Ethics (L3)

Question 1

What are the 3 main roles of the RICS?

Answer 1

1. To maintain the highest standards of education and training
2. To protect consumers and businesses through strict regulation of the profession
3. To be the leading source of information and independent advice on land, property, construction and associated environmental issues.

Question 2

How do RICS regulate and promote best practice?

Answer 2

• RICS regulate is self-regulatory.

- PACTT.

Question 3

What are the 5 principles of better RICS regulation?

Answer 3

P.A.C.T.T
Following the Carsberg Report. Purpose: members/firms can use 5 principles to decide how best to meet requirements of Rules of Conduct.
1. PROPORTIONALITY – making the penalty proportional to the breach
2. ACCOUNTABILITY – to all members and the public
3. CONSISTENCY – treating all members the sam, level playing field
4. TARGETING – targeted to be relevant and useful, but not prescriptive
5. TRANSPARENCY – to all members, clients and the public

Question 4

What is the Royal Charter?

Answer 4

A formal document granted 1881. A formal document issued by a monarch granting a right or power to an individual or a body corporate. Last update in 2009 – Requires members to promote the usefulness of the profession for the public advantage.

Question 5

What are the 5 ethical values of the RICS Professional and Ethical Standards 2015? – STIRR

Answer 5

1. Always provide a High Standard of Service = have a professional responsibility to provide client with the best possible advice
2. Act in a way that promotes Trust in the profession = act in a way that positively promotes you individually and the profession
3. Act with Integrity = be honest and straightforward in all you do
4. Treat others with Respect = treat everyone with courtesy and respect cultural differences
5. Take Responsibility = be accountable for your actions

Question 6

How do the 5 ethical standards and bye laws link?

Answer 6

Direct link to the BYE LAWS is Bye-Law 5 (Conduct), requires members to conduct themselves in manner befitting membership of RICS.

Question 7

What happens if you deviate from 5 ethical standards?

Answer 7

Deviation = RICS disciplinary action

Question 8

What is the ethical decision tree?

Answer 8

It is a Yes/No flowchart that helps to determine whether to proceed when faced with an ethical grey area.
Starts with:
• Do you have sufficient facts?
• Is it legal?
• Is it in line with RICS global professional and ethical standards?

Question 9

What else is available to you when facing an ethical dilemma apart from ethical decision tree?

Answer 9

Detailed case studies on RICS website. RICS confidential hotline to discuss ethical issues.

Question 10

What rules do the RICS Rules of Conduct 2007 (effective 2013) set out for members?

Answer 10

9 Rules for Members:
PART I:
1. Interpretation of ‘Member’
2. Communication – i.e. post, e-mail etc
PART II
3. Ethical Behaviour – act at all times with integrity and avoid conflicts of interest
4. Competence – carry out professional work with due skill, care and diligence and with regard for technical standards (i.e. not following MANDATORY STANDARDS is a disciplinary offence)
5. Service - carry out professional work in a timely manner, with proper regard for standards of service/customer care
6. Continuing Professional Development (CPD) – comply with RICS requirements in respect of CPD
7. Solvency – ensure that personal and professional finances are managed appropriately
8. Information to the RICS – submit in a timely manner such information as required
9. Co-operation - fully co-operate with RICS staff and any person appointed by Regulatory Board

Question 11

What 15 rules do the RICS Rules of Conduct 2007 (effective 2017) set out for firms?

Answer 11

9 Common Rules (Members), 6 EXTRA for Firms:
Part I
1. Definition of ‘Firm’
2. Communication
Part II Conduct of Business (PCS CPD CCI):
3. Professional Behaviour – act at all times with integrity, avoid conflicts of interest and actions/situations that are inconsistent with its professional obligations
4. Competence – carry out professional work with due skill, care and diligence with proper regard for technical standards
5. Service – carry out professional work with expedition and property regard for standards of service/customer care
6. Training and Continuing Professional Development (CPD) – necessary procedures in place to ensure staff are properly trained and competent
7. Complaints Handling – operate a complaints handling procedure and maintain complaints log – procedure must include an alternative dispute resolution mechanism that is approved by regulatory board
8. Client’s Money – preserve the security of client’s money entrusted to its care in the course of its business/practice
9. Professional indemnity insurance – ensure that all previous/current professional work is covered by adequate and appropriate PII cover which meets standards approved by regulatory board
Part III Form Administration
10. Advertising – promote services in truthful and responsible manner
11. Solvency – ensure all finances managed appropriately
12. Arrangements to cover incapacity/death of sole practitioner
13. Use of designations – must display on business lit a designation to denote it is RICS regulated (in accordance with RICS policy)
14. Information to RICS
15. Cooperation

Question 12

What is the difference between the Rules of Conduct and Ethical Standards?

