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2021 > Ethics, Rules of Conduct and Professionalism (L3M) > Flashcards

Ethics, Rules of Conduct and Professionalism (L3M) Flashcards

1
Q

What year was RICS founded?

A

1868 in London. Leased offices at 12 Great George St, Parliament Square, where headquarters still are today.

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2
Q

Where is the RICS headquarters?

A

Parliament Square, London - it’s here as they wanted to be close to the government

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3
Q

What is the RICS motto?

A

Translates to “there is measure in all things”

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4
Q

Who is the RICS president?

A

Clement Lau

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5
Q

Who is the RICS President Elect?

A

Ann Gray

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6
Q

Why do you want to be a member of the RICS?

A

I want to be part of a prestigious organisation which allows me to progress my career in an industry I am passionate about. It will give me recognition and status to work with clients on a greater level. 16% of members are women…

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7
Q

What are the benefits to membership and for RICS regulated firms?

A

To membership:

  • Market advantage
  • Professional recognition
  • Knowledge - International Practice Standards
  • Status
  • Global Network

Of regulated firms:

  • Confidence for clients
  • Professionalism
  • Security (need to have PII & CHP in place)
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8
Q

What is the RICS Governing Structure?

A
  1. Privy Council
  2. Governing Council (25 members)
  3. Regulatory Board - Audit Committee - Management Board
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9
Q

What are the 3 main roles of RICS?

A

PIS (Protect, Information & Standards)

  1. Protect consumers through strict Regulation
  2. leading source of Information and advice
  3. maintain highest Standards of education and Training
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10
Q

What is the RICS Disciplinary action?

A
  1. Action by the Head of Regulation (formal investigation):
    - Fixed penalty notices/consent orders
    - Refer to disciplinary panel - serious matters
  2. Action by Disciplinary Panel (issue penalties) - more serious breaches (50% of lay members on panel):
    - Consent order
    - Unlimited fine
    - Suspension/expulsion
    - Publication of hearing result
  3. Appeals Panel (50% of lay members on panel):
    - Fixed penalty notice
    - Disciplinary panel findings
    - Future registration conditions
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11
Q

What are RICS disciplinary penalties?

A
  • Consent order
  • Unlimited fine (proportional to offence)
  • Expulsion from RICS
  • Publish results from hearing
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12
Q

How should you handle clients’ money?

A
  1. Keep account separate/identifiable (use word ‘client’)
  2. Client must be able to have money on command
  3. Agree interest payment procedures
  4. Keep accurate records
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13
Q

What are the RICS Core Ethical Standards?

A

STIRR:

  • Standard of service (refer work if not competent - vals)
  • Promote trust in the profession (inform of conflict)
  • Act with integrity (inform of conflict)
  • Take responsibility (Trinity planning error)
  • Treat others with respect (mentor younger grads, treat all equally)
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14
Q

What are the RICS principles of better regulation?

A

PACTT:

  • Proportionality
  • Accountability
  • Consistency
  • Targeting
  • Transparency
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15
Q

What are the RICS Rules of Conduct for Members?

A

RICS Rules of Conduct (effective from 2 March 2020):
ECS CPD SIC:

  • Ethical behaviour
  • Competence
  • Service
  • Continuing Professional Development (CPD)
  • Solvency
  • Information to RICS
  • Cooperation
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16
Q

What are the RICS Rules of Conduct for Firms (2020)? (13 incl firms administration (the admin side of a business))

A

PCS CPD CCP:

  • Professional behaviour
  • Competence
  • Service
  • CPD and training
  • Complaints handling
  • Clients money
  • PII
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17
Q

What are the RICS Rules of Conduct for Firms in administration?

A

SICADD:

  • Solvency
  • Information to RICS
  • Cooperation
  • Advertising
  • Agreements to cover incapacity & death
  • Use of designations
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18
Q

List the International Ethical Standards

A

Expansion on existing RICS global professional and ethical standards. There are 10 and they include:

TICTAC FLRS:

  • Trust
  • Integrity
  • Confidentiality
  • Transparency
  • Accountability
  • Conflict of Interest
  • Financial responsibility
  • Lawfulness
  • Reflection
  • Standard of Service
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19
Q

What would you need to do in order to start a new practice?

A
  • Inform
  • Register
  • Appoint contact
  • RICS Valuation
  • Complaints officer and log
  • Clients’ money procedures
  • PII (RICS Pooled Cover)
  • Arrangements for succession (locum surveyor)
  • CPD
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20
Q

What legal considerations need to be taken into account when starting a new practice?

A
  • Business Names Act 1985
  • Bribery Act 2010
  • Data Protection Act 1998
  • Equality Act 2010
  • Financial Services Act 2012
  • Health and Safety Act 1974
  • Inform HMRC - VAT threshold = £85k
  • Money Laundering, Terrorist Financing and Transfer of Funds - appoint MLRO.
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21
Q

What needs to be done when closing down a practice?

A
  • Inform RICS
  • Inform clients
  • Return clients’ money
  • PII - 6 years runoff - min £250k
  • Retain clients’ files - min 6 years
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22
Q

What information needs to be included in the RICS Annual Return?

A
  • Type of business/staff details
  • Statutory regulated activities
  • Nature of clients
  • CHP
  • PII details
  • Client money details
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23
Q

What are the PII cover thresholds?

