Ethics / professionailsm

Question 1

Talk me through the rics governance structure

Answer 1

Rics governed under under the terms of its royal charter, by various internal coucils and boards
Governing council has over 20 members and runs the rics, proving management and strategic direction
The standards and regulatory board and management board report to governing council
There are 17 specialist professional groups covering land, property and construction. Each professional group has an elected board and is responsible for outlining standards of competence and practice
Current CEO is Justin young
Current present is an gray, this position now chairs governing council

Question 2

Name the Five Rules of Conduct?

Answer 2

1. Members and Firms must act with honesty and integrity and comply to their professional obligation, including obligations to the RICS.
2. Members and Firms must maintain their professional competency, and ensure that services are provided by competent individuals who have the necessary expertise.
3. Members and firms must provide a good quality and diligent service.
4. Members and Firms must treat others with respect and encourage diversity and inclusion.
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 their profession.

Question 3

Can you provide examples of how you adhere to these rules of conduct?

Answer 3

1. I am open and transparent with clients about their fees and ensure to include how they are calculated where appropriate and whether or not expenses are included.
2. I only undertake work that I have the knowledge, skills and resources to complete competently. I stay up to date and comply with relevant legislation, codes of practice and other relevant technical and professional standards.
3. I understand client needs and objectives before accepting any professional work. I agree with my clients the scope of services provided and its limitations and timescales for the work. I communicate clearly with clients and others in a way they can understand.
4. I respect the rights of others and treat others with courtesy. I do not bully, victimize or harass anyone. I work cooperatively with others.
5. I question practices and decisions that I suspect are not right and raise these questions with the appropriate person where I believe in good faith it is necessary to do so. I respond to complaints made about myself promptly, openly and professionally.

Question 4

What is Appendix A? members

Answer 4

• RICS Members must; 1. Comply with the CPD requirements set by the RICS. 2. Cooperate with RICS 3. Promptly provide all information reasonably requested by the standards and regulation board, or those exercising delegated authority on its behalf. Publish a complaints handling procedure and have a third party dispute resolution service in place.

Question 5

Why were the previous global professional and ethical standards and rules of conduct replaced?

Answer 5

The RICS developed new rules of conduct to introduce a simpler structure and provide clear examples of how members and firms can comply with each rule. There is also a renewed focus on respect, diversity and inclusion, understanding evolving technologies and tackling global issues such as tacking climate change.

Question 6

What is the ethics decision tree?

Answer 6

• The RICS Decision tree provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner or situation.
• It encourages considering the legality of ones actions and their consistency with the Rules of Conduct, as well as to consult with appropriate people and have clear reasoning before making decisions. The ultimate test is whether members would be content for their actions to be made public.

Question 7

CPD in relation to the Rules of Conduct- How has this improved your understanding of the Rules of Conduct?

Answer 7

The RICS Ethics module explored multiple scenario based questions linked to ethics and the rules of conduct. This improved my understanding of the types of ethical queries I may face in the workplace and how to deal with these situations.

Question 8

What are the 3 levels of disciplinary actions?

Answer 8

• Action by head of regulation
• Disciplinary Panel
• Appeal Panel

Question 9

First stage of disciplinary action

Answer 9

Action by head of regulation
Formal investigation by the head of regulation of the rics
Head of regulation can then initiate one of following four actions upon completion on their investigation
The four possible actions ?
Fixed penalty notice
Make a regulatory compliance order
Refer to a single member of the regulatory tribunal for consideration
Refer matter straight to disciplinary panel

Question 10

When might action from disciplinary panel come in?

Answer 10

More serious breaches of conduct
Head of regulation can consider that a hearing is required under the discipline rules

Question 11

What penalties are available to the disciplinary panel ?

Answer 11

• Regulatory compliance order
• Fine
• Reprimand
• Impose conditions upon future continued rics registration
• Expulsion or remove firm

Appeal panel

Question 12

Considerations when negotiating fees?

Answer 12

Avoid price fixing, aggressive fee cutting or collusion
Market based
Competitive but not under cutting
May wish to alter level of service with fee negotiations however still provide a high level of service
Must be transparent, state in terms if there is a referral fee
Acceptance of referral fees should be considered within the context of the bribery act 2010 and rules of conduct

Question 13

Three steps of before carrying out work for a client?

Answer 13

Competency
Independence – conflict of interest
Confirm terms of engagement

Question 14

What are terms of engagement

Answer 14

These state in writing the clients agreement to the proposed fee basis, payment of expenses and how they are calculated and that a copy of firms CHP is available on request

Question 15

Why would you decline an instruction?