Answer 12

Rules – clear and instructional

Standards – are a framework to apply to different situations

Question 13

What is the link between the Ethical Standards and the Rules of Conduct?

Answer 13

• Direct link to Rules of Conduct is Rule 3 (Members & Firms), requires members to act with integrity and avoid conflicts of interest.

Question 14

What happens if you do not comply with the Rules of Conduct?

Answer 14

Disciplinary action.
Self-regulation by RICS.
PACTT.

Question 15

What are CBRE’s internal policies on gifts/inducements?

Answer 15

Can give/receive gifts of a nominal value, as long as the intent behind the gift cannot be misconstrued.
Ask yourself if it is appropriate?
The permitted allowance is £100. Anything above that must be immediately declared to the Compliance Director (Geraldine Mash) who will decide if it appropriate (disciplinary action if no disclosed, could be criminal offence). Employees required to keep a record of gifts.

Question 16

What RICS guidance relates to gifts and inducements?

Answer 16

Countering bribery and corruption, money laundering and terrorist financing, February 2019

Question 17

What legislation relates to gifts and inducements?

Answer 17

Bribery Act 2010

Proceeds of Crime Act 2002

Question 18

What is a bribe?

Answer 18

Bribe = something given/promised in expectation of a change in behaviour.

Question 19

What is the Bribery Act 2010?

Answer 19

The Act aims to reduce bribery in business in the UK. New corporate criminal offence of failing to prevent bribery; a company will be responsible for employee corrupt acts if they cannot show adequate policies/procedures

Question 20

Once qualified, what are the requirements regarding Continuing Professional Development (CPD)?

Answer 20

Members = min. 20 hours CPD per annum
Min. 10 hours should comprise formal
Ethics CPD every 3 years
1 Jan – 31 Dec, must log by 31 Jan on RICS website

Failure to comply = disciplinary action (Rules of Conduct Members - Rule 6)

Question 21

What is the difference between formal and informal CPD?

Answer 21

FORMAL: includes all forms of structured learning that has clear learning objectives and outcomes
INFORMAL: includes any self managed learning that is relevant or related to your professional role

Question 22

What is a conflict?

Answer 22

When are firm or individual’s impartiality is threatened due to a conflict of interest. Types of interest are financial, personal, commercial relationships, acting on both side of a transaction, acting for two clients on the same side of a transaction (i.e. submitting two bids)

Question 23

What guidance is there to deal with a conflict of interest?

Answer 23

UK and Global Professional Statements (Mandatory for Firms and Members).
- Conflicts of interest, 1st edition, March 2017 (became effective 1st Jan 2018)
- Conflicts of interest – UK commercial property market investment agency, 1st edition, May 2017
Links to Rule 3 Ethical/Professional behaviour (act w/ integrity and avoid conflicts of interest).

Question 24

Global: Conflicts of interest, 1st edition, March 2017 (became effective 1st Jan 2018)

Answer 24

In three parts:
- Part 1: Mandatory rules for COI and definitions
- Part 2: Principles as to how to apply the PS
- Part 3: Guidance on how to meet the obligations set out in Part 1
General Principles (Part 1):
- Member/Firm must not advise or represent a client a Conflict of Interest or a significant risk of a Conflict of Interest;
- Unless those affected have provided their Informed Consent
- Must identify and manage Conflicts of Interest
- Must keep records of the decisions made in relation to whether to accept COIs, Informed Consent, preventing COIs arising (to show compliance)

Question 25

UK: Conflicts of interest – UK commercial property market investment agency, 1st edition, May 2017 (became effective 1st Jan 2018)

Answer 25

Firms and members acting on the open market sale or acquisition of a commercial investment real estate. Dual Agency: where an agent (firm/member) has a contractual agency relationship with both seller and buyer at the same time. MUST NOT be undertaken in UK. Also applies to Related Firms to the agent (must be separate legal entities, no fee sharing, no common directors and no common internal data/access to). Multiple Introductions: agent has competing contractual relationships to acquire similar opportunities. Must inform new client, MUST be agreed in written TOE happy to proceed on this basis, and MUST say exclusive/non-exclusive basis. If exclusive, advise other parties intro’d same property to that no longer able to act for them. If non-exclusive, obtain Informed Consent w/ info barriers. Incremental Advice: e.g. you act for seller but buyer approaches you for planning/valuation advice (not to act for them in agency capacity). Can with Informed Consent/Info Barriers.

