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RICS APC - Spring 2024 > Ethics, Rules Of Conduct And Professionalism > Flashcards

Ethics, Rules Of Conduct And Professionalism Flashcards

1
Q

What is a bribe?

A

A payment , gift or favour given to someone to influence their actions or decisions in favour of the person offering the bribe.

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2
Q

What should you avoid when negotiating a Fee?

A
  • price fixing,
  • aggressive fee cutting,
  • collusion with competitors
  • Undercutting another firm
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3
Q

What are your companies fees based on?

A

They are based on an hourly rate, recent experience of time taken to do similar jobs, market forces.

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4
Q

What is included within your companies Terms of Engagement (ToE)?

A
  • Breakdown of the scope of work
  • Proposed Fee
  • Monthly invoices (include 3% admin fee / expenses)
  • ensure measurements appropriate for CIL
  • £1m liability cap
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5
Q

What needs to be included within a ToE?

A
  • Clients agreement to proposed fee
  • Payment of expenses and how calculated
  • Copy of complaints handling procedure available on request
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6
Q

What are the steps to follow before accepting a job?

A

1) Check professionally competent
2) No conflict of interest / personal interest
3) Confirm terms of engagement and get written approval from Client

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7
Q

What are the reasonings for declining an instruction?

A
  • Not competent / outside your limitations
  • Do not have sufficient facts
  • Client not signed ToE / AML checks
  • Conflict of interest
  • PII liability cap cannot be agreed
  • Advice for friend and not covered by PII
  • Public Test
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8
Q

What is a conflict of interest?

A

Arises when a firm’s independence and impartiality is threatened due to conflict between two Clients. Examples include:
- Financial interest
- Personal interest
- Commercial relationships
- Acting on both sides of a transaction

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9
Q

Give me an example of a Conflict?

A

Quod Conflict of Interest: Undertaking planning or appraisal work on competing sites / planning work for both the developer and the local authority

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10
Q

What are the three types of conflict of interest?

A

1) Party conflict – same or related instruction
2) Own interest conflict – personal interest
3) Confidential information conflict

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11
Q

What is informed consent?

A
  • Given in writing
  • Transparent about all material factors / party understands what they are doing
  • All relevant parties best served
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12
Q

How do you handle a conflict?

A

Be open and transparent.

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13
Q

What is the three steps process to handling a conflict?

A

1) Conflict avoidance
- Get all the facts
- Consider whether conflict is irresolvable or whether it can be properly managed
- Decide whether to accept or decline instruction

2) Written advice to both parties (accept instruction)
- Disclose nature of the conflict, circumstances around it, any other relevant facts and proposals for how firm proposes to deal with the conflict
- Clear as possible: both parties make own decision (informed advice)
- Request written confirmation from both parties

3) Conflict Management (information/ethical barriers)
- Information barrier set up in accordance with provisions agreed with both clients
- Barrier must be ensure no information passed between two parties
- Surveyor must be different + physically separated
- Securely stored information / communications logged

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14
Q

What is your companies conflict process?

A

Any conflicts on job I am working on I send companywide email to include:
- Address
- Client
- LPA
- Work to be undertaken

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15
Q

What are the four offences of a bribe?

A

Four Offences:
1) Bribing
2) Receiving a bribe
3) Bribing a foreign public official
4) Preventing bribery

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16
Q

Should you accept gift/hospitality from a third party supplier or contactor?

A

No

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17
Q

What do you do if you receive a reasonable/proportionate gift?

A

Log within the gift register

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18
Q

What are the penalties of accepting or giving a bribe?

A

Policed by Serious Fraud Office, max penalty 10-year prison, unlimited fine

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19
Q

What is your companies policy on bribes?

A

Our company strictly prohibits bribery in any form. We adhere to the Bribery Act (2010) and have clear policies and procedures in place to prevent bribery, including training for employees and regular compliance audits

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20
Q

What is bribery, and how does the Bribery Act (2010) define it?

A

Bribery involves offering, giving, receiving, or soliciting something of value to influence the actions of an individual in a position of authority or trust. The Bribery Act defines bribery as the offering, promising, or giving of a financial or other advantage with the intention of inducing someone to perform their functions improperly or to reward them for doing so.

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21
Q

What are the key offenses outlined in the Bribery Act (2010)?

A

The Bribery Act establishes four main offenses: offering, promising, or giving a bribe; requesting, agreeing to receive, or accepting a bribe; bribing a foreign public official; and failure of commercial organizations to prevent bribery.

