Ethics, rules of conduct and professionalism Flashcards
1
Q
Why do you want to become a member of the RICS?
A
- Status
- Recognition
- Market Advantage
- Knowledge
- Network
2
Q
What is the role of the RICS?
A
- Promoting and enforcing the highest professional qualifications and standards in the development and management of land, real estate, construction & infrastructure
- Accountable to all members and public
- Involved in policy influence and political engagement
3
Q
What are the key functions of the RICS?
A
- Maintain the highest standards of education and training
- To protect consumers through strict regulations of professional standards
- To be the leading source of information and independent advice on land, property construction and associated environmental issues
4
Q
What is a Royal Charter?
A
- A royal charter is a document issued by the monarch that gives independent legal standing to an organisation.
5
Q
Who is the current RICS president?
A
Tina Paillet
6
Q
What do you understand by the term self-regulation?
A
- responsibility for regulating its members.
7
Q
What is a Bye-Law?
A
- a rule made by a company or society to control the actions of its members.
8
Q
Give an example of one of the RICS Bye-Laws.
A
- BYE-LAW 2: MEMBERSHIP AND REGISTRATION
9
Q
Explain to me the new RICS Rules of Conduct - what do they replace?
A
- Replace the previous Rules of Conduct for Members and Firms and the 5 Global Professional and Ethical Standards
- 5 Rules of Conduct
(1) Members and firms must be honest, act with integrity and comply with their personal obligations, including obligations to RICS.
(2) Members and firms must maintain their professional competency and ensure that services are provided by competent individuals who have necessary expertise.
(3) Members and firms must provide good-quality and diligent service.
(4) Members and firms must treat others with respect and encourage 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 their profession.
10
Q
When do RICS Rules Conduct take effect?
A
- 2nd Feb 2022
11
Q
What is the core professional obligations of firms and members to RICS?
A
- 3 for members, 7 for firms
Members
(1) Comply with CPD requirements.
(2) Cooperate with the RICS
(3) Promptly provide all information when requested by boards or delegated authorities.
Firms
(1) Publish a CPH, including ADR provider.
(2) All work covered by adequate PII.
(3) Sole principal work to continue in cases of incapacity or death.
(4) Cooperate with the RICS
(5) Promptly provide all info to boards and authorities
(6) Record on literature that they are RICS regulated.
(7) Report to RICS any matter they are required to
12
Q
What disciplinary procedures can the RICS impose?
A
(1) Action by Head of Regulation
(2) Disciplinary Panel
(3) Appeal Panel
13
Q
In what circumstances can disciplinary procedures be imposed?
A
- Failure to follow RICS Guidance
14
Q
When did RICS last update their disciplinary panel rules?
A
- 2022
15
Q
What are the different levels of action within these disciplinary procedures?
A
(1) Issue a Regulatory Compliance Order
(2) Reprimand
(3) Fine
(4) Impose unlimited fine proportionate to breach
(5) Impose conditions upon future continued RICS registration
(6) Expulsion from membership or removal of firm
(7) Require publication of results on Modus and in the local newspaper
16
Q
What do you understand by the term professional practice?
A
- Professionalism. How you apply and carry yourself in day-to-day dealings with colleagues, clients and third parties
17
Q
What is a red flag of money laundering?
A
- Inability or unwillingness of parties to provide identity documents
- Changes to parties involved in the transaction
- Payment in unusual currencies
- Unusual transaction features
18
Q
What money laundering regulations or legislation are you aware of?
A
- Terrorist Financing and Transfer of Funds regulations, 2017 (amended 2023)
- RICS Professional Standard: Countering bribery, corruption, money laundering and terrorist financing, 2019
19
Q
What are the penalties for accepting a bribe?
A
- Individuals: Max of 10 years imprisonment or unlimited fine
- Firms: Unlimited fine
19
Q
What bribery legislation are you aware of?
A
- Bribery Act 2010
20
Q
What is a bribe?
A
- Giving, offering, promising or receiving of an advantage such as payment, gift or a service for an action which is illegal or a breach of trust
21
Q
What are the penalties for being involved in money laundering?
