Ethics: RICS Requirements Part 1

Question 1

“Adequate and appropriate” run-off cover is required following cessation of trading:

Answer 1

• For consumer claims, a minimum of £1,000,000 of aggregate cover over a period of six years
• For commercial claims, firms must consider what is adequate and appropriate for a minimum of six years
• Firms that are unable to obtain run-off cover from their incumbent insurer or the open market will be able to apply for coverage to the RICS Run-off Pool

Question 2

4 levels of RICS membership:

Answer 2

1. FRICS
   2.MRICS
   3.AssocRICS
2. Trainee/Student

Question 3

5 Benefits of Being a RICS member

Answer 3

1) Status - Your professional credentials provide unrivalled client confidence
2) Recognition - Promotion of your professional excellence to governments and markets
3) Market advantage - RICS status and standards gives you a competitive advantage
4) Knowledge - International practice standards, professional guidance, CPD & knowledge sharing
5) Network - Access to professionals worldwide

Question 4

Mandatory professional obligations in Appendix A - RICS members must:

Answer 4

1. Comply with the CPD requirements set by 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

Question 5

RICS Professional Statement: Conflicts of interest - UK commercial property market
investment agency, 2017

Answer 5

• Whilst the RICS Conflicts of Interest Professional Standard, 2017 sets out high-level principles for the appropriate identification and management of conflicts, this additional mandatory professional statement relates only to UK commercial investment agency work where a specific risk has been identified

Dual agency
* It deals with dual agency: where an agent has a contractual agency relationship with both the seller and the buyer at the same time
* ‘This practice must not be undertaken in any circumstances from 1st January 2018 by any RICS
members’

Multiple introductions
* The statement also deals with multiple introductions: where an agent has competing contractual
relationships simultaneously with several buyers for commercial real estate investment opportunities

Incremental Advice
* This is where an agent is approached by another party to provide advice, to include valuation, building surveying or planning, related to a purchase or disposal that is incremental to an existing instruction
* An example given is where an agent is acting for the seller in relation to a disposal but is approached by the buyer, or its lender, to provide a valuation
* RICS members must only provide such incremental advice if consent is given and an information barrier is put in place before providing any incremental advice to the prospective buyer

Personal Interest/Own Interest Conflict
* This arises when acting for a family member, a close business associate or someone with whom you
have a financial or personal interest or benefit (known as a ‘connected person’)
* You must not let a personal interest interfere with or influence your professional judgement. Full
transparency is required
* Declare facts promptly and in writing before you accept the instruction
* Remember Section 21 of Estate Agents Act 1979 declaration required for agency work

Question 6

RICS development and enforcement of leading international standards does what?

Answer 6

protects consumers and businesses by ensuring the utmost level of professionalism is employed across the built and natural environment.

Question 7

The maximum level of uninsured excess required by RICS is:

Answer 7

Firm’s turnover in the preceding year:
Up to £1 billion
Over £10 million
Maximum uninsured excess:
The greater of 2.5% of the sum insured or £10,000
No set limit

Question 8

To become a RICS Fellow, you need to provide the following for the Fellowship assessor to consider:

Answer 8

• Evidence of achievement of FOUR Fellowship characteristics, which include five or more years at MRICS, a leadership role, professional/technical achievement, academic achievement or raising the profile of the RICS
• A portfolio of professional achievement to support the application is required to include your CPD record

Question 9

What are the standard minimum procedures for the handling of a complaint?

Answer 9

Stage One {In House):
* Details of the CHP should be issued whenever the firm receives a complaint from a valid complainant to whom the firm owes a duty of care
* The procedure must be quick, clear,
transparent and impartially implemented
* Details of the nominated person who will
investigate the complaint (The Complaints Handling Officer) must be stated as the person to be contacted in the first instance
* The complaint must be made in writing
* Procedures and strict timescales for the
investigation of the complaint should be
recorded
* A complaint should be acknowledged within 7 days and investigated within 28 days

