Ethics, Rules of Conduct and Prof. Flashcards
Why do you want to become a member of RICS?
5 benefits:
1 – Status
2 – Recognition
3 – Market advantage
4 – Knowledge
5 – Network
What is the role of RICS?
To promote and enforce the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure.
What are the key functions of RICS?
3 main roles:
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
What is a Royal Charter?
- A Royal Charter is awarded by the Privy Council (1881) to enable that organisation to self-regulate.
- The RICS bye laws set out the governance of the institution.
When was RICS granted the Royal Charter by the Privy Council?
1881
Who is the current RICS president?
Tina Paillet (from Jan 24)
Who is the current RICS CEO?
Justin Young (from July 23)
What are the key changes to RICS core material?
Changing current docs into 2 categories:
1. Professional Standards: Mandatory, set requirements for members
2. Practice information: supports practice , advisory
What happened in August 2023?
RICS published a new web page to collect Practice Alerts which warn the profession to emerging areas of risk e.g., new legislative requirements for FRA
How is the RICS governed?
- Governed under the terms of its royal charter granted by the privy council in 1881
- RICS regulations and byelaws set out the governance of the institution
- Governed by various internal councils and boards
- Governing Council (20 members chaired by the president) – Standards & Regulations Board – 17 specialist groups.
How is the RICS accountable for its members?
- Provides a royal chartered contactable body to represent it’s members.
- Accountability is achieved through regulation of its member through:
- Disciplinary action
- Quality standards
- Rules of conduct
- Requirements in regards to things like PII.
How does the RICS provide
accountability to it’s members?
RICS is accountable to its membership and reports on its progress through the Annual General Meeting and other corporate reports. As well as through various council voting and member engagement.
Vice Versa – through disciplinary procedures and regulation. Ultimate accountability is to the public.
What are the benefits to clients of you being regulated?
Confidence in quality
PII cover
Complaints handling procedures.
How many levels of RICS membership are there? And what are they?
4 levels:
- FRICS
- MRICS
- AssocRICS
- Trainee/Student
How do you become a Fellow?
Provide the following for the Fellowship Assessor to Consider:
- Evidence of achievement of 4 fellowship characteristics i.e. 5+yrs as MRICS, a leadership role, academic achievement or raising the profile of RICS
- A portfolio of professional achievement to support the application to include in CPD record
What do you understand by the term self-regulation?
Self-regulation means that an organisation has the ability to operate within its own published regulatory framework, rather than being legislated by Government.
Can you tell me what you understand by the principles of better regulation?
These principles aim to create a regulatory environment that protects the public interest while supporting professional practice and economic growth.
What is a Bye-Law?
A regulation or rule made by a corporation for firms or members to follow and are legally binding.
BYE-LAW 1: APPLICATION AND DEFINITIONS
BYE-LAW 2: MEMBERSHIP AND REGISTRATION
BYE-LAW 3: DESIGNATIONS
BYE-LAW 4: CONTRIBUTIONS TO FUNDS
BYE-LAW 5: CONDUCT
BYE-LAW 6: GOVERNING COUNCIL, OFFICERS AND STAFF
BYE-LAW 7: SUBORDINATE BOARDS, COMMITTEES AND GROUPS
BYE-LAW 8: PROCEDURE FOR GENERAL MEETINGS
BYE-LAW 9: ACCOUNTS AND AUDIT
BYE-LAW 10: GENERAL
Bye-law 5.2.1. (under conduct) this requires all members to conduct themselves in a manner befitting membership of the RICS
Give an example of one of the RICS Bye-Laws.
Bye-law 5.2.1. (under conduct) this requires all members to conduct themselves in a manner befitting membership of the RICS
Explain to me the new RICS Rules of Conduct - what do they replace?
The new rules comprise 5 rules to provide a simple structure with clear example behaviours and are accompanied by 12 supporting case studies.
Replaces the RICS Code of Conduct and the 5 Global Professional and Ethical Standards.
When do they take effect?
2nd February 2022
Who do they relate to?
All Members and firms
What was the reason for the new rules?
RICS rationale for changes into a new rules of conduct (was code of conduct and ethical standards):
* Simpler structure
* Clear examples
* Focusing on respect and D&I
* Technology
* Tackling global issues e.g. ESG
What are the ethical principles that the Rules of Conduct are based on?
- Integrity
- Competence
- Service
- Respect
- Responsibility
- Public Trust
- Ensures we continually develop our skills and maintain integrity through adherence to the code of conduct.
What are the 5 Rules?
- Members and Firms must be honest, act with Integrity and comply with their personal obligations including obligations to RICS.
- Members and Firms must maintain professional competency and ensure that services provided by competent individuals who have the necessary expertise.
- Members and Firms must provide good quality and diligent services.
4, Members and Firms must treat others with respect and encourage diversity and inclusion.
- 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.
Give an example behaviour for Rule 1
Members and Firms must be honest, act with Integrity and comply with their personal obligations including obligations to RICS.
Example: I act honestly and transparently when negotiating fees
Give an example behaviour for Rule 2
Members and Firms must maintain professional competency and ensure that services provided by competent individuals who have the necessary expertise.