Answer 15

Not competent
Do not have sufficient facts
Client will not sign AML checks or terms of engagement
Conflict or personal conflict of interest
PI Cap not agreed
PI wont cover probono cases
Client is on uk government sactions list
If I was not happy that my actions on behalf of the client were made visible to the public eye

Question 16

What would you consult if work would be considered a grey area?

Answer 16

Ethics decisions tree

Question 17

Define conflict of interest?

Answer 17

A conflict arises when a members or firms impartiality is compromised due to the existence of a conflict between two parties these could be:
Any financial interest
A personal interest
Commercial relationship
Acting on both side of transaction

Question 18

What is the difference between conflict avoidance and management

Answer 18

Avoidance do not accept instruction
Management you accept the instruction following the client giving informed consent and put ethical or informational barriers in place to mitigate

Question 19

Key points of the RICS Global statement on conflict of interest 2017

Answer 19

Mandatory statement that came out in 2017
States that member of firms must not advise a client where doing so would involve a conflict of interest or a significant risk of conflict of interest other than the situation where all those parties that could be effected have given their informed consent
Informed consent may only be sought where an rics member is satified that proceeding despite the conflict is in the interest of all the conflicted parties or may be effected and is not prohibited by law
Its also defines three types of conflict
Party conflict
Own interest conflict
Confidential conflict

Question 20

What are the three types of conflict ?

Answer 20

Party conflict - working on the same or related instruction for two parties
Own interest conflict – relates to personal interest
Confidential information conflict – relating to work between two parties which is confidential

Question 21

What is informed consent?

Answer 21

Can only be given in writing
Can only be given if the affected party is completely informed by the all the material factors that creates a conflict have been explain transparently and fully

Question 22

When should you seek informed consent ?

Answer 22

If there is a conflict of interest and you are satisfied that despite the conflict it is in the interest for all parties to carry out the work

Question 23

How would you manage a conflict of interest ?

Answer 23

Step one conflict avoidance
Upon receipt of the fullt fact consider whether the conflict is irresolvable because your impartiality is compromised and should be avoided or whether it can be managed mitigated transparency and openness
Decide whether you want to act or client A or B
Step two Written advice to both parties
Assuming you wish to accept the instruction set out in writing as soon as possible to client a and b covering three point:
Disclose the nature of the conflict, the circumstances surrounding it and any other relevant facts and set out your proposals for how the firm intends to deal with the conflict, i.e setting up ethical or information barrier
Be clear as I possible can – ensure both parties can arrive at their own opinion and advise they seek advise
Request written confirmation that you can act on behalf of both parties with the suggest provision and procedure you have suggested you undertake (informed consent)
Step three – conflict management
Receive inform consent set up information barrier in accordance with the provision I suggested

Question 24

Key consideration for an information barrier ?

Answer 24

Must be robust enough to prevent any information travelling between two parties
Take reasonable steps to operate the barrier
Sureyors on other side must be physically separated i.e. one work from home other in office (included support teams)
All information stored securely
Keep a clear audit trail of the conflict check process and all written and oral communication, compliance officer must oversee all actions.

Question 25

How long would you hold client files for after being instructed?

Answer 25

6 years before disposal

Question 26

What if you heard of a confidential piece of information regarding a party who is not their client?

Answer 26

This information cannot be used for their own purposes, If by email then the client and sender should be advised of this error, and recorded to the compliance office.

Question 27

When would allow a third party access to a client file ?

Answer 27

If the client gives consent Unless you are subject to a statutory duty which overrides clients confidentiality (HMRC or police)

Question 28

What is your firms CHP

Answer 28

My companies CHP policy Person involved seeks to resolve immediately, if not then CHO is notified and standard letter is sent to complaint within 3 days A principle in my firm is elected to launch an investigation in to the matter and conduct interviews audits and anything else pertinent to the complaint made Update to client of this investigation within 10 days If complaint still not happy then – CHO launches an investigation out come in 10 days If complaint still not resolved then we will direct them to a redress scheme such as the PRS of CEDR

Question 29

What if the complaint was not a client ?

Answer 29

We owe a duty of care to the client Beyond that it is not definitive (case by case basis) I then would contact my CHO

Question 30

Who must be contact in the event of a complaint?

Answer 30

CHO Always notify provides of our PI of any complaint as this could lead to a claim of negligence

Question 31

How would you communicate with complaint ?

Answer 31

Ensure that all correspondence is headed with ‘With out predjuduce’ No mention of our PI or existence of cover

Question 32

What are rics requirements for CHP

Answer 32

7 days acknowledge 28 instigate investigation Procedure quick and clear when firm receives a complaint from a party that firm ows a duty of care to Details of nominated CHO Complaints made in writing

Question 33

What if the complaint still isn’t happy ?