Stage Two (ADR - Third Party Resolution):
* If the complainant is not happy with the review, the second stage of the CHP involves using an independent redress scheme that the firm has chosen to use
* The name of the relevant appropriate redress mechanism must be provided to the complainant such as The Centre for Effective Dispute Resolution (CEDR), The Property Redress Scheme and the RICS Dispute Resolution Service

Question 10

• RICS Practice Information - Risk, Liability and Insurance, 2021, includes the following advice:

Answer 10

• RICS recommends the use of liability caps to manage risks associated with professional work
• Be aware of third-party reliance and make it clear that advice can only be relied upon by the client named in their terms of
  engagement

Question 11

Action by a Disciplinary Panel

Answer 11

• Procedure used for more serious breaches of conduct
• The Head of Regulation can consider that a hearing is required under the discipline rules
• Membership of a Disciplinary Panel includes lay members (not RICS members)
• The penalties available to a Regulatory Tribunal Disciplinary Panel include:

1. Issue a Regulatory Compliance Order (as above)
2. Reprimand
   3.Fine
3. Impose an unlimited amount of fine per breach but it must be proportionate to the offence
4. Impose conditions upon future continued RICS registration
5. Expulsion from membership or remove a firm
6. Require publication of the results of the hearing in the RICS Modus magazine, on the RICS
   website and in the local newspaper where the firm or member is base

Question 12

Appeal Panel

Answer 12

• Appeal Panels can consider a member’s or firm’s appeal against review of a decision relating to the above levels of disciplinary procedure
• They will review the decision made having regard to the evidence previously presented and any new representations. The Appeal Panel can allow the appeal and vary the penalty previously imposed
• Membership of this Panel includes lay members

Question 13

Background to the RICS

Answer 13

• RICS was founded in 1868
• RICS has a Royal Charter, initially granted by
  Privy Council in 1881
• RICS Regulations and Bye-laws set out the
  governance of the Institution

Question 14

Client Money handling Procedures

Answer 14

• Client accounts must be kept separately & clearly identifiable.
• The word ‘client’ is on the bank account and cheque book.
• A client must be able to have their monies on demand.
• Payment of interest is agreed with a client and accounts must be kept in credit.
• Regular bank reconciliation checking that payments received are transferred to the bank account and expenditure records are checked at least monthly.
• Accurate records are kept with a running balance available.
• Annual audit and reporting obligations by certified accountant employed by the RICS are met.
• Money can only be withdrawn from a client account if properly required.
• If cash receipts are made to settle transactions, make sure your records show all cash transactions.
• Signatories must be agreed with authorised staff and two signatures should be required.
• A discrete account is for a single named client account only.
• RICS Regulatory Review Visits of inspection can be undertaken by RICS usually on a routine 3-yearly basis by an accountant employed by the RICS.
• All firms handling client money need to display their procedures document on their website (residential agencies handling client money also need to display their scheme membership certificate in their premises).

Question 15

Closing a Practice - RICS compliance

Answer 15

Upon retirement or ceasing to practice consider the
following actions required by the RICS:
* Inform the RICS of your retirement/closure and
deregister
* Ensure clients are informed at the earliest
opportunity and hand over arrangements made to a
new firm
* Return any monies held by clients to their own
accounts
* Inform insurers and procure professional indemnity
insurance run-off cover for a minimum of 6 years
from the expiry of the policy in force at the time of
cessation in accordance with RICS requirements
* Retain a copy of the client files and records for a
minimum of 6 years

Question 16

Complaints Handling Procedures

Answer 16

• It is a requirement for RICS Regulated Firms to have
  a published complaints handling procedure (CHP)
  that meets the requirements of the RICS Rules of
  Conduct, 2021
• Whenever an RICS Regulated Firm issues Terms of
  Engagement. it should be made clear to the client
  that the firm operates a CHP
• Remember to notify your PII insurers as soon as
  possible if there is a complaint as this could lead to
  a claim for negligence
• Details of the CHP should be issued to a client at the
  same time as Terms of Business
• A complaints log must be maintained to show the
  details, progress and outcome of any complaints
• Firms must include an RICS approved Alternative
  Dispute Resolution (ADR) mechanism in their
  Complaints Handling Procedure

