high risk sectors.
What are the principles of the Money Laundering Regulations?
Sets additional obligations for private sector firms working in areas of high money launder risk. Aims to stop criminals using professional services to launder money and to investigate large or regular cash transactions. You have a duty to report cash payments over £10K. Carry out risk assessments to make sure that you take the necessary procedures when working with clients from high risk countries or high risk sectors.
If you were given a gift what would you do ?
Log in within the gift log, I may decline the gift taking into account timings and proportionality and my companies gift handling policy.
When would accepting or providing hospitality be acceptable ?
Once al the works are complete on site and the final account agreed and there is no conflict of interest. also consider the scale, time and suitability of the hospitality and or gift.
What’s the difference between a gift and a bribe ?
A gift is a small gesture, a bribe is under the impression that some gain will result.
Can you please expand on your knowledge of Merret Vs Babb ?
• Considered if a professional employee was vulnerable to claims brought directly against them for advice given on behalf of their employers.
• Essentially, an individual provided valuation advice and was negligent. The firm the person worked for did not have adequate run off insurance, the company shut down and the client made a claim which was passed to the employee that gave the advice.
Can you please expand on your knowledge of Hart V Large ?
The Claimants brought claims in negligence against the architects instructed by the previous owners, the Claimants’ conveyancing solicitors and Mr Large. The claims against both the architect and the solicitors settled prior to trial.
Against Mr Large, the Claimants alleged that he was negligent in: (1) failing to recommend a full building survey, rather than HomeBuyer report; (2) failing to draw attention to the issues of water ingress / damp in the HomeBuyer report; and (3) failing to recommend that the Claimants obtain a professional consultant’s certificate.
The key take-aways from this case:
• Being clear on the report about the scope of inspection including limitations, caveats and actions available to the client;
• Recommending justifiable further investigation;
• Taking all reasonable steps to ensure clients understand the differences between the levels of service, including the extent and limitations of each option
What is the RICS mission statement ?
Our mission is
• To be recognised in key worldwide markets as the leading body that sets and enforces standards
• Offers access to the most sought after professional status in land, property and construction.
When was the RICS founded ?
15th June 1868,
What does the RICS stand for ?
Royal Institution of Chartered Surveyors
What are the key roles of the RICS?
• Maintain the highest standards of training and professional experience
• Protect customers and consumers through a strict code of ethics
• Provide impartial advice, analysis and guidance
• Regulate and promote the profession
What are the 5 principles of better regulations?
PACTT
• Proportionality
• Accountability
• Consistency
• Targeting
• Transparency
What parts are there to the RICS ?
• Governing Council
• Regulatory Board
• Management Board
• Executive Team
• President Team
How many members does the RICS have ?
RICS has 140,000 members who operate out of 146 countries
What is the RICS motto ?
Est modus in rebes - there is measure in all things
Who gave the RICS Royal Charter?
1881 by Queen Victoria
What act covers discrimination ?
The Equality Act 2010, which came into force 1st October 2010
What are the key principles for firms to prevent Bribery ? PCR CDM
1) Proportionality
• Are the procedures proportionate to the bribery risk and the nature of the firms activities?
• Are the procedure clear, practical, effectively implemented?
• Are anti-bribery procedures in place for different payments? Hospitality, donations etc.
2) Commitment (Top Level)
• Issue a statement to staff/partners that communicate the polices
• Zero tolerance
• Select and train a senior employee to take responsibility for procedures and policy.
• Issue internal and external publications
3) Risk Assessment
• Procedures to assess the nature and extent to exposure for potential bribery.
• Accurately identify and prioritise risks a firm may face
• Written record of risk assessments and findings
• Internal risks – bonus culture, lack of bribery messages from top management
• External risks – Country (is the country particularly known for bribery) or Sectoral
4) Communication
• Embed an understanding of procedures and zero tolerance with internal and external communications
• Training should be continuous
• Whistle blowing policy established
5) Due Diligence
• Firms should carry out due diligence on their staff and partners
• Credit checks, internet checks, interviews etc
• Should get a clear statement of the nature of services offered
6) Monitoring and Reviewing
• Periodically review anti-bribery policies and assess effectiveness.
• Use bribery risk assessment to make decisions
• Review process in response to external or internal stimuli
• Review financial control mechanisms
What is the name of the RICS guidance on bribery and money laundering and when is it effective from ?
Professional Statement (Mandatory) - Countering bribery and corruption, money laundering ad terrorist financing, 1st edition, February 2019
What due diligence do you apply in relation to bribery ?
My company has a policy relevant to this, I would always air on the side of caution. For example as a business do not accept cash or cheque payments.
What is bribery ?
The offer, promise, giving, demanding to acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust.
EVIC - Exchange of value for an improper cause
What is corruption
The misuse of public office or power for private gain, or misuse of private power in relation to business practice and performance
What are the four main offenses noted in the bribery act 2010 ?