A

Below shows categories for the firm’s turnover in the preceding year and the minimum level of indemnity:

  • £100,000 or less = £250,000
  • £100,001 - £200,000 = £500,000
  • £200,001 and above = £1,000,000
  • runoff cover needs to be 6 years at £1,000,000 - PII update 1st April 2021
  • to manage the risk adequately, some firms may wish to hold a higher level of indemnity.
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24
Q

What is the maximum level of insured excess?

A

The part of each claim the firm must pay itself:

Liability of up to £500,000 - max uninsured excess = greater of 2.5% or £10,000

Liability of over £500,000 = max uninsured excess = 2.5% of sum insured

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25
Q

What does the Estate Agents Act 1979 apply to?

A
  • Disposal/acquisition of an interest in land

- Freehold/leasehold with capital value and land

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26
Q

Who is the Estate Agents Act 1979 policed by and what are the punishments for not adhering to it?

A
  • Policed by Trading Standards Office - prohibition or warning order
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27
Q

What is the cooling off period for the Estate Agents Act 1979?

A
  • Cooling off period - 14 days
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28
Q

Define bribery

A

The offer, promise, giving, demanding or acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust.

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29
Q

What legislation relates to bribery?

A
  • The Bribery Act 2010
  • Proceeds of Crime Act 2002

(- RICS Professional Statement: Countering Bribery and Corruption, Money Laundering and Terrorist Financing (September 2019))

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30
Q

What are the offences for bribery?

A

4 offences:

  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent bribery
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31
Q

Who is bribery policed by? What are the punishments?

A
  • Policed by Serious Fraud Office

- Max 10 years in prison & unlimited fine

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32
Q

What are the principles of the Bribery Act 2010?

A

PTR DCR:

  • Proportionality
  • Top level commitment
  • Risk assessment
  • Due diligence
  • Communication
  • Monitoring and Review
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33
Q

What are the changes that have been made to the RICS Rules of Conduct? When will these come into effect?

A
  1. A simpler structure - consolidating Rules of Conduct for Members, for Firms and the Global Professional and Ethical Standards into one document
  2. Clear examples for each rule
  3. Sustainability - embedded to provide assurance to clients that members will help them make decisions and recognise the challenges of climate change
  4. Evolving use of technology
  5. Focus on respect, diversity and inclusion

*Changes come into effect on 2nd Feb 2022

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34
Q

What will the new RICS Rules of Conduct be?

A

New rules for Members AND firms:

  1. HONESTY & INTEGRITY: Must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
  2. MAINTAIN COMPETENCE: Must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
  3. QUALITY SERVICES: Provide good quality and diligent services
  4. RESPECT, DIVERSITY & INCLUSION: Treat others with respect and encourage diversity and inclusion
  5. RESPONSIBILITY: Act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession
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35
Q

What are the key principles of the RICS Countering Bribery and Corruption, Money Laundering and Terrorist Financing Professional Statement (Sep 2019)?

A
  • Do not offer or accept anything that could constitute a bribe
  • Report any breaches to relevant authority

Firms:

  • Comply with applicable laws
  • Reform periodic written evaluations of risk that the firm faces
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36
Q

What are the key principles of the Money Laundering Terrorist Financing and Transfer of Funds Regulations, 2017?

A
  1. Cash limit of £10,000
  2. Enhanced DD on all clients (Suspicious Activity Reports)
  3. Check purchaser as well as vendor
  4. Seek evidence of funds
  5. Maintain records for 5+ years
    * All companies must have a MLRO
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37
Q

What AML checks are required?

A

Due Diligence - Customer, Enhanced (PEPs), Simple

PLC - certificate, register number, office and address, directors

Private - proof of ID, proof of address

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38
Q

What is Customer Due Diligence? (CDD)

A
  • Identify client by passport or drivers licence
  • Identify Ultimate Beneficial Owners (UBOs)
  • Company name, number and address
  • Names of any directors
  • Business relationship
  • Funding arrangements
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39
Q

What is required for enhanced due diligence?

A
  • Additional procedures for PEPs and majorly sanctioned countries
  • Detailed examination of their background and the purpose of the transaction
  • More detailed monitoring
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40
Q

What is a PEP?

A

A Politically Exposed Person is:

  • An individual with a prominent public function
  • High risk of bribery or corruption
  • Eg Members of Parliament, Ambassadors etc
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41
Q

What are the majorly sanctioned countries?

A
  • Cuba
  • Iran
  • North Korea
  • Sudan
  • Syria
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42
Q

What are the money laundering penalties?

A

Assisting:

  • 14 years in prison
  • Unlimited fine

Tipping off/failure to report:

  • 5 years in prison
  • Unlimited fine
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43
Q

What is required in Terms of Business?

A
  • Client engagement
  • Definitions
  • Fees/expenses
  • Disbursements
  • Confidentiality
  • Data protection
  • Conflicts of Interest
  • Complaints Handling Procedure
  • Liability and insurance
  • Termination
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44
Q

What is the legislation relating to GDPR?

A

General Data Protection Regulation from the Data Protection Act 2018 - replaces Data and Protection directive, designed to harmonise data privacy laws across Europe.

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45
Q

What are the GDPR Rights?