Question 17

Confidentiality

Answer 17

• The RICS Bye laws state that ‘client confidentiality
  must be maintained for all client affairs’
• This includes historic information and information
  provided by a client prior to instruction
• If a third party wants access to your files you must get
  your client’s approval first unless you are subject to a
  statutory duty overriding the client’s confidentiality
  rights, such as a police or HMRC investigation
• All old files should be held for a minimum of 6 years
  before disposal and destroyed securely
• If a surveyor overhears or finds out a confidential
  piece of information regarding a party who is not their
  client, such as the receipt of an email addressed to
  another party, then this cannot be used for their own
  purposes. The client and sender should be advised of
  the error. The matter should be recorded in a note to
  the firm’s compliance officer
• Any confidential material received in error should be
  disposed of securely

Question 18

Conflict avoidance v conflict management (‘No v Yes’)

Answer 18

• Conflict avoidance is when you do not accept the instruction
• Conflict management is when the instruction is accepted, and steps are agreed and put in place to
  manage the conflict, such as an information /ethical barrier, with the written agreement of all parties

Question 19

Conflict management - Use of information/ethical barriers

Answer 19

If both clients agree in writing, your firm can act for two parties where a conflict of interest exists, having
completed the above procedure, by creating an information barrier between those acting for the
respective clients. This should be operated as follows:
* The barrier must be robust enough to offer no chance of information passing between the two parties
* You must take ‘reasonable steps’ to operate an effective barrier
* The surveyors acting on the two sides must be different and they must be physically separated,
preferably in different buildings or on different floors of a building and with separate support teams
* There is a virtual IT barrier
* All information regarding the instruction should be securely stored
* Keep a clear audit trail of the conflict check process and all written and oral communication; the firm’s
compliance officer must oversee all actions

Question 20

Conflicts of Interest - Other key areas of the Professional Standard include:

Answer 20

• All conflicts must be managed in accordance with the Professional Standard
• Every RICS firm must have in place effective systems and controls appropriate to the size and complexity of their business to ensure full compliance
• AlI firms must keep records to show their compliance with the Stantard

Question 21

Conflicts of interest between 2 clients

Answer 21

• A conflict of interest arises when a member or firm’s independence and impartiality is threatened due to the existence of a conflict between two clients. Examples include:
• Any financial interest
• A personal interest
• Commercial relationships
• Acting on both sides of a transaction

Question 22

Continuing Professional Development (CPD) - Four requirements:

Answer 22

1. ‘Members shall undertake a minimum of 20 hours CPD in a calendar year
2. Of the 20 hours, at least 10 hours must comprise Formal CPD. The remainder can comprise Informal CPD
3. All members must maintain a relevant and current understanding of RICS Rules of Conduct during a rolling 3-year period.
4. All members must record their CPD activity using the RICS CPD Management System available
   online on the RICS website by 31st January each year’

Question 23

Current RICS Governance Structure

Answer 23

• RICS is currently governed, under the terms of its Royal Charter, by various internal councils, and boards
• Governing Council currently has over 20 members and runs the RICS, providing management and strategic direction
• The Standards and Regulation Board and the Management Board report to Governing Council
• There are 17 specialist professional groups covering property, land and construction. Each professional group has an elected board and is responsible for outlining standards of competence and practice
• The current Chief Executive Officer is Justin Young
• The current President is Tina Paillet FRICS with
  effect from 1 st January 2024. This position also
  chairs Governing Council

Question 24

Current RICS Membership

Answer 24

+140,000 qualified and trainee members

Question 25

Disciplinary Procedures

Answer 25

• The RICS is responsible for regulating the surveying profession in order to:
• Protect the public, uphold the public confidence in the profession & uphold professional standards
• This is undertaken by the Standards and Regulation Board
• A disciplinary procedure can be triggered by
  someone complaining to the RICS, an allegation by a client or third party or because of information received or established by the RICS
• Not every shortcoming on behalf of a member or a firm will necessarily give rise to disciplinary proceedings. However, a failure to follow any
  RICS guidance will be considered by the RICS when examining the behaviour of a member or firm. In such circumstances a member or firm may be asked to justify the steps they took, and this may be considered
• RICS Regulatory Decision Making, 2022 provides an outline of the regulatory approach by RICS of regulated members, non-members and firms; the disciplinary process itself is set out in the RICS Regulatory Tribunal Rules, 2022