The bribery Act 2010 details the 4 offences as :
• giving a bribe
• receiving a bribe
• bribery an official
• no procedure in place
What is a facilitation payment ?
A facilitation payment is a type of bribe and should be seen as such. A common example is where a government official is given money or goods to perform (or speed up the performance of) an existing duty. Facilitation payments were illegal before the Bribery Act came into force and they are illegal under the Bribery Act, regardless of their size or frequency.
Can you identify some bribery warning signs?
Bribery warning signs include :
* Lavish gifts or hospitality being given or received
* Unexplained preferment of certain individuals for receipt of benefits
* Individual never takes time off even if they are ill, for holidays, or insists on dealing with specific contractors themselves
* Making unexpected, uncommercial or illogical decisions when accepting projects or contracts
* Raising barriers around specific roles or departments which are key in the tendering or contracting process
* Unusually smooth process of cases where individual does not have the expected level of knowledge or expertise
* Abusing decision-making processes or delegated powers in specific cases
* Agreeing contracts not favourable to the organisation either with regard to terms or time period
* Unexplained preference for certain contractors during the tendering period
* Avoidance of independent checks on tendering or contracting processes
* Bypassing normal tendering or the contractor’s procedure
* Invoices being agreed in excess of the contract without reasonable cause or explanation
* Missing documents or records regarding meetings or decisions
* Firm procedures or guidelines not being followed
* The payment of, or making funds available for, high value expenses (e.g. school fees) on behalf of others
* Requesting or making donations to charitable or political causes connected to key individuals or companies that business is being done with
* Abnormally high commission percentage being paid to a particular agency. This may be split into multiple accounts for the same agent often in different jurisdictions
* Private meetings with public contractors or companies hoping to tender for contracts
* Abnormal cash payments
* Pressure exerted for payments to be made urgently or ahead of schedule
* Payments being made through a third party country, i.e. goods or services supplied to country A, but payment to be made usually to shell company in country B
What is a PEP ?
politically exposed person (hold positions that can be abused for the purpose of laundering illicit funds or other predicate offences such as corruption or bribery)
What is the definition of IESC ?
International Ethics Standards Coalition
What is the purpose of the International Ethics Standards (IESC) ?
The purpose of the international ethics standard coalition of professional organisations in construction/property is to assert and sustain the critical role of ethics in professional practice to meet the needs of the global market and maintain public trust.
- Accountability
- Confidentiality
- Conflict of Interest
- Financial Responsibility
- Integrity
- Lawfulness
- Reflection
- Standard of Service
- Transparency
- Trust
What is required to register a firm with the RICS ?
Offer professional services in surveying disciplines to professional, corporate, institutional and other clients who rely on such services. Have at least 25% principals (a senior manager, partner or owner), who are qualified RICS professionals (MRICS, FRICS, AssocRICS). Agree to observe and comply with RICS Rules for members and firms, including working to RICS standards.
What is the obligation of a RICS regulated firm ?
Avoid conflicts of interest, ensure competence, procedures for CPD, complaints handling procedure, suitable indemnity insurance, use of suitable designation, cooperate with RICS.
What is a contact officer ?
The designated person to liaise between company and the RICS. In my company this is ????
What is required to register a firm to RICS?
‘A Firm is required to register for regulation by RICS if: a. the Firm provides surveying services to the public. the Firm is operating in Regulated Area A (UK);c. at least 50% of the Firm’s Principals are RICS Members. ‘New requirement from April 2020 that 25% of principals must be RICS-qualified members.FRICS,MRICS< AsRICS
Why would a firm volunteer to be regulated?
It allows you to use RICS designation and logo’s on marketing material to show that you offer the highest level of service and given the RICS reputation and access to clients, this would be beneficial to the company.
As a sole practitioner, which additional safeguards do the RICS require? (for example if you are ill or pass away?)
• Use of a locum who can complete any outstanding works and arrange for adequate run-off cover
• Third party named for Complaints Handling
Who can you use the RICS logo ?
RICS Regulated firms and members.
How do you undertake a conflict of interest check
We have a system that checks appointments based on information such as address, name and partied involved, in addition to verbal conversations between the surveyors.
What is the difference between conflict avoidance and management ?
• Conflict avoidance is a person’s method of reacting to conflict, which attempts to avoid directly confronting the issue at hand
• Conflict management is the process of limiting the negative aspects of conflict while increasing the positive aspects of conflict. The aim of conflict management is to enhance learning and group outcomes, including effectiveness or performance in an organizational setting
What is a conflict of interest?
A conflict of interest occurs when an individual’s personal interests – family, friendships, financial, or social factors – could compromise his or her judgment, decisions, or actions in the workplace
What information barriers does your firm have in place?