A

8 rights to the individual:

  1. Right to be informed
  2. Right to access
  3. Right to rectification
  4. Right to erasure
  5. Right to restrict processing
  6. Right to data portability
  7. Right to object
  8. Right to not be subject to automated decision making
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46
Q

What is the purpose of the RICS Professional Statement: Conflicts of Interest - UK Commercial Property Market Investment Agency (1st ed, May 2017)?

A
  • UK-specific where specific risks have been identified with investment agency (informed consent must be given - must have all facts):
  • Dual agency (prohibited): cannot act for buyer and seller
  • Multiple introductions - allowed if on non-exclusive basis, information barriers
  • Incremental advice (advised something then it carries on going and becomes a conflict) - allowed: information barrier must be in place
  • Personal/own interest must be declared, remuneration stated (s21 Estate Agents Act)
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47
Q

What is contained within the RICS Complaints Handling Guidance Note 2016?

A
  • Refer to Rule 7 of RICS Rules of Conduct for firms: ‘A firm shall operate a CHP and maintain a complaints log. The CHP must include an Alternative Dispute Resolution (ADR) mechanism that is approved by the regulatory board’
  • Not a substitute for taking independent legal advice
  • ToE help to define circumstance/context in which complaints may be made or managed
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48
Q

What is the ‘initial notification stage’ of the Complaints Handling procedure?

A
  • Inform broker/insurer straight away

- Preliminary notice must be acknowledged in writing within 21 days.

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49
Q

Who is the interim CEO?

A

Richard Collins

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50
Q

Would you accept a gift from a client?

A

I would assess whether it was reasonable. If it was, I would complete a Declaration form for Gifts and Entertainment, stating:

  • Client details
  • My relationship with the client
  • Business justification
  • Potential conflicts of interest
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51
Q

Who is the interim Chair of Governing Council?

A

Nick Maclean

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52
Q

What would you do if you were offered a gift during an instruction?

A

Politely decline as the instruction is not yet complete and this could impact my impartiality.

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53
Q

What are some issues currently facing the RICS?

A
  1. Alison Levitt QC Enquiry
  2. Defining our future consultations
  3. Rules of Conduct changing to one set of 5 rules (now been published - effective from 2 Feb 2022)
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54
Q

What is the Levitt Review?

A
  • Articles have appeared in the Press suggesting that the RICS tried to suppress a critical internal report into its finances and then wrongly censured and let go those who sought to explore the issue.
  • Alison Levitt QC has recently undertaken an Independent Review of the governance, obligations and duties of the RICS.
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55
Q

What is your opinion on the outcome of the Alison Levitt QC enquiry?

A

Disappointed - as members and firms we have to uphold and adhere to strict ethical rules, which seemingly the RICS did not adhere to.
- However, RICS has accepted the recommendations offered. Eg: the Governing Council has begun work on a overarching statement which emphasises the culture and behaviours of openness and ethical conduct are as important as governance structures.

The Governing Council has now appointed Lord Michael Birchard to lead an independent review into the Institution’s Purpose, Governance and Strategy. The review will make firm recommendations on the purpose and governance structure.

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56
Q

Tell me about the Defining our Future

A
  • Kath Fontana (previous president) launched this review.
    Main aim is to review RICS business plan:
    1. How to maintain public and stakeholder trust
    2. How to ensure RICS remains a sustainable body
    3. How RICS can be aligned to further reinforce relevance to members.
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57
Q

What is the difference between Conflict Avoidance and Conflict Management?

A

Avoidance - decline as can’t act impartially

Manage - accept and manage as can act impartially.

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58
Q

Who regulates the RICS?

A

The regulatory tribunal:

  • Independent from RICS
  • Provide the profession with an effective, fair and independent judicial body
  • Consists of lay members and RICS members
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59
Q

What is the Standards and Regulatory board?

A
  • Responsible for exercising the standards and regulatory functions of the RICS.
  • Report annually to the governing council.
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60
Q

How can a firm become regulated?

A

Firms who provide a surveying service to the public are required to register - need to have 1 member to register.

RICS Rules for Regulation of Firms (2019)

  • 50% of principles from a UK firm are members then it has to be regulated
  • if it has at least 25% of principles as members then it can apply
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61
Q

What information is required by the RICS for registration?

A

Need to include the following in an annual return:

  • Type of business and staffing details
  • Statutory regulated services
  • Nature of clients
  • CHP details and records
  • PII details
  • Whether the firm handle’s client’s money
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62
Q

What are the different advice levels of RICS documents?

A
  • International Standards (Mandatory)
  • Professional Standards (Mandatory)
  • Practice Statements (Mandatory)
  • Guidance Notes (advisory)
  • Codes of Practice (mandatory or recommended)
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63
Q

What are the RICS minimum procedures for CHP?

A

*Notify PI insurer

  • Acknowledge a written complaint within 7 days
  • Investigated and responded to within 28 days
  • Refer to independent redress provider if unresolved (RICS dispute resolution service)
  • Log in a complaints log
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64
Q

What are the RICS CPD rules?

A
  • Non-members 48 hours per year for 2 years
  • Members - min of 20 hours per year (10 hours must be formal)
  • Members must maintain relevant understanding of RICS Professional & Ethical Standards during a rolling 3-year period.
  • Members must record CPD on RICS CPD management system
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65
Q

What is PII?

A

Professional Indemnity Insurance protects clients, surveyors and third parties against negligence claims

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66
Q

What are the min PII requirements?

