Ethics, rules of conduct and professionalism

Question 1

What is RICS’ Motto?

Answer 1

• Est Modus in Rebus

Question 2

When was RICS founded?

Answer 2

• 1868

Question 3

What do you do if you find out a chartered surveyor is working outside the Rule of Conduct?

Answer 3

• Verify the facts and confront them to remind them of their duties as a member of RICS.
• Inform the RICS specifying my relationship with the surveyor and any corrective action which I believe they are committed to putting in place.

Question 4

In the case of a breach of a RICS rule of conduct, what is the procedure?

Answer 4

• Not every shortcoming necessarily gives rise to proceedings.
• A formal investigation by the Head of Regulation of the RICS is the first step.
• RICS can then request information and visit to inspect compliance.

Question 5

How can a disciplinary proceeding be triggered?

Answer 5

• Someone complains to RICS.
• An allegation by client or third party.
• Information received or established by RICS.

Question 6

What are the disciplinary actions that can be imposed on members found to be in breach of the RICS rules of conduct?

Answer 6

• Fixed penalty
• Consent order - a written agreement between RICS and the offending member and can require the member to take corrective actions, or restrain from taking certain actions and also may require them to pay a fine also.
• Disciplinary panel - for more serious breaches of conduct, panel held in public with the burden of proof on RICS.

Question 7

Which firms are regulated by RICS?

Answer 7

• Those firms with 50% or more of their partners / directors that are members of RICS.

Question 8

What insurances would you need if you were starting up your own firm?

Answer 8

• Professional Indemnity
• Employer’s Liability
• Public Liability
• Building insurance of own office

Question 9

What is your firm’s complaints handling procedure?

Answer 9

• Person who receives the complaint is to document it if made in writing including the time and date, but if made orally they must create a written record and then confirm with the person making the complaint that it is correct.
• Complaint is then handed to the job director who will pass it to our complaints handling officer Alex Brown, a Director in our Bristol office.
• The complain will be reviewed and considered as soon as possible, but a full response or update with the progression of the complaint is to be given to the individual within 28 days.
• If an agreement cannot be made on how to solve the complaint then they individual has the opportunity to refer it to the Centre for Effective Resolution.

Question 10

What must a complaints handling procedure include?

Answer 10

• RICS provides an example model:
• Must have a redress mechanism
• Details of the procedure should be issued to the client with the Terms of Business
• Must be clear, quick, transparent and impartial and free of charge
• Names and contact details of the nominated investigating person must be stated
• Complaint must be investigated within 28 days
• All complaints, their progress and outcomes must be recorded
• Must have two procedural stages (at least) - consideration of the complaint by a senior member of the firm or complaints handling officer and if not resolved, referred to an independent third party with the authority to award redress

Question 11

What are the RICS Rules of Conduct?

Answer 11

• They support positive change in the built and natural environments, through promoting and enforcing the highest ethical standards.
• The rules of conduct are based on ethical principles of honesty, integrity, competence, service, respect and responsibility.
• The rules of conduct set out five rules which provide a structure for making ethical decisions about how to behave as a professional.
• The rules apply to ALL RICS members and firms who are regulated by RICS no matter where they work, although firms and members must consider geographical legal obligations that apply to them.

Question 12

What are the 5 rules that make up the RICS Rules of Conduct?

Answer 12

Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligations. including obligations to RICS.

Rule 2 - Members and firms must maintain their professional competence and ensure that services are provided by competent
individuals who have the necessary expertise.

Rule 3 - Members and firms must provide good-quality and diligent service.

Rule 4 - Members and firms must treat others with respect and encourage diversity and inclusion.

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 the profession.

Question 13

What are some example behaviours of Rule 1 of the RICS Rules of conduct?

Answer 13

Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.

Example behaviours:

• Members and firms do not mislead others by their actions or omissions, or by being complicit in the actions or omissions of others.
• Members and firms do not allow themselves to be influenced improperly by others (as a result of, for example, giving or receiving work referrals, gifts, hospitality or payments) or by their own self interest.
• Members and firms identify actual and potential conflicts of interest throughout a professional assignment and do not provide advice or services where a conflict of interest or a significant risk of one arises, unless they do so in accordance with the current edition of Conflicts of interest, RICS professional statement.
• Firms have effective processes to identify actual and potential conflicts of interest, to enable appropriate decisions to be made on whether to accept work, and to keep records of decisions made about actual and potential conflicts of interest.
• Members and firms providing advice and opinion in a professional context do so honestly and objectively based on relevant and reliable evidence, and firms have processes to ensure that directors, partners and employees do so.
• Members and firms are open and transparent with clients about their fees and services.
• Members and firms act to prevent others being misled about their professional opinion.
• Members and firms do not take unfair advantage of others.
• Members and firms protect confidential information and only use or disclose it for the purposes for which it was provided, where they have the necessary consent to do so or where required or permitted by law.
• Firms keep client money safe and have appropriate accounting controls.
• Members do not misuse client money and comply with controls intended to keep it safe.

Question 14

What are some example behaviours of Rule 2 of the RICS Rules of conduct?

Answer 14

Rule 2 - Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.

Examples:

Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.

Members and firms supervise any employees undertaking work for them and ensure that these employees have the necessary knowledge, skills and resources to do their tasks competently.

Members and firms check that subcontractors have the necessary knowledge, skills and resources to do their tasks competently.

Members and firms reflect on the work they have undertaken and its impacts, and consider how they might apply what they have learned to their future work.

Members maintain and develop their knowledge and skills throughout their careers. They identify development needs, plan and undertake continuing professional development (CPD) activities to address them and are able to demonstrate they have done so.

Firms encourage and support directors, partners and employees to maintain and develop their knowledge and skills, and check that they are complying with CPD requirements set by RICS.

Members and firms stay up to date and comply with relevant legislation, codes of practice and other professional and relevant technical standards. Firms ensure that their directors, partners and employees do so.

Question 15

What are some example behaviours of Rule 3 of the RICS Rules of conduct?

Answer 15

Rule 3 - Members and firms must provide good-quality and diligent service.

Examples:

Members and firms understand clients’ needs and objectives before accepting any professional work.

Members and firms agree with clients the scope of the service to be provided and its limitations, and timescales for the work.

Firms inform clients that they are regulated by RICS and that they may need to disclose records to RICS where required for regulatory purposes.

Members and firms inform clients promptly and seek their agreement if it is proposed that any of the terms of engagement or estimated fees or costs be changed.

Members and firms undertake their work in a timely manner; with due care, skill and diligence, and in accordance with RICS technical standards.

Members and firms communicate to clients the material information on which their professional advice and opinion is based.

Members and firms communicate with clients and others clearly and in a way they can understand.

Members and firms ensure that any referral or introduction they make for a client is in the best interests of the client and inform clients about any financial or other benefits to the member or their firm from a referral or introduction.

Members and firms keep proper records of their work and decisions in enough detail to allow them to answer questions from clients and to allow their work to be audited for quality assurance or regulatory purposes.

Members and firms, when advising clients about projects, encourage solutions that are sustainable in that they minimise harm and deliver balanced economic, social and environmental benefits.

Members and firms understand the risks and benefits of using relevant technology.

Members and firms check that all data used is accurate and up to date, is kept securely, and that they have proper legal rights to use it and, where required, share it.

Firms have effective quality assurance processes for their work.