Question 26

BTR Development Site, Bristol | What steps did you take to check for Conflicts of Interest?

Answer 26

I used CBRE’s internal conflict check database. Checked: - Property address - Client’s name - Borrower’s name Printed the results page, Job Director signed, dated and held on the Job File. Even though no conflict, I included a statement in both the Terms of Engagement and Valuation Report.

Question 27

BTR Development Site, Bristol | What would you have done if the conflict was flagged?

Answer 27

Contact the Fee earner of the conflicting instruction; see if there is a resolution. (e.g. Info Barrier) I would disclose any previous or current involvement with the parties or the property to be valued to the client: • Within the past 12 months for financial reporting purposes • Within the past 24 months for other purposes

Question 28

What is a risk check? What were the additional approval procedures you undertook?

Answer 28

Prior to job registration, risk check is carried out using CBRE’s risk management tool. Development sites = ‘high risk’ under the VAS Risk Analysis. Developments increase the risk score over the ‘high’ risk threshold. Anything at 16 or above requires additional approvals. Only certain valuers on the approved CBRE Development Appraiser and Reviewer Registers. Approval obtained from the VAS country head – Michael Brodtman. Provided a sensitivity analysis; must be provided within the final report as it was a secured lending valuation.

Question 29

Horlicks Factory | How did you identify a conflict of interest?

Answer 29

I used CBRE’s internal conflict check database. Both the client and the property address searches returned results for current or prior involvement. I contacted the Fee earner of the conflicting instruction on the land agency team to see if there was a resolution. We determined that it would be feasible to implement an Information Barrier if the client was happy to proceed on this basis. I informed all parties affected of the conflict in writing.

Question 30

Horlicks Factory | What is Informed Consent?

Answer 30

Consent to proceed where a conflict exists (after all facts have been disclosed to them) by the affected parties. It must be received in writing. It should only be sought if surveyor thinks that best interests of the affected parties will be served in proceeding. Must be willingly given with knowledge of all the facts.

Question 31

Horlicks Factory | When can you seek an Informed Consent?

Answer 31

When the RICS member or regulated firm is satisfied that proceeding despite a Conflict of Interest is: (a) in the interests of all of those who are or may be affected (b) is not prohibited by law, (c) the conflict will not prevent the member or regulated firm from providing competent and diligent advice to those affected.

Question 32

Horlicks Factory | What is an Information Barrier?

Answer 32

Barrier between two parties acting for the same client. - Must be robust - Must take reasonable steps to make effective - Surveyors on each side must be different and physically separated - Information securely stored - Keep an audit trail of the conflict identification and management process - specific arrangements made with the client to manage a potential conflict must be recorded in the Terms of Engagement and referred to in the valuation report

Question 33

Horlicks Factory | What Information Barriers did you implement? How did you enforce them?

Answer 33

Physical: - separation of teams on different floors of the same building - different surveyors and support staff - exercised caution as to what was said to the other team Electronic: - project folder with restricted access - sensitive documents within the folder were password protected

Question 34

Mansion Block Apartment, Marylebone | What did the client say? How did you respond?

Answer 34

The draft valuation had been issued to the client to check all facts were correct. They had expected the figure to have grown since the last valuation 6-months prior, however market conditions for central London residential at that time were poor and values were flat. I had already been through a thorough valuation process in line with the Red Book, however I wanted to show good Service to my client and take Responsibility for the value I had reported therefore I agreed to double check my methodology and figures, and then come back to the client to discuss.

Question 35

Mansion Block Apartment, Marylebone | Why were you confident in your opinion of value?

Answer 35

I had already undertaken a thorough valuation process in line with the Red Book. After analysing comparable evidence from within the block and from the immediate area where there are a number of mansion blocks, and speaking to local agents to gauge market conditions, it was clear that transaction volumes were active but there had been no growth since the previous valuation 6-months prior and the outlook appeared stable. Therefore I held my opinion of value.

