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RICS APC - Residential > Ethics - Level 3 > Flashcards

Ethics - Level 3 Flashcards

1
Q

What is the central purpose of the RICS?

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

How does the RICS ensure members abide by the Rules of Conduct for Members 2007?

A

Head of Regulation at the RICS investigates claims of misconduct. They have the power to:
1. Serve a Fixed Penalty Notice
2. Make a Regulatory Compliance Order
3. CPD sanctions
4. Refer to a Disciplinary Panel
Members have the right to appeal decision made at a Disciplinary Panel and going to an Appeal Panel.

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3
Q

What is the history behind the RICS?

A

The RICS was granted a Royal Charter in 1881.

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4
Q

What does the Royal Charter do?

A

The Royal Charter allows the RICS to be self governed. It maintains and promotes the usefulness f the profession for public advantage.

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5
Q

How do we get Bye-Laws?

A

Bye Laws are ratified by the Privy Council of UK Government

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6
Q

When were the Bye-Laws last updated?

A

February 2020

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7
Q

What does the RICS constitution consist of?

A
  1. The Royal Charter
  2. The 10 Bye Laws
  3. The Regulations
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8
Q

What are the 10 Bye-Laws?

A
  1. Application & Definition
  2. Membership & registration
  3. Designations
  4. Contribution to funds
  5. CONDUCT
  6. Conflict of staff
  7. Sub boards/committee
  8. Voting and meetings
  9. Accounts and audits
  10. General
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9
Q

What are the RICS regulatory goals known as?

A

The 5 principles for better regulation

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10
Q

How best to remember the 5 principles of better regulation?

A

PACTT

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11
Q

What are the 5 Global Professional and Ethical Standards?

A
  1. Act with INTEGRITY - be honest, open and transparent and avoid CoI
  2. Always provide a high level of SERVICE - the best advise to those who you have a professional responsibility towards
  3. Act in a way that promotes TRUST in the profession - act positively/professionally in private and professional life.
  4. Treat others with RESPECT - be courteous and respect cultural preferences.
  5. Take RESPONSIBILITY - be accountable for your actions.
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12
Q

Which two GPES resonate with you the most?

A
  1. Provide a high level of service

2. Promote trust in the profession - I deal with peoples homes and they are very precious over them.

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13
Q

What are the 6 steps required to set up a practice?

A
  1. Inform RICS
  2. Appoint a contact officer
  3. Obtain PII cover
  4. Set up a client account and procedures for client money
  5. Produce a CHP
  6. Arrange CPD and training for staff
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14
Q

Would you accept a gift or offer of hospitality from someone in a work capacity?

A

Gifts, hospitality and promotional activity are generally acceptable. However, it is linked with the Bribery Act 2010.
- If you are at all unsure, decline the gift.

  • The Act defines acceptable gifts and hospitality
  • The gift should be reasonable and proportionate
  • The gift must be offered openly
  • The gift should not be regular, cashier to influence decisions

If accepted;

  • Act openly and transparently
  • Keep a record on a gift register
  • Consideration toward the value and timing
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15
Q

What 7 steps must you take for the handling of clients money?

A
  1. Clients must have access to funds
  2. Clients money must be keep separately and clearly identifiable
  3. Include ‘client’ in account name
  4. Interest must be agreed with client
  5. Maintain a client ledger of transactions
  6. Agree terms and inform client of bank details
  7. Account must never be over drawn
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16
Q

What are the RICS 5 principles for better regulation?

A

The RICS has a Royal Charter allowing them to be self governed. They are governed by the Bye-Laws and principles of better regulations (PACTT).

  1. Proportionality - make the penalty proportional to the breach
  2. Accountability - Regulators must be able to explain their actions under public scrutiny. Promote complete fairness
  3. Consistency - treat everyone equally
  4. Targeting - focusing on serious breaches
  5. Transparency - Regulations are simple, clear and effectively communicated to all members, clients and public.
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17
Q

Why does the RICS have Rules of Conduct?

A
  1. Provide framework for all members to work to
  2. So the client knows he is getting a set level of service
  3. They are an important tool for RICS and a useful tool for professional guidance for members.
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18
Q

What are the Rules of Conduct for members?

A

There are 9.

  1. Interpretation - definitions set by RICS
  2. Communication - members must be open to communicating with RICS promptly
  3. Ethical behaviour - act with integrity and honesty
  4. Competence - provide the best level of service
  5. Service - always provide a high level of service
  6. CPD requirements - all RICS members must complete a set number of hours per year and demonstrate lifelong commitment to learning
  7. Solvency - members must remain solvent and financially responsible
  8. Information to RICS - always cooperate with RICS communications and give information when requested.
  9. Cooperation - cooperate fully with RICS.
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19
Q

What are the Rules of Conduct for Firms?