A
- 14 years prison sentence or an unlimited fine for assisting
- 5 years prison sentence or an unlimited fine for helping those avoid being detected
22
Q
What constitutes an offence under the Bribery Act 2010?
A
(1) Bribing
(2) Receiving a bribe
(3) Bribing a foreign public official
(4) Failing to prevent bribery
23
Q
What constitutes an offence under the current money laundering regulations?
A
(1) Concealing criminal property
(2) Arrangements
(3) Acquisition and use of possession
24
How long should you keep anti money laundering records for?
- Minimum of 5 years
25
What is Professional Indemnity Insurance (PII)?
- Insurance taken out to protect clients, surveyors and third parties against negligence claims when there is a duty of care breached and claim for damages arises
26
Can you tell me about the RICS requirements in relation to PII?
- Required for all surveyors working in practice. Policies must be underwritten from a RICS approved insurer. Minimum insurance based on turnover amount in the preceding year.
27
What is a PII aggregation clause?
- Policies cover claims that are made during the period of insurance regardless of when the negligent act occurred
28
Is a PII excess usually paid for per claim?
- No, based on turnover in preceding year
29
In a negligence claim, what would help to show that you acted with consideration and due process?
- Make detailed notes, follow Professional Standards and Guidance
30
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?
- Cap in Terms of Engagement but shouldn’t be carrying work outside your scope of competence
31
Can good record keeping help to provide a defence in a PII claim?
- Yes, it may show that you acted with consideration and due process
32
What is run off cover?
- Cover required following cessation of trading
33
What RICS requirements are there relating to run off cover?
(1) Consumer claims, minimum £1 million aggregate cover over a period of 6 years
(2) Commercial claims, firms need to consider what is adequate and appropriate for 6 years
34
Would a dictated report avoid the need to have any written site notes?
- Potentially, if the dictated notes are detailed and then recorded off site
35
How long can a PII claim arise after the work is undertaken?
- Contract: 6 years from date of negligent act or 3 years from knowledge of damage with long stop of 15 years
- Tort: 6 years for suffering of loss
36
What is the Assigned Risks Pool (ARP)?
- Those unable to arrange cover
37
Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance (1st Edition).
- Guidance Note that recommends the use of liability caps to manage risk. Make clear that any advice can only be relied upon by the named client
38
Explain when you might agree a liability cap.
- Terms of Engagement
39
When and how can the RICS be involved in a complaint about a firm or member?
- When there is no response to the complainant, or they are prevented from accessing an independent redress mechanism
40
Can you tell me about the CPD requirements for members of RICS?
- 20 hours for chartered members, 50% of which must be formal
41
Tell me about the RICS’ guidance on dealing with Conflicts of Interest.
- RICS Global PS on Conflicts of Interest, 2017. Effective from Jan 1st 2018.
42
What is double dipping (dual agency)?
- Representing both the buyer and seller simultaneously
43
How would you close down a regulated firm?
(1) Inform the RICS
(2) Ensure clients are informed at the earliest opportunity and arrange hand over
(3) Return any money held in client accounts
(4) Inform insurers and procure PII run off for 6 years
(5) Retain copy of client files and records for a minimum of 6 years
44
What can you tell me about RICS guidance relating to bribery, corruption or money laundering?
- PS – Countering bribery, corruption, money laundering and terrorist financing, 2019.
- Sets out mandatory, globally applicable requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing
45
What status does it hold?
- Professional Standard
46
What are some of the key principles of this guidance?
- 3 parts
(1) Bribery and Corruption
(2) Money laundering and terrorist financing
(3) Guidance and Supplementary Guidance
47
What must/should firms/members do to comply with the guidance?
- Written policy, Code of Behaviour, Gifts register.
47
What are the current RICS rules for registration of firms?
- Complete firms details form
- Appoint responsible principle
- PII
- CPH
- Complaints log and complaints handling officer
48
Who is a ‘qualified member’ of RICS?
