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APC Revision 2023 > Ethics, Rules of Conduct and Professionalism (Level 1) > Flashcards

Ethics, Rules of Conduct and Professionalism (Level 1) Flashcards

1
Q

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

A

Status – It provides confidence to both employers and clients that I am of a reputable standard within the industry

Knowledge and Progression – Allows me to continue my development with the access to the RICS CPD offerings and training

Maintaining Professional Standards – Ensures I am up to date with the RICS’s and the industry’s latest regulations and requirements
Network – Opportunity to network with other industry professionals

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2
Q

What is the role of the RICS?

A

The role of the RICS is to act as an impartial regulatory body developing and maintaining the highest professional standards within the built environment.

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3
Q

What are the key functions of the RICS?

A

Maintaining highest standards of education and training

Protecting consumers and businesses through regulation of professional standards

Act as the leading source of information on land, property and environmental issues

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4
Q

What is a royal charter?

A

A formal document issued by the King, granting a right or power to an individual or a corporate body. It defines its objectives, constitution and powers to govern its own affairs.

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5
Q

What does the RICS royal charter mean?

A

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

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6
Q

Who is the current RICS president?

A

Ann Gray (inaugurated in February 2023)

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7
Q

What do you understand by the term self regulation?

A

An individual or organisation regulating itself without interference from external parties

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8
Q

What are the principles of better regulation?

A

Proportionality

Accountability

Consistency

Targeting

Transparency

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9
Q

What is a bye-law?

A

A set of rules or law established by an organisation to regulate itself

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10
Q

Give an example of an RICS bye-law?

A

B5.2.1 (a) - every member shall conduct themselves in a manner befitting their membership of the RICS

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11
Q

Who do the RICS Rules of Conduct apply to, when were they introduced and what did they replace?

A

RICS Rules of Conduct apply to all members and firms, introduced 2nd February 2022.

They replaced the former RICS Rules of Conduct for firms and members and the global and professional ethical standards.

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12
Q

What are the 5 RICS Rules of Conduct?

A
  1. Members and firms must act with honesty and integrity
  2. Members and firms must maintain their professional competence and ensure that all services provided by competent individuals who have the necessary expertise
  3. Members and firms must provide a good quality and diligent service
  4. Members and firms must treat others with respect and promote diversity and inclusion
  5. Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession
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13
Q

Why were the RICS Rules of Conduct changed?

A
  • Provide a simpler structure
  • Provide clear examples and application
  • Focus on diversity, inclusion and respect
  • Account for evolving technology
  • Tackle global challenges such as climate change and sustainable development
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14
Q

What are the 6 ethical principles that the Rules of Conduct are based on?

A
  1. Honesty
  2. Integrity
  3. Competence
  4. Service
  5. Respect
  6. Responsibility
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15
Q

Can you give an example of when you have demonstrated honesty and integrity?

A
  • Honesty and integrity

o Tendering for role of IC on Essex
o Colleague wanted to commence interviews before all tenders were received
o I advised that it would be unethical and compromise the integrity of the tender process
o Ensured that all interviews were scheduled after the receipt of all bids

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16
Q

Can you give an example of when you have acted within your professional competence?

A
  • Maintain professional competence, necessary expertise

o Leasehold disposal of retail unit in Birmingham
o Questioned on complex legal matters by prospective tenants
o Informed them it was outside my area of competence
o Advised them to get in touch with a member of our legal team

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17
Q

Can you give an example of when you have provided a good quality and diligent service?

A
  • Provide good quality and diligent service

o Disposal of portfolio of PBSA assets
o Met our JV partners objectives
o Sold the assets in line with required timeline
o Achieved well above asking price and delivered above anticipated financial returns
o Indication of good service – entered into two more deals with them

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18
Q

Can you give an example of when you have promoted diversity and inclusion?

A
  • Respect, promote diversity and inclusion

o Undertook FIR Ambassador training
o Responsible for promoting D & I within Linkcity
o Created a calendar outlining the different religious holidays and celebrations
o Advised senior management that this should be considered when planning events e.g accounting for Ramadan and fasting

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19
Q

Can you give an example of when you have acted in the public interest, prevented harm or promoted trust within the profession?

A
  • Act in public interest, prevent harm and promote trust in the profession

o Tendering for role of IC on Essex
o Colleague wanted to commence interviews before all tenders were received
o I advised that it would be unethical and compromise the integrity of the tender process
o Ensured that all interviews were scheduled after the receipt of all bids

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20
Q

What are the core professional obligations of members to the RICS?

A

Members:
- Comply with the CPD requirements
- Members must co-operate with the RICS
- Members must promptly provide all information requested by the Standards and Regulation board

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21
Q

What are the core professional obligations of firms to the RICS?