• Restricted access to files
• Clear desk policy
• Private meeting rooms
• Physical barriers e.g. restricted floor access
What are the RICS Bye-Laws?
- Application and definition
- Membership and Registration
- Designations
- Contributions to funds
- Conduct
- Governing Council, officers and staff
- Subordinate Boards, committees and groups
- Procedure for general meetings
- Accounts and audit
- General
What are the penalty’s for non compliance with the RICS
• Fixed Penalties
• Regulatory Compliance Orders
• Regulatory Sanctions, which may be imposed by a Disciplinary or Appeal Panel (the ‘Panels’) or a Single Member of the Regulatory Tribunal
What methods of disciplinary to RICS use?
• Fixed Penalties
• Regulatory Compliance Orders
• Regulatory Sanctions, which may be imposed by a Disciplinary or Appeal Panel (the ‘Panels’) or a Single Member of the Regulatory Tribunal
Why does the RICS have rules of conduct ?
To provide a framework for all members to work towards resulting I clients having trust in the profession, helps to guide the institution members
What is a regulatory compliance order ?
An agreement between rics and member that they are liable for a disciplinary action could be from falling Shotr of standards such as CPD
What is a fixed penalty
Administrative fine issued by RICS when a member fails to provide the information requested, remains upon members record for a defined period
What were the main changed to the rules for firms and members ?
• A simpler structure. We are making it easier for RICS members and firms to understand our rules, providing more confidence for clients and the public.
• Clear examples. We want to support members’ professional judgement, so each Rule is illustrated with examples of how members and firms can behave to comply with the Rule. There are also 12 case studies showing real-life application of the Rules.
• Focusing on respect, diversity and inclusion. Whether it’s encouraging diversity and inclusion, or tackling modern slavery, respect and courtesy underpin all our professional ethics.
• Understanding evolving technology. The Rules highlight the importance of understanding the evolving use of data and technology, and the associated benefits and risks.
• Tackling global challenges. The Rules show that ethical practice by RICS members and firms has an important role when it comes to global challenges, including creating sustainable development and tackling climate change.
Who is the Current RICS President
Ann Gray, (1 January 2023 elected) FRICS, RIBA, FAIA, LEED AP founded GRAY Real Estate Advisors in 1995 providing consulting services to property owners, brokers, and land-use attorneys on entitlements, development, and positioning to optimize outcomes for complex properties. Project types include land, commercial, mixed-use, multi-family and entertainment.
Who is the President Elect
Tina Paillet - President Elect,
Tina is President Elect of RICS and works within the Presidential Team to advance strategic goals and create positive impact, particularly in the field of sustainability. Tina has served as the Chair of the RICS Europe Board from 2017 to 2021. Tina is CEO & Co-Founder of Circotrade – a technologically enabled trading platform designed to facilitate and unlock the future value of your building’s materials.
Who is RICS CEO?
Justin Young joined RICS as CEO on 5 July 2023.
Justin was appointed by RICS Governing Council to continue to lead the transformation of RICS, including delivery of an excellent experience for staff, members, and stakeholders.
Definition of Market Value
The estimated amount for which an asset or liability should. exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion
What are the new RICS rules of conduct ?
Rule 1 – Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
Rule 2 – Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
Rule 3 – Members and firms must provide good-quality and diligent service.
Rule 4 – Members and firms must treat others with respect and encourage diversity and inclusion.
Rule 5 - Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
What do you have to do if you are handling clients’ money?
• Separate bank account
• Client have access to money on demand
• Accurate records must be kept. Agree interest with client
• Use only in agreed draw down amounts
• Check where it comes from – not money laundering
• Can implement RICS Client Money Protection Scheme (£50k recoverable)
Can you give me some examples of clients money ?
Money collection from service charge, money collect from ground rent, money collected from rent.
Having an RICS Clients’ Money Protection Scheme in place allows what?
Allows firms to offer their clients the security of knowing their money is protected
What steps must you take for the handling of clients money ?
• Clients have access
• Clients in the account name
• Separate and clearly identifiable
• interest agreed by the clients
• Maintain a log of transactions
• Agree the terms
• Never allow account to be overdrawn
What is an escrow account?
It is a separate holding account controlled by an independent third party that releases the payment subject to agreement from both parties consenting.
Can you pick one of the 5 principles of better regulation and explain your understanding of it ?
Proportional - this is the measures implanted are suitable to the size of the business and the nature of its employees.
Have you ever had to deal with a complaint ?
Candidate specific. Answer should include :
• Ref to the RICS Guidance Note ‘Complaints handling’ 1st edition July 2016
• Timescale
• Two stage
• Escalation
• Initial response
• Third party redress
What is included within Appendix A from the RICS Rules of Conduct ?
This appendix sets out the core professional obligations for members and firms. Additional professional obligations are found in the mandatory requirements of RICS professional statements relevant to a member or firm’s practice.