A

Based on firm turnover:

  • Less than £100k = £250k min
  • £100,001 to £200k = £500k min
  • More than £200,001 = £1,000,000
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67
Q

What are the maximum levels of uninsured excess required by the RICS?

A

Can’t have much uninsured excess.

  • Limit of indemnity / Maximum uninsured excess
  • £500k - Greater of 2.5% of sum insured or £10,000
  • More than £500k - 2.5% of sum insured
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68
Q

Can you accept cash?

A
  • No - not under company policy - cannot accept cash or vouchers.
  • However, under money laundering regulations, I am allowed to accept cash up to £10k in euros. This would need to be witnessed and ideally take place in the office.
  • Suspect money laundering - large cash amount - report
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69
Q

Why is client money handling important?

A
  • One of the Rules of Conduct for Firms - client money must be kept safe.
  • RICS Professional Statement: Client Money Handling 2019
  • RICS runs a Client’s Money Protection Scheme for claims which an RICS regulated firm can’t repay.
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70
Q

What would you do if you were offered a gift by a third party?

A

Politely decline - they are not my client

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71
Q

What is the UK Structure of RICS?

A

4 National Associations
10 Regional Boards
Local Associations

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72
Q

What is the regulatory governance structure of the RICS?

A

Royal Charter, Bye Laws, Regulations, Rules of Conduct

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73
Q

Who is the RICS ultimately responsible to?

A

Members and the public

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74
Q

What are the benefits of becoming a member?

A
  • Status
  • Recognition
  • Market advantage
  • Knowledge
  • Network (global)
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75
Q

What are the consequences of a breach in standards?

A

Disciplinary action

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76
Q

What is a responsible principle (RP)?

A

Each firm must nominate an RP who is obliged to systems are in place to ensure compliance with the RICS regulation.

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77
Q

What are the rules for using the RICS logo?

A
  • Only RICS members and registered firms can use the logo.
  • Has to be displayed in black and white
  • Mandatory requirement for regulated firms to display on business literature
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78
Q

What triggers RICS disciplinary action?

A
  • Allegation from client
  • Information received or established by RICS
  • Complaint to RICS
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79
Q

What actions can the Head of Regulation initiate upon completion of their disciplinary investigation?

A
  • Fixed Penalty Notice
  • Make a Regulatory Compliance Order
  • CPD sanctions
  • Refer to Disciplinary Panel
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80
Q

Name some examples of International Standards

A

RICS Valuation - Global Standards

International Property Measurement Standards`

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81
Q

Name some examples of Professional Statements

A
  • Property Measurement (2018)
  • Conflicts of Interest (2017)
  • Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)
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82
Q

Name some examples of Practice Statements

A

Surveyor’s Acting as Expert Witnesses (2014)

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83
Q

Name some examples of Guidance Notes

A
  • Land Measurement for Planning and Development Purposes (Aug 2021)
  • Boundaries: Procedures for Boundary Identification, Demarcation and Dispute Resolution
  • Assessing Viability in Planning under the NPPF 2019 for England
  • Valuation of Development Property (2019)
  • Surveying Safely 2018
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84
Q

Name some examples of Codes of Practice

A

Code of Measuring Practice (2015)

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85
Q

What should you do if you receive confidential information in error?

A
  • It cannot be used for their own purposes.
  • Advise sender of the error.
  • Inform compliance officer.
  • Delete securely.
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86
Q

What are the RICS rules in relation to PII?

A
  • Mandatory requirement - Rules of Conduct for Firms
  • Need RICS approved insurer (list on website)
  • Need adequate and appropriate level for each instruction.
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87
Q

In relation to PII, what does retroactive mean?

A

Policy covers claims that are made within the insurance period, regardless of when the negligent act occurred.

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88
Q

What is run off cover and how long should it last?

A

For when the firm ceases to exist, need minimum 6 years but claims made up to 15 years (statute of limitations - 6 years is how long you can be punished for before it’s forgotten). This isn’t law, just RICS best practice. Limitation Act 1980 - can be sued for 6 years from the date of the negligent act or 3 years from the date of them finding out about the negligent act (longstop date of 15 years) - so if find out after 12 years, that can take you to 15.

89
Q

If a firm can’t arrange PII cover what is available?

A

RICS assigned risk pool - emergency PII cover, but comes at a cost.

90
Q

Name a guidance note relating to PII

A

RICS Guidance note on Risk, Liability and Insurance currently under consultation

91
Q

Name legislation that relates to gifts, bribery and corruption

A

Bribery Act 2010

Proceeds of Crime Act 2002

92
Q

What is the objective of the Bribery Act 2010?

A

To reduce bribery in business

93
Q

What is money laundering?

A

Proceeds of criminal activities are disguised/ converted and then realised as legitimate assets.

94
Q

What is terrorist financing?

A

The financing of terrorist acts, and of terrorists and terrorist organisations

95
Q

Name some legislation relating to money laundering?

A

Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2019

96
Q

What are the key components of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2019?

A
  • Adopt appropriate internal controls
  • Provide staff training
  • AML checks
  • Record keeping
97
Q

When is enhanced due diligence required?

A
  • Red flags.

- PEP (politically exposed person)

98
Q

Name some red flags which would trigger enhanced DD

A
  • Unwillingness to provide documents
  • Unusual patterns of transaction i.e. undue urgency, potential loss making
  • Changing currencies
  • Changes to parties involved
99
Q

What are the penalties under the Money Laundering, Terrorist Financing and Transfer of Funds Regulation 2019?