Question 26

Document Categories

Answer 26

new category of core material called a Professional Standard which is replacing professional statemetn andguidance note

Question 27

Fee negotiations

Answer 27

• Firms should avoid price fixing, aggressive fee cutting or collusion with competitors
• Fees should be market-based and agreed on an ad-hoc basis with clients
• Healthy competition is encouraged but aggressive fee cutting is not allowed
• You can enter into further fee negotiations with a prospective client, after you have submitted your initial fee proposal, having regard to the above so long as you act in a professional manner
• In deciding upon a fee, you should consider the amount of time and resources required and that you have the appropriate expertise. You might wish to make a reasonable profit
• You may wish to vary your proposed level of service when renegotiating your initial fee proposal but beware of still being able to provide a high standard of service and you should reexamine the scope of work
• You should not be seen to be undercutting another firm
• You must be completely transparent with your clients and consumers, so they understand that you may be in receipt of, or offering, a referral fee
  and state so in terms of engagement if applicable
• The granting and acceptance of referral fees should also be considered in the context of the Bribery Act 2010 and the RICS Rules of Conduct, 2021

Question 28

Fixed Penalties

Answer 28

• Procedure used for breaches of the Rules relating only to the supply of information to the RICS by firms and members. These may consist of a fine and/or a caution

Question 29

Formal CPD

Answer 29

• This includes all forms of structured learning that has clear learning objectives and outcomes
• Examples include structured online training, professional courses/ seminars and self-managed learning that can be assessed by an expert third party

Question 30

Future of RICS: Bichard Review

Answer 30

The Bichard Review reported in June 2022,
making 36 recommendations in 7 key areas:

• A renewed and increased focus on the public interest remit of RICS, including amending the Royal Charter and creating a public interest panel to advise Governing Council
• Maintaining self-regulation, through greater independence for regulatory functions
• Increased focus on diversity and inclusion across the profession and within RICS governance
• Empowering and enabling members through greater support for regional boards, alongside increased member engagement, with renewed focus on younger members
• Undertaking an independent review of RICS’ governance and effectiveness at delivering against its Charter for the public advantage once every five years
• A new simplified, clear, accountable governance structure
• Showing greater leadership on issues that matter most to society, such as sustainability and climate change

Question 31

Handling Clients Money - 6 main points

Answer 31

set out in “RICS professional standard: client money handling, 2019”
1 Holding clients money
2 Providing information to clients
3 receipts of client money
4 paymetns from client accounts
5 accounting records and controls
6 compliance

Question 32

How do you avoid negligence?
Mnemonic: “CCFDUC” - Confirm, Competence, Follow, Document, Update, Cap.

Answer 32

• Confirm client’s objectives in writing.
• Ensure competence in undertaking the instruction.
• Follow RICS advice and standards.
• Document with detailed notes and photos.
• Update market knowledge and record CPD.
• Cap liability in terms of engagement.

Question 33

How to handle a conflict of interest

Answer 33

1) Conflict Avoidance
upon receipt of full facts consider whether conflict is irresolvable because your impartiality is compromised and should be avoided or whether it can be property managed maintaining transparency and openess
2) Written advice to both parties
assuming you wish to accept instruction, set out in writing as soon as possible the following 3 points
a) disclose nature of conflict and how your firm inteds to deal with it (e.g. with information/ ethical barrier)
b) be as clear as you can and ensure both parties make their own descision and inform them to seek independent advice if needed
c) request written confirmation from both client of their informed consent that your firm can act in accordance with provisions of procedure proposed
3) Conflict management
once you have reviewed written consent to your declaration of conflict and your proposals - set up an information barrier