The following professional obligations to RICS are mandatory for RICS members.
• Members must comply with the 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.
The following obligations are mandatory for RICS-regulated firms.
• Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
• Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS
• Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
• Firms must cooperate with RICS.
• Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
• Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
• Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
Can you expand on your knowledge of COI ?
Personal - family or friend involved or could benefit yourself. E.g. client requests a named s/c that your friend / family member owns.
Project - where not acting in interest of client / own company - e.g. asked to undertake private work for a subcontractor whilst working for a main contractor the s/c is working with.
Confidential Info - you are informed of / come across information not in the public domain that could impede your decision / been seen to impede. Or where you share information considered to be confidential on a project i.e costs / details.
What acts are there linked to anti money laundering ?
• Proceeds of Crime Act 2002
• Money Laundering regulations 2007
What are the potential penalties for money laundering ?
• 14 years in prison
• Unlimited fines
Would you you report money laundering to ?
• NCA
• Police
• HMRC
What should a firm have in place regarding anti money laundering ?
• Systems and training
• Measured to understand clients
• Evaluate and review
• Record and retain information
What are money laundering red flags ?
• Cash only buyers
• Unusual sale price
• Payments form multi sources
• Excessive or rapid transaction timings
What are the principles of the Bribery Act 2010 ? PCRCDM
• Proportionality
• Top Level Commitment
• Risk assessment
• Communication
• Due Diligence
• Monitor and Review
What are the RICS Bye Laws ?
- APPLICATION AND DEFINITIONS
- MEMBERSHIP AND REGISTRATION
- DESIGNATIONS
- CONTRIBUTIONS TO FUNDS
- CONDUCT
- GOVERNING COUNCIL, OFFICERS AND STAFF
- SUBORDINATE BOARDS, COMMITTEES AND GROUPS
- PROCEDURE FOR GENERAL MEETINGS
- ACCOUNTS AND AUDIT
- GENERAL
What do/can the RICS impose on members and firms for non compliance ?
• Fixed penalty - Minor breach - Non compliance such as CPD
• Regulatory compliance order - Consent notice - Do something
• Disciplinary panel - Serious breach can be appealed
What are the updates to surveying safely ?
• Safe person concept
• Consideration of the HASAWA 1974
• Fire safety
• Risk control hierarchy
What is NRM ?
NRM provides a standard set of measurement rules and essential guidance for the cost management of construction projects and maintenance works.
NRM 1: Order of cost estimating and cost planning for capital building works
NRM 2: Detailed measurement for building works
NRM 3: Order of cost estimating and cost planning for building maintenance works
Who would you report modern slavery to ?
NCA, there is also a freephone helpline
Tell tales of modern slavery ?
• Under the control of someone else
• Reluctant to talk to strangers
• Appear frightened
• Few belongings
• Language barrier
What is the proceeds of crime act 2002 ?
The Proceeds of Crime Act (POCA) 2002 criminalises the use of any property, such as money, shares and goods, that has been obtained through criminal conduct. Examples include tax evasion, bribery and any benefits received as a direct result of a business failing to comply with UK law.
What would you need to do in your notice miss appropriation of funds within your firm ?
Should clients’ money be misappropriated, the firm must inform RICS and, where appropriate, the police and their insurers.
If a COI arises and the client insists that you continue to act anyway, what are the conditions for being able to continue with the instruction?
Ensure there is no legal considerations, i am competent to complete the works, ensure to source informed consent and consider and information barrier internally.
In relation to Surveying Safely 2018, can you list the personal responsibilities relevant to individuals ?
Individual responsibilities include:
• Performance
• Control
• Adaptability
• Vigilance
• Awareness
• Teamwork
What are the common issues firms face with clients money ?
• 1 - Reconciliations – General bank accounts
• 2 - Lack of review and approval of reconciliations
• 3 - Overdrawn client ledger balances
• 4 - Authorisation of client account electronic payments by non-Principals
• 5 - Insufficient verification of changes to payee bank details
• 6 - Reconciliation issues – old uncleared reconciling items and differences
• 7 - The word ‘client’ not appearing in the bank statement title
• 8 - Written client money handling issues
• 9 - Suspense Accounts
• 10 - Reconciliations not being completed on a regular basis
How could you proceed even in a COI is present ?
Informed consent - Informed consent occurs when a party who might be adversely affected by a conflict of interest acknowledges the existence of that risk but still agrees to instruct an RICS- regulated firm or RICS member to proceed with the assignment.
Who deals with complaints for your employer?
The Responsible Principal
Who deals with escalated complaints for your employer?
Property Ombudsman
Explain how your employer deals with Freedom of Information requests.
Freedom of information (FOI) gives you the right to ask any public sector organisation for information they hold. Anyone can request information. You can also ask for information about yourself under data protection legislation.
Explain the contents of the letter of engagement.