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22
Q

How does the Bribery Act (2010) impact businesses and individuals?

A

It applies to both individuals and businesses, imposing criminal liability for bribery-related offenses. It requires businesses to implement adequate procedures to prevent bribery and holds individuals accountable for their involvement in bribery schemes.

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23
Q

Can you provide examples of situations that could constitute bribery under the Bribery Act (2010)?

A

Examples of bribery include offering kickbacks to secure a contract, providing lavish gifts or hospitality to influence a decision-maker, and making cash payments to expedite administrative processes. Any form of inducement or reward aimed at improperly influencing someone’s actions could be considered bribery.

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24
Q

What are the consequences of violating the Bribery Act (2010) for individuals and businesses?

A

Individuals found guilty of bribery offenses can face imprisonment, fines, and damage to their reputation. For businesses, the consequences may include unlimited fines, confiscation of assets, and reputational damage, as well as potential civil liability for failing to prevent bribery.

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25
Q

How can businesses ensure compliance with the Bribery Act (2010) and prevent bribery within their organizations?

A

Businesses should implement robust anti-bribery policies and procedures, provide training to employees on bribery prevention, conduct due diligence on third-party partners and suppliers, and maintain accurate records of hospitality and gifts. Regular monitoring and review of compliance measures are also essential.

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26
Q

What are the requirements for firms (bribery)?

A

1) Prepare a written policy + risk assessment
2) Appropriate governance and systems in place
3) Encourage transparency i.e. gift register
4) Clear guidance for staff: price fixing
5) Appoint contactable person within company
6) Code of behaviour for staff
7) Due diligence checks

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27
Q

What are the requirements for members (bribery)?

A

1) Declare items in risk register
2) Attend training provided by firm
3) Be familiar with employer’s policy

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28
Q

What is money laundering?

A

Process of disguising proceeds of crime to make them appear legitimate within the financial system.

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29
Q

What are the requirements for firms to highlight money laundering?

A
  • Staff training
  • Conduct written risk assessment for firm
  • Comply with due diligence requirements
  • Comply with PEP requirements
  • Keep records
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30
Q

What are the levels of due diligence for money laundering?

A

1) Customer Due Diligence:
- Identify client: passport, driving licence
- For a company: name, registered address, company number
- Names of directors (unless on stock exchange)
- Nature of business relationship and proposed funding arrangement

2) Enhanced Due Diligence:
- High risk third countries
- Politically Exposed People
- Higher initial background check + enhanced monitoring

3) Simple Due Diligence
- Low risk
- Not suitable for property transactions

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31
Q

what are the other key requirements that you should be aware of for money laundering?

A
  • 10,000 euros max as cash
  • Register with MRHC on annual basis
  • Senior compliance officer appointed
  • Report to National Crime Agency
  • Keep records for 5 years
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32
Q

What is the penalties for money laundering?

A

14 years in prison

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33
Q

What is the procedure for suspicion of money laundering?

A

any suspicions reported through compliance officer to the National Crime Agency

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34
Q

What is money laundering?

A

Money laundering is the process of concealing the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.

35
Q

How does RICS address money laundering?

A

RICS has regulations and guidelines in place to prevent money laundering, including thorough due diligence on clients, reporting suspicious transactions, and complying with anti-money laundering laws.

36
Q

What are the key provisions of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2017)?

A

The regulations require regulated firms to carry out risk assessments, implement customer due diligence measures, maintain records of transactions, and report suspicious activities to authorities.

37
Q

What is customer due diligence (CDD)?

A

Customer due diligence involves verifying the identity of clients, assessing the nature of their business, and understanding the purpose of the intended transactions to mitigate the risk of money laundering or terrorist financing.

38
Q

How does RICS ensure compliance with anti-money laundering regulations?

A

RICS provides guidance and training to its members on anti-money laundering measures, conducts regular reviews of compliance procedures, and collaborates with regulatory authorities to uphold standards.

39
Q

Can you provide examples of suspicious activities related to money laundering?

A

Suspicious activities may include unusual transactions, large cash deposits with no apparent source, frequent transfers to high-risk jurisdictions, or discrepancies in client information provided during due diligence processes.

40
Q

How does RICS ensure ongoing compliance with anti-money laundering regulations?

A

RICS regularly updates its guidelines and regulations in line with changes in legislation, provides continuing professional development (CPD) opportunities for members to stay updated on best practices, and conducts audits to assess compliance with anti-money laundering measures.

