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RICS APC Oct 2023 > Ethics, Rules of Conduct and Professionalism > Flashcards

Ethics, Rules of Conduct and Professionalism Flashcards

1
Q

What is the role of the RICS?

A

Highest standards of education / training
Protect consumers through Professional Standards
Leading source of information on land, property, construction and environment

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2
Q

When was the RICS founded?

A

1868

Royal Charter 1881

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3
Q

How many members of the RICS are there?

A

137,500

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4
Q

What is the composition of the RICS?

A

Governing Council 25 members

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5
Q

President of the RICS?

A

Ann Grey

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6
Q

What is the Bichard Review?

A

Followed from the Levitt Review
to;
- Clarify the role of the RICS to work in the public best interest
- Make recommendations on its governing structure
- Provide proposals for the incoming leadership and governing body on
the future culture and strategy of the instruction

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7
Q

What were the main recommendations of the Bichard Reivew?

A

1) Focus on public interest - (Public interest panel)
2) Maintain self-regulation
3) Increase focus on diversity and inclusion
4) Enable members through greater support
5) Undertake independent reviews of governance every 5 years
6) Simplified, clear, accountable structure
7) Show greater leadership on the largest current issues (Sustainability / climate change)

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8
Q

What are the benefits of the RICS?

A

Kite mark of excellence in the interest of consumer protections

Status
Recognition
Knowledge
Network

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9
Q

If your business became RICS chartered what are the benefits?

A

Confidence

Professionalism

Security

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10
Q

What information does the RICS require in order to register a Firm?

A

1) Type of business & staffing details
2) Nature of clients
3) Complaints Handling Procedure
4) PII details
5) Client Money Handling Procedure
6) Statutory Regulate Activity

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11
Q

What is the First Rule of Conduct?

A

Honest, act with integrity and comply with personal and RICS obligations

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12
Q

Can you give me an example of how you comply with the first rule of conduct in your work life?

A
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13
Q

What is the Second Rule of Conduct?

A

Maintain professional competency and ensure services are provided by a competent individual

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14
Q

Can you give me an example of how you comply with the Second rule of conduct in your work life?

A

When instructed by a client to conduct a valuation for a portfolio of both residential and commercial units I informed the client of my lack of expertise in commercial valuation and referred them to our commercial valuations team

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15
Q

What is the Third Rule of Conduct?

A

Provide a good quality diligent service

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16
Q

Can you give me an example of how you comply with the Third rule of conduct in your work life?

A

I ensure to stick with the scope of work laid out and signed in the Terms of Engagement

When valuing a portfolio consisting of mostly flats I ensure to conduct additional due diligence on any blocks that might pose a a fire risk

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17
Q

What is the Fourth Rule of Conduct?

A

Treat other with respect and encourage diversity and inclusion

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18
Q

Can you give me an example of how you comply with the Fourth rule of conduct in your work life?

A

When working in agency I ensure I put all offers received by any potential purchaser through to the client

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19
Q

What is the Fifth Rule of Conduct?

A

To act in the publics best interest, take responsibility and work to prevent harm

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20
Q

Can you give me an example of how you comply with the Fifth rule of conduct in your work life?

A

When instructed on a new job I always make sure to carry out a conflicts of interest check

  • To insure there are no personal or company conflicts that could harm
    image
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21
Q

What is Appendix A of the RICS?

A

Set out core professional obligations details for all RICS members and firms

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22
Q

What are the Mandatory Obligations of Members? (Appendix A)

A

Comply with CPD requirements

Cooperate with the RICS

Promptly provide information reasonably requested by the Standards Board

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23
Q

What are the Mandatory Obligations of Firms? (Appendix A)

A
  • Publish Complains Handling Procedure
  • Dispute resolution provider approved by RICS
  • If a sole principle make appropriate arrangements for work to continue
    in the event of injurie or death
  • Cooperate with the RICS
  • Promptly provide all information requested by the Standards Board
  • Display Business Literature in accordance with RICS
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24
Q

What is the Ethics Decision Tree?

A

Provides a frame work of questions members should ask them sleeves when facing a potential unethical situation
- Legality of action
- Consistency with the Rules of Conduct
- If public knowledge would you be happy
- RICS Regulation Confidential Hotline with offers

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25
Q

What are the 3 RICS Disciplinary Procedures?

A

1) Action by Head of Regulation
2) Regularity Tribunal
3) Appeal Panel

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26
Q

What is an Action by Head of Regulation?

A

Investigates the claim of misconduct

After the investigation they can;
- Serve a Fixed Penalty (Fine or Caution)
- Make a regulatory Compliance Order (Low level breach, written
document states term member must take or deist)
- Refer to a single members Regulatory Tribunal - (More serious breach)
- Refer directly to Disciplinary Panel

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27
Q

What is a Regulatory Compliance Order?