Question 16

What are some example behaviours of Rule 4 of the RICS Rules of conduct?

Answer 16

Rule 4 - Members and firms must treat others with respect and encourage diversity and inclusion.

Example behaviours

Members and firms respect the rights of others and treat others with courtesy.

Members and firms treat everyone fairly and do not discriminate against anyone on any improper grounds, including age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.

Members and firms do not bully, victimise or harass anyone.

Firms check that supply chains do not involve modern slavery or other abuses of the workforce.

Members and firms report abusive labour practices to proper and recognised authorities if they become aware of, or suspect, them.

Members and firms work cooperatively with others.

Members and firms develop an inclusive culture in their workplaces, support equal access and opportunity for all, and identify and address unconscious bias.

Question 17

What are some example behaviours of Rule 5 of the RICS Rules of conduct?

Answer 17

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 the profession.

Example behaviours

Members and firms question practices and decisions that they suspect are not right, and raise concerns with colleagues, senior management, clients, RICS or any other appropriate person, body or organisation where they believe in good faith that it is necessary to do so. Firms provide processes to allow and support individuals within the firm to raise concerns with senior management.

Members and firms support directors, partners, employees, colleagues or clients who have acted in good faith to report concerns.

Members and firms ensure that public statements made by the firm, or in which members are (or could be) identified as members of the profession, do not undermine public confidence in the profession.

Members and firms respond to complaints made against them promptly, openly and professionally.

Members and firms do not dissuade complainants from approaching an alternative dispute resolution provider, RICS or any other regulatory body.

Members and firms cooperate with investigations into complaints or concerns, and provide information where it is reasonably requested and they can do so lawfully.

Members consider the effect that any health conditions may have on their competence or ability to undertake professional work, and inform management or clients where they require reasonable adjustments or are unable to continue to undertake work competently.

Members and firms manage their professional finances responsibly.

Members and firms take appropriate action when they consider that the rules have been breached, and report suspected significant breaches of the Rules of Conduct by themselves or others to RICS.

Question 18

What CPD have you attended relating the ethics?

Answer 18

• RICS online ethics test.
• Internal presentations at my firm.
• Private study - have familiarised myself with ethics rules of conduct.

Question 19

What is a conflict of interest? (personal conflict of interest)

Answer 19

A conflict of interest occurs when an individual’s personal interests – family, friendships, financial, or social factors – could compromise his or her judgment, decisions, or actions in the workplace.

Question 20

What are the three types of conflict of interest according to the RICS Conflicts of Interest Professional Statement?

Answer 20

• Party conflict: a situation in which the duty of an RICS member or firm to act in the interests of a client in a professional assignment conflicts with a duty owed to another client in relation to the same or a related professional assignment.
• Own Interest Conflict: a situation in which the duty of an RICS member or firm to act in the interests of a client in a professional assignment conflicts with the interests of that same member/ firm.
• Confidential Information Conflict: a conflict between the duty of an RICS member or firm to provide material information to one client, and the duty of that RICS member or firm to another client to keep that same information confidential.

Question 21

What does informed consent mean?

Answer 21

Consent given willingly by a party who may be affected by a Conflict of Interest, that party having demonstrated to the RICS member working independently or within a non-regulated firm or regulated firm concerned that the party understands:

1. There is a Conflict of Interest or a significant risk of a Conflict of Interest and;
2. The facts known by the RICS member (working independently or within a non-regulated firm or within a regulated firm) or the regulated firm that are material to the Conflict of Interest.
3. What that Conflict of Interest is or may be and d that a Conflict of Interest may affect the ability of the RICS member (working independently or within a non-regulated firm or within a regulated firm) or a regulated firm to advise or act fully in the interests of a client.

Question 22

You see that a colleague is having some unwanted attention from a male colleague and it has happened a few times, what action if any would you take and what is this?

Answer 22

Consider this as a potential form of workplace harassment. I would go and speak to the male colleague and tell him its not acceptable behaviour, I would also report to my senior.

Question 23

You set up your own business but you decide to go off on a skiing holiday for 2 weeks, you break your leg and the doctors say you must have complete bed rest and no access to emails or work phone, what do you need in place to cover this situation?

Answer 23

A Locum agreement

Question 24

How many different types of RICS document statuses are there ?

Answer 24

There are three main types of document statuses issued by RICS:

1. International standard - high level standards developed in collaboration with other relevant bodies.
2. Professional statement - Mandatory requirement for RICS members and firms.
3. Guidance note - Recommendations and best practice approach followed by competent and conscientious practitioners.
4. Code of practice - Document developed in collaboration with other professional bodies and stakeholders, same status as as a professional statement or guidance note.

Question 25

What is the status of a RICS professional statement ? who does it apply to ?

Answer 25

Mandatory
RICS trainees, members, regulated firms

Question 26

What would you do if you considered your directors advice to be incorrect ?

Answer 26

Consider :
• The implications of the advice
• Is it legal ?
• Discuss with managers, colleagues
• Refer to the Ethics decision tree

Question 27

How does your behaviour differ professionally and personally ?

Answer 27

My approach and behaviour does not change.

Question 28

How do you keep up to date with current affairs and topic issues ?

Answer 28

On mailing list, office discussion, CPD email group, magazines and publications etc

Question 29

Why do you want to become chartered ?

Answer 29

• Gold standard in my profession
• Offers guidance and support from RICS
• Designation will help my career
• I am committed to lifelong learning
• I want to give back to the up and coming surveyors

Question 30

What is the RICS ethical decision tree?

Answer 30

The RICS decision tree assists me in making informed decisions , confirming my actions are ethical and legal

Question 31

What are ethics?

Answer 31

Moral principles that govern an individuals behaviour.

Question 32

What does it mean to act ethically as a Chartered Surveyor?

Answer 32

Acting ethically means complying with standards and ensuring that you are acting on behalf of your clients best interests.

Question 33

How would you close down a practice?

Answer 33

• Inform the RICS
• Inform clients and arrange for them to be handed over to a new firm
• Return any clients’ money
• Set-up professional indemnity run-off cover for a minimum of 6 years
• Retain a copy of client files and record for a minimum of 6 years

Question 34

How long should files be kept for?

Answer 34

• A minimum of 6 years before disposing and destroying them securely (although can be sued for negligence for up to 15 years)

Question 35

How would you limit the risk of working with a client or contractor who may be financially unstable ?

Answer 35

• Screening process:
• Dun & Bradstreet credit check
• Company search (Account information from Companies House)
• Internet search (Client website for additional information judgement on reliability)

Question 36

If your client asked you to lower your fees because of their limited funding, what would you do ?

Answer 36

The client would have to pay the required price for the level of service required or reduce the scope of works involved. I could consider if the scope of work could be reduced however on the client request i would not just lower my fees.

Question 37

Why shouldn’t you reduce fees at the request of a client?

Answer 37

• Devalues the profession by driving down prices.
• Fee has been calculated on time and resources needed to ensure a sufficient profit - not sustainable financially.

Question 38

How do you know you are competent ?

Answer 38

• Skills
• Knowledge
• Attitude
• Training
• Experience

Question 39

Can you advise somebody as an individual ?

Answer 39

Unless you have the correct insurances in place, you should not be giving any professional advice to anybody, friend or family or strangers. I would advise them to contact me during normal working hours as long as it does not become a conflict of interest and TOE can be defined etc.