- A registered member that has successfully passed the assessment of professional competence
48
What is a phoenix firm?
- Firms which close in a disorderly way and then rapidly re-establish themselves as a new trading entity
49
When must a firm register for regulation?
- If undertaking Red Book Global Valuations
50
Who is a Responsible Principal?
- provide oversight, accountability and engagement with RICS standards and regulation.
51
What are the rules around use of the RICS logo and ‘Regulated by RICS’ designation?
- The use of the RICS logo by regulated firms only
- Restricting the use of the designation "Chartered Surveyors" by firms to the trading name only
52
What is a locum and who might need one?
- A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work
53
What RICS guidance relates to handling client money?
- Client Money Handling, Professional Standard
54
What do the RICS Rules of Conduct say about client money?
- Client accounts and money must be kept separately
- Word client on the account
- Client must be able to have their money on demand
- Annual audit
55
Explain your understanding of the RICS Scheme Rules relating to client money protection.
- Clients Money Protection Scheme, provides last resort protection in instances where an RICS Regulated firm is unable to repay a client’s money
55
What are the main schemes available to firms?
- Commercial or Residential
56
When were CMPS last updated?
- June 2020
57
What is the current compensation limit?
- £50,000 per claim or aggregate of £10.3 million per annum
58
What does the annual regulatory review fee relate to?
- Operational costs of the client money regulatory review visit programme
59
Explain the key themes from the RICS Futures 2020 Report.
- Sustainability, T&D, Talent and Skills
59
Explain the potential implications of the Hart v Large case.
- Establishes a precedent for negligence of surveyors
- Home Buyers Report by Large
- Hart suffered water ingress not mentioned in HBR
59
What might client money include?
- Deposits
60
Explain your understanding of precedent set in Burgess v Lejonvarn.
- Established that professionals providing professional services pro bono and without contract owe a duty of care in respect of services. However, they are not under a duty to advise or give warnings, and nor are they liable for work they do not do
- L was an American architect who provided architectural and project management services to B for significant garden landscaping project.
60
Explain your understanding of the RICS Levitt review.
- Independent review by Alison Levitt QC in 2021
- Investigate articles in the press that alleged that RICS ‘tried to supress a critical internal report into its finances in 2018/2019 and then unfairly dealt with those who sought to explore the issue
61
What is whistleblowing?
- Whistleblowing is the activity of a person, often an employee, revealing information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe or fraudulent.
62
What does good governance mean to you?
- Processes and institutions produce results that meet the needs of society while making the best use of resources at their disposal
63
Explain what the Pandora Papers are and the ethical issues raised within them.
- Papers that uncovered a complex web of tax havens, shell corporations, and offshore accounts that hide the true ownership of billions of dollars of assets
64
Explain what you understand by the RICS Bichard Review.
- A RICS commissioned review conducted by Lord Bichard, consulting members and external stakeholders. Its purpose was to “Clarify the purpose of RICS, including its responsibility to act for the public advantage; make recommendations on its governing structure to deliver that purpose”.
65
Explain some of the recommendations of the Bichard Review.
- 36 recommendations
- Increased focus on diversity and inclusion across the profession
- Maintaining self-regulation through greater independence
- A renewed and increased focus on the public interest remit
66
How will these recommendations be implemented by RICS?
- New Governing Council with better geographical representation
- Recruited Diversity, Equality and Inclusion and Sustainability panel chairs.
- Package of support to drive member engagement.
67
How do professional integrity and professional ethics differ?
- "Ethics" are principles that guide behaviour, while "integrity" suggests that we should carry out ethical principles in our daily lives and activities
68
Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying.
- RICS Compliance
(1) Firm Details Form
(2) Appoint responsible person
(3) Register with RICS
(4) PII
(5) CMH
(6) CHP
(7) Complaints log
(8) Logo
(9) Succession
(10) Annual return
- Statutory Compliance
(1) Disclose business name
(2) Inform HMRC
(3) Employer and public liability
69
If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.