A
  • Assisting: Max 14 years imprisonment and/or unlimited fine

- Tipping off/not reporting: max 5 years imprisonment and/or unlimited fine

100
Q

What are some key requirements for firms regarding money laundering?

A
  • Annual registration with HMRC
  • 10,000 euros is the maximum cash payment
  • Detailed record keeping
  • Enhanced DD on all clients with suspicious activity reports
  • Keep records for min 5 years
  • Check purchaser as well as vendor
  • Report discrepancies to Company House Register
101
Q

What money laundering checks do you need to do for private individuals?

A
  • Passport/drivers licence

- Utility bill from last 3 months

102
Q

What money laundering checks do you need to do for PLCs?

A

London Stock Exchange Listing

103
Q

What money laundering checks do you need to do for public bodies?

A

Government ownership / control

104
Q

What money laundering checks do you need to do for private limited companies?

A
  • Certificate of incorporation
  • Full name
  • Registered Office
  • Registered number
  • Business address
  • Name of all shareholders with over 25% stake.
    (report discrepancies to Companies House)
105
Q

What is the Proceeds of Crime Act 2002?

A

Provides power for enforcement authorities to recover money and assets deemed to be the proceeds of crime

106
Q

What are the main areas of offence under the proceeds of Crime Act 2002?

A
  • Concealing criminal property
  • Arrangements
  • Acquisition, use and possession
107
Q

What is the purpose of the RICS Professional Statement - Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)?

A

Sets out mandatory, global requirements for RICS members and firms.

108
Q

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

A
  • Mandatory requirements for bribery and corruption
  • Guidance for best practice i.e. having a gift register)
  • Supplementary guidance
109
Q

What must RICS firms do in relation to Bribery, Corruption, Money Laundering and Terrorist Financing?

A
  • Not offer or accept bribes
  • Report suspicions to relevant authorities
  • Not facilitate or be complicit to Money Laundering or Terrorist Financing
110
Q

How do you promote trust in the profession?

A

I provide a high standard of service and ensure all instructions are completed within the agreed ToE.

111
Q

How do you treat others with respect?

A

I treat everyone equally in a way that I would want to be treated.

112
Q

How do you promote trust in the profession?

A

I am conscious of the way I conduct myself both at work and outside of work settings. I keep my social media accounts private. I am always honest and transparent with my clients.

113
Q

Why is it important for RICS Members to carry out CPD?

A
  • One of the Rules of Conduct.

- To offer the best service possible to clients by being up to date and in the know on latest guidance and information.

114
Q

Why do firms have PII?

A
  • One of the Rules of Conduct.
  • Protects against negligent behaviour.
  • Protects clients, firm and me.
115
Q

What Alternative Dispute Resolution service does RICS provide?

A

RICS Dispute Resolution Service

116
Q

What do you actually do for your AML checks?

A

Anti Money Launder the client & purchaser
If company, secretary & directors identified and anyone with more than 25% stake in company

Take photo copy of their ID.
Log the following info onto KYC tool:
- Whether met them face to face
- Estimated value of asset
- The official Land Registry Documents
- Do I believe there has been suspicious activity
117
Q

RICS Client Money Protection Scheme from June 2020

A
  • RICS operates a Client Money Protection Scheme in the UK
  • Scheme provides protection (as a last resort) when an RICS regulated firm is unable to repay a client’s money
  • Limit per claim = £50,000
  • Cap on liability as a whole £10,300,000
118
Q

When is a firm required to register for regulation by RICS?

A
  • Providing surveying services to the public

* At least 50% of the firm’s principals are RICS member

119
Q

Can you advise a friend in the pub about office market trends?

A
  • You can give them information which is in the public domain
  • Cannot give any advice
  • Not in a work setting and under signed terms of engagement
120
Q

What is your firms’ PII?

A

As my firm’s global turnover is in excess of £200,001, the PII is £1m.

121
Q

Within your firm, how do you undertake conflict of interest checks?

A

We have an internal system where I would search the client’s name and the area which looking in. From that, a different team from within my team may come up. I would then send an email to that team to confirm my findings. (Email to confirm findings if I thought anything was unanswered).

122
Q

What documentation do you need to obtain when undertaking KYC checks?

A
  • Valid passport/drivers licence

- Utility bill from last 3 months for proof of address

123
Q

If a prospective purchaser called you during the tender process requesting a heads up on the levels of bids received, what would you do?

A
  • Not at liberty to discuss any other offers

- Bid to a level comfortable with and that if they lose out they are comfortable with the figure they bid.

124
Q

Can you give a friend free advice?

A
  • Wouldn’t be covered by PII
  • Can give your friend advice if they have instructed you in the same way any client would
  • I wouldn’t be able to undertake the work as it would be a conflict - conflict management - recommend they get in touch with relevant person within the firm.
125
Q

Would you discuss fee levels with other companies?

A

No, I would never discuss this- it is confidential/commercially sensitive

126
Q

What is a Royal Charter?

A

A Royal Charter is an instrument of incorporation, granted by The Queen, which confers independent legal personality on an organisation and defines its objectives, constitution and powers to govern its own affairs.

127
Q

What are some RICS bye-laws?

