Ethics, Rules Of Conduct And Professionalism Flashcards
What 6 ethical principals are the RICS rules of conduct based on
Honesty
Integrity
Competence
Service
Respect
Responsibility
What is the 1st RICS rule of conduct
Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
What is the 2nd RICS rule of conduct
Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
What is the 3rd RICS rule of conduct
Members and firms must provide good quality and diligent service
What’s the 4th rule of conduct
Members and firms must treat others with respect and encourage diversity and inclusion
What’s the 5th rule of conduct
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
What does CPD stand for
Continuing professional development
How many hours of CPD do I need per year once chartered.
20 hours (50% formal)
What’s the purpose of the RICS
Regulate and promote the surveying profession
Maintain the highest educational and professional standards
Protect clients and consumers via a strict code of ethics and codes of practice
Provide expert impartial advice and guidance
What’s does RICS stand for
Royal institute of chartered surveyors
How many RICS regional boards are there in the Uk
9
What 3 professional groups are there within the RICS
Land
Property
Construction
What is lion heart
A charity funded through past and present RICS members
Provides support to members and their families, including financial support, health and well-being packages and work related support
What is BCIS and what’s it’s relationship with RICS
Building cost information service is published by the RICS
It provides independent cost and price info for key areas in the construction industry
Who is the current RICS president
Ann Gray
Who is the current senior vice president of the RICS
Justin Sullivan
What different types of professional guidance are published by RICS
Professional standards
Practice information
What determines when a firm has to register with the RICS
If it provides surveying services in the UK and at least 50% of its partners/ directors are RICS members
A firm can still register if it’s less than 50%
What are the benefits of RICS regulation
Quality assures competence through adherence to the rules of conduct
Enhances members professional status by providing confidence to consumers
Provides guidance, support and advise for members
Name some of the RICS obligations for starting a new surveying business
Appoint a responsible principal
Register for regulation with RICS
Ensure clients money handling procedures as per RICS guidance are in place
Obtain sufficient PI
Adopt a sufficient complaints handling procedure
Set up arrangements for CPD and staff training
What should a PI policy include
On a claims made basis
On an each and every claim basis
Wording written on a full civil liability basis
Underwritten by a listed insurer
Covers past and present employees
Run off cover
Minimum level of indemnity required by the RICS
Explain the term ‘claim made basis’
The policy at the time the claim is made will respond not the insurance in place at the time of the negligence
Explain the term ‘each and every claim basis’
The limit of indemnity covers each claim individually instead of accumulatively for that year
What does a full civil liability basis mean
If a claim isn’t specifically excluded, it’s included (as opposed to a negligence only policy where if a claim if not specifically included, it’s excluded)
What is run off cover
Provides ongoing protection for claims made against a company/ someone once they have ceased trading/ retired
What are the minimum levels of PI based on
The firms turnover in the previous year (estimated for a new firm)
What are the minimum levels of PI required
£100k or less - £250k PI
£101k - £200k - £500k PI
£201k and above - £1m PI
What is meant by the maximum level of uninsured excess
The part of each claim the firm must pay itself
What are the levels of maximum uninsured excess
Up to £10m turnover - the greater of 2.5% of the sum insured or £10k
Over £10m - no limit
What is the minimum period required by RICS for run off cover
6 years
What should you do in case of a potential claim on your PI
Must notify insurer in the event of
An actual claim
A written or verbal threat of a claim
Any circumstance that the firm has reason to believe may result in a claim
Any complaint notified via the CHP
What constitutes a complaint
Any expression of dissatisfaction
What’s the purpose of a client holding account
To preserve the security of clients money against:
Insolvency of the firm
Misappropriation by any party
Death of a sole practitioner
What’s the difference between a general and discrete client account
General - holds money belonging to more than one client
Discrete - holds money belonging to a single client
What is the maximum length of time you should keep a clients money before placing it in an appropriate account
3 days
What is a locum agreement
An agreement for a person to temporarily fulfil the duties of another due to their incapacity or death
What’s the Clients Money Protection Scheme
An RICS service that allows clients to be reimbursed for any direct loss of funds (I.e clients money held by a regulated firm that has been misappropriated)
When does the Client Money Protection scheme come into operation
It’s a last resort, so only when a firm is unable to make payment
What are the current monetary limits on the Clients Money Protection Scheme
£50k per claim
£10.3m cap on liability of the scheme as a whole in respect of any financial year
What steps would you take if any surplus money was discovered in a clients account?