- I would perceive this as a bribe. Follow guidance outlined in the Bribery Act 2010. Potentially report to the Serious Fraud Office for further investigation
70
What would you do if you were asked by a client to reduce a fee proposal to win new work?
- I would be wary of aggressive fee cutting which is not permitted by the RICS. I should also not be actively undercutting other firms.
71
What would you do if you became suspicious that a client was involved in money laundering?
- Report to my firms nominated Money Laundering Reporting Officer, they would complete a Suspicious Activity Report for the National Crime Agency
72
What would you do if you became suspicious that a client was involved in terrorist activities?
- Report to my firms nominated liaison or directly to my line manager.
73
If you were to set up in practice on your own, tell me about the types of insurance you would need.
- PII
- Public liability
- Buildings insurance
- Employers’ liability cover
- Contents insurance
- Business interruption insurance
74
What are the ethical principles that the Rules of Conduct are based on?
Honesty, Integrity, Competence, Service, Respect and Responsibility
74
Give an example behaviour for each for the 5 Rules
Rule 1: Deal with gifts, hospitality and bribery
Rule 2: Structured CPD
Rule 3: Recording a change to any terms over the course of the instruction
Rule 4: Fostering inclusive workplaces
Rule 5: Complaints handling
75
What changes did RICS recently make to the Minimum Approved PII Wording?
RICS launched the External Wall Fire Review (EWS) process (EWS1 form) in December 2019 in response to the Grenfell tower fire and valuation of high-rise properties that use actual or potential combustible materials in external wall systems and balconies. Given the potential liability associated with this process, RICS have inserted a temporary ability for insurers to apply their own fire safety exclusions into policies. Previously, RICS included prescribed fire safety exclusions wording in the minimum policy requirements.
The excess applicable in respect of defence costs has been adjusted to allow insurance providers more flexibility when proposing renewal term.
Unlimited aggregate round the clock limit of liability, with the aim to provide increased availability of PII insurance to firms.
76
Explain PII requirements relating to fire safety cover and cyber cover.
Cyber Security: The minimum terms now exclude claims relating to the use of, or inability to use, a computer system arising from the receipt or transmission of malware, or from so-called 'cyber acts' including damage to or destruction of programs, software or stored data.
Fire Safety: minimum terms now state that, absent dispensation, any exclusion in a PII policy 'will not apply to professional work relating to buildings four storeys or under'
77
What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?
(1) scope of work
(2) basis in which the fee will be calculated
(3) the liability cap
78
What is an annual return?
79
Tell me what you understand about Complaints Handling Procedures (CHP).
Stage 1: Investigated by Complaints handling Officer, Complaint must be made inwriting, acknowledge within 7 days, investigated within 28 days
Stage 2: ADR, independent redress scheme, name of redress mechanism must be provided to complainant. The Centre for Effective Dispute Resolution, The Property Redress Scheme and RICS dispute resolution service
80
What are the registration eligibility criteria?
Offer professional services in surveying disciplines to professional, corporate, institutional and other clients who rely on such services.
Have at least 25% of principals (a senior manager, partner or owner), who are qualified RICS professionals (MRICS, FRICS, AssocRICS).
Agree to observe and comply with RICS Rules of Conduct for Firms, including working to RICS standards.
81
What if a firm can't meet the eligibility criteria?
82
When did the rules last change for RICS logo?
Effective 2 Feb 2022
83
What changes were made for RICS logo?
84
Tell me about the restrictions to the use of the designation ‘Chartered Surveyors’ by firms.
Sole practitioners
The designation ‘chartered surveyor(s)’ may be used by a sole practitioner who is a chartered
member.
Partnerships and company names
A partnership or company carrying on surveying services may also use the chartered surveyor
designation if:
* 50% or more of the partners or directors are chartered members
* no partner or director has been expelled from membership of RICS and not subsequently
re-admitted
* the chartered surveyor designation is only used in the business’ trading name and does not
feature in the business’ corporate name
– where a designation is used in conjunction within a partnership’s trading name, either
the names of all partners are stated in legible characters on all stationery, electronic
communications and public displays or, if there are more than 20 partners, a list of the
names of all the partners may be maintained at the partnership’s principal place of
business or
– where a designation is used in conjunction with a company’s Trading Name, the
company’s registered corporate name is also stated in legible characters on all
stationery, electronic communications and public displays.