A

Disciplinary measure from the Head of Regulation
- Low level breach
- Can enforce action a member must take

e.g. CPD order

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28
Q

What is a Regulatory Tribunal?

A

A panel consisting of Lay Members
- Used for serious breaches of conduct

Can;
- Issue Regulatory Compliance Order
- Impose unlimited fine per breach but must be proportionate
- Conditions for continued RICS registration
- Expulsion
Require publication In RICS Modus magazine

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29
Q

What is the RICS Appel Panel?

A

Consider a firm / members appeal against disciplinary procedure

Can;
- Alter the disciplinary
- Allow the appeal

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30
Q

Why would you decline an instruction?

A
  • Competency
  • Sufficient facts of the issues
  • Client will not sign Terms of Engagement
  • Conflicts of Interest or personal Interest
  • PII Cap cannot be agreed
  • Potential clients on the UK Sanctions List
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31
Q

What is a conflict of interest?

A

When a member of firms independence and impartiality is threatened due to the existence of a conflict

Examples;
- Financial
- Personal
- Commercial relationship
- Acting on both side of a transaction

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32
Q

How would you manage a Conflict of Interest?

A

Conflict Avoidance
- Not accepting the Instruction

Conflict Management
- Instruction is accepted and steps are agreed to manage the conflict
- written agreement from all parties (informed Consent)

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33
Q

What is the RICS document you consider when a conflict of Interest arises and what does it state?

A

RICS Professional Statement on Conflicts of Interest 2017
- Must not advice / represent where it would involve a Conflict of Interest
unless there is Informed Consent

Part Conflict - (Working with two party’s on same / similar instruction)
Own Interest - (Personal Interest)
Confidential Information - (Work between two parties that is confidential)

Member must;
- Consider of its irresolvable because impartiality is compromised
- Can it be properly managed maintaining transparency and openness
- Decide to accept or decline instruction

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34
Q

What are the Rules around Informed Consent?

A

1) Disclose the nature of the Conflict and how I intend to deal with it
2) Ensure both parties make their own decision
3) Request written confirmation from both clients of informed consent

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35
Q

What is an Information Barrier?

A

Where you stop confidential information passing between two parties in the firm working on different sides of an instruction
- Surveyors must be different
- Audit trail must be kept
- Surveyors must be physically separated

36
Q

What is your firms Complaints Handling Procedure?

A

1) Register receipt of the compliant (within 3 days) in writing and send a
copy of the CHP
2) Form a response / solution to the complaint and send in writing within
10 days

If the complaint still persists
3) Inform the Complaint Handling Officer via HR
4) In form the Insurers of a potential claim for negligence
5) refer to CEDR (Center for Effective Dispute Resolution)

37
Q

What is the RICS publication on Complaints Handling Procedures and what does it state?

A

RICS Guidance Note Complaint Handling 2016
- Must be approved by RICS
- Notify PII insurer when complaint arises
- CHP details sent to client with terms of business
- Complaints log
- Use an RICS ADR in the CHP

38
Q

What is Private Indemnity Insurance?

A

PII protects clients, surveyors and third parties against negligence where a duty of care has been breached and their is a claim for damages

39
Q

What are the levels of PII?

A

Based of annual base turnover

£100,000 or less - £250,000
£100,001- £200,000 - £500,000
£200,001 and above - £1,000,000

40
Q

What is a Duty of Care?

A

Legal obligation to avoid acts that can cause harm or lead to claims of Negligence

41
Q

What case established that a valuer owes a Duty of Care to a Mortgagee? (Negligence)

A

Yianni V Edwin Evans

42
Q

What case established that a valuer doesn’t owe a duty of care to a Borrower when valuing for the lender?

A

Scullion V Bank of Scotland

  • Court held that a surveyor who provides advice on value to Lender in
    respect of BTL property doesn’t owe a duty of care to the Borrower
43
Q

What case established that services provided pro bono owe a duty of care?

A

Burgess V Lejonvarn

  • Owe a duty of care to act with reasonable care and skill
  • Not under a duty to advice / give warnings / nor liable for the work they
    do not do
44
Q

What is the Limitation Act 1980?

A

Set out the current time limitations a claim for negligence can arise

Contract - 6 Years from breach, negligence or omission

Tort - 6 years from date the loss was suffered

45
Q

What do you do when handling clients money?

A

1) Client accounts must be kept separate and clearly identifiable
2) Word client must be on the bank account / cheque book
3) Monies must be available on demand
4) Interest payment are agree upfront with client
5) Accurate records with running balance
6) Annual audit and report by RICS employed accountant

46
Q

What does the RICS do to help with Client Money Handling?