A

Firms:
1. Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.

  1. 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.
  2. 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.
  3. Firms must cooperate with RICS.
  4. Firms must promptly provide all information reasonably requested by the Standards and Regulation Board
  5. 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.
  6. Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
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22
Q

What disciplinary procedures can the RICS impose for less serious cases?

A

Where the regulated member admits fault - a regulatory compliance order can be imposed to ensure future compliance with the standards

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23
Q

What disciplinary procedures can the RICS impose for more serious cases?

A

Sanctions can range from fines to expulsion - this will be determined by the disciplinary panel

Fixed Penalty Notice - A fixed penalty is an administrative fine and/or caution issued by RICS when a Regulated Member breaches the Rules

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24
Q

What do you understand by the term professional practice?

A

Conduct and work of someone from a particular profession

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25
Q

What money laundering regulations or legislation are you aware of?

A

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

Anti-Money Laundering Sanctions Update (March 2022)

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26
Q

What does the RICS Professional Statement on Countering Bribery and Corruption, and Money Laundering and Terrorist Financing (2019) set out?

A

Sets out:
- Mandatory requirements for anti-bribery and corruption and for anti-money laundering and terrorist financing.
- Guidance setting out supporting good practice for anti-bribery and corruption and for anti-money laundering and terrorist financing

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27
Q

Why were the Anti-Money Laundering Sanctions Update introduced?

A

Following the start of the conflict in Ukraine it was introduced to provide further guidance on dealing with and reporting newly sanctioned Russian entities and individuals

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28
Q

What is a red flag of money laundering?

A
  • unwillingness to provide formal identification documents
  • requests payments in unusual currencies
  • deliberate loss making
  • requests for cash payments
  • time pressures on payments
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29
Q

What bribery legislation are you aware of?

A

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

Bribery Act (2010)

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30
Q

What is the purposed of the Bribery Act (2010)?

A

To prevent bribery and corruption in the UK and abroad

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31
Q

What are the four main offences in the Bribery Act (2010)?

A
  1. Offering a bribe
  2. Receiving a bribe
  3. Bribing a public official
  4. Failing to report or prevent bribery
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32
Q

What is a bribe?

A

giving or receiving a financial or other advantage in connection with the improper performance of a position of trust, or a function that is expected to be performed impartially or in good faith

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33
Q

What are the 6 principles of the Bribery Act (2010)?

A
  1. Proportionality
  2. Top Level Commitment
  3. Risk Assessment
  4. Due Diligence
  5. Communication
  6. Monitoring and Review
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34
Q

What are the penalties for breaching the Bribery Act (2010)?

A

Can be liable for unlimited fines, and individuals can receive a jail sentence of up to 10 years

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35
Q

What are the main offences under current money laundering regulations?

A

Concealing Offence - concealing, disguising, converting or transferring criminal property

Arranging Offence - facilitating the acquisition, retainment, use or control of criminal property

Acquisition, use of position offence - acquiring or using criminal property

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36
Q

What are the penalties for breaching money laundering regulations?

A

Jail sentence of up to 14 years or unlimited fines - seriousness is dependent on the amount of money involved

37
Q

How long should you keep anti-money laundering records for?

A

5 years from the date of business relationship ending / the date of transaction is completed. Material includes:

  • records of transactions
  • receipts
  • checks
38
Q

What is professional indemnity insurance?

A

Insurance that protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services or negligent advice you have offered

39
Q

What are the RICS requirements for PII cover if your firm’s turnover is:

  • £100,000 or less
  • £100,000 - £200,000
    -£200,000 - £500,000
    £500,000+
A
  • £100,000 or less –> Cover = £250,000
  • £100,000 - £200,000 –> Cover = £500,000
  • £200,000 - £500,000 –> Cover = £1 million
  • £500,000 + –> Cover = 2.5% of your annual turnover
40
Q

What are the RICS requirements for PII cover if your firm’s turnover is:

  • £100,000 or less
  • £100,000 - £200,000
    -£200,000 - £500,000
    £500,000+
A
  • £100,000 or less –> Cover = £250,000
  • £100,000 - £200,000 –> Cover = £500,000
  • £200,000 - £500,000 –> Cover = £1 million
  • £500,000 + –> Cover = 2.5% of your annual turnover
41
Q

What are the uninsured excess requirements relating to PII cover?

A

For firm’s with turnover up to £10 million it is the greater of 2.5% of turnover or £10,000

For firm’s with turnover over £10 million the excess requirements have been removed

42
Q

What is an aggregation clause in PII?

A

A clause that enables payouts from claims made under the same policy in the same year to be covered in one payment

43
Q

What does ‘claims made’ policy mean in PII?