41
Q

What is the purpose of the RICS Professional Statement on Countering Bribery, Corruption, Money Laundering, and Terrorist Financing?

A

The purpose of the statement is to outline RICS members’ obligations to prevent and counter bribery, corruption, money laundering, and terrorist financing in their professional activities.

42
Q

What are the key principles outlined in the RICS Professional Statement?

A

The key principles include maintaining integrity, avoiding conflicts of interest, ensuring transparency in financial transactions, conducting thorough due diligence on clients, and reporting suspicious activities.

43
Q

How does the Professional Statement define bribery?

A

Bribery is defined as the offering, giving, receiving, or soliciting of something of value as a way to influence the actions of an individual or organization in a professional or business context.

44
Q

What actions are required of RICS professionals to counter bribery and corruption?

A

RICS professionals are required to conduct business with honesty and integrity, avoid offering or accepting improper inducements, and report any instances of bribery or corruption to the appropriate authorities.

45
Q

How does the Professional Statement address money laundering and terrorist financing?

A

The statement requires RICS professionals to implement due diligence procedures to prevent money laundering and terrorist financing, including verifying the identity of clients, monitoring financial transactions, and reporting suspicious activities.

46
Q

Can you provide examples of situations that may constitute bribery, corruption, money laundering, or terrorist financing?

A

Examples may include offering or accepting cash bribes, providing gifts or hospitality to improperly influence decision-making, engaging in transactions with politically exposed persons without proper due diligence, or knowingly facilitating financial transactions for illicit purposes.

47
Q

What are some key points for confidentiality?

A
  • Includes historic information
  • Client approval if third party wants info
  • Old files kept for min 6 years before disposal
  • If overhear info should be kept confidential, not to be used. Let client know
  • Confidential info received in error should be disposed of securely
48
Q

What is the purpose of the RICS Complaints Handling Procedure?

A

The purpose is to provide a transparent and fair process for handling complaints made against RICS professionals or firms regarding their conduct or services.

49
Q

Who can file a complaint under the RICS Complaints Handling Procedure?

A

clients, other professionals, or members of the public who have concerns about the conduct or services of an RICS professional or firm.

50
Q

What types of issues can be addressed through the Complaints Handling Procedure?

A

professional misconduct, negligence, breaches of ethical standards, or failure to meet professional obligations.

51
Q

what is your companies complaints handling procedure?

A

Initial issues raised with member client is working with, who will discuss concerns, and aim to resolve them. Formal complaint procedure below:

Stage 1)
- In writing to designated director
- Acknowledged within 7 days / response provided within 28 days
- Recorded in complaints log

Stage 2)
- If unable to agree then taken to Independent Redress Provider: Centre for Dispute Resolution (CEDR)

Sole practitioner must nominate a surveyor in another form to act as complaints handling officer

52
Q

What is negligence?

A

Negligence is a failure to take reasonable care to avoid loss to another person.

53
Q

What is Duty of Care?

A

Duty of Care exists to clients and third parties, using ‘reasonable care and skill’. When breaches, and there is a loss, a claim for damages arises.

54
Q

How do you avoid / reduce negligence?

A
  • Understand client objectives / confirm ToE
  • Competent to undertake work
  • Undertake work in accordance with RICS guidance
  • Up to date market knowledge
  • Cap PII in ToE
55
Q

what is Personal Indemnity Insurance?

A

PII is designed to protect professionals and their businesses from claims arising to errors, omissions, negligence or malpractice in the services they provide.

56
Q

What are the minimum requirements for PII?

A

£100k or less: £250k
£100k - £200k: £500k
£200k+: £1m

57
Q

What is the Max Uninsured Excess for PII?

A

Liability up to £500k: 2.5% or £10k (highest)
Liability over £500k: 2.5% of sum

58
Q

What is Retroactive?

A

policy covers claims regardless of when negligent act occurred

59
Q

What is Run off Cover?

A

Consumer Claims: £1m aggregate over min 6 years
Commercial Claims: decide what is adequate. Min 6 years. Claims can be made up to 15 years

60
Q

What is a contract?

A

Agreement between two parties that will be recognised and enforced by the courts. Contract can be oral

61
Q

What is there to be understood by a contact?

A

Parties should understand:
1) The are creating a contract
2) Can be enforced by the law

62
Q

How do you form a contract?