A

There are 15.

  1. Interpretation
  2. Communication*
  3. Professional Behaviour
  4. Competence
  5. Service
  6. Training and CPD
  7. Complaints handling*
  8. Clients money*
  9. Indemnity
  10. Advertising*
  11. Solvency*
  12. Arrangements for a sole practitioner of incapacity or death
  13. Use of designations
  14. Information to RICS
  15. Cooperation
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20
Q

What sort of information do RICS firms have to send the RICS annually?

A

This is the annual return. Failure to do so leads to a penalty.

  1. Type of business and staffing
  2. Nature of clients
  3. Training provision
  4. CHP details and records
  5. PI insurance details
  6. Whether hold client money
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21
Q

what must a CHP include?

A

The RICS provide a model for firms to base their CHP on.

  1. The CHP must include a ADR mechanism, approved by RICS.
  2. The CHP must include two stages;
    - Complaint considered by senior members of staff or complaints handling officer.
    - If not resolved, referred to an independent 3rd party with authority to award redress.
  3. It must include the names and contact details of investigating persons.

It must be clear, transparent, impartial and free of charge.

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22
Q

If you were chartered and a friend asks you for advise, what would you do?

A
  1. If I was not comfortable offering advice i would politely decline and advise them to use the RICS ‘find a surveyor scheme’
  2. If i was happy to advise, I would not offer advice without PII.
  3. If I have PII I would ensure all information given was subject to a thorough checking process.
  4. I would inform them to contact me during working hours to discuss T&Cs of appointment
  5. I would always ensure to where to Rules of Conduct.
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23
Q

What is PII?

A

Professional Indemnity Insurance - provide financial cover if a client suffers financial loss as a results of a breach of professional duty e.g. neglect or error.

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24
Q

What benefits does PII offer?

A
  • The profession is protected from financial loss

- The firm does not have to pay for the damage from their own resources.

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25
Q

What basis should PII be underwritten?

A

On a claims made basis.
This is where the insurance policy that is in place at the time the breach is DISCOVERED is used to cover the claim. Not the policy in place at the time of the breach.

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26
Q

Tell me about the Merrett Vs Babb case?

A
  • Court Case in 2001
  • Babb did a valuation as an employee of a company, for a house that was purchased by Merrett.
  • The valuation was later found to be negligent.
  • The original company no longer existed.
  • The Court rules they could go against Babb for the losses.

This was a big shock in the industry.

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27
Q

Why was the Merrett Vs Babb case significant?

A
  • The case saw a professional employee was vulnerable to claims being brought directly against them for advice given on behalf of their employer.
  • Highlights importance of run-off cover.
  • Professional individuals must ensure that run-off cover is in place after they leave their firm’s employment or the firm ceases trading.
  • Individuals should ensure that their ex-company keeps up this cover on their behalf.
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28
Q

How long should run-off cover be in place off?

A

Run off cover is cover for a firm that has ceased trading, it protects the firm and its employees from future claims.

The length depends on type of contracts the professional has been involved in.
Usually 6 years if contract executed under hand.
Or 12 years if executed by deed.

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29
Q

What are the requirements regarding PII by the RICS?

A
  1. Must be made on an each and every basis.
  2. Gives minimum policy wording for firms and members
  3. Sets out minimum levels of indemnity required
  4. Sets out maximum levels of uninsured excess
  5. Run off cover in place for minimum of 6 years
  6. Cover in place for past and present employers, directors, and partners.
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30
Q

What are the minimum levels of indemnity/ how do you determine the level of PI cover?

A

This depends on the firms turnover.

  • If turnover =< £100k = indemnity of £250k
  • If turnover £100-£200k = indemnity of £500k
  • If turnover >£500k = indemnity of £1m
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31
Q

what are the maximum levels of uninsured excess?

A
  • Depends on the level of indemnity
  • Up to £500k =greater than 2.5% of insured sum or £10,000
  • > £500k = 2.5% of insured sum.
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32
Q

What measures should be taken to avoid PI claim?

A
  1. keep full, detailed record of meeting and conversations etc
  2. Record recommendations and advice given
  3. Use proper letter of engagement, scope of services and terms of engagement
  4. Dont advise on a specialism outside your field of experience
  5. Use RICS guidelines
  6. Avoid poor management and excessive workloads
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33
Q

If you put together a fee proposal, but a couple of months into the job you realise that you have under forecasted your resources, do you go back to the client and ask for more money?

A
  1. No, if the project has not changed, it is your fault for forecasting too low.
  2. Yes, if the project requirements (e.g. services, scope of works, value) has changed a fee increase could be negotiated
  3. DO NOT reduce the level of service you offered originally.
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34
Q

What are the CPD requirements?