Question 40

If faced with a situation that you felt was unethical, how would you proceed?

Answer 40

Using the decision tree:
• Do I have sufficient facts?
• Is the matter legal?
• Is it in line with RICS Professional and Ethical Standards?
• Have I consulted with appropriate people?
• Do I have clear reasoning in reaching my decision?
• Would I be content for my actions to be made public?
If answered no to any of the above, I would not proceed with the situation alone and would consult senior staff with direction on how to proceed.

Question 41

Why are ethics important?

Answer 41

• Prevents any issues with consistent behaviour
• Sets a standard of expertise and professionalism
• Promotes trust in the company and industry

Question 42

What are the CPD requirements?

Answer 42

• Qualified/MRICS member – 20 hrs per year, min 10 hours formal
• Student member – 48 hrs per year (Min 24 formal)

Question 43

What is the difference between formal and informal training ?

Answer 43

Formal has a learning objectives and a defined learning outcome, i could reference the CPD decision tree for further guidance.

Question 44

What is a complaints handling procedure?

Answer 44

A procedure to allow and define the procedure for clients to raise a complaints. This may include ADR and relevant timescales for the process.

Question 45

What is a Complaints Handling Procedure ?

Answer 45

• A firm must have a CHP and maintain a complaints log
• If there is a complaint, it must be addressed to the Complaints Handling Officer and handled within 28 days of receipt. If the complaint cannot be resolved, it can be referred to an independent 3rd party
• You can be your own Complaints Handling Officer as a sole practitioner but most refer it to a 3rd party

Question 46

What must a complaints handling procedure include?

Answer 46

• A form to fill out
• Redress mechanism
• Details should be issued to clients with the terms of business
• Clear, quick, transparent and impartial and free of charge
• Names and contact details of nominated investigating person must be stated
• Complaint must be investigated within 28 days
• All complaints and progress and outcomes must be recorded
• Advise PI insurers of a complaint
• Two stages: 1 – consideration, 2 – referral to third party

Question 47

What options are available if you couldn’t resolve the complaint?

Answer 47

• Property Ombudsman
• RICS Dispute Resolution
• Escalation etc

Question 48

What is the property ombudsman?

Answer 48

Independent government approved body who provides redress to consumers whose complaints are considered on a case by case basis. They are not regulators and have no authority to take legal action or dictate action.

Question 49

How many years after an instruction has been completed can a Professional Indemnity claim be made ?

Answer 49

15 years (Limitations Act)

Question 50

What type of cover would you need to cover a claim brought after a firm or member ceases to trade ?

Answer 50

Run off cover

Question 51

What cover do you need to open your own firm?

Answer 51

• PII insurance - Professional indemnity insurance covers financial loss, personal injury and property damage resulting from your negligent act or error while you’re working for a client.
• PLI insurance - Public liability insurance is there to protect you if a member of the public is injured (or their property is damaged) and your business is faced with a compensation claim as a result. It can cover you when you’re working at client sites or in public.
• Employers Liability Insurance - Employers’ liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you. It’s legally required of all businesses with one or more employees.
• Building Insurance (if you own your own premises)

Question 52

What is the purpose of PII

Answer 52

• Ensure that if the firm faces a claim, it is protected from financial loss that it cannot meet from its own resources
• Protect the insured member or firm against the consequences of its liability to pay damages to third parties for breaches of professional duty that it commits through its professional activities and
• Ensure that the firm’s clients do not suffer financial loss, which the firm cannot meet.

Question 53

What are the RICS requirements for a firms’ PII policy?

Answer 53

The nature and extent of your insurance must be adequate and appropriate for your business. It must meet the following requirements.

• An ‘each and every’ claim basis or aggregate plus unlimited round the clock reinstatement basis.
• RICS’ minimum policy wording or more comprehensive wording. As a minimum, you should ensure that your policy wording is written on a full civil liability basis and the minimum level of indemnity based on the firm’s turnover in the previous year (or estimated for a new firm). To manage their risk adequately, some firms may wish to hold a higher level of indemnity.

Question 54

What is the minimum limit of PII cover for firms? What is the maximum level of uninsured excess required by RICS?

Answer 54

• PII cover dependent on turnover (during previous financial year or predicted turnover if a new firm) - _needs to be for any one claim or aggregate and round the clock reinstatement basis (w_hen each layer of indemnity has been exhausted up to the full limit of indemnity, the cycle should start again and reinstate back to the primary amount).

£100,000 or less = £250,000

£100,000 to £200,000 = £500,000

£200,000 and above = £1,000,000

• Maximum uninsured excess is also based on firms’ turnover (as per new UK PII requirements effective 2022).

£10,000,000 or less - The greater of 2.5% of the sum insured or £10K.

Over £10,000,000 - No limit set.

Question 55

What is the minimum level of run-off cover for a firm?

Answer 55

• For consumer claims: £1,00,000 for period of six years.
• For non-consumer claims: proportionate and adequate runoff for period of six years.

Question 56

What status is the RICS Professional Indemnity Insurance Requirements document?

Answer 56

A regulation document

Question 57

What is meant by each and every claim ?

Answer 57

• This is one of the two types of cover/policy
• Each and every is cover for each claim that does not add up, the opposite is aggregates, where the claims and added up to a certain agreed value.
• You could have each and very claim up to £100,000 per claim or you could have £100,00 aggregate(which is a lot lower cover)

Question 58

What are the April 202 PI Insurance updates ?

Answer 58

• Fire safety cover - Since 2020, insurers have imposed a blanket fire safety exclusion on PII terms provided due to concern following high profile fire safety failures, meaning chartered surveying firms have increasingly been left uninsured for fire safety exposure on all aspects of their business.
• Under the new terms, insurers are not permitted without specific dispensation to exclude fire safety claims on a property four storeys or less and fire safety coverage must be provided as a minimum on an aggregate, defence cost inclusive basis.This aspect of the changes will come into effect on 1 May 2021.
• Cyber cover - There is a new regulatory requirement for insurers to clarify the cyber cover provided in PII policies. The changes do not restrict the cover provided in PII policies, but clarifies existing requirements on insurers from their regulator the Prudential Regulatory Authority.
• Approved Insurers -A new insurer has joined the list of RICS Approved Insurers, providing a greater competition and increasing the availability of cover.

Question 59

What measures should be taken to try and avoid PI claims?

Answer 59

• Keep full and detailed records of meetings, conversations etc
• Record recommendations and advice given
• Use proper letters of engagement, scope of services and terms of engagement
• Don’t advise on a specialism outside your field of experience
• Use RICS guidelines
• Avoid poor management and excessive workloads

Question 60

What if the loss exceeds the cover provided by the PI insurance?

Answer 60

The professional / firm is liable for the difference – in assets etc

Question 61

What is run-off cover? What is RICS’ requirements regarding run-off cover?

Answer 61

• Insurance cover maintained should a firm go bankrupt / cease to practise.
• RICS requires firms to have run-off cover for at least 6 years for a limit of £1,000,000. However, it is recommended that 15 years is maintained to ensure cover is given under the maximum period of the limitations act.

Question 62

Explain the term ‘claims made Basis’

Answer 62

A ‘claims made’ basis covers claims that are made and reported during the policy period only and not once the policy period is over.