Ensure all efforts are made to trace the clients of the money
Hold the surplus in a suspense account
Hold surplus for at least 6 years
Donate to a registered charity if no owner has been found.
What’s money laundering
The process by which the proceed of crime are converted into assets that appear to have legitimate origin
What are some typical indicators of money laundering
Large payments made in cash
Unknown sources of funds
Party being secretive
A client gives you money to cover planning applications for a project. What should you do
Set up a clients holding account in accordance with the RICS requirements
Who should you report to if you have suspicions of money laundering
Report to the National Crime Agency
How are disciplinary matters dealt with by the RICS
Disciplinary rules are made by the regulatory board and implemented when a member/ firm beached the rules of conduct
What 3 sanctions can the RICS impose on members and firms
- Fixed penalty - caution or fine
- Consent order - formal written agreement to take action within a specified time or pay a fine
- Disciplinary panel hearing - for serious breaches in front of a disciplinary panel where penalties can be anything from a caution to expulsion
When might a fine be deemed necessary to discipline a member or firm
Insufficient CPD,
Failing to provide i for to the RICS
Insufficient registration fees
When might a consent order be deemed necessary to discipline a member or firm
Breaches not serious enough for hearing
The member or firm admits to the breach and is willing to co-operate with the RICS
When might a hearing be deemed necessary to discipline a member or firm
For serious breaches (e.g. mishandling clients money, accepting bribes etc)
Who reviews the decisions relating to the registration of firms/ members
The registration panel
Who hears cases and exercises the disciplinary powers of the RICS
The Disciplinary Panel
Who hears appeals from decisions of the disciplinary panel
The appeal panel
What’s the difference between formal and informal CPD
Formal has clear learning objectives and outcomes
How would you keep up to date in legislation
RICS website
Modus
CPD seminars
A client gives you a large sum of cash to pay for a builder whilst he’s out the country. What do you do
Question why cash is being used
If circumstance’s aren’t deemed suspicious, set up a client holding account in accordance with RICS obligations
If circumstances are suspicious report to the National crime agency
What can you and your firm do to prevent fraud
Set up a fraud response plan
Never hand out confidential information to any unsolicited phone calls, texts or emails.
What 6 procedures should be included in a fraud response plan
Detection
Investigation
Prevention of further loss
Securing evidence
Recovery
Reporting
Where can I find the rules of client money handling
Client money handling professional standard
What’s an RICS annual return
The RICS contacts all regulated firms on an annual basis to ensure info is correct and up to date
How does the RICS regulate firms
They employ a desk based review followed by a regulatory review if necessary
What’s a desk based review
Following completion of the annual return, RICS regulation may require a firm to undertake a DBR (electronic questionnaire) to determine what level of risk a firm or member possesses
Give an example of a high risk activity under a desk based review (DBR)
Holding clients money
What’s a regulatory review visit (RRV)
Where serious issues have been indentured in the DBR, an RICS staff member will visit the firm and review what actions need to be taken to address the finding of the DBR
Is complying with Professional standards and Practice Information mandatory
Professional standards - yes
Practice information - no
Who regulates members of the RICS and ensures they comply with the rules
The RICS as they are a self regulatory board (not regulated by government but are internally monitored and inspected)
What are the rules of conduct
Set core expectations for professional practice by members and firms
Who do the rules of conduct apply to
All members and firms regulated by the RICS
Example of Rule 1
Offered expensive dinner by client to amend my programme assessment and declined it
Example of rule 2
I was asked to review a collateral warranty and advise on legal wording. I advised them that I couldn’t do it as i wasn’t competent to do so
Example of rule 3
I ensure my work is checked and peer reviewed. I’ll also agree and meet deadlines.