• Address
• Client details
• Scope of involvement
• Fee basis
• Details of the complains handling procedure
• Exclusion
• Inspection date
Why is it important to agree your appointment in writing ?
To have an accurate, defined and dated record of the agreement in the event of future disagreement
What is the difference between rules and ethics ?
Ethics are moral principles, rules are something that has to be followed.
What is your cpd requirements when chartered ?
Min 20 Hours, at least 10 formal.
What would you do if your boss increases your workload to the point it is unmanageable ?
Be realistic with timescales, raise to manage first then senior managers
Can you give me an example of a gift you have been offered ?
I have been previous offered bottles of wine for xmas which is logged in the gifts register or declined if large value or within tender period.
What do the RICS say about gift handling ?
RICS members should follow these rules:
• Only offer or accept gifts and hospitality that are customary, proportionate and reasonable in terms of value and frequency
• Never offer or accept any gift or hospitality if it may improperly influence your decisions/judgement or give the appearance of doing so (e.g. consider the timing of the gift)
• Only offer or accept gifts and hospitality that you would be happy for others to know about
• Follow the policies and procedures of your employer in relation to gifts, hospitality and promotional expenditure - e.g. record in company’s gifts and hospitality register
• Report any concerns about bribery to your employer or to RICS Regulation
How would you manage a unhappy client ?
Try and understand why they are not happy, try and reach a solution, refer back to CHP
Why is trust in the profession important?
To ensure the longevity of the profession
Explain, in detail, how your employer’s complaints handling policy works .
N/A
Where do you buy professional indemnity insurance from ?
From a broker ensuring the policy is underwritten by an approved under righter (Approved by RICS)
Assuming you are successful at interview and become a chartered surveyor, you then decide to set up your own practice, what would you need to do to comply with RICS guidance and regulations?
• Register with RICS
• Create CHP
• Register for and have procedures for clients money
• PII Insurance
• Appoint a contact officer
• Appoint a responsible principal
• Potential locum agreement
• Ensure min 25% MRICS principals
• Training and CPD policy
How do the requirements of health and safety differ from an office environment to a site environment ?
They do not, different RAMS and CDM
Can you please expand on your knowledge of WAH 2005 Regulation ?
• Aims to eliminate or reduce accidents associated with working at height
• Ensure staff are trained to use ladders, scaffolding and how to be safe at height
• Requirement for Risk Assessment and Method Statement
• Keep ladders and scaffolding secure
What is the RICS Black book ?
“The ‘Black Book’ is a suite of guidance notes that define good technical standards for quantity surveying and construction professionals.
• Including :
• Subcontracting - 1st Edition
• Acceleration - 1st Edition
• E-Tendering - 2nd Edition
• Extension of time - 1st Edition
• Interim Valuation and payments - 1st Edition
• Retention - 1st Edition
• Tendering Strategies - 1st Edition”
What is the need for third party redress panels ?
In the event of a dispute a stand alone/independent third party will be enlisted to manage the manage the dispute.
What is the RICS Red Book ?
RICS Valuation - Global Standards (‘Red Book Global Standards’) contains mandatory rules, best practice guidance and related commentary for all members undertaking asset valuations. The Red Book is issued by RICS as part of our commitment to promote and support high standards in valuation delivery worldwide.
RICS Address
12 Great George St, London SW1P 3AD
Levels of membership
Student
AssocRics
MRICS
FRICS
What are the 4 key roles of the RICS
Maintain highest standards of training and professional experience
Protect customers and consumers (Code of ethics)
Provide impartial advice analysis and guidance
Regulate and promote the profession
RICS Bylaws
RICS has a set of rules and regulations that govern the conduct of its members, and these rules are often referred to as “bylaws” or “regulations.” These bylaws are designed to ensure that RICS members uphold the highest professional and ethical standards in their work.
What is a Royal Charter?
A Royal Charter is an instrument of incorporation, granted by The King, which confers independent legal personality on an organisation and defines its objectives, constitution and powers to govern its own affairs. The terms of each Charter are therefore somewhat different, depending on the individual requirements of the type of organisation that is being incorporated.
What do you understand by the term self-regulation?
RICS self-regulates, meaning that it operates within it’s own published regulatory framework, rather than being legislated by Government. RICS regulation is led by an independently-chaired Regulatory Board and regional sub-boards.
What is a By-Law?
A regulation made by a local authority or corporation.
What are the 6 ethical principles that the Rules of Conduct are based on?
E – Ethical Behaviour
C – Competence
S – Service
CPD & training
S – Solvency
I – Information to RICS
C – Co-operation
What is a PII aggregation clause?
Aggregation allows more than one loss covered by the same policy to be treated as a single loss when applying policy deductibles or limits.
Disciplinary panel rules - different levels of action
Action by Head of Regulation
Regulatory Tribunal
Appeal Panel
Is a PII excess usually paid for per claim?