Question 63

Explain the term ‘each and every claim Basis’

Answer 63

The limit of indemnity covers each claim individually (instead of a accumulatively for that year, which is referred to as ‘in the aggregate’)

Question 64

What are the levels of maximum uninsured excess?

Answer 64

• 1. Up to and including £500,000 indemnity = the greater of 2.5% of the sum insured or £10,000
• 2. Over £500,000 indemnity = 2.5% of the sum insured

Question 65

In the RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing February 2019 - RICS Members and Firms must do what in relation to bribery and corruption ?

Answer 65

In relation to bribery and corruption RICS-regulated firms must:
• not offer or accept, directly or indirectly, anything that could constitute a bribe
• have plans in place to comply with applicable laws governing bribery and corruption, and ensure that these are followed
• report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager
• act with due diligence to perform periodic written evaluations of the risks that face the firm and that may lead to the facilitation of bribery or corruption; in determining Countering bribery, corruption, money laundering and terrorist financing 6 RICS professional statement Effective from 1 September 2019 the appropriate level of due diligence, the firm may consider the type of business activities they engage in and the environment in which they operate
• retain information detailing how the firm has met the requirements of this professional statement.

In relation to bribery and corruption RICS members must:
• not offer or accept, directly or indirectly, anything that could constitute a bribe
• ensure that they have adequate knowledge of bribery and corruption to be able to comply with the requirements of this professional statement
• report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager.

Question 66

Can you name any Money Laundering Red Flags?

Answer 66

• Cash-only buyers
• An unusual sale price (too low or too high)
• Payments from multiple/different source to counterparty
• Funds provided by unknown third parties

Question 67

What due diligence do you apply in relation to money laundering ?

Answer 67

My company has a policy relevant to this, I would always air on the side of caution. For example as a business do not accept cash or cheque payments. Any red flag would be raised suitably.

Question 68

What is money laundering ?

Answer 68

Legitimisation of criminal proceeds.

Question 69

Client comes into your office with 10k cash to pay builder, what can you do?

Answer 69

I would politely decline as under RICS guidance, one should not facilitate or complicit any money laundering acts. Should I be concerned if there is money laundering then this should be reported to local legislation. Under the Money Laundering Act 2007 (updated 2017), under HMRC guidance, which advise that necessary due-diligence should be completed to ensure the money is clean. HMRC advise that these checks should be done if these transactions are occasional and of a value of €10k and you are not registered high value dealers. A high value dealer is a firm who has registered with the HMRC as they receive regular high value payments of €10k or more in cash for goods. Companies such as jewellers or car dealers. Such due-diligence checks include; checking who they say they are, financial statements, where the money came from.

Question 70

How would you advise the client to deal with the 10k cash?

Answer 70

I would advise that the money needs to be put into the bank and proof of where the money was obtained will also need to be shown to their bank as banks can become suspicious of irregular payments of large amounts.

Question 71

If you ran your own firms who would you report suspicious activity to ?

Answer 71

• National crime agency(NCA)
• HMRC
• The Police

Question 72

Give me some examples of how your firm might comply with the Money Laundering Regulations.

Answer 72

We report cash payments over £10K. Carry out risk assessments to make sure that we take the necessary procedures when working with clients from high risk countries or high risk sectors.

Question 73

If you were given a gift what would you do ?

Answer 73

Log in within the gift log, I may decline the gift taking into account timings and proportionality and my companies gift handling policy.

Question 74

Would you accept a gift from a contractor ?

Answer 74

I would take into account the proportionality and timings. If I did It would be logged in our gifts handling record.

Question 75

When would accepting or providing hospitality be acceptable ?

Answer 75

Once al the works are complete on site and the final account agreed and there is no conflict of interest. also consider the scale, time and suitability of the hospitality and or gift.

Question 76

What’s the difference between a gift and a bribe ?

Answer 76

A gift is a small gesture, a bribe is under the impression that some gain will result.

Question 77

Would you accept a gift or hospitality?

Answer 77

Consider the timing and proportionality - for example if I the contractor was currently or soon to be tendering for works then this would not be appropriate, additionally I would consult my firms’ gift handling procedure (UPDATE ONCE CONFIRMED).

Could always check this against the guide in the Bribery Act 2010. Ensuring it does not influence decisions, should not be regular, should be openly received, keep a gift of the items received.

Question 78

What would you do if a contractor took you out for a coffee?

Answer 78

I would question the intentions firstly. If I felt like it was a genuine business reason, I would accept but offer to pay for myself and log the meeting in the companies gift register if they end up paying.

Question 79

There is some case law relevant to PII and discusses the Liability of individuals. What is the name of the case law?

Answer 79

Merrett v Babb
Hart v Large

Question 80

Can you please expand on your knowledge of Merret Vs Babb ?

Answer 80

• Considered if a professional employee was vulnerable to claims brought directly against them for advice given on behalf of their employers.
• Essentially, an individual provided valuation advice and was negligent. The firm the person worked for did not have adequate run off insurance, the company shut down and the client made a claim which was passed to the employee that gave the advice.

Question 81

Can you please expand on your knowledge of Hart V Large ?

Answer 81

The Claimants brought claims in negligence against the architects instructed by the previous owners, the Claimants’ conveyancing solicitors and Mr Large. The claims against both the architect and the solicitors settled prior to trial.

Against Mr Large, the Claimants alleged that he was negligent in: (1) failing to recommend a full building survey, rather than HomeBuyer report; (2) failing to draw attention to the issues of water ingress / damp in the HomeBuyer report; and (3) failing to recommend that the Claimants obtain a professional consultant’s certificate.

The key take-aways from this case:
• Being clear on the report about the scope of inspection including limitations, caveats and actions available to the client;
• Recommending justifiable further investigation;
• Taking all reasonable steps to ensure clients understand the differences between the levels of service, including the extent and limitations of each option

Question 82

What is the RICS mission statement ?

Answer 82

To be recognised in key worldwide markets as the leading body that sets and enforces standards
and offers access to the most sought after professional status in land, property and construction.

Question 83

What are the key roles of the RICS?

Answer 83

• Maintain the highest standards of training and professional experience
• Protect customers and consumers through a strict code of ethics
• Provide impartial advice, analysis and guidance
• Regulate and promote the profession

Question 84

What are the 5 principles of better regulations?

Answer 84

PACTT
• Proportionality
• Accountability
• Consistency
• Targeting
• Transparency

Question 85

What parts are there to the RICS ?

Answer 85

• Governing Council
• Regulatory Board
• Management Board
• Executive Team
• President Team

Question 86

How many members does the RICS have ?

Answer 86

RICS has 140,000 members who operate out of 146 countries

Question 87

How is the RICS structured ?

Answer 87

• Privy council
• Governing council
• Standard and regulation board (overseeing he standard and upholding them), management board (inform and oversee RICS affairs via the strategy), audit committee (monitor the effectiveness,

Question 88

Who is the president of the RICS ?

Answer 88

Clement Lau

Question 89

What is Clement Lau working on in during his term ?

Answer 89

He is determined to extend the reach and influence of RICS’ thought-leadership and to drive the organisation’s digital capability during his term

Question 90

What is bribery ?

Answer 90

Bribery is the act of giving or receiving something to influence an action.

Question 91

What is the bribery act ?