A
  • All RICS members must commit to lifelong learning
  • New requirements January 2013
  • All members must undertake and record appropriately lifelong training and on request provide evidence that they have done so to maintain/imrove levels of professional competent.
  • All member must undertake a minimum of 20 hours CPD/year - half must be formal.
  • Members must maintain a relevant and current understanding of RICS professional and ethical standards during a rolling 3 year period.
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35
Q

How is the RICS structured?

A
  1. Privy Council - Grated RICS Royal Charter
  2. Governing Council - elected members from around the world.
    (3. Regulatory Tribunal (off on side on own) ?)
4. Standards and Regulations Board
Management Board - inform and oversee RICS affairs
Audit Committee
Nominations Committee 
Presidential Nominations Committee
  1. Finance Committee
    World Regional Boards and Market Advisory Panels
    Remuneration Committee
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36
Q

What are the RICS Bye-Laws?

A 
There are 10
REVISE THEM AND UNDERSTAND THEM. 
1. Application and definitions
2. Membership and registration
3. Designations
4. Contributions to funds
5. CONDUCT
6. Governing council officers and staff
7. Subordinate Boards, committees and groups
8. Procedure for general meetings
9. Accounts and Audits
10. General
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37
Q

Who is the president of RICS?

A

Kathleen Fontana since December 2020.

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38
Q

What is Kathleen Fontana up to?

A

She has 5 priorities

  1. Build back better - climate change and sustainable development
  2. Data and technology - building the bridge between property and tech
  3. Professionalism - improved it
  4. Future of the workplace - how workplaces can support lifestyles positively
  5. Diversity and inclusion - equal opportunities for all
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39
Q

When was RICS established?

A

The Royal Charter was granted on 26th August 1881.

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40
Q

What is the RICS motto?

A

Est Modus in Rebus

There is measure in all things

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41
Q

If you were bidding for works and client said you can have the job but you to to beat the lowest price of a competitor of £12,000 what would you say?

A

This is a bribe - Bribery Act 2010 and goes against GPES.

  • Unfair competition
  • Not acting with integrity or honestly
  • Not treating other surveyors with respect
  • Can you offered the required level of service for the reduced fee?
  • Devaluing the profession
  • Business should not be conducted in the manner.
  • Respectfully decline the offer
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42
Q

What is a consent order/ Regulatory Compliance Order?

A

A RCO is an agreement between RICS and a regulated member that they are liable for disciplinary action. A regulated member is an individual or firm.

The order states the action that the firm or member must take in a specified time period.

The Regulated Member admits that they have fallen short of the standards expected.

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43
Q

What is a fixed penalty?

A

An administration fine and/or caution issued by RICS when a regulated member fails to provide them with information that RICS have requested.

A procedure for breaches of the Rules relating only to the supply of information to the RICS.

Any fixed penalty issued and not rescinded will remain on a Regulated Member’s record for a defined period.

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44
Q

What are the principles of the bribery act?

A

Bribery is defined as “The offering, receiving, giving or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her legal duties.”

The Act only applies to the bribery of local officials.
UK companies and foreign companies operating in the UK have the duty of having corporate measure in place to prevent bribery and have in place control measures. Companies have to pay a fine if they dont have control measure in places.

Individuals can receive a combination of a fine and imprisonment for up to 10 years to the are committed of bribery.

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45
Q

What are the principles of GDPR?

A
  1. Lawfulness, fairness, transparency
  2. Purpose limitation
  3. Data minimisation
  4. Accuracy
  5. Storage limitation
  6. Integrity and confidentiality (security)
  7. Accountability
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46
Q

What are the principles of Money Laundering Regulations 2017?

A
  • The MLR 2017 set out additional obligations of private sector firms working in areas of higher money laundering risk. They aim to stop criminals using professional services to launder money by requiring professional to take a risk-based approach.
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47
Q

Your brother in law is a chartered surveyor. You find out he is working outside RICS rules and regulations, what do you do?

A

I verify the facts and confront him reminding him of his duties as a member of the RICS.
I would inform the RICS specifying my relationship to the person and any corrective action which I believe my brother in law is committed to put in place.

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48
Q

Can you tell me about a piece of CDP you completed recently?

A

State;

  • Informal or formal - In house formal training held by director of BEL
  • Learning objectives - Review of Fire Safety
  • Outcome - Understanding of requirements and duties under RR (FS) O 2005
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49
Q

What is the difference between forma and informal learning?

A
  1. Formal - web based training with structured assessment, formal seminars, providing training to others where research and preparation is required.
  2. Informal - Private reading, internal CPDs, shadowing/mentoring trainee
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50
Q

How will you record CPD and return this to RICS?

A

CPD can be recorded on the RICS portal

Must record type, date, subject area, number of hours, learning objectives and outcome.