Yes
In a negligence claim, what would help to show that you acted with consideration and due process?
Provide evidence that work was undertaken in accordance with RICS standards and Guidance Notes.
Taking detailed file notes and photographs
What precedent has caselaw set in terms of keeping adequate site notes (and therefore providing a defence in a PII claim)?
Explain PII requirements relating to fire safety cover and cyber cover.
What is the Assigned Risks Pool (ARP)?
The Assigned Risks Pool (ARP) in RICS helps its members who have difficulty obtaining professional indemnity insurance (PII) in the open market due to various factors. It ensures that RICS members can continue their professional practice despite insurance challenges.
Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance (1st Edition).
The RICS Guidance Note “Risk, Liability, and Insurance (1st Edition)” offers advice to RICS members on how to handle risk, liability, and insurance matters in their professional work. It helps them assess and manage risks, understand liability issues, and secure the right insurance coverage, all while upholding professional standards in the property and construction sectors.
Explain when you might agree a liability cap.
agreeing to a liability cap refers to setting a limit on the maximum financial liability that a surveyor or their firm would be responsible for in case of errors, omissions, or professional negligence. Here are situations in which a liability cap might be agreed upon:
Client Negotiation: When entering into a contract with a client for professional services, negotiations may take place regarding the extent of liability. If a client is concerned about potential financial exposure in the event of a mistake, they may request a liability cap to limit the surveyor’s liability.
Large or High-Risk Projects: For particularly large or high-risk projects, such as complex construction developments or major property transactions, the financial stakes can be significant. In such cases, both parties (the surveyor and the client) might find it beneficial to agree on a liability cap to manage risk and provide some financial predictability.
Insurance Coverage: The availability and cost of professional indemnity insurance (PII) can influence the decision to set a liability cap. A surveyor or their firm may agree to a cap that aligns with their insurance coverage limits. This ensures that insurance is in place to cover potential liabilities up to the cap, while any liability beyond that amount would not be covered.
Industry Practice: In some sectors of the industry or specific types of services, it may be customary or standard practice to include liability caps in contracts. This aligns with industry norms and expectations.
Legal and Regulatory Requirements: Depending on local laws and regulations, there may be limitations on the extent to which liability can be capped. Surveyors should be aware of and comply with legal requirements related to liability caps in their jurisdiction.
Client’s Risk Tolerance: The client’s risk tolerance and their willingness to accept potential liability can vary. Some clients may be more risk-averse and prefer lower caps, while others may be open to higher caps if it allows them to secure the services they need.
It’s important to note that the specific terms and conditions of any liability cap should be clearly outlined in the contract between the surveyor and the client. Additionally, while liability caps can provide protection for both parties, they should be carefully considered and negotiated to ensure they are fair and reasonable for all parties involved. Consulting with legal counsel and insurance advisors can be beneficial in these negotiations.
What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?
The scope of the work
The basis on which the fee will be calculated
The liability cap
What is double dipping (dual agency)?
Dual agency, also known as “double dipping,” happens when the same real estate agent or broker represents both the buyer and the seller in a property transaction. It can create conflicts of interest and potential issues because the agent is supposed to act in the best interests of both parties, even when those interests may clash. Some regions restrict dual agency or require informed consent from both parties. It’s advisable for buyers and sellers to be aware of this arrangement’s implications and consider seeking separate representation to protect their interests.
What is a phoenix firm?
a “phoenix firm” typically refers to a company that has been dissolved or liquidated, often to avoid financial obligations or liabilities, only to be resurrected or “risen from the ashes” as a new entity with a similar or identical business operation.
Here’s how a phoenix firm scenario typically unfolds:
Financial Difficulties: The original company faces financial difficulties, often due to debt, insolvency, or legal issues.
Dissolution or Liquidation: To escape financial obligations, the company is dissolved or goes through a liquidation process. This effectively closes the business.
Creation of a New Entity: Soon after, the individuals or entities behind the original company establish a new business entity with a similar name, structure, and often the same personnel.
Continuation of Business: The new entity continues the same or similar business activities that the original company was involved in, often without the burden of past debts or legal issues.
Phoenix firms have been a subject of concern in various industries because they can be used to avoid financial liabilities, leaving creditors or others with unresolved claims. Many jurisdictions have legal mechanisms in place to address this practice and prevent the abuse of the system.
When is a firm required to register?
A Firm is required to register for regulation by RICS if:
a the Firm provides surveying services to the public
b the Firm is operating in Regulated Area
c if at least 50% of the Firm’s Principals are RICS Members
Who is a Responsible Principal?
A Responsible Principal in RICS-regulated firms has the following key responsibilities:
Compliance with RICS rules and regulations.
Serving as the point of contact for regulatory matters with RICS.
Upholding high ethical standards within the firm.
Overseeing professional development and training.
Protecting the interests of clients and the public.