Answer 91

The bribery Act 2010 details the 4 offences as :

• Giving a bribe
• Receiving a bribe
• Bribery a foreign public official.
• Failing to prevent bribery - no procedure in place.

Question 92

What is a facilitation payment ?

Answer 92

Small bribes paid to facilitate routine Government action

Question 93

Can you name some bribery warning signs

Answer 93

• Lavish gifts or hospitality being given or received
• Unexplained preferment of certain individuals for receipt of benefits, especially when outside of normal selection and control procedures, such as secondments, training contracts, employment, placements and internships
• Individual never takes time off even if they are ill, for holidays, or insists on dealing with specific contractors themselves
• Making unexpected, uncommercial or illogical decisions when accepting projects or contracts
• Raising barriers around specific roles or departments which are key in the tendering or contracting process
• Unusually smooth process of cases where individual does not have the expected level of knowledge or expertise
• Abusing decision-making processes or delegated powers in specific cases
• Agreeing contracts not favourable to the organisation either with regard to terms or time period
• Unexplained preference for certain contractors during the tendering period
• Avoidance of independent checks on tendering or contracting processes
• Bypassing normal tendering or the contractor’s procedure
• Invoices being agreed in excess of the contract without reasonable cause or explanation
• Missing documents or records regarding meetings or decisions
• Firm procedures or guidelines not being followed
• The payment of, or making funds available for, high value expenses (e.g. school fees) on behalf of others
• Requesting or making donations to charitable or political causes connected to key individuals or companies that business is being done with
• Abnormally high commission percentage being paid to a particular agency. This may be split into multiple accounts for the same agent often in different jurisdictions
• Private meetings with public contractors or companies hoping to tender for contracts
• Abnormal cash payments
• Pressure exerted for payments to be made urgently or ahead of schedule
• Payments being made through a third party country, i.e. goods or services supplied to country A, but payment to be made usually to shell company in country B

Question 94

Are you familiar with any RICS guidance on money laundering ?

Answer 94

RICS counter bribery, corruption, money laundering and terrorist financing. 1st Edition - February 2019

Question 95

What act governs bribes ?

Answer 95

The Bribery Act 2010, this came into affect on 1st July 2011

Question 96

Why is real estate in general attractive to potential money laundering ?

Answer 96

Safe investment, good return on investment, fixed abode for further activates, good reputation

Question 97

What are the RICS requirements to set up a new practice?

Answer 97

• Inform RICS with firm detail form.
• Appoint a responsible principal for RICS communications.
• Register with RICS for regulation.
• Arrange suitable insurance (PI, PII, etc).
• Set up client business account for client money.
• Have complaints handling procedure approved by RICS.
• Arrangements in place to cover incapacity (locum agreement) or death of a sole practitioner.
• Ensure RICS logo is used for practice material.
• Ensure CPD log is submitted online to the RICS CPD system.

Question 98

Who can you use the RICS logo ?

Answer 98

RICS Regulated firms and members.

Question 99

What do you have to do if you are handling clients’ money?

Answer 99

• Separate bank account
• Client have access to money on demand
• Accurate records must be kept. Agree interest with client
• Use only in agreed draw down amounts
• Check where it comes from – not money laundering
• Can implement RICS Client Money Protection Scheme (£50k recoverable)

Question 100

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

Answer 100

• Clients have access
• Clients in the account name
• Separate and clearly identifiable
• interest agreed by the clients
• Maintain a log of transactions
• Agree the terms
• Never allow account to be overdrawn

Question 101

What is included within Appendix A from the RICS Rules of Conduct ?

Answer 101

This appendix sets out the core professional obligations for members and firms. Additional professional obligations are found in the mandatory requirements of RICS professional statements relevant to a member or firm’s practice.

The following professional obligations to RICS are mandatory for RICS members.
• Members must comply with the CPD requirements set by RICS.
• Members must cooperate with RICS.
• Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.

The following obligations are mandatory for RICS-regulated firms.
• Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
• Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS
• Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
• Firms must cooperate with RICS.
• Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
• Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
• Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.

Question 102

What do the RICS say about gift handling ?

Answer 102

RICS members should follow these rules:
• Only offer or accept gifts and hospitality that are customary, proportionate and reasonable in terms of value and frequency
• Never offer or accept any gift or hospitality if it may improperly influence your decisions/judgement or give the appearance of doing so (e.g. consider the timing of the gift)
• Only offer or accept gifts and hospitality that you would be happy for others to know about
• Follow the policies and procedures of your employer in relation to gifts, hospitality and promotional expenditure - e.g. record in company’s gifts and hospitality register
• Report any concerns about bribery to your employer or to RICS Regulation

Question 103

What is the RICS black book ? what documents are contained within this ? (23)

Answer 103

The ‘Black Book’ is a suite of guidance notes that define good technical standards for quantity surveying and construction professionals.

Including :
Subcontracting - 1st Edition
Acceleration - 1st Edition
Extension of time - 1st Edition
Interim Valuation and payments - 1st Edition
Retention - 1st Edition
Tendering Strategies - 1st Edition
E-Tendering - 2nd Edition

Question 104

What are the RICS Bye Laws ?

Answer 104

1. APPLICATION AND DEFINITIONS
2. MEMBERSHIP AND REGISTRATION
3. DESIGNATIONS
4. CONTRIBUTIONS TO FUNDS
5. CONDUCT
6. GOVERNING COUNCIL, OFFICERS AND STAFF
7. SUBORDINATE BOARDS, COMMITTEES AND GROUPS
8. PROCEDURE FOR GENERAL MEETINGS
9. ACCOUNTS AND AUDIT
10. GENERAL

Question 105

What is the Royal Charter / Byelaws?

Answer 105

• They are dictated by the Royal Charter which has been granted by the Queen to allow independent legal independence so the RICS can govern its’ own affairs.
• Charters can only be amended by the The Queen in Council and amendments to RICS’ bye-laws require approval of the privy council.
• Bye-Laws are based on the Royal Charter and set out the governance of the institution.

Question 106

What are the main elements included in a fee proposal?

Answer 106

• Terms and conditions
• Scope of services
• Exclusions
• Assumptions – e.g. programme

Question 107

What is included within Appendix A from the RICS Rules of Conduct ?

Answer 107

This appendix sets out the core professional obligations for members and firms. Additional professional obligations are found in the mandatory requirements of RICS professional statements relevant to a member or firm’s practice.

The following professional obligations to RICS are mandatory for RICS members.
• Members must comply with the CPD requirements set by RICS.
• Members must cooperate with RICS.
• Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.

The following obligations are mandatory for RICS-regulated firms.
• Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
• Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS
• Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
• Firms must cooperate with RICS.
• Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
• Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
• Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.

Question 108

What are the core professional obligations for RICS members?

Answer 108

• Members must comply with the CPD requirements set by RICS.
• Members must cooperate with RICS.
• Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.

Question 109

What are the core professional obligations for RICS firms?

Answer 109

• Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
• Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS
• Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
• Firms must cooperate with RICS.
• Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
• Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
• Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.

Question 110

Why are the RICS Rules of conduct in place? What are the RICS Rules of Conduct

Answer 110

• They support positive change in the built and natural environments, through promoting and enforcing the highest ethical standards.
• The rules of conduct are based on ethical principles of honesty, integrity, competence, service, respect and responsibility.
• The rules of conduct set out five rules which provide a structure for making ethical decisions about how to behave as a professional.
• The rules apply to ALL RICS members and firms who are regulated by RICS no matter where they work, although firms and members must consider geographical legal obligations that apply to them.