Answer 33

If the complaint is still not happy with the review: The second stage of the CHP involces using an independent redress scheme that the firm has chosen to use The name of the relevant redress mechanism must be provided to the complaint such as the centre for dispute resolution CEDR, the property redress scheme and the rics dispute resolution service

Question 34

When would the rics get involved? regarding complaints

Answer 34

Only if a member fails to respond to the compliant or prevents the party from a gaining access to an independant mechanism

Question 35

What if a sole practitioners ? regarding complaints

Answer 35

Nominate a surveyor in another firm to act as CHO

Question 36

What are CPD requirements

Answer 36

20 hours 10 formal Maintain understanding of rules of conduct during a 3 year period All member to record cpd on cpd management system on the rics website by 31st January

Question 37

CPD decision tree?

Answer 37

Focused topic Formal structure – with learning outcomes Objective enhance knowledge or skills Interation with other, professors or professionals in a class toom like or conference setting ? Yes all those then formal

Question 38

What is PI based on ?

Answer 38

A firms previous years annual turnover

Question 39

Determine PI requirements for new firm?

Answer 39

Projected turnover

Question 40

What are the current turnover bands ?

Answer 40

100,000 or less - 250,000 100,000 to 200,000 – 500,000 Over 200,001 – 1 million

Question 41

Maximum level of uninsured excess ?

Answer 41

Preceding years turnover up to 10 million the greater of 2.5% of the sum insured of £10,000 Over 10 million no set limited

Question 42

What if a claim was made for something that happen 2 years ago and you had since renegotiated PI?

Answer 42

Made on a claims made basis IE the current term covers those claim currently and any previous claims made

Question 43

What is run off cover ?

Answer 43

Cover required once trading of a company has ceased

Question 44

Where would you get PI from?

Answer 44

RICS approved provider

Question 45

How long would have to arrange run off cover for ?

Answer 45

6 years after trading Why – 1980 limitation act which sets out limitations period for negligence which is 6 years in the case of contract law from the date of the negligence act

Question 46

What needs to occur for a negligence breach

Answer 46

Duty of care is breached Loss Damages (negligence claim)

Question 47

Can you explain the basis yianni v Edwin evans 1981

Answer 47

A residential valuer instructed by a mortgagor lending instruction could owe a duty of care to a mortgagee purchaser reiling on a valuation

Question 48

Scullion v bank of Scotland 2010

Answer 48

A valuer may not have a duty of care to a commercial astute borrower. Relates to a buy to let case I.e. they are likely to rely on their own surveys and experience

Question 49

Burgess v lejonvarn 2020

Answer 49

Professionals providing services pro bono and without contract owe a duty of care in tort to act with reasonable care and skill in respect of the service they provide

Question 50

What could you do to reduce chance of claims of negligence ?

Answer 50

Clearly understand client objectives in writing with terms of engagement Ensure competence Under take works with guidance notes and professional statements Make detailed file notes Keep up to date with market knowledge Cap professional liability excess on your pi policy in the terms of engagement

Question 51

What guidance does the rics provide on handling client money

Answer 51

RICS professional standard ‘client money handling’ 1st edition 2019

Question 52

6 main arears of good practice regarding RICS professional standard ‘client money handling’ 1st edition 2019

Answer 52

What are the 6 main arears of good practice 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

Question 53

RICS professional standard ‘client money handling’ 1st edition 2019 - procedures

Answer 53

Client accounts must be kept separate and clearly identifiable The word client is on the bank account and cheque book Client must be able to have monies on request Payment of interest is agreed with a client and accounts must be kept in credit Regular bank reconciliations checking that payments received are transferred to the bank account and expenditure records are checked monthly Accurate records are kept with a running balance available Annual audit and reporting obligations by certified accountant employed by rics are met Money can only be withdraw from an account if properly required A discrete account is for a single named client account only Rics regulated review visits of inspection can be undertaken by rics usually on a routine 3 yearly basis by an accountant employed by rics All firms handling client money need to display their procedures document on their website

Question 54

what is your companies client money handling procedure?