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51
Q

What is on the latest cover of Modus?

A

Be aware of current affairs in the industry

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52
Q

How do you keep up with current affairs and topical issues?

A

I am on the mailing list for ARMA news, IRPM technical updates and RICS updates.
I read Property Week.
I read the general news.

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53
Q

What is your CPD strategy?

A
  • Meet with line manager bi-annually to discuss career development and set objectives
  • From this I set CPD based on current topics/personal interests
  • My main objectives for this year are to complete major works projects including boiler replacement.
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54
Q

Why do you want to become a Chartered Surveyor, over the ARMA qualification?

A
  1. Knowledge - The level of guidance and support from RICS will allow me to better serve my clients
  2. Recognition - RICS designation is highly valued and will further my career development and opportunities
  3. Professional development - To assist in improving industry standard for block management
  4. Networking - 130,000 professionals worldwide
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55
Q

What is the purpose of RICS?

A
  • RICS promotes and enforces the high professional qualifications and standards in the development and management of land, real estate, construction and infrastructure.
  • The work of RICS professionals is hugely varied and includes;
    1. Providing the best guidance to industry professional and governments.
    2. Influence best practice in the industry working policies
    3. Protecting consumers and businesses
    4. Developing assets in the built environment so they are fit for future generations.
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56
Q

What sets out the governance of the institution?

A

regulations and bye laws

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57
Q

How many qualified members are there?

A

over 130,000

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58
Q

What do you need to provide to become a FRICS?

A

Demonstrate 4 fellowship characteristics;

  1. MRICS for 4+ years
  2. Leadership role
  3. professional/technical achievement
  4. raising the profile of RICS

and a portfolio of professional achievement.

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59
Q

In the governance structure how many professional groups are there and what is their role?

A

17.

They outline the standards of competence and practice.

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60
Q

What is the UK structure?

A
  1. 4 National Assocations
  2. 10 Regional Boards
  3. Local Associations
  4. CEO Dr Sean Thompkins
  5. President - Kathleen Fontana
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61
Q

What is the role of the RICS?

A

To promote and enforce the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure.

  1. Maintain highest standards of education and training
  2. Protect consumers through strict regulation
  3. To be leading source of information and independent advice.
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62
Q

What is the role of the RICS?

A

To promote and enforce the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure.

  1. Maintain highest standards of education and training
  2. Protect consumers through strict regulation
  3. To be leading source of information and independent advice.
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63
Q

What are the benefits of being an RICS member?

A
  1. Status - professional credential provide unrivalled client confidence
  2. Recognition - promotion of professional excellence
  3. Market advantage - RICS status and standards gives competitive advantage
  4. Knowledge - RICS provide international practice standards and guidance
  5. Networking - access to 130,000 professionals worldwide
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64
Q

State a commonality between RoC for members and firms?

A

Rule 3 states that members and firms should act with integrity and avoid conflict of interest.

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65
Q

What is the ethical decision tree?

A

Framework for members to follow to determine how they should act in a situation.

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66
Q

Where can an RICS member go to if they have ethical concerns?

A

a senior member of staff or the RICS Regulation Confidential Hotline.

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67
Q

What are the benefits of regulations and rules of conduct for Firms?

A
  1. Confidence - for client
  2. Professionalism - firms will provide clear, impartial and expert advice
  3. Security - firms have to have recognised complaints procedure and access to independent redress and PII cover.
68
Q

What are the benefits of regulations and rules of conduct for Firms?

A
  1. Confidence - for client
  2. Professionalism - firms will provide clear, impartial and expert advice
  3. Security - firms have to have recognised complaints procedure and access to independent redress and PII cover.
69
Q

What are the three levels of disciplinary action?

A
  1. Action by Head of Regulation
  2. Regulatory Tribunal
  3. Appeal Panel
70
Q

What are the three sections of the RoC for Firms?

A
  1. General
  2. Conduct of Business
  3. Firm Administration
71
Q

What is the initial investigation stage for disciplinary action?

A

The HEad of Regulation investigates. They consider the following actions;

  1. Serve a Fixed Penalty Notice
  2. Make a Regulatory Compliance Order
  3. CPD Sanctions
  4. Refer the matter to the disciplinary panel
72
Q

What are CPD sanctions?

A

Obligation for a member to undertake CPD requirements.

73
Q

What is aciton by Regulatory Tribunal?

A
  1. A procedure used for for more serious breaches of conduct
  2. the Head of Regulation can determine if a hearing is required
  3. 50% of the panel are lay members
74
Q

What does the Appeal Panel do?

A
  1. They will review a member/firm’s appeal against the disciplinary action taken
  2. The panel can vary the penalty.
75
Q

What is an International Standard?