Question 111

What are the 5 rules that make up the RICS Rules of Conduct?

Answer 111

Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligations. including obligations to RICS.

Rule 2 - Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.

Rule 3 - Members and firms must provide good-quality and diligent service.

Rule 4 - Members and firms must treat others with respect and encourage diversity and inclusion.

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 the profession.

Question 112

What are some example behaviours of Rule 1 of the RICS Rules of conduct?

Answer 112

Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.

Example behaviours:

• Members and firms do not mislead others by their actions or omissions, or by being complicit in the actions or omissions of others.
• Members and firms do not allow themselves to be influenced improperly by others (as a result of, for example, giving or receiving work referrals, gifts, hospitality or payments) or by their own self interest.
• Members and firms identify actual and potential conflicts of interest throughout a professional assignment and do not provide advice or services where a conflict of interest or a significant risk of one arises, unless they do so in accordance with the current edition of Conflicts of interest, RICS professional statement.
• Firms have effective processes to identify actual and potential conflicts of interest, to enable appropriate decisions to be made on whether to accept work, and to keep records of decisions made about actual and potential conflicts of interest.
• Members and firms providing advice and opinion in a professional context do so honestly and objectively based on relevant and reliable evidence, and firms have processes to ensure that directors, partners and employees do so.
• Members and firms are open and transparent with clients about their fees and services.
• Members and firms act to prevent others being misled about their professional opinion.
• Members and firms do not take unfair advantage of others.
• Members and firms protect confidential information and only use or disclose it for the purposes for which it was provided, where they have the necessary consent to do so or where required or permitted by law.
• Firms keep client money safe and have appropriate accounting controls.
• Members do not misuse client money and comply with controls intended to keep it safe.

Question 113

What are some example behaviours of Rule 2 of the RICS Rules of conduct?

Answer 113

Rule 2 - Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.

Examples:

Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.

Members and firms supervise any employees undertaking work for them and ensure that these employees have the necessary knowledge, skills and resources to do their tasks competently.

Members and firms check that subcontractors have the necessary knowledge, skills and resources to do their tasks competently.

Members and firms reflect on the work they have undertaken and its impacts, and consider how they might apply what they have learned to their future work.

Members maintain and develop their knowledge and skills throughout their careers. They identify development needs, plan and undertake continuing professional development (CPD) activities to address them and are able to demonstrate they have done so.

Firms encourage and support directors, partners and employees to maintain and develop their knowledge and skills, and check that they are complying with CPD requirements set by RICS.

Members and firms stay up to date and comply with relevant legislation, codes of practice and other professional and relevant technical standards. Firms ensure that their directors, partners and employees do so.

Question 114

What are some example behaviours of Rule 3 of the RICS Rules of conduct?

Answer 114

Rule 3 - Members and firms must provide good-quality and diligent service.

Examples:

Members and firms understand clients’ needs and objectives before accepting any professional work.

Members and firms agree with clients the scope of the service to be provided and its limitations, and timescales for the work.

Firms inform clients that they are regulated by RICS and that they may need to disclose records to RICS where required for regulatory purposes.

Members and firms inform clients promptly and seek their agreement if it is proposed that any of the terms of engagement or estimated fees or costs be changed.

Members and firms undertake their work in a timely manner; with due care, skill and diligence, and in accordance with RICS technical standards.

Members and firms communicate to clients the material information on which their professional advice and opinion is based.

Members and firms communicate with clients and others clearly and in a way they can understand.

Members and firms ensure that any referral or introduction they make for a client is in the best interests of the client and inform clients about any financial or other benefits to the member or their firm from a referral or introduction.

Members and firms keep proper records of their work and decisions in enough detail to allow them to answer questions from clients and to allow their work to be audited for quality assurance or regulatory purposes.

Members and firms, when advising clients about projects, encourage solutions that are sustainable in that they minimise harm and deliver balanced economic, social and environmental benefits.

Members and firms understand the risks and benefits of using relevant technology.

Members and firms check that all data used is accurate and up to date, is kept securely, and that they have proper legal rights to use it and, where required, share it.

Firms have effective quality assurance processes for their work.

Question 115

What are some example behaviours of Rule 4 of the RICS Rules of conduct?

Answer 115

Rule 4 - Members and firms must treat others with respect and encourage diversity and inclusion.

Example behaviours

Members and firms respect the rights of others and treat others with courtesy.

Members and firms treat everyone fairly and do not discriminate against anyone on any improper grounds, including age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.

Members and firms do not bully, victimise or harass anyone.

Firms check that supply chains do not involve modern slavery or other abuses of the workforce.

Members and firms report abusive labour practices to proper and recognised authorities if they become aware of, or suspect, them.

Members and firms work cooperatively with others.

Members and firms develop an inclusive culture in their workplaces, support equal access and opportunity for all, and identify and address unconscious bias.

Question 116

What are some example behaviours of Rule 5 of the RICS Rules of conduct?

Answer 116

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 the profession.

Example behaviours

Members and firms question practices and decisions that they suspect are not right, and raise concerns with colleagues, senior management, clients, RICS or any other appropriate person, body or organisation where they believe in good faith that it is necessary to do so. Firms provide processes to allow and support individuals within the firm to raise concerns with senior management.

Members and firms support directors, partners, employees, colleagues or clients who have acted in good faith to report concerns.

Members and firms ensure that public statements made by the firm, or in which members are (or could be) identified as members of the profession, do not undermine public confidence in the profession.

Members and firms respond to complaints made against them promptly, openly and professionally.

Members and firms do not dissuade complainants from approaching an alternative dispute resolution provider, RICS or any other regulatory body.

Members and firms cooperate with investigations into complaints or concerns, and provide information where it is reasonably requested and they can do so lawfully.

Members consider the effect that any health conditions may have on their competence or ability to undertake professional work, and inform management or clients where they require reasonable adjustments or are unable to continue to undertake work competently.

Members and firms manage their professional finances responsibly.

Members and firms take appropriate action when they consider that the rules have been breached, and report suspected significant breaches of the Rules of Conduct by themselves or others to RICS.

Question 117

What CPD have you attended relating the ethics?

Answer 117

• RICS online ethics test.
• Internal presentations at my firm.
• Private study - have familiarised myself with ethics rules of conduct.

Question 118

What is a conflict of interest?

Answer 118

A conflict of interest occurs when an individual’s personal interests – family, friendships, financial, or social factors – could compromise his or her judgment, decisions, or actions in the workplace.

Question 119

What are the three types of conflict of interest according to the RICS Conflicts of Interest Professional Statement?

Answer 119

• Party conflict: a situation in which the duty of an RICS member (working independently or within a nonregulated firm or within a regulated firm) or a regulated firm to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another client or party in relation to the same or a related professional assignment.
• Own Interest Conflict: a situation in which the duty of an RICS member (working independently or within a nonregulated firm or within a regulated firm) or a regulated firm to act in the interests of a client in a professional assignment conflicts with the interests of that same RICS member/ firm (or in the case of a regulated firm, the interests of any of the individuals within that regulated firm who are involved directly or indirectly in that or any related professional assignment).
• Confidential Information Conflict: a conflict between the duty of an RICS member (working independently or within a non-regulated firm or within a regulated firm) under paragraph 2.2 to provide material information to one client, and the duty of that RICS member (working independently or within a non-regulated firm) or of a regulated firm under paragraph 2.1 to another client to keep that same information confidential.