What is bye law
A by-law is a law established by an organisation to regulate itself and its members
What’s self regulation
RICS self regulates meaning it operates within its own published regulatory framework rather than being legislated by the government
What money laundering and bribery legislation are you aware of
Bribery act 2010
Proceeds of crime act 2002
The money laundering, terrorist financing and transfer of funds regulations 2017
Why do RICS have rules of conduct
It’s a framework all can work to so clients know they are getting a set level of service
A tool for institution and professional guidance
Protect clients, members and the public
What are the professional obligations of members
CPD requirements (20hrs)
Coorperate with RICS
Provide all info reasonable and requested by RICS
What are the professional obligations for firms
Publish a complaints handling procedure
Work to be covered by adequate PI
Those with sole principal must have adequate arrangements for their work to continue in the event of incapacity
Cooperate with RICS
Display that they are regulated by RICS on literature
Report to RICS any matters that are required under the rules for the registration of firms
What requirements for handling clients money are there
Clients must always have access to funds
Must be kept separately and clearly identifiable
Interest on account must be agreed with client
Maintain clear running balance of transactions
Agree terms and advise client on bank details
Must Never be overdrawn
What are the 5 principals of RICS regulation for members and firms
Proportionality - making the penalty proportional to the breach
Accountability - to all members and the public
Consistency - treating all members the same
Targeting - serious breaches
Transparency - to all members clients and the public
What info needs to be provided by registered firms to RICS annually
Annual return
Types of business and staffing
Nature of clients
Training provisions
Complaints procedure and log
PI details
Details on whether any client moneys are held
What’s Dalbergias complaints handling procedure
It’s as per the RICS’ complaints handling professional standard
What does the RICS’ royal charter require
The Royal Charter requires RICS to act in the public interest.
What would you do if you were asked to do something unethical
I would speak to someone more senior, such as a supervisor or line manager.
I would whistleblow if required
What has the RICS produced to help surveyors make ethical decisions
An ethics decision tree
How would you approach a conflict of interest
Conflict avoidance - decide if the conflict is manageable and whether proceeding is in the best interest of all parties
Written advice to both parties - disclose the nature of the conflict, explain how you will manage it and request written confirmation of informed consent
Why does Dalbergia have terms of engagement?
Creates a contract with the client
How do you close down a practice
Inform the RICS
inform clients and arrange for them to be handed over to a new firm
Return clients money
Inform insurance and procure PI run off cover for a min of 6 years
Retain a copy of client files and records for a minimum of 6 years
Why do you want to be a chartered surveyor?
Status and recognition
Market advantage
Knowledge via the professional standards and practice info
Network to all RICS members
What forms of conflict of interest are there?
Party conflict - acting on both sides of a transaction
Own interest conflict - relating to personal interest
Confidential info conflict - relating to work between two parties which is confidential
What would you do if you had a personal conflict of interest and how would you manage this
Ensure all parties were aware and provided informed consent.