Question 36

Mansion Block Apartment, Marylebone | Can you change the figure?

Answer 36

Yes if I had found new evidence or received new advice that materially impacted the Market Value. However I had relied on a number of comparables – four of which were from within the block - and spoken to five agents, which gave a holistic overview.

Question 37

Mansion Block Apartment, Marylebone | How does this example fit into Ethics (standards & rules)?

Answer 37

It demonstrates a time when my actions have followed the Ethical Standards. It showed: - Service: I had a responsibility to provide my client with the best possible professional advice based on a reasoned process. I carried this out to the best of my ability, and though they queried the figure, I took them through my rationale and evidence. - Trust: I acted in a way that promotes Trust and transparency in the profession, I knew I had been through a reasoned and evidence-based process and wanted to show the client that they could trust my process and the outcome. - Integrity: I was honest and straightforward in advising the client of my opinion of value ad didn’t bend to client pressure. Demonstrated following Rules of Conduct for Members: - Rule 3; act ethically

Question 38

Mansion Block Apartment, Marylebone | What advice did you provide the client with?

Answer 38

The advice provided was two-fold; - I initially advised the client of the Fair Value - After being challenged on the figure, I re-ran my process and sought additional input to substantiate my opinion of value. I then explained to the client my methodology and assumptions in more detail to show them how I came to the advised figure.

Question 39

BTR Development Site, Caterham | What did the client want you to do? Why is this outside your area of expertise?

Answer 39

The client wanted me to go through each item, compare and contrast the cost that had been attached to the item, and decide which cost appeared reasonable. The cost plan ad been prepared by a Quantity Surveyor. I am not a Quantity Surveyor and do not have expertise in providing cost schedules for developing a BTR product.

Question 40

BTR Development Site, Caterham | What is a QS? Did you recommend CBRE’s QS?

Answer 40

A QS calculates the cost of the whole project. I advised the client that CBRE do have a QS team, however to maintain impartiality, I advised the client to use the RICS Find a Surveyor tool to locate an QS.

Question 41

BTR Development Site, Caterham | What advice did you provide the client with?

Answer 41

I advise the client that I would not be able to provide the service requested of me. I recommended using the RICS Find a Surveyor tool to identify a third party to provide their impartial advice.

Question 42

What is the background of the RICS?

Answer 42

Royal Institution of Chartered Surveyors. Est Modus in rebus – there is measure in all things (MOTTO) Founded in 1868 by John Clutton Approx. 130,000 members internationally 4 levels of membership – FRICS, MRICS, AssocRICS and Trainee/Student Current President: Chris Brooke Next President (President Elect): Tim Neal UK CEO: Sean Thompkins Has a Royal Charter, granted by Privy Council in 1881 Self-regulatory

Question 43

What is included in the RICS Business Plan?

Answer 43

2018 – 2021. Incudes strategic goals, annual objectives and plans/targets to achieve objectives. Strategic goals: • Influential thought leaders to bring change in response to world’s major challenges • Globally trusted by stakeholders and society • RICS professional qualifications remain in market demand • Sustainable professional body

Question 44

What is the RICS Constitution?

Answer 44

 ROYAL CHARTER  10 BYE-LAWS (ratified by Privy Council, high-level enabling principles)  10 REGULATIONS (approved by Governing Council, detailed)  RULES OF CONDUCT (Members and Firms)

Question 45

What is the structure of the RICS's governance?