A

This is mandatory standard.
E.g. RICS Valuation - Global Standards
IPMS 2019

76
Q

What are Professional Statements?

A

They are mandatory guidance.
e.g.
Conflicts of Interest, Global 2017
Property Management 2018

77
Q

What are Practice Statements?

A

They are mandatory statements. Only a few.
e.g.
Surveyors Acting as Expert Witnesses 2014
Surveyors Acting as Advocates (Scotland) 2008

78
Q

What are guidance notes?

A

These are voluntary but promote good practice.
e.g.
Comparable Evidence in Real Estate Valuation 2019
Surveying Safely 2018

79
Q

What are Codes of Practice?

A

These are mandatory and provide up to date research and advice.
e.g
Service Charge Residential Management Code 2016
Code of Measuring Practice 2015 ( does not apply to resi)

80
Q

When negotiating a fee, what should you do?

A
  1. Fees should be market based and agreed as and when services are required.
81
Q

When negotiating a fee, what should you not do?

A
  1. Avoid price fixing or fee cutting
82
Q

What are 3 steps to follow when engaging with a professional?

A

CIT

  1. Check professional COMPETENCE
  2. No conflict of INTEREST
  3. Confirm TERMS of engagement in writing
83
Q

When would it be appropriate to decline an instruction?

A
  1. Conflict of interest
  2. If you are not competent
  3. If the work involves illegal activity
  4. Questions - Would you be content with your actions to be made public?
84
Q

What is a conflict of interest?

A

Where there is reduced impartiality as there is a pre-existing relationship which will affect duty to deliver services to the required standard.

85
Q

What is conflict avoidance?

A

When an instruction is declined due to a CoI

86
Q

What is conflict management?

A

When an instruction is acceptable and steps are agreed in writing to manage the conflict.

87
Q

What a is ‘Party Conflict’ ?

A

Relates to parties working on the same or related instruction for two different parties

88
Q

What is an ‘Own Interest Conflict’?

A

Relates to a personal interest e.g. shares own in the company

89
Q

What is a ‘Confidential Information Conflict’?

A

Relates to work between two parties which is confidential

90
Q

What is informed consent?

A
  • Where there is a CoI
  • a party is informed in writing of this
  • the party is fully aware of the risks involved and other options available
91
Q

What is the RICS statement for Conflicts of Interest?

A

The RICS Professional Statement on Conflicts of Interest 2017.
Came into affect of 1st January 2018.
it is mandatory.

92
Q

What does the RICS statement on CoI state?

A

Members must not advise or represent a client where doing so would involve a conflict of interest or a significant risk of a CoI. Other than when informed consent is provided.

93
Q

How would you handle a CoI?

A
  1. Conflict Avoidance - consider all facts and whether the CoI can be managed, if not decline the instruction.
  2. Written advice to both parties stating;
    - Disclose nature of conflict, the facts and how firm propose to deal with this.
    - Be clear and advise parties to take independent advise
    - Request written confirmation from both clients of their INFORMED CONSENT
  3. Conflict management
    Once received the informed consent, set out proposal of how the conflict will be managed. Demonstrate reasonable steps to operate an effective barrier.
94
Q

What do the RICS Bye-Laws state about confidentiality?

A

states that ‘client confidentiality must be maintained for all client affairs’

This includes historic information and new information.
All old files must be held for a minimum of 6 years.

95
Q

What is the RICS note on CHP?

A

RICS Guidance Notes on Complaints Handling 2016

96
Q

What is Assigned Risk Pool?

A

Assistance available at a cost for members who cannot arrange cover

97
Q

What should a member do is they have gone into administration and they are facing claims?

A

They can contact the Members Support Service.

98
Q

What is the RICS note on PII?

A

RICS Guidance Note on PII, Risk, Uncertainty and Insurance in Valuation Work 2018

99
Q

What is the RICS note on clients money? KNOW THIS!

A

RICS Professional Statement ‘Client Money Handling’ 2019

100
Q

What are the 6 areas of the RICS Professional Statement ‘Client Money Handling’ 2019?

A
  1. Holding client money
  2. Providing information to clients
  3. Receipts of client money
  4. Payments from client accounts
  5. Accounting, records and controls
  6. Compliance
101
Q

When setting up a new practice, what statutory compliance needs to be obeyed?

A
  1. Disability discrimination compliance (Equality Act 2010)
  2. Bribery Act 2010 (gifting register)
  3. Fire safety compliance
  4. Asbestos register and COSHH
  5. Register with HMRC for VAT and tax
102
Q

What do you need to to when closing a practice to be compliant with RICS?

A
  1. Inform RICS of closure
  2. Inform clients at earliest possibility and arrange handover
  3. Return client money
  4. Inform insurers and arrange run-off cover
  5. Retain a copy of client files for 6 years.
103
Q

What are the 6 principles of the Bribery Act 2010?