Addressing conflicts of interest and ethical concerns.
Implementing risk management practices.
What RICS guidance relates to handling client money?
Client Money Handling 2022
Reissued in October 2022 as a professional standard. It had previously been published in October 2019 as a professional statement.
What is the current compensation limit?
What does the annual regulatory review fee relate to?
The annual regulatory review fee, or ARRF, is a fee charged by RICS to its regulated firms. It supports regulatory oversight and monitoring, including compliance checks, risk assessment, client protection, professional development, and administrative costs. The fee ensures firms adhere to RICS standards and comply with regulations, promoting transparency and ethical practices within the industry.
Explain the key themes from the RICS Futures 2020 Report.
The RICS 2020 Futures Report addressed several critical themes and trends in the real estate and built environment sector:
Sustainability and Climate Change: The report emphasized the increasing importance of sustainability and climate change considerations in property development and management. It highlighted the need for environmentally responsible practices and green building standards.
Technology and Digital Transformation: The report discussed the significant impact of technology on the surveying profession, including the use of data analytics, artificial intelligence, and Building Information Modeling (BIM). It recognized the need for professionals to adapt to technological advancements.
Changing Market Dynamics: The report acknowledged evolving market dynamics, such as shifting demographics, urbanization trends, and the rise of flexible workspaces. It emphasized the importance of adaptability and innovation in response to these changes.
Resilience and Risk Management: The report addressed the importance of resilience in the face of global risks and uncertainties, including pandemics and economic disruptions. It highlighted the need for robust risk management strategies.
Professional Skills and Ethics: The report emphasized the significance of maintaining high professional standards, ethics, and continuous learning to meet the evolving demands of the industry.
Explain your understanding of precedent set in Burgess v Lejonvarn.
In the case of Burgess v Lejonvarn, it was established that even in informal or non-contractual situations, individuals providing professional advice or services can be held liable for professional negligence if they assume responsibility and their actions lead to harm. This ruling underscores the importance of maintaining professional standards and exercising due care, irrespective of formal agreements, to prevent potential liability for negligence.
What is the new maxim of RICS in relation to compliance?
“Do the right thing.” (Sep 2021)
This maxim emphasizes the importance of ethical behavior, integrity, and compliance with RICS standards and regulations in the practice of surveying and the real estate profession.
What is whistleblowing?
Whistleblowing is the act of reporting misconduct or unethical behavior within an organization. Whistleblowers have access to insider information and choose to come forward with their concerns, often to promote transparency and ethical conduct. Legal protections are often in place to safeguard whistleblowers from retaliation.
What are the key values of the interim Governing Council statement relating to ethics, behaviour and culture?
Explain what the Pandora Papers are and the ethical issues raised within them.
The Pandora Papers are a massive leak of 11.9 million files and financial documents (October 2021), exposing ethical issues like tax evasion, lack of transparency, conflicts of interest, and questionable business practices among the global elite. It highlights wealth inequality and raises questions about the roles of professionals who facilitate such financial activities. The leak has sparked discussions about transparency, regulation, and ethical responsibility in financial systems worldwide.
Explain what you understand by the RICS Bichard Review.
Published June 2022
The Bichard Review is an independent review of the RICS’ purpose, governance and strategy. It was commissioned by RICS Governing Council in December 2021 following the Levitt Review.
The aim of the Bichard Review was to ‘create a new sense of purpose and direction, reinforcing the strong reputation of the RICS
What is the purpose of the Sanctions and Anti-Money Laundering Act 2018.
SAMLA 2018 has two purposes:
- To enable the UK to create its own sanctions framework whereby it can issue its own sanctions rather than adopting EU or UN models, and
- Make provision for the purposes of the detection, investigation, and prevention of money laundering and terrorist financing, and to implement standards published by the Financial Action Task Force(FATF) rather than adopting EU directives
How do professional integrity and professional ethics differ?
Professional integrity is about personal values and principles, while professional ethics refers to the organization’s specific guidelines and standards or its members in the industry. Both are crucial for maintaining professionalism and trust within the field.
Why was the Register of Overseas Entities introduced?
The Register of Overseas Entities was introduced in the UK to increase transparency and combat money laundering, corruption, and tax evasion. It requires overseas entities owning UK property to disclose their true owners, helping law enforcement track illicit financial activities. This move aligns with international standards and safeguards the integrity of the UK property market.
What is modern slavery and how would you identify red flags of it?
When an individual is exploited by others for personal or commercial gain. It encompasses slavery, servitude, human trafficking and forced labour.
How does a firm ensure compliance with bribery legislation?
In relation to bribery and corruption RICS-regulated firms must:
* not offer or accept, directly or indirectly, anything that could constitute a bribe
* have plans in place to comply with applicable laws governing bribery and corruption, and ensure that these are followed
* report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities
* act with due diligence to perform periodic written evaluations of the risks that face the firm and that may lead to the facilitation of bribery or corruption;
* retain information detailing how the firm has met the requirements of this professional standard.