Answer 45

``` GOVERNING COUNCIL (sets top-level strategy, chaired by RICS President Chris Neal) Underpinned by boards and committees, including regional boards and specialist boards. Management Board, Regulatory Board and Audit Committee report to Governing Council ```

Question 46

What is the hierarchy of RICS documents?

Answer 46

1. RICS Rules of Conduct 2. International standards 3. RICS Professional Statements 4. RICS Guidance Note 5. RICS Code of Practice 6. RICS Jurisdiction Guide

Question 47

How do you become a Fellow?

Answer 47

Provide: - Evidence of 4 Fellowship characteristics (5+ years MRICS, leadership role, raising profile of RICS, technical achievement, professional achievement) - Portfolio of professional achievement

Question 48

Why do you want to achieve MRICS / benefits of being an RICS member?

Answer 48

It is the “gold-standard” Status – credentials provide client confidence Professional recognition and standards – promotion of professional excellence Market advantage – RICS status = competitive advantage Network – access to worldwide professional network

Question 49

What are the International Ethics Standards?

Answer 49

Global framework for the built environment sector. Published December 2016 by the International Ethics Standards Coalition (RICS is a leading member). High level principles. There are 10 GLOBAL ETHICAL STANDARDS – incorporates STIRR but elaborates.

Question 50

What are the 3 benefits of regulation for firms?

Answer 50

C.P.S Confidence – for clients as firm regulated by RICS Professionalism – firms will have to provide clear, impartial and expert advice and follow RICS guidance Security – firms have to have a recognised complaints handling procedure, access to free independent redress, PII cover, handle clients money

Question 51

What is a firm?

Answer 51

A corporate body or sole practitioner practice Eligible to register if more than 25% RICS Members Required to register if more than 50% RICS Members. * if NO RICS members in the firm, firm cannot register

Question 52

What are the 3 levels of disciplinary action by the RICS?

Answer 52

1. Action by Head of Regulation – first step 2. Disciplinary Panel 3. Appeal Panel

Question 53

What 3 actions are available to the Head of Regulation should they consider disciplinary action appropriate?

Answer 53

First, they carry out an initial investigation. 1. Serve a Fixed Penalty notice 2. Make a Consent Order – a document setting out various terms the member/firm is to comply with (e.g. undergo training, stop ding certain types of work) 3. Refer the matter to Disciplinary Panel hearing if ‘Realistic test’ is satisfied and that hearing in public interest. Used for more serious breaches.

Question 54

What penalties are available by the Disciplinary Panel?

Answer 54

1. Issue a Consent Order 2. Impose an unlimited fine per breach – must be proportionate to offence 3. Impose conditions upon future continued RICS registration 4. Expulsion from membership or remove a firm 5. Require publication of results of hearing in RICS Modus, RICS website and local newspaper

Question 55

What is the Appeal Panel?

Answer 55

Review a member/firm’s appeal against review of a decision at Disciplinary Panel. 50% of membership of this panel are lay members (not RICS)

Question 56

What is the RICS’s policy regarding fee negotiations?

Answer 56

Fees should be market based and agreed on ad-hoc basis with clients – aggressive fee cutting is not allowed; should not be seen to be undercutting another firm. NO price fixing. Can enter into further fee negotiations n professional manner – but should reconsider scope of service. Referral fees should be considered in context of Bribery Act.

Question 57

Under what scenarios may you have to decline an instruction?

Answer 57

* You are not competent to undertake the work – outside your limitations * The proposed client won’t sign your terms of engagement or complete money laundering checks * There is a conflict of interest or personal interest * Advice if for a friend or pro bono and your PII will not cover work carried out on a personal basis

Question 58

What are the Bribery Act 2010’s principles?

Answer 58

Based on SIX PRINCIPLES (DR PT MC): 1. Due diligence 2. Risk assessment 3. Proportionality 4. Top level commitment 5. Monitoring and review 6. Communication

Question 59

What are the offences and penalties under the Bribery Act 2010?

Answer 59

The FOUR OFFENCES are: 1. Giving a bribe 2. Taking a bribe 3. Bribing foreign public officials 4. Failure of an organisation to prevent bribery Penalties (from the Director of the Serious Fraud Office): - INDIVIDUALS: Max. 10 years imprisonment and/or unlimited fine - COMPANIES: Unlimited fine

Question 60

What is the Proceeds of Crime Act 2002?

Answer 60

Allows recovery of money and other assets deemed to be the proceeds of crime in civil and criminal proceedings

Question 61

What is money laundering?

Answer 61

When proceeds of criminal activity are disguised or converted, then used for legitimate purposes.

Question 62