A
  1. Proportionality
  2. Top level commitment
  3. Risk assessment
  4. Due diligence
  5. Communication
  6. Monitoring and review
104
Q

What are the four offences linked with Bribery Act 2010?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent bribery
105
Q

Is hospitality prohibited by the Bribery Act 2010?

A

No, it states that offering a client reasonable and proportionate hospitality will not constitute an offence as long as is it recorded in the gift register

106
Q

What can firms do to avoid bribery?

A
  1. offer staff training
  2. Have appropriate procedures in place
  3. Have a gift register
107
Q

What are the penalties for bribery?

A
  1. The Act is policed by the Serious Fraud Office
  2. Max penalty of 10 years imprisonment
  3. Companies can face an unlimited fine
108
Q

What should firms do to prevent ML and TF?

A
  1. Requirement to conduct a written ML and terrorist financing risk assessment
  2. Implement systems to prevent ML and TF
  3. Provide staff training
  4. Comply with customer due diligence, enhanced due diligence and simplified due diligence.
  5. AML checks must be undertaken to confirm the identity of a proposed purchaser of a property and check the source of the funds.
109
Q

What should firms do to prevent ML and TF?

A
  1. Requirement to conduct a written ML and terrorist financing risk assessment
  2. Implement systems to prevent ML and TF
  3. Provide staff training
  4. Comply with customer due diligence, enhanced due diligence and simplified due diligence.
  5. AML checks must be undertaken to confirm the identity of a proposed purchaser of a property and check the source of the funds.
110
Q

What is Customer Due Diligence?

A
  1. Identify the client and verify their identity based on an independent source eg. passport
111
Q

What are the Customer Due Diligence ML checks for a Ltd?

A
  1. Certificate of incorporation
  2. Full name, registered address, registered office
  3. Name of all directors and names of all shareholders with 25% or more holding.
112
Q

What are the Customer Due Diligence ML checks for an individual?

A
  1. Check valid passport or driving licence

2. Bank statement or council tax bill not more than 3 months old

113
Q

What is Enhanced Due Diligence?

A

Additional procedures required when a business transaction involves a person established n a ‘high risk third country’ or is a politically exposed person (PEP).

114
Q

What are the penalties if fail to comply with ML regulations?

A
  1. 14 year prison sentence and/or unlimited fine for assisting with ML.
  2. 5 year prison sentence and/or unlimited fine for tipping someone off that they are being investigated.
115
Q

Under the Proceeds of Crime Act 2002, what are the 3 main areas of offence?

A
  1. Concealing criminal property
  2. Assisting with arrangements
  3. Acquisition use and possession
116
Q

What is the RICS note on criminal activity?

A

RICS Professional Statement - Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019

117
Q

What are the three parts of RICS Professional Statement - Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019?

A
  1. Mandatory requirements for anti-bribery, corruption, AML and ATF
  2. Guidance setting out good practice for the above
  3. Supplementary guidance on some of the concepts detailed in the note
118
Q

What must a RICS firm do regarding bribery and corruption?

A
  1. Not offer or accept a bribe
  2. Have procedures in place to comply with the law
  3. Report suspicion to the relevant authority
  4. Act with due diligence to perform periodic written evaluations
  5. Retain records
119
Q

What must a RICS firm do regarding ML and TF?

A
  1. Not facilitate ML or TF
  2. Have systems in place to comply with the law
  3. Report suspicion
  4. Evaluate and review the risks presented to the firm
  5. Use third party checks where required
  6. Verify clients by checking ID
  7. Retain records to show the firm has met requirements.
120
Q

What is negligence?

A

A duty of care exists to all clients and third parties, using ‘reasonable care and skill’

When breached and their is a loss, a claim for damages arises.

121
Q

What is the Burgess Vs Lejonvarn (2020) case?

A

States that professionals providing services on a pro bono basis, without a contract, still owe a duty of care. But Court of Appeal stated that the professional is not under duty to offer advise or give warnings.

122
Q

What is a margin of error?

A

The permissible ranged allowed by courts, for example in respect of valuations

123
Q

What is the Singer & Friedlander Ltd Vs JD Wood (1977) case?

A

Stated that the usual margins of error can be varied. For straightforward valuations it can be narrower compared to complex valuations.

124
Q

What were the margins or error stated in the K/S Lincoln and Others Vs CB case?

A

+/- 5% - residential property
+/- 10% - commercial property
+/- 15% - property with exceptional features

125
Q

What is the Limitations Act 1980?

A

The act states the current limitation periods for negligence;
Contract - 6 years from the date of negligent act
Tort - 6 years from the date the claimant suffered loss.

126
Q

How should a company avoid neglience?