Example: I told my director that I was not competent enough to advise on party wall matters and advised I obtain expert advice.
Give an example behaviour for Rule 2
Members and Firms must maintain professional competency and ensure that services provided by competent individuals who have the necessary expertise.
Example: I told my director that I was not competent enough to advise on party wall matters and advised I obtain expert advice.
Give an example behaviour for Rule 3
Members and Firms must provide good quality and diligent services.
Example: I would compile and issue detailed minutes after sign-off meetings to keep a proper record of decisions and for quality assurance.
Give an example behaviour for Rule 4
Members and Firms must treat others with respect and encourage diversity and inclusion.
Example: I would be reflective of my own unconscious biases in a process e.g. when asked about members of the community.
Give an example behaviour for Rule 5
Members and Firms must act in the Public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in their profession.
Example: I was informed of a leak in one of our buildings which was impacting my client’s neighbour. I handled the conversation professionally and reported to my client with advice for remedial works.
What are the core professional obligations of members?
RICS members must:
1. Comply with CPD
2. Cooperate with RICS
3. Provide information to standards and regulation board
What are the core professional obligations of firms?
RICS firms must:
1. Publish complaints handling procedure
2. Ensure PI cover
3. Future plan for incapacity/death if a sole principal is present
4. Cooperate with RICS
5. Provide all information to standards and regulation board
6. Display business literature in accordance with RICS
7. Report to RICS on any required matters
What are the different levels of action within these procedures?
3 levels:
- Action by Head of Regulation (low-level breaches)– can initiate 4 actions:
1. Serve a Penalty Notice used for breaches of the RULES relating to supply of info
2. Make a regulatory compliance order (e.g. for low level breaches)
3. Refer to regulatory tribunal
4. Refer to disciplinary panel (e.g more serious breaches)
2.Disciplinary Panel (more serious breaches) – penalties available:
1. Issue regulatory compliance order
2. Reprimand
3. Fine
4. Impose fine per proportionally
5. Impose conditions on future RICS registration
6. Expulsion
7. Require publication in Modus and local newspaper
- Appeal panel – can consider persons/firms appeal against decision of disciplinary procedure
What is a regulatory compliance order?
The power to impose this outcome is contained in the Rules but the version relied on depends on date of complaint: RICS Disciplinary, Registration and Appeal Panel Rules (for complaints 1 October 2019 to 1 March 2020) or RICS Regulatory Tribunal Rules (for complaints on or after 2 March 2020).
A Regulatory Compliance Order shall consist of one or more of the following:
- Caution
- Reprimand
- A requirement that the Regulated Member gives one or more undertakings as to future conduct
- A requirement that the Regulated Member takes or stops taking certain actions within a specified period of time
- Conditions on the Regulated member’s continued membership of RICS
- Conditions on a Regulated Members registration for regulation
- A requirement that the Regulated Member pays a fine of up to £2000 per breach
- The new rules allow RICS to agree to impose cautions and reprimands which was previously not available through Consent Orders.
What are the Regulatory Tribunal Rules?
The RICS Charter and Bye-Laws authorise the Standards and Regulation Board to make Rules about the exercise of disciplinary powers. These rules are called the Regulatory Tribunal Rules (formerly the Disciplinary, Registration and Appeal Panel Rules).
These set out the processes for disciplinary action and the decisions that can be made as well as the regulatory actions available.
When did RICS last update their disciplinary panel rules?
On 2 March 2020, the Conduct and Appeal Committee was renamed the Regulatory Tribunal, and the ‘Disciplinary, Registration and Appeal Panel Rules’ changed to the ‘Regulatory Tribunal Rules’.
Therefore, concerns raised, or information received, from that date are considered under the new rules (and older complaints under the older rules).
What do you understand by the term professional practice?
Professional practice is the ability to act competently and within your scope of expertise. It also refers to your professional responsibility in and outside of the workplace.
Can you tell me about the CPD requirements for members of RICS?
- Minimum of 20 hours (10 must be formal) – must be recoded and logged onto the RICS system
- Maintain understanding of RoC every 3 years
- Must record CPD using CPD management system available online by 31st Jan each year.
- Formal CPD = structured learning with clear objectives
- Informal CPD = self-managed learning or that is relevant to professional role
Why is CPD important?
It is part of both the rules of conduct for both members and firms.
Ensures that members are keeping up to date with recent changes in the profession
What are the current RICS rules for registration of firms?
Required to register if -
a the Firm provides surveying services to the public
b the Firm is operating in Regulated Area A
c at least 50% of the Firm’s Principals are RICS Members-
Eligible to register - 25% then you can.
Firms must designate a Responsible Principal who provides oversight, accountability and engagement with RICS standards and regulation
When were these last updated?
Version 8 of the rules came into effect 2nd February 2022.
What is the required information for registration?
- Type of business and staffing details
- Name of Responsible Principle
- Statutory regulated activities – such as for financial services
- Nature of clients
- Complaints handling procedure details and records
- Professional indemnity details
- Whether the firm holds clients’ money
How would you start a practice?