What is the legislation relating to money laundering and what are its provisions?

Answer 62

Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 Provisions: - Required to do written money laundering and terrorist financing risk assessment for firm - Implement systems, policies and control - Provide staff training - Comply with new due diligence requirements - Ensure record keeping - Confirm identity of purchaser and source of funds before contracts exchanged Limit of 10,000 Euro acceptance of cash Must have a Money Laundering Officer at a firm

Question 63

What are the requirements of the Money Laundering Regs 2017 for due diligence?

Answer 63

The Regulations identify 3 levels of DD: - CUSTOMER (identify client, beneficial owner – using passport, drivers licence – business – using company number, registered office. Obtain funding info for the purpose of the instruction) - ENHANCED (additional checks for Politically Exposed Person, their family/associates, people from High Risk Third Countries) - SIMPLIFIED (only appropriate where low risk of ML)

Question 64

What are the penalties for non-compliance with the Money Laundering Regs 2017?

Answer 64

Found to have assisted money laundering – up to 14 years in prison and/or an unlimited fine Found to have tipped of a person about an investigation – up to 5 years and/or an unlimited fine

Question 65

What RICS guidance is available on bribery and money laundering? Who does it apply to?

Answer 65

Countering bribery and corruption, money laundering and terrorist financing, February 2019 Professional Statement, mandatory, global. Effective 1 September 2019. Applies to RICS member and regulated firms

Question 66

Who do you have a duty of care to? Case law?

Answer 66

Clients and third parties, using ‘reasonable care and skill’. If duty is breached, a negligence claim can arise. If a loss is sufferance due to negligence, they may be able to sue for damages. Scullion vs. RBS 2011. Valuers do not owe a duty of care to buy-to-let borrowers in secured lending instructions for a lender.

Question 67

What is the permissible valuation margin for error?

Answer 67

+/- 5% for residential, +/- 10% for one-off commercial, +/- 15% if there are exceptional features.

Question 68

What are the timeframes for making a negligence claim?

Answer 68

Under the Limitation Act 1980, 6 years

Question 69

What is PII?

Answer 69

Professional Indemnity Insurance. Protects surveyors, clients and third parties from negligence claims when they arise. It is mandatory for surveyors to have adequate insurance.

Question 70

What RICS guidance is there on PII? What are the cover requirements?

Answer 70

Required under Rule 9 – Rules for firms. Professional Indemnity Insurance Requirements 2019, effective 2 July 2019. Policies must be underwritten by an insurer. Min. cover requirements are based on turnover of the preceding year: (double, double plus. Double, double double) £100k or less £250,000 £100,001-£200,000 £500,000 £200,001 and above £1m

Question 71

What are the PII requirements?

Answer 71

- Certificate must be sent to RICS annually - Adequate run-off cover required for after ceasing trading; £1m for min. 6 years - If you can’t get run-off cover, apply for coverage from RICS run-off pool - Additional PII needed for pro-bono work

Question 72

What is good practice for holding client money? What is the RICS Guidance?

Answer 72

What is good practice for holding client money? What is the RICS Guidance? Rule 8, Rules for Firms - Obligation to keep accurate records - Keep client accounts separately - Word ‘client’ must be in the account name - Client able to have the monies on demand - Regular bank reconciliation *NEW REQUIREMENT: publish procedures for handling Client Money on their website RICS Client’s money: General advice for firms 2011 RICS Client Money Protection 2019

Question 73

What do you need to do when closing a practice?

Answer 73

- Inform RICS - Inform client and return any monies held - Inform insurers and procure PII run-off cover - Retin client files for min. 6 years

Question 74

What do you need to do when starting a new practice to ensure RICS compliance?

Answer 74

- Inform RICS; Firm Detail Form - Register for RICS regulation by the Regulatory Board - Arrange PII and provide certificate to RICS - Register with the VRS - CHP, get RICS approval - Set up complaints log - Appoint CHO - Obtain a logo kit

Question 75

What guidance is there for the use of designations?

Answer 75

Guidance for personal use and firms use 2019. Only firms can use the ‘Regulated by RICS version’ Cannot place designation inside a box, distort it, at the top of letterhead, change the colour.

Question 76

What are the Red Flags relating to money laundering?

Answer 76

Secretive or evasive about who they are Refuses to provide property information Avoids personal contact without good reason The source of funds are unusual; e.g. large cash payments Won’t sign TOEs Have criminal associations.

Question 77

How do you carry out AML checks?

Answer 77