A

Claims made - whilst you are covered, any claims that arise within the policy period are covered

44
Q

What can help to provide a good defence in a PII claim?

A

Record keeping - demonstrates your actions and the guidance you followed

45
Q

If you were providing services outside of your usual scope to a client, what might you need to do in relation to your PII cover?

A

Check if you are covered and extend your cover if appropriate - or decline the work

46
Q

What is run off cover and what are RICS requirements are there relating to run off cover?

A

Run off cover is insurance for claims made against a firm after it has stopped doing business

When closing down an RICS firm you must have run off cover for at least 6 years (£1m aggregate cover), the RICS recommends run off cover of 15 years

47
Q

What changes did RICS recently make to the Minimum Approved PII Wording?

A

Effective 1st May 2021 - new minimum policy wording means PII policies will provide greater fire safety cover

48
Q

Explain PII requirements relating to fire safety cover and cyber cover.

A

Fire Safety:
- Insurers may impose a fire safety exclusion
- From 1 May 2021 any exclusion will not apply to professional work relating to buildings four storeys or under

Cyber Cover:
- The minimum terms now exclude claims relating to the use of, or inability to use, a computer system or from ‘cyber acts’ including damage to or destruction of programs, software or stored data

49
Q

How long can a PII claim arise after the work is undertaken?

A

A claim can be brought up to 6 years after the work was completed or 3 years after the client could reasonably be expected to know they had a claim

50
Q

Explain when you might agree a liability cap.

A

You would agree a liability cap before entering into contract to carry out a service or provide advice

51
Q

What are the CPD requirements for members of the RICS?

A
  • Must undertake a minimum of 20 hours of CPD each year
  • 50% of those 20 hours must be formal CPD
  • Must maintain an understanding of professional and ethical standards during a rolling 3 year period
52
Q

What is a conflict of interest?

A

When a member or firm’s independence and impartiality is threatened due to the existence of a conflict between two clients

53
Q

What is the RICS guidance on dealing with conflicts of interest and what does it set out?

A

RICS Global Professional Statement on Conflicts of Interest (2017)

Sets out an obligation for members and firms to act with integrity and avoid conflicts of interest and any actions or situations that are inconsistent with its’ professional obligations

54
Q

What are the 3 different types of conflicts of interest?

A
  1. Party Conflict - duty to act in the interests of one client conflicts with another in relation to the same professional assignment e.g double dipping
  2. Own Interest Conflict - an individual’s impartiality is conflicted when acting in the interest of the client e.g dealing with family/friends in a professional setting
  3. Confidential Information Conflict - the duty of a member to provide relevant information to one client impacts the duty to maintain confidential information or another client
55
Q

What is double dipping and why is it an unacceptable practice?

A

Double dipping - acting for multiple parties within the same transaction e.g acting for both the buyer and the seller

Impossible to act in the interests of both parties and is unethical

56
Q

How would you closed down an RICS regulated firm?

A
  • Inform the RICS of closure
  • Inform clients of closure
  • Inform insurers
  • Ensure you have the appropriate insurance in place - run off cover for minimum of 6 years (£1 million aggregate cover), RICS recommends 15 years
  • Return client’s money
  • Retain files and records for a minimum of 6 years
57
Q

How would you set up an RICS regulated firm?

A
  • Inform the RICS
  • Appoint responsible priniciple
  • Arrange PII cover
  • Set out requirements for client money handling
  • Set up a CHP, complaints log and appoint a complaints handling officer
  • Outline a business succession procedure3
  • Ensure there is a CPD logging procedure
  • Submission of an RICS annual return
  • If undertaking Red Book Valuations apply to be a part of the RICS Valuer Registration Scheme
58
Q

What is a phoenix firm?

A

a company that starts again after it had previously closed down via an insolvency process e.g administration or liquidation

59
Q

When is a firm required to register for regulation?

A

A firm is required to register for regulation by RICS if:

  • the firm provides surveying services to the public
  • the firm is operating in the UK
  • at least 50% of the firm’s principals are RICS members
60
Q

When is a firm eligible to register for regulation by the RICS?

A

A firm is eligible to register by RICS if:
- the firm provides surveying services to the public and
- at least 25% of the firm’s principals are RICS members

61
Q

Who is a responsible principal?

A

Responsible principal will have primary responsibility for ensuring that RICS’ professional, technical and ethical standards are applied upheld and supported

62
Q

What is a locum and who might need one?

A

A locum is another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work e.g in the event of illness

A sole trader would need a locum

63
Q

How could a sole trader set up their CHP using a locum?

A

Appoint a locum as their complaints handling officer

64
Q

What RICS guidance relates to handling client money?