There are both RICS and Statutory Compliance that must be met.
RICS Compliance:
1. Inform RICS by completing a Firm Details Form
2. Appoint a Responsible Principal for all RICS communication (previously known as Contact Officer)
3. Arrange PI insurance and send details to RICS
4. Set up procedures for Client Money Handling incl. a protection scheme
5. Register for Valuer Registration Scheme (VRS)
6. Set up Complaints Log & appoint Complaints Handling Officer (CHO)
7. Use RICS logo kit
8. Plan for succession
9. Ensure CPD logged for members
10. Ensure completion of RICS annual return (eo each year)
Statutory Compliance:
1. Requirement to disclose business name
2. Disability discrimination compliance (Equality Act, 2010)
3. Financial Services compliance
4. Bribery Act 2010
5. Appoint a Money Laundering Reporting Officer (Money Laundering Reds 2017)
6. H&S Compliance (H&S act, 1974)
7. Asbestos Register (Control of Asbestos Regs, 2012)
8. Fire Safety (Regulatory form – fire safety order 2005)
9. Estate Agency compliance (Estate agents act 1979/Misreps 1967)
10. Inform HMRC and Tax registration (VAT registration is >£85,000pa t/o)
11. Ensure compliance with employment law
12. Ensure insurance compliance
How would you close down a regulated firm?
RICS compliance:
- Inform RICS and clients
- Ensure adequate handover arrangements are made
- Return any clients moneys and settle up book
- Inform insurers and organise sufficient PII run off cover (min. 6 years)
- Retain copy of client’s files for 6 years
Who is a ‘qualified member’ of RICS?
A qualified member is defined as being AssocRICS, MRICS or FRICS
What is a phoenix firm?
A company that has re-emerged after going through financial difficulties. Often involves the same individuals or management team as the original entity.
Who is a Responsible Principal?
A Responsible Principle is appointed by an RICS regulated firm to take responsibility for ensuring that the RICS professional and ethical standards are applied and upheld within the firm.
What are the rules around use of the RICS logo and ‘Regulated by RICS’ designation?
Version 6 with effect from 2 February 2022
- Use of the RICS logo is restricted to Regulated Firms only
- Regulated Firms must include prescribed text in their terms of engagement to explain what being Regulated by RICS means to clients
What happens if a firm cannot comply with the eligibility criteria?
If a firm is unable to meet this, they can implement a plan to secure compliance or be supervised by another RICS Regulated Firm
Tell me about the restrictions to the use of the designation ‘Chartered Surveyors’ by firms
The use of ‘Chartered Surveyors’ is restricted to trading names only of firms. E.g. company name can’t be MB chartered surveyors, but trading name can be.
What must be included in ToE relating to firm regulation?
Regulated firms must include prescribed text in their terms of engagement to explain what being Regulated by RICS means to clients.
What is a locum and who might need one?
A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work, e.g. in the event of an accident/illness, unforeseen circumstances, prolonged absence (e.g. holiday or a sabbatical) or death.
How could a sole trader set up their CHP using a locum?
A sole practitioner may use a locum as their complaints handling office to ensure that their CHP can be run fairly.
Explain the potential implications of the Hart v Large case.
Hart v Large case – failure of reporting damp and recommending the client gets a Professional Consultant’s certificate.
Implications are:
* Surveyors must continue to keep advice under review;
* Ensure that they report anything that has not been inspected with an explanation as to why;
Explain your understanding of precedent set in Burgess v Lejonvarn.
Burgess v Lejonvarn (2020):
*Providing a professional service pro bono and without a contract you still owe a duty of care in tort to act with reasonable care and skill
CoA stated that they are not expected to give warnings or liable for the work they do not do
What do RICS set out as good practice for the use of social media in their Regulation document (June 2021)?
Reminds users of the high standards of professional behaviour expected as a RICS member. RICS likely to investigate if it is abusive/discriminatory/ignoring RICS advice.
Explain the key themes from the RICS Futures 2020 Report.
Key themes included:
* The need for RICS to remain relevant, in terms of training and development of members.
* Improving technology across the sector – use of drones
* Ensure ethical standards are maintained
Explain your understanding of the RICS Levitt review.
This investigated governance issues and handling of internal concerns about financial management. Outcome was:
- Clear transparency amongst all stakeholders
- Structured process for decision making
- Restore trust and ensure that whistleblowers were treated fairly
- Leadership reform
- Systematic approach to ensure that high ethical standards and service is upheld
What is whistleblowing?
When anyone who interacts with the RICS reports concerns about wrongdoing, misconduct or unethical behaviour. The aim is to ensure that issues like fraud, malpractice, breaches of RICS standards or governance failings are addressed.
What does good governance mean to you?
Having robust standards and practices implemented and are clear for all to follow.
Explain what the Pandora Papers are and the ethical issues raised within them.
The pandora papers refer to a leak of financial documents published October 2021 and expose how the most wealthy used secret offshore structures and trust to hide assets, avoid taxes and engage in questionable financial dealings. Raised the following ethical issues:
- Loss of trust
- Loss of transparency
- Corruption
- Public harm