A

3) Offer
4) Acceptance
5) Consideration

63
Q

Tort vs Contract

A

In contract, the rights and obligations are created by the acts of agreement between the parties in the contractual agreement

Tort, the rights and obligations are created by the courts applying common law (precedent)

64
Q

All firms holding client money in the UK need to publish client money handling procedure.

What are the key factors for handling clients money?

A
  1. Keep accounts separate / identifiable (use word “client”)
  2. Client must be able to have monies on demand
  3. Agree interest payment procedures
  4. Keep accurate records
  5. Properly trained staff
  6. Accounts not overdrawn
  7. Three-way reconciliation
65
Q

What can clients monies include?

A

Deposits, rent collection, service charges

66
Q

If you was to set up your own RICS firm, what steps would you have to take?

A
  1. Inform RICS
  2. Contact officer for all RICS communications
  3. PII + send details to RICS
  4. Details on handling client money
  5. RICS valuer registration scheme
  6. Complaints handling procedure
  7. Complaints log
  8. Complaints handling officer
  9. Logo kit
  10. Ensure CPD
  11. Staff training plan
  12. RICS annual return
67
Q

What are the steps for Statutory Compliance?

A

1) Requirement to disclose business name
2) Disability discrimination compliance (Equality Act 2010)
3) Bribery Act 2010 (compliance)
4) Appoint money laundering officer
5) Health and safety compliance
6) Fire safety compliance
7) Inform HMRC for tax reasons
8) Ensure have EMPLOYERS LIABILITY INSURANCE (employee injured on premises) and PUBLIC LIABILITY INSURANCE (third party injured on premises)

68
Q

what are the steps for closing a practice?

A

1) Inform RICS
2) Ensure Clients are informed + hand over to new firm
3) Return any client money
4) Inform insurer
5) PII insurance for min of 6 years from expiry of current policy
6) Retain client files for minimum 6 years.

69
Q

Give me an example of when you have acted with integrity?

A

For all new instructions, before accepting, I issue a conflict check out to the wider company.

70
Q

Tell me about when you have provided a high standard of service?

A

For Bellamy and Byng where I was able to align with the timelines set by the client.

71
Q

Tell me about how you have promoted trust in the profession.

A

By fulfilling my obligations. Doing what I say I would do.

72
Q

Explain how you have taken responsibility in your current role.

A

Ferry Lane - I found a financial discrepancy and took responsibility by reviewing the data, ensuring an accurate assessment.

73
Q

Tell me about how you treat clients with respect.

A

By speaking to them in a timely and respectable manner no matter of the issue in hand.

74
Q

Tell me about how you treat other surveyors with respect.

A

The same way as how you would treat a client, within a respectable manner.

75
Q

Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying.

A

Under the Rules for the Registration of Firms 2022.
- Inform the RICS
- Obtain Adequate Insurances
- Measures in place to preserve the security of clients’ money
- Put a complaints handling procedure in place
- Ensure training, including CPD opportunities

76
Q

If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.

A

I would decline the offer immediately and inform my director. Quod adheres to strict company policies, reporting the incident to the appropriate authorities to maintain ethical standards.

77
Q

What would you do if you were asked by a client to reduce a fee proposal to win new work?

A

I would explain to the client the importance of maintaining fair and transparent pricing practices to ensure quality service delivery.

78
Q

What would you do if you became suspicious that a client was involved in money laundering?

A

I’d follow Quod’s policy on reporting concerns to the designated Money Laundering Reporting Officer while also maintaining confidentiality.

79
Q

What would you do if you became suspicious that a client was involved in terrorist activities?

A

I would immediately report my concerns to the appropriate authorities, such as the National Crime Agency or the police. I would follow our firm’s internal procedures for reporting suspicions of terrorist financing and cooperate fully with any investigations.

80
Q

If you were to set up in practice on your own, tell me about the types of insurance you would need.

A
  • Professional indemnity insurance (PII)
  • Public liability insurance
  • Employer’s liability insurance
81
Q

Ferry Lane – how did you ethically deal with the additional payment?

A

I was responsible for highlighting the discrepancy, informing the client on the missing information.

82
Q

Uplands – how did you advise within your scope of competence?

A

I informed the client that advising on structural support was outside of my expertise and referred them to ‘Find a Surveyor’.

83
Q

Uplands - Why was it important not to exceed this service?

A

As this scope of work was outside of my professional expertise and I would not be professional competent to offer that level of advise.

84
Q

What are the three pillars of dispute resolution?

A
  1. Negotiation
  2. Mediation
  3. Adjudication

RICS APC - Spring 2024 (39 decks)

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