A
  1. Clearly understand the client’s objectives
  2. Agree precise terms of engagement
  3. Ensure you are competent for the instruction
  4. Undertake work in accordance with RICS standards and Guidance Notes.
127
Q

What is the ethical decision tree?

A

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?

128
Q

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

A

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

129
Q

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

A

Rules – clear and instructional

Standards – are a framework to apply to different situations

130
Q

What RICS guidance relates to gifts and inducements?

A

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

131
Q

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

A

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)

132
Q

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

A

UK and Global Professional Statements (Mandatory for Firms and Members).
- Conflicts of interest, 1st edition, March 2017 (became effective 1st Jan 2018)

133
Q

What financial checks would you carry out for a new tenant?

A
  1. Dun and Bradstreet credit checks

2. Experian

134
Q

When is a situation when you have to comply with ML regulations?

A

If a property is being let to an individual or company for more than 10,000euros/month.
Two types of Due Dilignce (CDD and EDD)

135
Q

If it is a company, on who do you do the ML checks on?

A

A person with significant control. As stated on Companies House.

136
Q

What information does a person with significant control need to provide for ML checks?

A
  1. ID - Driving licence or passport
  2. Council tax statement or bank statement - not more than 3 months old.

To check an address, use Experian and compare it to the council or bank statement.

137
Q

How does the BEL complaints procedure work?

A 
2 steps
1. Complaint to senior member of staff - acknowledge in 7 and reply in 28 days. 
2. Independent 3rd party 
for consumers - Property Ombudsman
for businesses RICS dispute resolution
138
Q

What is the Property Ombudsman?

A

A scheme providing customers and property agents with an alternative dispute resolution since 1990.

139
Q

What does ‘without prejudice’ mean in a letter?

A

The letter can not be produced in legal proceedings

140
Q

What is a Calderbank offer?

A

Normally used in rent review, but could be used in a service charge dispute.

tenant say - prepare to settle outstanding at sum of £8500 for the last two years, offer open for 21 days. If not accepted we reserve the right to use this as evidence of costs.
If an arbitrator settles it at £8000, then invites submission on costs. The tenant will write to them with the Calderbank offer, stating the tenant offered a higher some before arbitrator appointed and the tenant will ask the landlord to cover all costs.

141
Q

If you are acting for a tenant and they ask you to advise on a service charge issue on a building you don’t manage and the landlord is a subsidary of your biggest client, what would you do?

A

Write to client and notify them that you have discovered the Conflict of Interest. As the landlord is a subsiduary of my biggest client, it would not be appropriate to continue with the appointment and that they should seek alternative advice.

142
Q

Difference between RICS Guidance Note and RICS Practice Statement?

A

Guidance note is voluntary (Surveying Safely 2018 & Comparable Evidence in Real Estate Valuation 2019)
Practice Statement is mandatory (surveyors acting as expert witness 2014)

143
Q

What checks do you do when you take on a new management client?

A

Anti-money laundering for person with significant control.

144
Q

What are the RICS IES?

A

International Ethical Standards

  1. Accountability
  2. Confidentiality
  3. Conflicts of Interest
  4. Lawlessness
  5. Financial Responsibility
  6. Integrity
  7. Reflection
  8. Standard of Service
  9. Transparency
  10. Trust
145
Q

What do firm have to do for administration?

A

“1. Advertising - promote services in a truthful and responsible manner

  1. Solvency - ensure finances are managed appropriately
  2. Arrangement to cover the incapacity or death of a sole practitioner
  3. Use of designations - state on business literature that it is regulated by RICS
  4. Information to RICS - supply info to RICS when required
  5. Co-operation - to co-operate fully with RICS staff and any person appointed by the regulatory board”
146
Q

What is meant by a firm?

A

“1. The whole or part of a corporation

  1. A partnership
  2. A limited liability partnership
  3. Unincorporated sole practitioner”
147
Q

What is a recent rule change with firm registration?

A

“If 50% of Principals of UK firm, which provides surveying services are RICS members they have to be regulated
If at least 25% they can apply
If no RICS members the firm cannot register
NB Principles are sole practitioners, directors, partners, board members or equivalent”

148
Q

Provide examples of professional behaviour.

A

“1. Sharing client confidential info

  1. Company director failing to pay taxes
  2. Continuing to trade knowing firm is insolvent”
149
Q

What are Regulatory Compliance Orders?

A

“Used for low level breaches

written document - states terms upon which member to follow CPD requirement”

150
Q

Name and Describe a recent disciplinary panel

A

“Mr Tariq Samee - June 2020 - Rule 3 Ethical Behaviour
He conducted a property valuation for a bank. Spoke to seller and indicated he could find a cash buyer. Inflated valuation of property. Therefore conflict of interest, dishonesty, lack of integrity. Expelled from RICS. “

151
Q

Provide an example of informed consent

A

Leaseholder set up a RTM and when to a different managing agents. They then came back to Burlington and Burlington informed the RTM and freeholder. All parties agreed it would be in the best interest for BEL to accept the instruction.