Question 120

What is the RICS ethical decision tree?

Answer 120

The RICS decision tree assists me in making informed decisions , confirming my actions are ethical and legal.

It asks the following:

1. Do you have sufficient facts on the issue.
2. Is it legal?
3. It is in line with the RICS rules of conduct?
4. Have you consulted with the appropriate people to make an informed decision?
5. Do you have clear reasoning in reaching your decisions?
6. Would you be content for you decisions to be make public?

Question 121

What are ethics?

Answer 121

Moral principles that govern an individuals behaviour

Question 122

What must a complaints handling procedure include?

Answer 122

• A form to fill out
• Redress mechanism
• Details should be issued to clients with the terms of business
• Clear, quick, transparent and impartial and free of charge
• Names and contact details of nominated investigating person must be stated
• Complaint must be investigated within 28 days
• All complaints and progress and outcomes must be recorded
• Advise PI insurers of a complaint
• Two stages: 1 – consideration, 2 – referral to third party

Question 123

What cover do you need to open your own firm?

Answer 123

• PII insurance - Professional indemnity insurance covers financial loss, personal injury and property damage resulting from your negligent act or error while you’re working for a client.
• PLI insurance - Public liability insurance is there to protect you if a member of the public is injured (or their property is damaged) and your business is faced with a compensation claim as a result. It can cover you when you’re working at client sites or in public.
• Employers Liability Insurance - Employers’ liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you. It’s legally required of all businesses with one or more employees.
• Building Insurance (if you own your own premises)

Question 124

What parts are there to the RICS ? What do they do?

Answer 124

• Privy council
• Governing council - Highest governing body that sets the global strategy for the RICS and ensures that the RICS fulfils its’ Royal Charter obligations.
• Standards and regulations board - has exclusive responsibility for operational oversite of RICS’ professional standards, entry and admission to the profession and qualification standards. Reports to the RICS governing council.
• Management board - directs RICS affairs under delegated authority from the Governing Council.
• Audit committee - Monitors the effectiveness of RICS’ financial reporting, internal control and risk management systems.

Question 125

How would you proceed if a client was insistent that you continued to work for them despite a conflict of interest?

Answer 125

• Check their understanding of reduced impartiality
• Seek letter of instruction to continue
• Agree working procedures to manage the conflict
• Keep them updated of any risks
• Seek informed consent

Question 126

How can a disciplinary proceeding be triggered?

Answer 126

• Someone complains to RICS.
• An allegation by client or third party.
• Information received or established by RICS.

Question 127

Which firms are regulated by RICS?

Answer 127

• Those firms with 50% or more of their partners / directors that are members of RICS.

Question 128

What insurances would you need if you were starting up your own firm?

Answer 128

• Professional Indemnity
• Employer’s Liability
• Public Liability
• Building insurance of own office

Question 129

What does informed consent mean?

Answer 129

Consent given willingly by a party who may be affected by a Conflict of Interest, that party having demonstrated to the RICS member working independently or within a non-regulated firm or regulated firm concerned that the party understands:

1. There is a Conflict of Interest or a significant risk of a Conflict of Interest and;
2. The facts known by the RICS member (working independently or within a non-regulated firm or within a regulated firm) or the regulated firm that are material to the Conflict of Interest.
3. What that Conflict of Interest is or may be and d that a Conflict of Interest may affect the ability of the RICS member (working independently or within a non-regulated firm or within a regulated firm) or a regulated firm to advise or act fully in the interests of a client.

Question 130

How many different types of RICS document statuses are there ?

Answer 130

There are a number of document types. This includes (can be found within the first few pages of many RICS documents) :
• Rules of conduct for members and firms, updated Feb 2022
• International standards - High-level standard developed in collaboration with other relevant bodies
• RICS professional statements (PS) - Mandatory requirements for RICS members and regulated firms
• RICS guidance note (GN) - A document that provides users with recommendations or an approach for accepted good practice as followed by competent and conscientious practitioners
• RICS code of practice (CoP) - A document developed in collaboration with other professional bodies and stakeholders that will have the status of a professional statement or guidance note
• RICS jurisdiction guide - This provides relevant local market information associated with an RICS international standard or RICS professional statement. This will include local legislation, associations and professional bodies as well as any other useful information that will help a user understand the local requirements connected with the standard or statement. This is not guidance or best practice material, but rather information to support adoption and implementation of the standard or statement locally

Question 131

If faced with a situation that you felt was unethical, how would you proceed?

Answer 131

Using the decision tree:
• Do I have sufficient facts?
• Is the matter legal?
• Is it in line with RICS Professional and Ethical Standards?
• Have I consulted with appropriate people?
• Do I have clear reasoning in reaching my decision?
• Would I be content for my actions to be made public?
If answered no to any of the above, I would not proceed with the situation alone and would consult senior staff with direction on how to proceed.

Question 132

Why did the RICS implement the new Rules of Conduct?

Answer 132

• A simpler structure. We have made it easier for RICS members and firms to understand our rules, providing more confidence for clients and the public.
• Clear examples. To help support members’ professional judgement, each Rule is illustrated with examples of how members and firms can behave to comply with the Rule. There are also 12 case studies showing real-life application of the Rules.
• Focusing on respect, diversity and inclusion. Whether it’s encouraging diversity and inclusion, or tackling modern slavery, respect and courtesy underpin all our professional ethics.
• Understanding evolving technology. The Rules highlight the importance of understanding the evolving use of data and technology, and the associated benefits and risks.
• Tackling global challenges. The Rules show that ethical practice by RICS members and firms has an important role when it comes to global challenges, including creating sustainable development and tackling climate change.

Question 133

Why are ethics important?

Answer 133

• Prevents any issues with consistent behaviour
• Sets a standard of expertise and professionalism
• Promotes trust in the company and industry

Question 134

What are the RICS CPD requirements?

Answer 134

• Qualified/MRICS member – 20 hrs per year, min 10 hours formal
• Student member – 48 hrs per year (Min 24 formal)

Question 135

What level of Professional Indemnity Insurance does your firm have? Why?

Answer 135

• Would consult the RICS Regulation - UK Professional Indemnity Insurance Requirements
• PII level for RICS is dependent on annual turnover of the proceeding year or anticipated turnover of first year.
• My firms turnover was £50m last year so standard PII is £1m for each and every claim - but higher (up to £10m available at discretion of Director) - depends on size and nature of a job.

Question 136

What document would you refer to for level of PII required?

Answer 136

RICS Regulation - UK Professional Indemnity Insurance Requirements

Question 137

What is runoff cover? What are the RICS requirements?

Answer 137

• Insurance cover to ensure that members, firms and clients are not exposed to financial detriment following ceasing of trade.
• Minimum requirements are

1. Consumer claims: £1,000,000 in all for a period of six years.

Question 138

MAKE SURE YOU STATE ALL REQUIREMENTS OF PII - SOME CONTRACT ARE SIGN ED DEED SO NEED 12 years

Question 139

Who does PII protect?

Question 140

What is the mission statement of the RICS?

Question 141

What is your firms’ hospitality and gift protocol?

Question 142

What is money laundering?