How does a firm ensure compliance with money laundering regulations?
In relation to money laundering and terrorist financing RICS-regulated firms should:
1. have a written policy addressing money laundering and terrorist financing risks
2. have appropriate governance and systems controls in place, proportionate to the type of work the firm does
3. provide appropriate, recurring training for staff, to ensure they are familiar with the risks associated
4. keep reports of suspicion of money laundering and terrorist financing activity confidential
5. identify the beneficial owner of a company/client involved within a transaction
6. appoint a senior person to be responsible for ensuring anti-money laundering and counterterrorist financing policies are in place and complied with
Tell me about your understanding of your firm’s process for escalating a complaint to Alternative Dispute Resolution (ADR).
Tell me about a conflict of interest check you have carried out.
RICS CPD Guidance
RICS have published guidance including CPD specifications, decision tree, breakdown of formal vs informal, deadlines and penalties for failing to provide sufficient CPD including a fixed penalty caution (remaining on record for 10 years), a second breach results in a further fixed caution/fixed penalty of £150 and published on the RICS website - non payment leads to increase/debt recovery/disciplinary panel. Third breach, likely disciplinary panel, likely resulting in expulsion.
What is the RICS Matrix
Matrics,” is a network and professional group within RICS that is dedicated to supporting and engaging with surveying professionals who are in the early stages of their careers. The term “MATRICS” stands for “Members and Associates Training and Representation in Construction and Surveying.”
Key objectives and activities of MATRICS may include:
Networking: MATRICS offers events, seminars, and social gatherings to facilitate networking among young professionals, helping them build valuable connections within the industry.
Professional Development: The network provides resources and support for career development, including guidance on RICS membership pathways and continuing professional development (CPD) requirements.
Knowledge Sharing: MATRICS often hosts educational sessions and discussions on industry trends and topics of interest to young surveying professionals.
Advocacy: It represents the interests and concerns of early-career professionals within RICS, helping to ensure that their voices are heard within the institution.
Community Engagement: MATRICS may also engage in community and charitable activities to give back to society and promote responsible and ethical surveying practices.
What is Lionheart
RICS LionHeart is a charitable organization associated with RICS (Royal Institution of Chartered Surveyors) that offers support to RICS professionals and their families facing financial, career, mental health, or housing challenges. It provides financial assistance, mental health support, career transition guidance, education and training grants, and family support.
5th anti money laundering directive
The 5th Anti-Money Laundering Directive (AMLD5) was one such directive issued by the EU and was in force as of January 10, 2020. It introduced several measures to enhance AML and counter-terrorist financing efforts across EU member states.
RICS different levels ( reg triubunal)
What guidance is in place for social media use?
Use of Social Media: Guidance for RICS Members, version 1, June 2021. Comprises social media such as LinkedIn, Twitter, Facebook, forums, podcasts and blogs. RICS likely to investigate posts that are:
Discriminatory
Dishonest
Abusive, threatening or harassing
Repetitive, Concerning or inaccurate communications
In serious cases disciplinary action can be taken for public protection and the RICS reputation.
What guidance is provided on client relationships and handling data?
https://www.rics.org/profession-standards/rics-standards-and-guidance/conduct-competence/client-relationships-and-handling-data
RICS provide guidance on the following:
Attracting clients to your business
Setting up your initial agreement with clients
Communication
Quality management
Complaints handling
Data handling
Data security and retention
COI 2017 PS
jb
Tell me more about Informed Consent and Information barriers
‘Informed Consent’ means: consent given willingly by a party who may be affected by a Conflict of Interest, that party having demonstrated to the RICS member working independently or within a non-regulated firm or regulated firm concerned that the party
understands:
a that there is a Conflict of Interest or a significant risk of a Conflict of Interest and
b the facts known by the RICS member (working independently or within a non-regulated firm or within a regulated firm) or the regulated firm that are material to the Conflict of Interest and
c what that Conflict of Interest is or may be and
d that a Conflict of Interest may affect the ability of the RICS member (working independently or within a non-regulated firm or within a regulated firm) or a regulated firm to advise or act fully in the interests of a client.
‘Information Barrier’ means: the physical and/or electronic separation of individuals (or groups of individuals) within the same firm that prevents confidential information passing between them
Levitt Report
Commissioned by RICS following a Treasury management audit in 2018 after needing to extend its overdraft facility by c.£3m due to inaccurate cashflow forecasting.
Alison Levitt QC following her independent report and review into governance - No evidence of improper or illegal conduct was found - but made 18 recommendations:
Governing council to have more oversight into internal dealing of the RICS
RICS Governing Council are to be briefed by the management board rather than a single CEO
Overhaul of whistleblowing procedures