I would refer the instruction internally and ensure the appropriate information barriers were set up
What info barriers does your firm have in place for potential conflicts of interest
Restricted access to files
Clear desk policy
Private meeting rooms
Physical barriers (restricted floor access)
What doc can you refer to if you were required to hold clients money
The professional standard on Client Money Handling 2019
If a firm wants to be registered what % of staff need to be RICS members
25%
Would you ever receive a gift from a client
Would be inappropriate if I was doing a job for that client
Would consult the ethics decision tree and my firms anti bribery procedure
Would consider RICS professional statement countering bribery, corruption, money laundering and terrorist financing 2019
If you thought it was appropriate to accept a gift how would you proceed
Record it on my firms gifts and hospitality register
What is the law associated with gift giving and receiving
Bribery act 2010
Proceeds of crime act 2002
What are the six principles of the bribery act 2010
Proportionality
Top level commitment
Risk assessment
Due dillegence
Communication
Monitoring and review
What are the 4 offences under the bribery act 2010
Bribing
Receiving a bribe
Bribing a foreign public official
Failing by a commercial organisation to prevent bribery
What would you do if you were suspicious of a client
I wouldn’t make them aware as that could be tipping off which is an offence
I would report and escalate internally
What’s the background of the RICS
Founded in 1868
RICS has a royal charter, granted by the privy council in 1881
RICS regulations and bye laws set out the governance of the institution
What are the four levels of membership for the RICS
FRICS
MRICS
AssocRICS
Trainee/ student
Whose the CEO of RICS
Justin Young
What are the International ethics standards 2016
Ethical framework for the global property market
What’s an RICS practice statement
A document that provides members with mandatory requirements
What’s an RICS guidance note
A document provided to promote good practice.
recommended good practice
What’s an RICS code of practice
A document produced with other professional bodies and stakeholders to provide up to date research and advice.
Either mandatory or recommended good practice (will say in doc)
What should you consider during fee negotiations
Avoid price fixing, aggressive fee cutting or collusion with competitors
Fee must be market based and agreed on an ad hoc basis with clients
What steps should you follow when receiving instructions from clients
Competence
Conflicts of interest check
Terms of engagement
What would you do if a family member or friend asked you for some advice on a pro bono basis
I would be unable to give them advice as my firms PI would cover work carried out on a personal basis.
I would refer them to another surveyor who would be able to advise them appropriately
What should you do if a personal conflict of interest arises
Must not let it interfere with or influence you personal judgment
Full transparency is required
Facts must be declared in writing before the instruction is accepted
What’s a personal conflicts of interest
Arises when acting for a family member, friend or close business associate
Is hospitality permitted under the bribery act 2010
It does not constitute as an offence as long as they are recorded in a gift/ hospitality register
What are the details of your firms anti bribery procedure
Gifts, hospitality and entertainment must be recorded in the gifts register
Receiving gifts over £50 should be declined. Require approval for meals and hospitality over £150 per head
Giving gifts requires approval for more than £50 and hospitality/ entertainment over £150 per head
Is your firm able to accept cash payments
My firms policy is not to accept cash payments
but I know that the money laundering, terrorist financing and transfer of funds regulations 2017 allows for a maximum of €10,000 to be accepted in cash
What’s the RICS guidance on bribery and corruption called
RICS countering bribery, corruption, money laundering and terrorist financing 2019
What’s the regulatory document issued by the RICS on PI called
RICS professional indemnity insurance requirements version 9 2022
What scheme for the RICS is run for instances where an RICS registered firm is unable to repay clients money
Clients money protection scheme
What are some of the greatest challenges facing RICS
Lack of diversity in the industry
Keeping up with an ever evolving industry
What key items should be included in terms of engagement
Party details
Fee
Scope of works
Limit of indemnity
Declaration of actual/ potential conflict of interest
Confirmation that we have a RICS complaints handling procedure
List of info provided and Assumptions
Name some of the black books
Cost reporting
E- tendering
Final account procedures
Fluctuations
Interim valuations and payment
Lenders independent monitoring surveyor
Tendering strategies
Valuing change
Value management and engineering
What’s the black book
The ‘Black Book’ is a collection of guidance notes that define good technical practice
What’s the red book
A publication which details mandatory practices for RICS members undertaking valuation services.
What does WLCA stand for
Whole life carbon assessment
What’s the whole life carbon assessment
A standard published by the RICS for consistent and accurate carbon measurement in the built environment.
The RICS are in the process of converting their document categories to professional standards and practice information. What were the previously
Professional standards/ statement
Codes of practice
Guidance Notes
Information papers
Define a professional standard
These are the documents which set requirements for competent and ethical practice
Define Practice Information Papers
These documents provide advice or practice support
Professional standards must be complied with. What levels of compliance may they include?