Question 143

CHECK INFORMED CONCENT CARDS AGAINST RICS PROFESSIONAL STATEMENT

Question 144

Can you name each of the rules of conduct and provide an example of when you have adhered to them?

Answer 144

Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligations, including those to RICS

• I ensure that I identify potential conflicts of interest prior to accepting and undertaking a professional assignment for a client through my firms conflict checker.
• I am open and transparent with client regarding fees and make sure these are all broken down in any fee proposal.

Rule 2 - Member and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.

• I ensure that I supervise any fellow employees who are new intakes or graduates and ensure I supervise them sufficiently and ensure they have the necessary skills and knowledge prior to undertaking any part of an instruction.
• I maintain and develop my knowledge by partaking in CPD events and personal study and have ensured that I have undertaken the RICS required amount of 48 hours per annum, with at least 50% formal CPD.

Rule 3 - Members and firms must provide good quality and diligent service

• I ensure that I understand my client’s needs and objectives prior to accepting any work and ensure that a I agree a scope of services to be provided to my client with a fee proposal that will include limitations and timescales.
• I ensure that I communicate clearly with clients in a way that they can understand depending on their professional background and favoured method of communication.

Rule 4 - Members and firms must respect others with respect and encourage diversity and inclusion.

• I ensure that I respect the rights of others and treat others with curtesy regardless of background, position, race or any disability.
• I work cooperatively with all others within my firm and also as part of a design team to ensure objectives are met.

Rule 5 - Members and firms must act in the public interest, take responsibility for their actions to prevent harm and maintain public confidence in the profession.

• I would ensure that I respond to complaints made promptly and in line with with firms’ complaints handling procedure.
• I would support fellow colleagues and clients who have acted in good faith to report concerns.

Question 145

What quality assurance procedures do you adhere to to ensure your work is kept to a high standard?

Answer 145

• I ensure that I undertake my own strict quality assurance which includes reading through any document I have produced carefully, ensuring it is formatted correctly, running a spell check and ensuring any appended documents are included and referenced correctly.
• I then issue to the job manager for initial QA and ensure I undertake all QA amendments as necessary.
• I then issue the document to the Job Partner for final QA and then make any amendments prior to issuing to the client.

Question 146

What level of Professional Indemnity Insurance does Hollis offer to its’ clients?

Answer 146

• Our standard level of PII for clients is £1million in respect of each and every claim or series of claims arising from the same originating cause which will extend for six years.
• We do offer higher insurance cover to clients but this may come with an increased agreed fee and assessment by our legal and regulatory check team.

Question 147

What is the Bichard review?

Answer 147

• Lord Michael Bichard has issued an independent review of the RICS purpose, governance and strategy following publication of the Levitt review in 2021 which recommended ‘a wide ranging review…’.
• The main takeaway findings and recommendations were:

1. Purpose of RICS - recommendation to amend the wording of the royal charter to include reference to RICS delivering positive change in the built and natural environment and emphasis and prioritisation of doing things in the public’s interest.
2. Strategy - Governing council should give appropriate freedoms, resources and responsibilities to regional and area boards. Diversity and inclusion panel should be established.
3. Regulation and public interest - to put public interest at the heart of works with scholarships for students from communities where surveying is not well represented.
4. Member engagement - Customer service improvement programme so members receive improved level of service.
5. Culture and values -
6. Governance and structure - New proposed governance structure with governing council, RICS board, Diversity and inclusion panel and standards and regulation board.

Question 148

When did the new RICS rules of conduct come into force?

Answer 148

Effective from 2nd February 2022

Question 149

How would you prevent money laundering?

Answer 149

• Through Customer Due Diligence (CDD) checks on clients - identify the transacting party / parties, verify the identification is valid and carry out additional checks as required. Customer Due Diligence should always be routinely carried out for existing clients to ensure that nothing has changed.
• Through Enhanced Due Diligence (EDD) - used to understand the source of the funds used in a transaction - required if any red flags occur and may request information such as bank statements.

Question 150

What is the regulations that govern Money Laundering?

Answer 150

Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017

Question 151

What are the penalties for breaching the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017?

Answer 151

• Max 15 years in prison / unlimited fine for assisting with money laundering.
• Max 5 years in prison / unlimited fine for tipping off a person who is a suspect of money laundering.

Question 152

What are red flags when it comes to money laundering?

Answer 152

• Refusal / deception when providing identity documents.
• Changes to parties involved with transactions.
• Transactions in unusual currencies.

Question 153

What is the penalty for breaching the Bribery Act 2010?

Answer 153

Maximum penalty of 10 years imprisonment and / or unlimited fine for individuals and companies

Question 154

What are the six principals of preventing bribery recommended by the UK government for commercial organisations?

Answer 154

1. Proportionality - procedures are to be proportional to the risk of bribery that a commercial organisation faces.
2. Top level commitment - top level management of commercial organisations need to be committed to preventing bribery.
3. Risk assessment - should risk assess the internal and external risk to bribery a commercial organisation faces and document and regularly review the assessment.
4. Due diligence - apply due diligence procedures that are proportionate and risk based.
5. Communication - ensure that bribery prevention policies and procedures are understood by all employees and provide proportionate training.
6. Monitoring and review - monitor and review procedures designed to prevent bribery and make improvements where necessary,

Question 155

When is bribery committed?

Answer 155

When you are under duress or real danger

Question 156

What is Hollis’ policy around accepting entertainment, hospitality and gifts?

Answer 156

Corporate entertainment and hospitality

Hollis permits corporate entertainment and hospitality if:

• it is for establishing or maintaining business relationships.
• to improve the image and reputation of the company.
• to present the companies services.

… and is arranged in good faith and not undertaken to influence impartiality of the recipient and proportionate.

Gifts

• All gifts offered must be reported to your line manager.

Procedure

• All hospitality, entertainment and gifts received are to be reviewed by the individual’s line manager who will assess their appropriateness and confirm if they are to be accepted or rejected.

Question 157

What is your firms procedure for reporting suspected bribery?

Answer 157

1. Fill out a form from HR department to record the event.
2. Line manager and Alex Brown (our compliance officer) will undertake a confidential investigation.
3. Individual is to report to Alex Brown if there is attempted coverup / dismissal of the event by the line manager.

Question 158

When might obtaining informed consent not be enough to proceed with a conflict?

Answer 158

Although the professional statement does not prohibit obtaining informed consent for an Own Interest Conflict, the risks are often greater.

Question 159

What is the RICS assigned risk pool?

Answer 159

Temporary insurance for members who cannot obtain PII insurance. Can be given for max of 2 years

Question 160

What are the RICS requirements to close a practice?

Answer 160

• inform the RICS of your retirement / closure.
• Inform clients of hand over arrangements made with a new firm.
• Return any client held money.
• Inform insurers and arrange run off cover for minimum of 6 years.
• Retain copy of client files and records for minimum of 6 years.

Question 161

What does the RICS Conflicts of Interest Professional statement contain?

Answer 161

• Outlines what a conflict of interest is (the different types).
• Confidential information - RICS members and firms must maintain confidentiality of information unless disclosure is required by law.
• Firms systems and controls - firms must have effective systems with controls appropriate to their size and complexity to prevent conflicts of interest.
• Supporting commentary on:

1. Record keeping to show compliance with the professional statement.
2. Informed consent
3. Information barriers