Question 34

Informal CPD

Answer 34

• This includes any self-managed learning that is relevant or related to your professional role
• This includes private study, on the job training and informal seminars/ events
• The RICS provides clear advice on the definition of both forms of CPD on their website and a useful
  decision tree to decide whether the CPD is formal or informal
• There is an online RICS Decision Tree to assist with this decision-making process as to whether CPD is formal or informal

Question 35

Information required by RICS for Registration

Answer 35

1 Type of business and staffing details
2 Name of Responsible Principal
3 Statuatory regulated activities - such as for financial serviecs
4 Nature of clients
5 Complaints handling procedure details and records
6 Professional indemnity insurance details
7 whether the firm holds clients’ money

Question 36

Informed Consent

Answer 36

• This can only be given in writing by the party if the person explaining the position to them is entirely transparent about any material factors and sure that the party affected understands what they are doing
• Surveyors should only seek informed consent if satisfied that all relevant parties are best served by doing so

Question 37

Initial investigation stage

Answer 37

• First step is a formal investigation by the Head of
  Regulation of the RICS
  Head of Regulation can initiate one of the
  following FOUR actions upon completion of their
  investigation if they consider that disciplinary
  action is required:
  1. Serve a Fixed Penalty Notice
  2. Make a Regulatory Compliance Order
  3. Refer the matter to a single member of the
  Regulatory Tribunal for consideration
  4. Refer the matter directly to a Disciplinary Panel

Question 38

It may be appropriate to decline an instruction, for which reasons:

Answer 38

1. You are not competent to undertake the work - it is
   outside your limitations
2. You do not have sufficient facts on the issue
3. The proposed client will not sign your terms of
   engagement and/or complete AML checks
4. There is a conflict of interest or personal interest
5. A professional indemnity insurance liability cap cannot
   be agreed
6. The advice is for a friend or on a pro bona basis (for
   example free of charge for a charity) and your
   professional indemnity insurance will not cover work
   carried out on a personal basis
7. The potential client is included in the UK Government’s
   sanctions list
8. Would you be content for your actions to be made
   public - in the newspapers or internet?

Question 39

Negligence

Answer 39

• Duty of care exists to clients and third parties, using a ‘reasonable care and skill’. When breached, and there is a loss, a claim for damages arises

Question 40

Negligence - Legislation

Answer 40

• Yianni v Edwin Evans (1981)-the case established that a residential valuer instructed by a mortgagor lending institution could owe a duty of care in tort to a mortgagee purchaser relying on a valuation
• Scullion v Bank of Scotland pie (t/a Colleys) (2010) - relates to a breach of the duty of care owed to Mr. Scullion in relation to a valuation report prepared for a flat in Cobham, Surrey. The Court of Appeal held that a surveyor who provides advice on value to a lender in respect of a buy-to-let purchase does not owe a duty of care to the borrower who is seeking funding to purchase the property. It over-turned the original court decision in the case of a “commercially astute” borrower
• Burgess v Lejonvarn (2020) - established that professionals providing professional services pro bono and without a contract owe a duty of care in tort to act with reasonable care and skill in respect of services they provide. However, the Court of Appeal also determined that they are not under a duty to advise or give warnings, and nor are they liable for work they do not do
• Hope Capital Ltd v Alexander Reece Thompson LLP (2023) found that the purpose of a valuation is central to the extent of the valuer’s duty when considering a negligence claim. The High Court confirmed that the purpose of the valuer’s opinion or advice will define the extent of their duty

Question 41

Negligence - Limitation Act 1980

Answer 41

• The current limitation periods for negligence
  are:
• Contract - 6 years from the date of the negligent act, breach of contract or omission. Also, Section 14A provides an alternative limitation period of 3 years fromthe date of knowledge of the damage subject to the 15 years long stop from the negligent act or omission
• Tort - 6 years from the date the claimant
  suffered the loss

Question 42

PII - Minimum Requirements

Answer 42

Firm’s turnover in the
preceding year
1 £100,000 or less
2 £100,001 to £200,000
3 £200,001 and more

Minimum level of
indemnity required for
each and every claim
a £250,000
b £500,000
c £1,000,000