A

There are 10 bye-laws

  • Bye Law 2: Membership & Registration
  • Bye Law 3: Use of Designations (eg MRICS) each designation starts with ‘Chartered’ and ends with ‘Surveyor’
  • Bye Law 4: Contributions to funds (fees & subscriptions)
  • Bye Law 5: Conduct
  • Bye Law 6: Governing Council, Officers and Staff
  • Bye Law 7: Subordinate Boards, Committees & Groups
  • Bye Law 8: Procedure for General Meetings
  • Bye Law 9: Accounts and Audit
  • Bye Law 10: General
128
Q

Who would you seek approval from for ticket

A
  • Line Manager

- Compliance Team

129
Q

What happens you gained approval from your compliance team to accept the rugby match invitation, and it then turns out by accepting it you have received a bribe by accepting it?

A
  • Inform compliance officer

- You would have to take responsibility for accepting the invitation (5 Global Ethical & Prof standards)

130
Q

Who writes the response to a complaint?

A
  • The response would come from my complaints handling officer
131
Q

What happens if you suspect money laundering?

A

Report to relevant authority. I would not say anything to the purchaser or client - it would be tipping off. Criminal offence to say anything to the purchaser or client. Relevant authority would likely be in touch within 5 days, they have to catch them in the act - if you tip them off it’s gone. It’s the act of money laundering they want to capture.

132
Q

What did the RICS do during COVID-19?

A

Recommended use of Material uncertainty clause - prepared in exceptional circumstances. Provided suggested wording for the clause to be used for COVID.

133
Q

What are the four levels of membership?

A

FRICS, MRICS, AssocRICS, Trainee/student

134
Q

How do you become FRICS?

A
  • 5 or more years of service
  • Academic achievement
  • Professional achievement
  • Leadership role
  • Raise the profile of the RICS
135
Q

How many specialist RICS groups are there?

A

17 covering property, land and construction.

136
Q

What is negligence?

A
  • Surveyors have a duty of care to clients and parties, must use “reasonable care and skill”.
  • Negligence = a breach of this where damages arise.
  • Limitation Act 1980 = 6 years from date of negligent act / 3 years from date of knowledge / 15 year longstop date.
137
Q

Why do we have the Rules of Conduct?

A

Rules of conduct for members and firms, they need to adhere to these for regulation and to uphold professionalism.

138
Q

What is the definition of ethics?

A

Moral principles that govern a person’s behaviour or the conducting of an activity. Duty of care - refer to professional & ethical standards.

139
Q

When was the Royal Charter granted?

A

Privy council elected it to be a royal charter in 1881

140
Q

Who do you have a duty to if you are within the Royal Charter?

A

The public.

141
Q

What are the advantages of being within the Royal Charter?

A
  • Recognition of professional expertise
  • Increased public confidence and awareness
  • They are reserved for professional bodies.
142
Q

What are the most common breaches for the RICS?

A
  • Not doing enough CPD
  • Not acting ethically
  • Breach of professional behaviour professional behaviour (confidentiality, or failing to pay taxes)
  • Failing to protect clients’ money
143
Q

How many bye-laws are there?

A

10

144
Q

How many rules are there for members?

A

9 (2 of these are admin)

145
Q

How many rules are there for firms?

A

15 (7 for code of business + 6 for registration) (plus 2 for admin)

146
Q

Who do the rules for better regulation apply to?

A

Where members and firms can decide how they best meet the requirements

147
Q

RICS Ethical Decision Tree

A

To decide whether you should act for a client or not

  1. Sufficient facts
  2. Is it legal?
  3. In line with RICS global & professional
  4. Consulted with enough people to be able to make informed decision
  5. Clear reasoning to support decision?
  6. Would you be happy for your actions to be made public?
148
Q

RICS Ethical Decision Tree

A
  • It 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.
  1. Sufficient facts
  2. Is it legal?
  3. In line with RICS global & professional
  4. Consulted with enough people to be able to make informed decision
  5. Clear reasoning to support decision?
  6. Would you be happy for your actions to be made public?
149
Q

What if new business and don’t have turnover?

A

You would look at the projected turnover figures

150
Q

What is your complaints handling procedure within your company?

A
  • Acknowledge within 7 days - investigating partner assigned to case
  • Within 21 days - outcome - if not concluded, refer to independent redress or remedial action
151
Q

Negligence case this year?

A

Large vs Hart Jan 2021:

Did not communicate all of the information.

  • Failed to identify and report the extensive damp at the Property. Whilst there was no evidence of damp at the time of Mr Large’s inspection, he noted in his report that he could not see whether damp-proof membranes had been installed and he should therefore have advised that further investigations were required.
  • Crucially, Mr Large should have recommended that a PCC be obtained prior to purchase of the Property, particularly as this was a newly reconstructed property. Without it, the Harts had no contractual rights against the contractors engaged in the build.
152
Q

What RICS regulations relate to bribery?

A

RICS Professional Statement: Countering Bribery and Corruption, Money Laundering and Terrorist Financing (September 2019)

153
Q

What does the Royal Charter require RICS to do?

A

The royal charter requires RICS to “promote the usefulness of the profession for the public advantage in the UK and in other parts of the world.”

154
Q

How many RICS members are there?

A

134,000

155
Q

What does the Privy Council do?

A

Overlook the governing council.

156
Q

What do all companies need in relation to money laundering?