A

RICS Professional Statement on Client Money Handling (2019)

  • purpose is to ensure that RICS members and firms preserve the security of their client’s money in their care
65
Q

What do the RICS Rules of Conduct say about client money handling?

A

Rules of conduct state ‘a firm shall preserve the security of clients’ money entrusted to its care in the course of its practice or business’

66
Q

Explain your understanding of the RICS Money Protection Scheme Rules relating to client money protection.

A
  • All RICS regulated firms must register with the appropriate RICS money protection scheme
  • ensure all client money received is paid into a client money account promptly
  • ensure that when mixed monies are received the receipt is paid into a client money account and the office money is transferred into the office account
67
Q

What are the main RICS money protection schemes available to firms?

A
  • General client money protection, covering money held by firms undertaking surveying activities
  • Residential agency activity protection, covering areas under the Client Money Protection Scheme for property agents
68
Q

What is the current compensation limit for RICS Money Protection Schemes?

A
  • Limit per claim = £50,000
  • Cap on liability = £10,300,000
69
Q

What does the annual regulatory review fee relate to?

A

Relates to the fees paid by RICS registered firms to the RICS for regulation to take place

70
Q

Can you give examples of client money?

A
  • Payment on account of general costs
  • Rent
  • Service charges
  • Interest credited to a client account
  • Arbitration fees
  • Client money held but due to be paid to contractors
71
Q

Can you give examples of office money?

A
  • Interest on general client accounts which the client agrees will not accrue to them
  • Fees
  • Disbursements
72
Q

Explain the key themes from the RICS Futures 2020 Report.

A
  • Data and technology
  • Sustainability
  • Talent and skills
73
Q

Explain the potential implications of the Hart v Large case.

A

Case was regarding a dispute over a RICS Homebuyer Report that led to significant remedial works.

Key Takeaways;
- 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

74
Q

Explain your understanding of precedent set in Burgess v Lejonvarn.

A
  • it was alleged that an architect had acted negligently in the provision of professional services for which there had been no payment
  • no contract between the parties, the Defendant did owe the Claimants a duty of care
75
Q

What do RICS set out as good practice for the use of social media in their Regulation document (June 2021)?

A

The standards expected of members do not change because they are communicating through social media rather than face-to-face or other traditional media.

76
Q

Explain your understanding of the RICS Levitt review.

A

Levitt Review (2021) outlined that the RICS lacked
- clarity
- structure
- purpose

Called for an independent review of governance and strategy

77
Q

Explain your understanding of the RICS Bichard review.

A

Following on from recommendations of the Levitt review an independent review of RICS governance called for
- simplified clear governance
- For RICS members to act in the public interest
- For RICS to encourage diversity and inclusion

These recommendations have been captured in the new rules of conduct.

78
Q

What is whistleblowing?

A

Whistleblowing is ‘making a disclosure in the public interest’

79
Q

What does good governance mean to you?

A

Good governance is implementing clear and fair rules that are equal for all and are underpinned by honest and moral principles.

80
Q

Explain what the Pandora Papers are and the ethical issues raised within them.

A

The Pandora Papers are a 2021 leak of nearly 12 million documents incriminating hundreds of global politicians and wealthy elite for tax avoidance and corruption

81
Q

How do professional integrity and professional ethics differ?

A

Ethics are principles that guide behaviour, integrity is the action of following and acting in line with those principles

82
Q

What is modern slavery?

A

Modern slavery is when individuals or groups are used by others, for personal or commercial gain

83
Q

How would you identify red flags of modern slavery?

A

8 signs of modern slavery:
- Evidence of a workplace being used for accommodation.
- Workers are distrustful of authorities.
- Workers look uneasy, unkempt or malnourished.
- Signs of psychological trauma.
- Untreated injuries.
- Evidence of control over movement (being picked up and dropped off in groups)
- Signs of substance misuse.

84
Q

What is the Sanctions List and why should you be aware of it?

A

Sanctions list is a list of individuals, organisations and countries for which transactions or activities with them are prohibited

85
Q

What is a sanctions check and how would you carry this out?

A

A sanction check is to take measures to prevent transactions with persons prohibited from certain transactions or activities.

I carry out a sanctions check through Salesforce which checks if the entity/individual in question is on any UK sanctions list.

86
Q

Why was the Register of Overseas Entities introduced?

A

It was introduced to make it more difficult for foreign criminals to launder money through UK property

87
Q

What are the 6 RICS values published as a result of the Levitt Review?

A
  1. Integrity
  2. Transparency
  3. Inclusion
  4. Collaboration
  5. Advocacy and Passion
  6. Accountability
88
Q

Who polices Money Laundering Regulations?

A

National Crime Agency

APC Revision 2023 (34 decks)

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