Question 43

Professional Indemnity Insurance (PII)

Answer 43

• Mandatory for surveyors working in practice
• To protect clients, surveyors and third parties against negligence claims when there is a duty of care breached and a claim for damages arises
• Details set out in RICS “Professional Indemnity
  Insurance Requirements” w.e.f. 1 April 2022
• All members must ensure that an adequate and appropriate level of insurance is in place for each instruction having considered potential liabilities which may exist
• All policies must be underwritten by an RICS approved insurer, as found on the RICS website
• The current minimum requirements based on turnover of the firm are:

Question 44

RICS 3 Main Roles

Answer 44

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 environemntal issues (RICS 2015)

Question 45

RICS 5 Rules of Conduct - CRISP

Answer 45

1) Competence: Maintain professional competence and ensure expertise.
2) Respect: Treat others with respect and promote diversity & inclusion.
3) Integrity: Be honest, act with integrity and comply with obligations.
4) Service: Provide diligent and high-quality service.
5) Public Interest: Act responsibly and maintain public trust in the profession.

Question 46

RICS Ethics Decision Tree

Answer 46

• The 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 one’s 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 to have their decisions or actions made public
• The RICS Regulation Confidential Hotline offers assistance to members with any ethical issue
  **
  APC SUCCESS
  APC REFERENCE MATERIAL (AUTUMN 2024)
  Unsure Can you get more information
  or seek advice?
  Is it legal?
  Decide

Question 47

RICS Ethics Decision Tree: Process

Answer 47

Start
Do you have sufficient facts on the issue?
Yes: Go to the next point.
No: Try to separate facts from other emotional response or seek more advice.
Is it legal?
Yes: Go to the next point.
Unsure: Can you get more advice? If yes, seek advice. If no, do not proceed.
No: Do not proceed.
Is it in line with the RICS Rules of Conduct?
Yes: Go to the next point.
No: Do not proceed.
Have you consulted with appropriate people to make an informed decision?
Yes: Go to the next point.
No: Do not proceed.
Have you assessed all the risks involved?
Yes:
Is your decision based on robust evidence?
Yes:
Would you be comfortable for your actions or inactions to be made public – on the internet or in newspapers?
Yes:
Decide what action you are going to take
Act on and reflect, then record for a record of the decision & action
No: Reconsider your decision-making process.
No: Reconsider your decision-making process.
No: Assess whether there are options that are considered legal.

Question 48

RICS Future Foundations

Answer 48

RIGS published 5 Future Foundations in November 2023 following the Bichard Review
1. Vision - natural and built environment that is sustainable, resilient and inclusive for all
2. Mission: inspire member. advance knowledge, up hold standards
3. Strategic Goals - lead and influence on sustainability, attract a diverse next gen, strengthen trust in the profession, enchance member value and engagement
4. Values: professional, collaborative, inclusive, ambitious
5. A world calss organisation - efficient, effective and inspiring professional body

Question 49

RICS Global Professional Standard: Conflicts of Interest, 2017

Answer 49

• This mandatory standard came into effect on 1st January 2018
• It states that ‘a Member must not advise or represent a client where doing so would involve a conflict of interest or a significant risk of a conflict of interest, other than where all those who are, or may be affected have provided their informed consent’.
• Informed consent may only be sought where the RICS member or regulated firm is satisfied that proceeding despite a conflict of interest is in the interests of all of those who are or may be affected and is not prohibited by law’ (RICS, 2017)

Question 50

RICS Professional Standard

Answer 50

set requirements or expectations for RICS members and regualted firms about how they provide services or outcomes of their actions

Question 51

RICS standards lay out what?