A

Money Laundering Reporting Office - report to the National Crime Agency

157
Q

What is a conflict?

A

Anything that can be perceived to affect your impartiality

158
Q

What are the different types of conflict? RICS Conflict of Interest Professional Statement 2017

A
  • Party
  • Confidential
  • Own interest
159
Q

Meritt vs Babb 2001

A

Negligence - surveyors can be personally liable for negligence (firm went bankrupt, had no PII, got sued and actual surveyors had to pay them)

160
Q

Have you ever declined an agency instruction?

A

No

161
Q

What do the RICS Regulations and bye-laws do?

A

Set out the governance of the institution.

162
Q

How many bye-laws are there?

A

There are 10 bye-laws (regulations approved by RICS governing council)

163
Q

What is the role of the 17 specialist professional groups?

A

The 17 professional groups across property, land and construction each have their own elected board and are responsible for outlining standards of practice and competence.

164
Q

What does the RICS say about confidentiality?

A

RICS Bye-laws state that ‘client confidentiality must be maintained for all client affairs’

165
Q

What can be included under the term ‘client’s money’?

A
  • Deposits
  • Rent
  • Service charges
  • Retentions
166
Q

What is the RICS document relating to client money?

A

RICS Professional Statement ‘Client Money Handling’, 2019

167
Q

What are the 6 areas of good practice set out in 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
168
Q

What is the difference between formal and informal CPD?

A
  • Formal includes structured learning that has clear learning objectives and outcomes.
  • Informal is self-managed learning related to the role.
169
Q

What does the Bribery Act 2010 state about hospitality?

A

Hospitality is not prohibited by the act. It states offering a client reasonable and proportionate hospitality will not be an offence, as long as it is accurately recorded in a gift/hospitality register.

170
Q

If you had suspected money laundering during your checks and due diligence before accepting the instruction, what must you have done?

A

Report any suspicions to your:
• Compliance Officer
• National Crime Agency

171
Q

What is the process of money laundering once you have reported the suspicions?

A

You must:

o Submit a suspicious activity report
o Seek permission to undertake the transaction

172
Q

How would you do a complaints handling procedure in your new company?

A

Set up complaints handling procedure - needs to be approved by the RICS.

If sole practitioner, designate a complaints handling officer in another firm.

173
Q

You mentioned a rugby match invitation. So you declared it and received approval. Who invited you and why did they invite you?

A

I was invited by a national housebuilder following some work I had done for them. The job had completed.

174
Q

Would you have accepted the instruction if the job hadn’t completed with them (if still ongoing)?

A

No - could be seen to affect my impartiality

175
Q

Would you have gone for a meal at a local restaurant with the client during a project with them? Or a coffee?

A

No - would ensure meet in a work setting, so would invite them to the office for a meeting.

176
Q

If you completed on your property, sold for £402,000 so £8k fee. If I came into the office with £8k in cash to pay the fee, what would you do?

A

We cannot receive cash within my firm. I would ensure they had my firm’s bank details and ask them to pay it into their bank account and transfer it to that. I would also inform my MLRO as it would be quite suspicious receiving such a high amount of cash.

177
Q

What steps would you need to take when setting up your own RICS practice?

A

Adhere to the relevant legislation

and

Follow RICS steps

178
Q

How would you decide whether to accept it or not?

A

If I thought it was reasonable and the job had completed I would accept. If I felt unsure about it, I would politely decline.

179
Q

What are the rules of dealing with conflicts of interest at Strutt & Parker?

A
  • Search client name on online database and see if get any matches
  • If do, contact relevant team/office to confirm findings
  • Alert line manager and compliance team
  • Decide whether to avoid the conflict or whether it can be managed sufficiently (eg information barrier)
180
Q

What is a fixed penalty?

A

A fixed penalty is issued by the police for minor offences and isn’t classed as a criminal conviction. If you pay the fine on time, that’s the end of the matter and all liability for the offence is discharged.

181
Q

What are the red flags to you if someone might be trying to bribe you?

A

If they offer you anything or invite you to anything during the instruction. Ensure to politely decline, inform line manager and contact Serious Fraud Office if they do offer you a bribe.

182
Q

Talk me through the action you would take if you’re on site and you think someone is trying to bribe you? What legislation would you have regard to?

A

I would decline and inform my line manager, leave site, contact Serious Fraud Office.
Bribery Act 2010

183
Q

What is the regulatory function of the RICS? How does it ensure standards across the profession?

A

It is independent of Government and set up by Royal Charter. It sets rules of membership and professional standards and can take disciplinary action against its members for breach of these rules.

184
Q

What is intellectual property?

A

Intellectual property is a branch of law that includes all the rules applicable to “intellectual” or “intangible” creations, which are “intangible assets”.

185
Q

What happens if loss exceeds PII cover?

A

Firm is liable to pay difference

186
Q

How can PI claims be avoided?

A
  • Full and detailed records of meetings, conversations etc
  • Record recommendations and advice given
  • Use comprehensive Terms of Engagement
  • RICS guidelines
  • Stick within your specialism - refer work if not competent/suitable for an instruction.
187
Q

What would you do if you weren’t competent for an instruction and there wasn’t a relevant team in your company?

A

Refer client to RICS ‘find a surveyor scheme’ on the RICS website.

188
Q

What was the Carsberg Report 2005?

