Ethics, Rules of Conduct and Professionalism

Question 1

What are the five rules of conduct and when were the changes made?

Answer 1

The changes were made in February 2022
* Rule 1:Members and Firms must be honest, act with integrity and comply with professional obligations including obligations to RICS
* Rule 2: Members and firms must maintain their professional competence and ensure that services provided by competent individuals who have the necessary expertise
* Rule 3: Members and firms must provide good quality service and diligence
* Rule 4: Members and firms must treat others with respect and encourage diversity and inclusion
* Rule 5: Members and firms must act in public interest, take responsibility of actions, prevent harm and maintain public confidence in profession

Question 2

Pick a rule of Conduct and provide an example of you have kept in line with Rule?

Answer 2

• I would like to pick Rule 1: Members and Firms must be honest, act with integrity and comply with professional obligations including obligations to the RICS.
• While assessing Compensation Event quotations with the subcontractor, I ensure to highlight all errors in calculations or formulas requesting that correct the issues and reissue the quotation.

Question 3

What is the difference between ethics, integrity and Rules of Conduct

Answer 3

Ethics: moral principles that govern a person’s behaviour
Integrity: quality of being honest and having strong moral principles
Rules: a framework that allows people to act with Ethically and with integrity

Question 4

What are the 5 Rules of Better Regulation?

Answer 4

• Proportionality
• Accountability
• Consistency
• Targeting
• Transparency

Question 5

What are the requirements for Professional Indemnity Insurance cover?

Answer 5

• ‘each and every’ claim basis or aggregate plus unlimited round the clock reinstatement
• RICS’ minimum policy wording or more comprehensive wording.
• RICS sets minimum Levels of indemity and uninsured excess based on firm’s turnover in previous year
• Run off cover to be in place based on contract 6 years underhanded 12 years deed, RICS recommendation 15 years which is the minimum limit for a claim
• PII policy to be fully retroactive – all former works carried out by the firm will be covered
• Policy should cover for past and present employee, directors and partners
• Under written by a list insurer under RICS – Updated list of experience brokers
• Fire safety exclusions to be requested to RICS for approval (1st of May 2021 exclusion not apply for buildings 4 storeys or under

Question 6

How does a company choose their insurance provider/broker?

Answer 6

RICS has issued a list of accepted experienced Insurance providers/ brokers.

Question 7

What is the basis of that decides the limit of Professional Indemnity Insurance cover you need?

Answer 7

A company’s turnover in the preceding year.

Question 8

How does a new company calculate what limit of insurance they need?

Answer 8

A new company uses their forecasted cost for the first year based on the business plan to calculate their insurance limit which can be later amended after the first year of business.

Question 9

How does an existing company calculate their insurance limit?

Answer 9

A company uses the previous year’s turnover to calculate limit of insurance required

Question 10

When did the changes to PI insurance limits come into effect?

Answer 10

May 2020

Question 11

What are the limits of insurance?

Answer 11

PI insurance minimum limit of indemity is based on the Firm’s Turnover in the preceding year
If the Turnover is £100,000 or less then limit is £250,000
If the Turnover is £100,001 to £200,000 then limit is £500,000
If the Turnover £200,001 and above then the limit is £1,000,000

Question 12

What is uninsured Excess and its limits?

Answer 12

It is the part of each insurance claim the firm must pay for itself.
PI insurance minimum limit of indemity is based on the Firm’s Turnover in the preceding year
if the Turnover is £10,000,000 or less then the limit is The greater of the 2.5% of the sum insured or £10,000
if the Turnover is £10,000,001 and above then there is no limit set

Question 13

What is run off cover?

Answer 13

Run off cover is Profession insurance that covers historic liabilities of a business after it ceases to trade.

Question 14

Do you think that a person carrying out surveying works regardless of working for a company should have PI insurance coverage?

Answer 14

Yes, they should because in the event the company ceases to exist the claimant is able to pursue the individual as determined in the case of Meruit Vs Babb

Question 15

What is the required duration for run-off cover and RICS recommendations?