Answer 51

Our standards documents lay out the ethical conduct, and competence-related standards for the profession. By working to our standards, professional members and RICS regulated firms deliver confidence and transparency. RICS ensures these standards are upheld by the profession through our system of independently led regulation.’ (RICS 2020)

Question 52

RICS-regulated firms must:

Answer 52

1. Publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log
2. Ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approvedby RICS
3. If having a sole principal, make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work
4. Cooperate with RICS
5. Promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf
6. Display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS
7. Report to RICS any matter that they are required to report under the Rules for the Registration of Firms

Question 53

Regulatory Compliance Orders

Answer 53

• For low level breaches of the Rules, such as for some minor breaches which could be easily corrected
• It is a written document which states the terms upon which the member or firm must take or desist from taking certain actions in a specified time period, and an agreement to pay a fine
• A Regulatory Compliance Order may cover issues such as non-compliance with RICS Rules, including failure to undertake appropriate CPD. Failure to undertake appropriate CPD may result in sanctions such as a Fixed Penalty and Disciplinary Panel action resulting in expulsion

Question 54

Role of the RICS

Answer 54

• ‘The Royal Institution of Chartered Surveyors promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure.’ (RICS, 2020).
• It is accountable to both members and the public
• It is involved in policy influence and political engagement

Question 55

Starting a New Practice - RICS compliance

Answer 55

• Inform RICS of your new practice by completing a Firm Details Form
• Appoint a Responsible Principal for all RICS communication (previously known as the Contact Officer)
• Register with RICS for regulation of the firm
• Arrange professional indemnity Insurance and send details to RICS
• Set up procedures for the requirements for client money handling, including a protection scheme
• Register for the RICS Valuer Registration Scheme (VRS) if undertaking Red Book Global valuation work
• Obtain RICS approval for the complaints handling procedure
• Set up a complaints log
• Appoint a Complaints Handling Officer (or elect a surveyor in another practice if a sole practitioner)
• Use a logo kit from the RICS for all practice material to comply with the designation ‘Regulated by RICS’
• Plan for succession/future running of the business if a sole practitioner
• Ensure CPD logged on line on the RICS CPD Management System and set up a staff training plan
• Ensure completion of an online RICS Annual Return at the end of each year

Question 56

Starting a New Practice - Statuatory compliance

Answer 56

• Requirement to disclose business name
• Disability discrimination compliance (Equality Act 2010)
• Financial services compliance (Financial Services and Markets Act 2000, Financial Services Act 2012 et al.)
• Bribery Act 2010 compliance
• Appoint a Money Laundering Reporting Officer (Money Laundering Regulations 2017, as amended)
• Health and Safety compliance (Health & Safety Act 197 4, as amended)
• Asbestos register (Control of Asbestos Regulations, 2012)
• Fire Safety compliance (Fire Safety Act 2021 et al.)
• Register for data protection (General Data Protection Regulation and Data Protection Act 2018)
• Estate agency compliance (Estate Agents Act 1979, Consumer Protection Regulations 2008, Misrepresentation Act 1967 et al.)
• Inform HMRC for VAT and Tax registration (VAT registration threshold is currently £90,000 p.a. turnover)
• Ensure compliance with current employment law, i.e. National Living Wage, working hours, stakeholder pensions, gender pay gap reporting etc.
• Ensure insurance compliance for employer and public liability

Question 57

THREE levels of disciplinary action are:

Answer 57

1. Action by Head of Regulation
2. Disciplinary Panel (drawn from the independent Regulatory Tribunal)
3. Appeal Panel

Question 58

THREE types of conflicts of interest are defined:

Answer 58

• A ‘Party Conflict’ relating to work on the same or related instruction for two different parties
• An ‘Own Interest Conflict’ relating to a personal interest
• A ‘Confidential Information Conflict’ relating to work between two parties that is confidential

Question 59

Terms of Engagement Legislation

Answer 59

• Compliance with Section 18 of the Estate Agents Act 1979 and money laundering checks (Money Laundering Regulations, 2017, as amended) is required for agency work
• The Consumer Rights Act 2015 allows a cooling off period of 14 days from the date of the agreement

Question 60

What must a Terms of Engagement state:
FEC

Answer 60

• Fee basis agreement.
• Expenses payment details.
• Complaints handling procedure

Question 61

What three things must you do before you undertake work on an instruction?

Answer 61

• Check professional competence.
• Avoid conflicts of interest.
• Confirm terms in writing and get approval