A

Runs Client Money Protection Schemes
- For claims
- Provides last minute relief for Registered firms unable to repay clients money

47
Q

What would you require to start a new practice?

A

1) Firm Detail Form - informs RICS
2) Responsible Principal - for RICS communication
3) Register for regulation under the RICS Regulation Board
4) Arrange PII and tell RICS
5) Set up Client Money Handling procedure
6)Complaint Log
7) Complaint handling officer

Statutory
- Register for Data Protection (GDPR 2016 & Data protection Act 2018)
- Fire Safety (Regulatory Reform (Fire Safety) Order 2005)
- Financial Services Compliance
- Bribery Act 2010
- Health and Safety (Health and Safety Act 1974)

48
Q

How do you ensure you comply with Bribery Legislation?

A

Make note of the Bribery Act 2010
- Follow my firms internal procedures
- Will be liable even if you fail to prevent

49
Q

How can you act to avoid conflicts?

A
  • Understand client objectives & mange expectations
  • Clear drafting of terms
  • Procure conflict’s avoidance (pre-emphasis / transparency)
  • Keep good record
  • Early intervention
50
Q

What are the different methods of Dispute Resolution?

A

1) Negotiation
2) Mediation (non-binding 3rd party)
3) 3rd party determination (arbitration / external expert)
4) Litigation

51
Q

What are the benefits of using ADR?

A
  • Quick & flexible
  • Cheaper (avoids lengthy court process)
  • Confidential
  • Expert determination rather than non expert judge
52
Q

What is Mediation?

A

Independent mediator appointed to facilitate resolution
- No decision making authority
- Informal and confidential

53
Q

What is arbitration?

A

Arbitrator appointed in a quasi-judicial role
- In accordance with the 1996 Arbitration Act
- Binding decision
- cannot be sued for negligence
- Appeal on point of law only

54
Q

What is independent expert determination?

A

Independent expert is appointed by two parties
- Investigates disputes
- evidence from parties + own evidence
- Both parties bound by decision
- No right of appeal

(Quicker and cheaper than arbitration)

55
Q

How do you ensure data security?

A
  • Firewalls
  • VPN, encrypted and passwords protected
  • Anti-viruses software
  • Clear desk policy
  • Lock screen when not at computer
56
Q

What is an NDA?

A

Non-disclosure Agreement
- Legal contract
- Confidentiality Agreement
- Sets out how information can be shared

57
Q

What does the Freedom of Information Act 2000 cover?

A

Gives public right to access information held by public bodies (Gov, School, police etc)

Exceptions
- For a criminal investigation
- Commercial interest

Requires public bodies to publish certain information

58
Q

How do you comply with GDPR?

A
  • Only keep the information needed
  • Delete the information when no longer needed
  • Hold information securely
  • Keep information up to date
  • Request opt in new consumers
  • Reports and breaches
59
Q

What are the attributes of a good team?

A
  • Diversity in skills
  • Common objectives
  • Good communication
  • Mutual trust & respect

Increase productivity and leads to better solutions and decision making

60
Q

What is diversity and inclusion and why is it important?

A

Diversity is all the difference which make an individual
Inclusion is valuing people for those differences

It is important as it will:
- Attract talent
- Increase productivity and profit
- Important to clients
- In line with the Equality Act 2010

61
Q

What is an Unconscious Bias?

A

Unsupported judgment in favor or against something / someone that is formed unconsciously

62
Q

Why is it important to discover Unconscious Bias?

A
  • Causes unintended discriminations
  • Can lead to poor decision making
  • Decrease diversity
  • Subconsciously impacts who is hired
63
Q

How is JLL Diverse and Inclusive?

A

1) Training (seminars on discovering you bias and working with others)
2) Flexible working
3) Gender Pay Gap Report 25% - 21%
- Gender diverse interview panels
- Mentorship program

64
Q

How is the RICS combating Diversity and Inclusion?

A

RICS Inclusive Employer Quality Mark
A membership pledge is to increase diversity and inclusion

Four principles
1) Leadership
2) Recruitment
3) Culture
4) Development

65
Q

What are some key characteristics of Client Care?

A

1) Clear effective communication
- Understand objectives
- Respond quickly to queries
- Seek feedback
2) PII cover
- Protect client
3) Effective Complaints Handling procedures

66
Q

What are some process of managing Client Care?

A
  • CRM databases
  • Client feedback
  • Quality assurance
  • Effective Complaints Handling Procedures
67
Q

What happens if a client requests something which conflicts with Professional Obligations?