Answer 15

It is based on the contract – if underhanded then 6 years, if deed then 12 years however RICS recommends keeping for 15 years which limit when a claimant has the opportunity to legally bring a claim under the Limitation Act 1980

Question 16

What is the minimum limit for run off cover?

Answer 16

1,000,000 (1 million)

Question 17

Why should you have a claims handling procedure?

Answer 17

A claims handling procedure allows the public the opportunity to bring a claim of loss of money, goods or services.
A company can better manage their liabilities and is a insurance requirement.

Question 18

Can you state the complaints handling procedure?

Answer 18

When a claim is received it should be acknowledged,
Professional insurance provider should be notified.
The claim has to be logged on a complaints log.
The company has 28 days to resolve the claim. If the claim takes longer then the claimant should be notified and updated on the developments.

Question 19

Who should be notified in the event of receiving a claim?

Answer 19

Professional indemnity insurance provider

Question 20

What should be available for a claimant if the claim is not accepted?

Answer 20

An independent redress which is an alternative option for the claimant to obtain relief.
Adjudication/ Ombudsman (independent redress)

Question 21

What are the specific firms that are approved by RICS to act for Ombudsman?

Answer 21

The Property Ombudsman
Ombudsman services

Question 22

What are the Adjudicating Nominating Bodies?

Answer 22

RICS: Royal Institute of Chartered surveyors
RIBA: Royal Institute of British Architects
CIArb: chartered instate of arbitrators

Question 23

If an employer hand cash of 10,000 for a job that is completed, what would you do?

Answer 23

I would politely decline and request they put it into a bank account and carry out the transaction. I am however aware that I am able to accept up to 10,000 euros according to HMRC’s Money Laundering regulations.

Question 24

What are the requirements to holding client money?

Answer 24

Money is protected and held safely in separate accounts identified with the owner’s name.
Client accounts have effective robust controls and systems. Client accounts should not contain any other sums other than what the client has paid into or replace money withdrawn in error. The client money should be immediately available regardless of interest. The client should be periodically notified of the status of the account.

Question 25

What are the requirements for unidentified client money?

Answer 25

• All efforts should be made to track or trace the owner of the client money,
• If owner has not been found in 3 years, then money must be donated to a charity.
• The firm must obtain a indemnity from the charity that they will hand over the money if the owner arrives after the 3 year period.

Question 26

What is the preferrable charity that RICS recommends that you donate money?

Answer 26

Lionheart – the independent charity for surveyors founded by RICS.

Question 27

What is the money scheme that RICS requires all registered firms to sign on to?

Answer 27

RICS Client Money Protection Scheme (CMPS) in the UK which is a last resort in the event that RICS regulated firm is unable to repay a client’s money.

Question 28

If you were offered a gift by a subcontractor of a bottle of wine/expensive tickets to a match/ charity donation, how would you handle the situation?

Answer 28

I would politely decline the offer to avoid the implication of improper obligations. I would notify my manager to make aware of the situation.
If the gift was not inappropriate and does not pose an improper obligation, I am aware that Skanska has a policy of declaring the gift in a Gifts Register and where it is raffled off.

Question 29

What are the 6 principles of the Bribery Act?

Answer 29

• Proportionality: action to be taking proportionate to risk and size
• Top level commitment: senior members to ensure organisation conducts without bribery.
• Risk assessment: risk assessments to be carried out to understand nature and extent of exposure.
• Due diligence: due diligence procedures for people who perform services on behalf of the organisation must be applied to prevent bribery.
• Communication: ensure all policies and procedures are communicated to their staff
• Monitoring and Review: monitor and review procedures in line with regulations and make improvements where necessary.

Question 30

What are the potential consequences for not adhering to the Bribery Act?

Answer 30

The consequences are imprisonment or fines.
For an individual: 10 years of imprisonment and or unlimited fine
For a company: unlimited fine

Question 31

What is the requirement for CPD for a chartered surveyor?

Answer 31

20 hours per calendar year, 10 hours of it formal, undertake training to review or refresh ethics on a 3-year rolling basis.

Question 32

what is the difference between informal and formal CPD?

Answer 32

Formal Learning is structured outline, learning outcomes and a measured assessment
Informal learning is through reading or by one-on-one learning with an expert.