A

Thorough internal and external review of the RICS. Response to dissatisfaction of RICS. Key recommendations: Conduct Board should be established, RICS should regulate firms as well as members, reviews of complaints procedure should be carried out.

189
Q

What does proportionality mean?

A

RICS only intervene when necessary and punishments should be proportionate.

190
Q

What does accountability mean?

A

Must be able to justify actions

191
Q

What does consistency mean?

A

Complete fair and level playing field

192
Q

What does targetting mean?

A

Focussed on problem

193
Q

What does transparent mean?

A

Keep regulations simple and user friendly.

194
Q

What would you do if your fees for a job went over an agreed level?

A
  • Don’t lower standard of service
  • Investigate why it happened
  • If error - put in place measures to ensure doesn’t happen again
  • Keep track of any additional fees not within scope of service
195
Q

Name some examples of topics the RICS publishes help sheets and policy documents on

A 
CPD
Client money handling
PII
CHP
Global Ethical and Professional Standards
196
Q

What is the purpose of the RICS Rules of Conduct?

A

Provides framework - client knows they are getting a set level of service.

197
Q

What is the Clients Money Protection Scheme?

A

Run by RICS - any member of public to be reimbursed directly for loss of funds - RICS insurance policy

198
Q

What would you do if a client paid in advance for services?

A
  • Identifiable client account
  • Statement of account
  • Services and associated fees
  • Transparency once complete
199
Q

How do firms comply with GDPR?

A
  • Rights of individuals
  • Demonstrate managing data in compliance with GDPR
  • Must be able to delete everything
200
Q

How would you check source of wealth?

A
  • Proof of property sale.
  • Records of external investments.
  • Commercial loan agreement letter.
  • Audited Financial Statements.
  • Bank Statements.
  • Written confirmation from a qualified accountant/lawyer.
  • Individuals certified biography.
  • Grant of Probate/Copy of Will.
201
Q

What do proof of funds letters need to include?

A

A Proof of Funds letter must include the following:

  • Your bank’s name and address
  • An official bank statement, either printed at a branch or as an online statement
  • Balance of total funds in the account
  • Balance of funds in checking or savings account
  • Copy of an online banking statement
  • Might require the signature of an authorized bank employee or notary
  • Includes the date that the funds were in the account
202
Q

What is the RICS document relating to conflicts?

A

RICS Conflicts of Interest Professional Statement 2017

203
Q

What RICS document relates to Client Money Handling?

A

RICS Professional Statement: Client Money Handling 2019

204
Q

When do buildings need asbestos surveys?

A

If building built before 2000, likely needs asbestos survey.

205
Q

How does an asbestos survey actually work?

A

Because asbestos fibres can’t be identified by eye, during an asbestos survey, samples may need to be taken. The material can then be examined in a laboratory, to identify if asbestos is present, and what type of asbestos.

206
Q

What will an asbestos survey tell you?

A
  • The location of asbestos
  • The type
  • The condition
  • The quantity
  • Further action required (if any)
207
Q

What information is required by the RICS for regulation?

A
  1. Type of business and staffing details
  2. Statutory regulated activities (such as for financial services)
  3. Nature of clients
  4. Complaints handling procedure details and records
  5. Professional indemnity insurance details
  6. Whether the firm holds client’s money
208
Q

What could client’s money include?

A

Holding deposits, rent, service charges and retentions

209
Q

What are the global and ethical standards for?

A
  • Main purpose is to advance and enforce standards in property and promote the usefulness of the profession for the public good.
  • Written and agreed by the RICS Governing Council.
  • ‘stop and seek’ if unsure of anything
  • Can call anonymously to an RICS helpline.
210
Q

What is the difference between RICS Practice Notes and RICS Guidance Notes?

A

Practice Notes provide information on how a surveyor should carry something out, whereas guidance notes recommend how something should be carried out, but is open to interpretation. Courts often use guidance notes to make their decisions.

211
Q

What does integrity mean?

A

The quality of being honest and having strong moral principles.

212
Q

What are the differences between the 2 rules of conduct and when were they last updated?

A

March 2020 both last updated.

213
Q

What are the different types of conflict and what is the 3-step process when referring to conflicts of interest?

A
  1. Conflict Avoidance
  2. Written advice to both parties
  3. Conflict management
214
Q

What is the punishment for breaching confidentiality?

A

Data Protection Act…

greater of £17.5m or 4% global annual turnover

215
Q

What is the difference between ethics and integrity?

A
  • Ethics can be defined as rules and regulations that have been formed which allow an individual to work in accordance to moral principles.
  • Integrity can be defined as the quality of being honest and fair.
  • Ethics are more external whereas integrity is internal.
  • Ethics is not a choice whereas integrity is a personal choice.
  • Ethics can be imposed on individuals, but integrity cannot be imposed on.
216
Q

Give some examples of matters where you may refer to the RICS ethical decision tree to seek guidance?

A
  • Accepting an instruction
217
Q

When’s it a gift or a bribe?

A

A gift is something of value given without the expectation of return. A bribe on the other hand, is the same thing but with the expectation of influence or benefit. Both can be monetary, actual items or they can be tickets to an event, like different sporting events or entertainment, such as dinners or concerts.

218
Q

What RICS document relates to complaint handling?

A

RICS Complaint Handling Guidance Note 2016

2021 (22 decks)

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