A

Professional Obligations always come first
- Explain to the client
- If you cannot agree the decline instruction

68
Q

How do JLL ensure Good Client Care?

A

Client Plus (CRM Program)
- Data base of client factsheets and objectives with client feedback and questions

Agency (RADAR CRM Program)
- Weekly feedback to LLs
- Mystery shoppers (quality assurance)

Complaints Handling Procedures

Know Your Client procedures

69
Q

How does RICS ensure Client Care?

A

Mandatory requirements and Professional standards
- CPD
- Ethics CPD
- PII
- CHP
- Clients money
- Minimum Terms of Engagement
- Confidentiality

70
Q

What are the Three Methods of Communication?

A

1) Verbal
2) Written
3) Visual

71
Q

How would you conduct a negotiation?

A

1) Prepare
- Detail research / evidence
- Understand your objectives
- Review arguments
- determine win win

2) During
- Use appropriate methods of communication
- Be respectful but firm
- Identify areas of common ground

3) After
- Written confirmation of agreement - signed

72
Q

What does Know Your Client mean?

A

It is a check which must be carried out before agreeing instructions
- All clients
- Recorded for audit

  • Confirm identity
  • Financial standing (Credit check / JLL fee)
  • Reputation (google / discuss)
  • Sanctions?
73
Q

What is a Business Plan and what should it include?

A

Formal statement of business goals and how they will be reached
- SWOT
- Financial core costs / budgeting
- Management Team
- Key Performance Indicators
- Goals / Mission Statement
- Strategy

74
Q

What is JLL’s business plan?

A

To focus on our long term goals of:
1) Generating sustainable value
2) To be a technology company which does real estate
3) Promote growth through at lower levels of the firm and recruit in a more diverse manner

75
Q

How is JLL meeting their plan?

A
  • JLL has the first property Chat GPT resource aimed at helping all levels of the
    business
  • Achieve ambitions branding
  • Increased focuses on internal seminars covering current issues and training
76
Q

Do you know the RICS business plan?

A

Build Towards a New Future
- Ensure RICS qualifications remain relevant
- Be a leader in influential thought on key issues within the industry (Tech,
sustainability, data)
- Be a sustainable 21st century organisation (transparency of governance)

77
Q

What are the different types of company?

A

Limited (Ltd)
- Registered at companies House
- Liability of shareholders limited to what they have invested

Public Limited co. (Plc)
- Registered at companies house
- Shares offered to public

Limited Liability Partnership (LLP)
- Partners have limited liability (Limit agreed between them)
- One partner is not liable for the other

Partnership / Sole Trader
- Owners are personally liable for all debts
- Unlimited liability

78
Q

What are the International Financial Reporting Standards?

A

Set of accounting principles and procedures issued by International Accounting Standards Board
- Increase Transparency and Consistency

Adopted in the UK for all publicly listed companies since 2005

It replaced UK GAAP for public listed companies but non-listed companies have a choice

79
Q

What is UK GAAP?

A

UK Generally Accepted Accounting Principles

Accounting standards published by the Financial Reporting council

Regulates accounts

used by some non-listed companies

80
Q

What is the difference between a management and client accounts?

A

Management (Prepared for Internal Use)
- For managers to monitor the performance / make business decisions

Company Accounts (Statutory Accounts for Limited Companies)
- Required by law and prepared and audited by charted accountants
- Prepared annual by companies house and HMRC

Includes:
- Profit and Loss account (Ingoing and out going in a fiscal year)
- Balance sheet (Assets and liabilities in a snap shot)
- Cashflow Statement (a firms predicted verses its actual expenditure)
- Remuneration Report

81
Q

What are the different types of Financial Statement?

A

Profit and Loss
- Income and expenditure over a time period (fiscal year)
- Revenue - Direct costs - Operating expenses = Net profit / Loss

Balance Sheet
- Shows a firms assets and liabilities in a snap shot
- Fixed + Current assets - Non-current + current liabilities = Net Asset Value

Cashflow Statement
- Financial statement showing all cash in flows and out flows over a given period of
time
- Cash balance
- Predicted vs actual expenditure

82
Q

What methods can you use to assess company accounts?

A

Liquidity Ratio
- Current Assets / Current Debts

Gross Profit Margin
- Gross Profit / Equity
- Expense of business to loans

Return on Equity
- Net Gain / Equity

Compare with previous years / other companies KPIs

83
Q

What is an Asset?

A

Something a companies owns
- Property
- Cash
- Plant

84
Q

What is a Liability?

A

Something the company owes
- Bank loans
- Overdraft
- taxes
- Trade debt
- Wages

85
Q

What do you understand by the term insolvency?

A

When a firm does not have enough asset to pay their debts’

RICS APC Oct 2023 (20 decks)

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