* the firm is registered with RICS for Regulation, if it has its principal office in the UK
* for any firm that has its principal office outside the UK that is not registered for regulation
by RICS, there is an agreement between the partners (for a partnership) or all directors (for
a company) that any surveying services carried on by the partnership or company shall be
conducted at all times in accordance with the Rules of Conduct, and a copy of that agreement
must be supplied to RICS on demand and
* each individual partner or director who is a chartered member uses the appropriate
designatory initials when they conduct the business of the partnership or company.
85
What must be included in ToE relating to firm regulation?
86
What are some of the key principles of the RICS Professional Standard relating to client money protection?
86
How could a sole trader set up their CHP using a locum?
complaints handling officer to ensure that their Complaints Handling Procedure can be run fairly and impartially.
87
What do RICS set out as good practice for the use of social media in their Regulation document (June 2021)?
88
What is modern slavery and how would you identify red flags of it?
89
Explain the implications of the Sanctions and Anti-Money Laundering Act 2018.
This Act provides the legal framework for the UK to impose, update, and lift sanctions autonomously. Before this, the UK implemented sanctions as part of the EU. The Act also allows the UK to implement UN sanctions more swiftly. The Act includes measures to fight money laundering.
90
What is the Sanctions List and why should you be aware of it?
Sanction list is an extensive registry that is essential for identifying people, groups, and governments involved in illicit activities, facilitating risk assessment, and enforcing harsh penalties for sanctions breaches.
91
Why was the Register of Overseas Entities introduced?
The ROE requires anonymous foreign owners of UK property to reveal their identities. It has been introduced to make it more difficult for foreign criminals to launder money through UK property
92
What are the six RICS values published as a result of the Levitt review?
Integrity, Transparency, Inclusion, Collaboration, Advocacy, Passion
93
Explain the impact of the Economic Crime (Transparency and Enforcement) Act 2022.
Includes a beneficial ownership register for overseas entities owning property in the UK, which allows authorities to prosecute those involved in money laundering easier
94
How do you ensure that you comply with bribery legislation?
I consider the Bribery Act 2010, the RICS Professional Standard, my organisations procedures, proportionality
95
How do you ensure you comply with money laundering regulations?
Consider Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, RICS Professional Standards, Government guidance, due diligence
96
How do you ensure you comply with your firm’s bribery and gifts policy?
Follow the guidance and procedures. Record any gifts that I've received and report any offers that I constitute a bribe
97
Tell me about an instance of when you have been offered a gift or hospitality by a client.
98
Tell me about what you would do if you felt that an instruction was outside your scope of experience or knowledge.
Decline the instruction
99
Tell me about an instance of when you have handled client’s money.
100
How would you keep client’s money securely and safely held?
Client account held separately
101
Tell me about how you would handle a client complaint.
Follow CPH procedure that is set out by my firm
102
Tell me about your understanding of your firm's process for escalating a complaint to Alternative Dispute Resolution (ADR).
103
Tell me about a conflict of interest check you have carried out.
104
If you identified a potential or actual conflict of interest, how could you handle this? Why could you not accept the food hamper? Was this a potential bribe?
105
How did you record your decision? What principles did you apply when considering the offer?
105
How did you deal with the tenant’s complaint?
106
What process was followed?
107
How did you resolve the matter?
108
Who was liable to remedy the leak?
109
Give me an example of when you have acted with integrity?
110
Tell me about when you have provided a high standard of service.
111
How did you deal with the legal query? Why was it important to act within your scope of competence?
112
Tell me about how you have promoted trust in the profession.
113
How did you ensure the tenant sought appropriate representation?
114
Explain how you dealt with the conflict of interest relating to the legal firm?
115
How did you record the outcome?
116
What type of conflict was this? What ethical guidance do solicitors have to adhere to?