Mandatory requirements which use the word ‘must’
Recommend best practice which use the word ‘should’
Name the professional standards
Conflicts of interest
Countering bribery, corruption, money laundering and terrorist financing
Client money handling
Whole life carbon assessment for the built environment
Complaints handling
List some Guidance Notes
Surveying safely
International BIM implementation guide
Management of Risk
Termination of contract, corporate recovery and insolvency
Cladding for surveyors
Outline some RICS regulation docs
Rules for the registration of firms
UK professional indemnity insurance requirements
Whose the chair of the RICS
Martin Samworth
What’s your understanding of rule 1
Members and firms shouldn’t allow themselves to be influenced improperly through acceptance of work referrals, gifts or hospitality
Members and firms should be sure to identify conflicts of interest
What’s your understanding of rule 2
Only act for clients where I have necessary knowledge, skills and resources to carry out the work competently
What’s your understanding of rule 3
I must be able to understand a clients specific requirement before acting on their behalf
The clients scope of services should be agreed along with timescales before signing terms of engagement
What’s your understanding of rule 4
RICS expects its members to respect the rights of others and treat them with courtesy
We need to ensure everyone is treated fairly and eliminate discrimination
Zero tolerance towards bullying or harassment
What’s your understanding of rule 5
Question practices and decision I suspect aren’t right
Ensure we don’t undermine the profession when making public statements
When dealing with complaints it’s needs to be done promptly, Openly and professionaly
What were the Levitt report recommendations
Governing council are to be briefed by the management board as opposed to a single CEO
Governing council are to oversee executive management bonuses
What is the motto of the RICS
Est modus in rebus
There is measure in all things
What’s the Bichard Review
Bichard review was commissioned by the RICS to review the institutions purpose, governance and strategy
Example of a bribe
Money
Gifts
Promotions
On what grounds would you ask a client for additional fees
Programme duration is extended
The scope of services has changed
The value/ scope of project has changed
Increased attendance at meetings is requested
How would you approach asking clients for additional fees
Arrange a meeting
Explain the reason for additional fee
Discuss the benefits the additional services will provide the client
Be sympathetic, understanding and prepared to compromise
If a client advises that by reducing my fee, I will win a tender how would I advise the client
It would be unfair competition
Not treating others with respect or acting with integrity
What measures should be undertaken to avoid PI claims
Keep detailed records of meeting and convos
Provide a good quality and diligent service
Don’t advise outside your experience
Use RICS guidelines
Why is client care so important
Retain existing clients
Develop new clients from referrals
Poor client care can lead to complaints and potential PI claims
Name some components of a fee proposal
Scope of service
Terms of engagement
Fees and fee schedule
Project particulars
Insurances
Excluded items and assumptions
What’s a soft landing
A strategy designed to make an easy transition from construction to occupational
What would you do following a meeting where a verbal agreement was made
Seek to formalise in writing ASAP
What are the RICS sectors
Land
Construction
Property
Whose name would be on the bank account when handling client money
The client
What does modern slavery encompass?
Slavery
Servitude
Human trafficking
Forced labour
What policies for the RICS operate with regards to the Modern Slavery Act 2015
Anti slavery policy - how to identify and where to go for help
Recruitment policy - conducting eligibility to work in the Uk checks to safeguard human trafficking
Raising concerns policy - whistle blowing policy to raise concerns
Procurement policy - maintains preferred suppliers lists and ensures appropriate due diligence is undertaking on proposed ones
What act deals with slavery, servitude, human trafficking and forced labour
Modern Slavery Act 2015
What insurances does an RICS firm need
PI
Buildings insurance
Contents insurance
Employers liability
How long does run off cover need to be in place under hand and as a deed
Under hand - 6 years
Deed - 12 years
What if the loss exceeds the cover provided by the PI insurance
The professional/ firm is liable for the difference
A firm is required to register for regulation by RICS if:
A firm provides surveying services to the public in the UK
at least 50% of the firms directors are RICS members