152
Q

What are the recent changes to the RICS PI Insurance Minimum Wording?

A
  1. Fire Safety
  2. Cyber cover
  3. New Risk, Liability and Insurance Guidance Note.
153
Q

What are the International Ethics Standards 2016?

A

Ethical Framework for the global property market published by the International Ethics Standards Coalition.

154
Q

What are the 10 International Ethics Standards 2016?

A
  1. Accountability
  2. Confidentiality
  3. Conflict of Interest
  4. Financial responsibility
  5. Integrity
  6. Lawfulness
  7. Reflection
  8. Standard of service
  9. Transparency
  10. Trust
155
Q

What is the International Ethics Standards Coalition?

A

63 professional bodies, associations and standards-setting organisations from across the world.

156
Q

What is RIDDOR?

A

Reporting of Injuries, Diseases, and Dangerous Occurrences Regulations 1995

157
Q

What is your duty under RIDDOR?

A
  1. Report injuries within 7 days to HSE
  2. Keep a record of all injuries 3-day plus
  3. Keep injury information for minimum of 3 years
158
Q

What is your opinion of the RICS Rules of Conduct?

A

A positive and necessary set of rules which ensures RICS standards are maintained worldwide

159
Q

Who determines regulation?

A

The Better Regulation Commission

160
Q

Do all shortcomings of Rules of Conduct give rise to disciplinary procedures?

A

No, each case is assessed on a case by case basis. Options;

  1. Serve a Fixed Penalty Notice
  2. Make a Regulatory Compliance Order
  3. CPD sanctions
  4. Refer to a Disciplinary Panel
161
Q

Outline the appeal panel

A
  1. Consider member’s or firm’s appeal
  2. Review with regard to previous and any new evidence.
  3. Appeal Board can allow appeal and vary penalty imposed
  4. 50% of Panel are lay members
162
Q

What are the different types of RICS Core Material?

A
  1. International Standards - Mandatory
    - RICS Valuation - Global Standards, 2019 (effective Jan 20)
    - International Property Measurement Standards (IPMS) 1st Ed - Resi and Office
  2. Professional Statements
    - Conflict of Interest, Global, 2017
    - Real Estate Management, October 2016
  3. Practice Statements
    - Surveyors Acting as Expert Witnesses, 2014
  4. Guidance Notes
    - Health and Safety for Residential Property Managers 1st Ed 2016
    - Comparable Evidence in Real Estate Valuation 2019
    - Surveying Safely, 2018
  5. Codes of Practice
    - Service Charge Residential Management Code 3rd Ed 2016
163
Q

How would you deal with a conflict of interest?

A

Consider Conflict Avoidance and don’t accept the instruction.

Write to Client A and B covering 3 points:

  1. Disclose nature of the conflict of interest
  2. Be clear and ensure both parties can make own decision
  3. Request written confirmation from both clients of informed consent, stating the firm can act in accordance with provisions of procedure proposed
    - Openness - conflict management
164
Q

What is included in BEL’s terms of appointment?

A
  • service to be provided by the agent;
  • authority of the agent;
  • client’s obligations;
  • fees
  • termination; and
  • liability of the agent.
165
Q

What is on the latest cover of Modus?

A

??!?!?!?!?!?!?!?!?!??!?!?!?!?!?!?!?!?!

166
Q

Equality Act 2010 reasonable adjustments - Explain

A
  1. Section 36 of the Equality Act 2010, and Schedule 4, include provisions on reasonable adjustments to the common parts of buildings such as blocks of flats. But not actually in force yet.
  2. Landlord has to agree to changes to common parts if asked by a disabled tenant and if, after consulting the other residents, they concluded that it would be reasonable to do so.
  3. It is always legal for the landlord to ask the disabled tenant to pay for the alteration.
  4. The failure to commence these provisions was criticised by the Equality and Human Rights Commission, the Discrimination Law Association, the Disability Law Service, University of Leeds, Disability Rights UK, and the Law Centres Network.368Justin Bates of the Housing Law Practitioners Association gave us a practical example of a case in which he had been involved: “An elderly leaseholder has a flat on the second and third floor. There is absolutely no reason why she cannot live independently, save that she has mobility issues. She wants to install a stair lift to get up to her second or third floor flat. She asks the freeholder for permission. The freeholder says no. She offers to pay the installation costs and all the running costs herself so there is no drain on the service charge. The freeholder says no. On the face of it, that is a lawful refusal.”

RICS APC - Residential (22 decks)

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