Answer 54

our money handling procedures align with the RICS standards client accounts clearly detailed as client money is kept seperate from savills own money immediately available money is recorded in an individual client ledger to maintain segregation of funds minimum BBB+ rated bank Only a principal of the client can authorise a new signatory all cash and cheques are logged and banked on day of receipt all un identified funds are reviewed as soon as possible and no later than 1 month from receipt at which time they will be allocated or returned Withdrawals only authorised after signatory from an approved signatory - supporting evidence Agreement of interest - typically retain interest to off set against administrative charges as per PMA agreement monthly reconciliations - three way between bank, general ledger and individual client ledger

Question 55

when is a gift deemed in appropriate

Answer 55

When it could be conceived as a bribe

Question 56

How could you establish if it was a bribe ?

Answer 56

Regard the gift policy I.e below £50 Frequency of gifts Timing of the gift e.g. negotiation a contract, doing a valuation and borrower gives you a gift Gift not in keeping with Savills code of conduct or rics code of conduct (think ethics questions, would I be happy if this was covered by the press) Could create a conflict of interest and you may feel obliged to return the favour

Question 57

Good practice for gifts and hospitality?

Answer 57

Ensure gift and hospitality is legitimate with business purpose Gift is transparent – declare gift on register, communicate with manger Ensure gift and hospitality is proportionate Ensure that you are accompanied by another relevant employee when attending hospitality Seek guidance from compliance team or group legal team

Question 58

Savills gift and hospitality policy

Answer 58

Entertainment – 125 per meal per person any higher requires approval - 250 per person per event any higher requires approval - No more that 500 per year with out approval Gifting – giving up to 50 Receiving up to 50 if more then politely decline if not able to then raffle off the goods for charity or share Giving and receiving no more than 100 per annum

Question 59

Does your company support any political parties or support foreign Charites ?

Answer 59

No

Question 60

What if a client asked you to sponsor something ?

Answer 60

Be aware of the bribery risk Comply with code of conduct

Question 61

Four offences under the bribery act 2010

Answer 61

Bribing Receiving a bribe Failing to prevent bribery Bribing a foreign public official, including facilitating payment (even from third parties)

Question 62

What is a bribe

Answer 62

The exchange of something of value which in return results to the person receiving it promising to do something improper in their line of business

Question 63

where does the bribery act apply ? (locations)

Answer 63

In the UK and overseas

Question 64

What is the bribery act 2010?

Answer 64

Applies to British citizens Anyone that commits a relevant offence in the UK Uk companies acting in the UK and overseas as well as non uk companies who conduct business in the uk It aims to reduce bribery in business in the Uk and abroad

Question 65

Six principles of the bribery act

Answer 65

Used to assess the quality of the procedures in place Proportionality - A commercial organisation’s procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the commercial organisation’s activities. They are also clear, practical, accessible, effectively implemented and enforced. Top level commitment - The top-level management of a commercial organisation (be it a board of directors, the owners or any other equivalent body or person) are committed to preventing bribery by persons associated with it. They foster a culture within the organisation in which bribery is never acceptable. Risk assessment - The commercial organisation assesses the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it. The assessment is periodic, informed and documented. Due diligence - The commercial organisation applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organisation, in order to mitigate identified bribery risks. Communication - The commercial organisation seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training, that is proportionate to the risks it faces Monitoring and review - The commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.

Question 66

What is the money laundering legislation

Answer 66

Terrorist financing and transfer of funds regulations 2017

Question 67

What is money laundering?

Answer 67

When proceeds of criminal activities are disguised or converted and then realised as legitimate assets

Question 68

Key points of Terrorist financing and transfer of funds regulations 2017 in the sense of regulation

Answer 68

Have a written money laundering and terrorist financing risk assessment Implement procedures to address money laundering and terrorist financing Provide staff training Comply with new customer, enhanced and simplified dd requirements Comply with requirements relating to politically exposed personal Ensure appropriate record keeping, policed and procedures AML checks must be undertaken to confirm the identify of the proposed purchaser of a property and check the purchasers source of funds by the vendors agent before contracts are exchanged Check high risk factors e.g. where there are transactions between parties based in high risk countries

Question 69

What CDD is required for different types of client

Answer 69

Private individual - Identify the client and verify their identification based on passport as well as proof of address Company - Company house number, details of directors, beneficiaries of the company (25% share holders), obtain information on the purpose and intended nature of the business relationship and proposed funding arrangements PLC - LSE number Government body - proof of this

Question 70

When would you undertaken Enhance DD

Answer 70

Identify any red flags PEP - entrusted people of influence and so require EDD business operations in red flags countries detailed by the UK government People on UK sanctions list Fast sales odd currencies

Question 71

What would you do if you suspected ML

Answer 71

Do not tell client could be tipping off Go straight to AML team (MLRO) You wait for their instruction and complete a suspicious activity report we do not need evidence but need a foundation, do not need to know the exact source of illicit activity

Question 72

What is the regulator and what must savills provide regarding ML

Answer 72

HMRC regulate and can audit any time we must appoint a money laundering office have written policies available to staff Risk assess your business to identify high risk instructions train staff regularly

Question 73

What are ML red flags ?