At CBRE – have a central AML process so that it’s collated globally, before TOEs signed. Client must be verified by obtaining relevant document copies. Must also be checked against UK Sanctions list. Report any suspicions/red flags to the Money Laundering Reporting Officer at CBRE.

Question 78

If a client asked you reduce the payable fee based on being unhappy with a reported value, what would you do?

Answer 78

If the scope of the agreed services had not changed and had been delivered, I would discuss with the client that our obligations have been fulfilled and the fee was not variable based on the value reported. If this didn't resolve, refer to CHP.

Question 79

What are the THREE types of conflicts?

Answer 79

1. A PARTY conflict; same or related instruction for 2 parties 2. An OWN INTEREST conflict; personal interests 3. A CONFIDENTIAL INFORMATION conflict; work between 2 parties that is confidential

Question 80

What does the RICS guidance is available on bribery and money laundering set out?

Answer 80

Countering bribery and corruption, money laundering and terrorist financing 2019. It was effective from 01 Sept 2019. It’s a 3-part mandatory GLOBAL Professional Statement setting out: 1. Requirements - for anti-bribery and anti-money laundering 2. Guidance – setting out good practice 3. Supplementary guidance - on some of the key concepts in Parts 1 & 2

Question 81

What are the key requirements of Part 1 in the RICS PS on Bribery & ML?

Answer 81

That RICS Regulated forms must: - Have procedures in place to comply with the law - Report any suspicions - Retain records BRIBERY: - Not accept anything that could be a bribe MONEY LAUNDERING & TERRORIST FINANCING: - Not facilitate ML & TF or be complicit - Take appropriate measures to check the client’s identity with basic ID checks - Use third party reliance for checks only

Question 82

What is the guidance in Part 2 in the RICS PS on Bribery & ML?

Answer 82

- Provide staff training - Have a written policy in place for Bribery and ML - Senior management take control of procedures - Set up a gifts register - Keep up to date with legislation

Question 83

What does the supplementary guidance in Part 3 of the RICS PS on Bribery & ML include?

Answer 83

Establishing the 3 ‘W’s – WHO are you acting for, and WHAT and WHY are you being asked to do – to assess risk to the business. Dealing with Politically Exposed Persons The need to identify the beneficial owner of a company

Question 84

What are the changes to the rules relating to registration of firms?

Answer 84

New guidance has been published ‘Guidance on the new Rules for the registration of firms and Rules for the use the RICS logo and designations by firms’, effective 1 April 2020. 1. At least 25% of principals in firm must be RICS-qualified; if currently Registered and >25% may still be Regulated at Head of Regulation’s discretion. 2. If more than 50% - REQUIRED be Regulated 3. Need to designate a Responsible Principal to ensure RICS compliance of Firm.

Question 85

What are the changes to the rules for the use of the RICS logo and designations?

Answer 85

New guidance has been published ‘Guidance on the new Rules for the registration of firms and Rules for the use the RICS logo and designations by firms’, effective 1 April 2020. 1. The use of the logo has been restricted to member and Regulated firms only. 2. Regulated firms must now include prescribed text in TOEs explaining what it means to be regulated. 3. Requirements for how the ‘regulated by RICS’ designation have been tightened.

Question 86

What are the changes to the RICS Governing Council?

Answer 86

- Smaller Governing Council - With more global representatives - Amends to Royal Charter and Bye-Laws

Question 87

What is the RICS doing to address diversity and inclusion?

Answer 87

RICS are a professional body that promote equality, diversity and inclusion - Introduced the RICS Inclusive Employer Quality Mark - Celebrate of Pride and Black History month

Question 88

What is negligence?

Answer 88

Breach of a duty of care which results in damage.

Question 89

2 pieces of case law within the last 12 months?

Answer 89

Franses v Cavendish Hotel 2018: Hotel opposing new tenancy under s.30, Ground F of the L&T Act citing redevelopment despite no intention, they just wanted VP. Test; would LL do works if tenant was leaving voluntarily? Wells v Devani 2019: went to Supreme Court. Case was about whether a binding contract had been agreed between a developer and estate agent. Supreme Court ruled there had been, despite neither party specifying when the agreed fee rate would be due.

Question 90

What are the new logo-use rules? When do they come into effect?

Answer 90

April 2020. - re-structured to enhance simplicity and readability - restricting the use of RICS logo to regulated firms only - restricting the use of the designation "Chartered Surveyors" by firms to the trading name only; - added a requirement that Regulated Firms must include a prescribed text in the terms of engagement issued to clients in respect of its surveying services to explain what being regulated by RICS means