Answer 73

Unwillingness to provide identify documents Changes to parties involved in transactions Unusual features, unexpected urgency Unusual currencies

Question 74

Key RICS material on bribery and ml

Answer 74

RICS professional standard: countering bribery, corruption, money laundering and terrorist financing 2019 Sets out mandatory, globally applicable requirements for the rics member and regulated firms in relation to bribery, corruption, money laundering and terrorist financing

Question 75

RICS professional standard: countering bribery, corruption, money laundering and terrorist financing 2019 - how is it set out?

Answer 75

Mandatory requirements for anti-bribery, corruption, AML, and terrosit finance Guidance on good practice

Question 76

what is a politically exposed person

Answer 76

They are higher risk as they hold positions of influence and as such require additional enhanced due diligence

Question 77

What could you be sentenced for for assisting anyone with ML

Answer 77

14 years imprisonment and unlimited fine

Question 78

Penalties for bribery

Answer 78

10 years imprisonment and unlimited fines

Question 79

3 main roles of rics

Answer 79

1 maintain highest standards of education and training 2 protect consumers through the strict regulations 3 be the leading source of information and independent advice regarding land, property and construction

Question 80

What is a principle ?

Answer 80

A director, partner or anyone that can act autonomously without supervision

Question 80

RICS requirements for registration

Answer 80

if 50% or more of the principles are rics accredited then must be regulated if 25% may be regulated

Question 80

What is a responsible principle

Answer 80

a nominated principle that is required to ensure all reaosnable steps are taken and systems are in place to ensure compliance with the rics which includes reporting to the rics

Question 80

5 benefits of being an rics member

Answer 80

status - professional accreditation recognition - signalling excellence to market market advantage - competitive advantage over other consutants network - access to 125,000 other surveyors knowledge - access to cpd and knowledge sharing

Question 80

Appendix A for firms

Answer 80

Publish CHP Appropriate PI cover from approved provider if a sole principal appropriate arrangements for incapacitation or death cooperate with rics provide all information reasonably requested by standards and regulatory board publish rics logo on literature in line with standards REPORT ANY MATTER THEY ARE REQUIRED TO DO SO TO THE RICS

Question 81

information required by the rics for registration

Answer 81

responsible principle nature of clients type of business CHP PI cover certificate whether or not the firm holds client money

Question 81

Use of social media?

Answer 81

RICS will investigate social media post from members where they involve: Discrimination bullying dishonesty Abusive The rics may not investigate posts which are: Critial of a company and not a person use of professional language are removed if requested RICS use of social media: Guidance for RICS Members 2021

Question 81

Confidential Information Conflict

Answer 81

A Confidential Information Conflict will arise where the duty of a RICS member to provide to every client all the information that is material to the client’s professional assignment of which that RICS member has knowledge, conflicts with the obligation to maintain confidentiality of confidential information. Please note this conflict will only arise where the information is known to the individual RICS member and not the firm as a whole.

Question 81

New rics core material what are they ?

Answer 81

RICS professional standards - mandatory (Professional statements) RICS practice information - best practice (Guidance notes)

Question 81

Party conflict

Answer 81

A situation in which the duty of a RICS member or a regulated firm to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another client or party in relation to the same or a related professional assignment;

Question 81

Own interest conflict

Answer 81

A situation in which the duty of a RICS member or a regulated firm to act in the interests of a client in a professional assignment conflicts with the interests of that same RICS member/ firm (or in the case of a regulated firm, the interests of any of the individuals within that regulated firm who are involved directly or indirectly in that or any related professional assignment).

Question 82

Starting a new company RICS compliance

Answer 82

inform rics of your new practice by completing a firm details form appoint responsible principal register with rics arrange pi set up cmh procedures obtain chp rics approval set up complaint log appoint cho (elect from another firm if sole practioner) plan for succession if sole practitioner ensure cpd logged online on cpd management system ensure completion of rics annual return at end of each year register with valuer registration scheme

Question 83

Starting a new practice statutory complaince

Answer 83

Bribery act 2010 compliance appoint Amlo health and safety compliance inform hmrc register with companies house ensure insurance is in place register with ico (data protection)

Question 84

closing a practice

Answer 84

Inform rics inform clients return any client money inform insurers set up run off cover for a min of 6 years retain certain files and records for 6 years (1980 limitation act)