Ethics, Rules Of Conduct And Professionalism

Question 1

Tell me about the Rules of Conduct for Members & Firms (2021)

Answer 1

There are five RICS Rules of Conduct, which are:

(1) Must be Honest, act with integrity and comply with personal obligations

(2) Maintain professional competency and services are provided by competent individuals

(3) Provide good quality and diligent service

(4) to treat others with Respect, and encourage diversity and inclusion

(5) act in the Public Interest, take responsibility for their actions and maintain public confidence in the profession.

These became effective from Feb 2022

Question 2

Why was there a change of the Rules of Conduct?

Answer 2

Simpler structure, clear examples, focus on respect, diversity and inclusion.

Question 3

Can you give us an example of where you have acted in line with the Rules of Conduct?

Answer 3

During my Case Study, I acted with integrity in that I ensured that there was no pre-existing conflict of interest that would prevent me from impartially undertaking the instruction, and I respected the confidentiality of information provided to us by the Client.

Question 4

What are the mandatory professional obligations for Members?

Answer 4

1. Comply with CPD Requirements set out by the RICS.
2. Cooperate with the RICS.
3. Provide all info reasonably requested by Standards and Regulation Board.

Question 5

What are the mandatory obligations for RICS Regulated Firms? (8) When setting up a new practice.

Answer 5

1. Inform RICS - Firm Detail Form
2. Appoint a Responsible Officer
3. Register with the RICS for regulation of firm
4. Arrange PII + send details to RICS
5. CHP + Complaints Log + CHP Officer
6. Use Logo Kit
7. Plan Succession if sole practitioner
8. Ensure completion of RICS Annual Return

Question 6

What tools can you utilise to help with making ethical decisions?

Answer 6

Use the RICS Ethics Decision Tree which provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in an unethical manner.

Question 7

What is the difference between an RICS Professional Standard / Statement and a Guidance Note?

Answer 7

A professional Standard / Statement is mandatory and a guidance note providers users with recommendations or an approach for accepted good practice.

Question 8

How can a disciplinary procedure be triggered?

Answer 8

By someone complaining to the RICS. A failure to follow any RICS guidance will be considered by the RICS by examining the behaviour of the member or firm. This is outlined within the RICS ‘Regulatory Decision Making’ (February 2022 and disciplinary process is outlined within ‘RICS Regulatory Tribunal Rules’ 2020.

Question 9

What are the THREE levels of disciplinary action?

Answer 9

1. Action by Head of Regulation.
2. Disciplinary Panel (drawn from the independent Regulatory Tribunal)
3. Appeal Panel.

Question 10

What FOUR actions can the Head Of Regulation initiate upon completion?

Answer 10

1. Serve a Fixed Penalty Notice.
2. Make a Regulatory Compliance Order.
3. Refer the matter to a single member of the Regulatory Tribunal for consideration.
4. Refer the matter directly to a Disciplinary Panel.

Question 11

If a breach of Conduct is referred to the Disciplinary hearing, what penalties can be imposed on the Breaching Party?

Answer 11

1. Issue a consent order
2. Impose an unlimited (but proportionate) fine for each breach.
3. Conditions on Continued Membership of the RICS.
4. Expulsion from Membership or Remove a firm.
5. Require publication of the results of a hearing in Modus magazine, on the RICS website and in the local newspaper of the area where the offending firm is located.

Question 12

What legislation is there regarding use of Social Media?

Answer 12

RICS Guidance note entitled ‘Use of Social Media’ 2021. Highlights importance of social media to members and firms. RICS may take action if a post may damage public confidence or trust in profession

Question 13

When might the RICS investigate social media posts?

Answer 13

If it involves:

Discrimination

Dishonesty

Abusive or threatening behaviour

Bullying

Question 14

What is the need for Professional Indemnity Insurance?

Answer 14

To protect clients, surveyors and third parties against negligence claims when there is a duty of care breached and claim for damages.

Question 15

What is the difference between Informal and Formal when it comes to CPD?

Answer 15

Informal includes any self-managed learning that is relevant to your professional whereas Formal has clear learning objectives and outcomes.

Question 16

What are the appropriate levels of turnover when it comes to PII?

Answer 16

£100,000 or less (turnover) = £250,000 (cover)

£100,001 to £200,000 (turnover) = £500,000 (cover)

£200,001 and above (turnover ) = £1,000,000

In accordance with RICS Requirements for Professional Indemnity Insurance (2019)

Question 17

What is the RICS Document on Complaints Handling?

Answer 17

RICS Global Professional Standard on Conflicts Of Interest, 2017 (Effective 1 January 2018)

Question 18

What is Informed Consent?

Answer 18

Informed Consent occurs when a party who might be adversely affected by a conflict of interest acknowledges the existence of that risk but still agrees to instruct an RICS regulated firm / member to proceed.

Question 19

What is the difference between Conflict Avoidance v Conflict Management ?

Answer 19

Conflict Avoidance is when you do not accept the instruction.

Conflict Management is when the instruction is accepted and steps are put in place to manage the conflict.

Question 20

How would your firm handle a complaint?

Answer 20

My firm would respond to the complaint within 7 days and would look to resolve the complaint within 28 days. If the complainant wasn’t happy with the resolution offered, they would be referred to our third party redress service. (For us it is Property Redress Scheme)

Question 21

Give me some examples of Third-Party Resolution Schemes?

Answer 21

If complainant is not happy with review, second stage can be via use of independent redress scheme such as Centre for Dispute Resolution, Property Redress Scheme and RICS Dispute Resolution Service.

Question 22

What is Dual Agency ?

Answer 22

Where an agent has a contractual agency relationship with both the seller and the buyer at the same time.

This practice must not be undertaken in any circumstances from 1 January 2018 by any RICS members.

Question 23

What is the RICS Professional Statement on Clients Money Called?

Answer 23

The statement is called “Client Money Handling”, published October 2019. Effective from January 2020.

Question 24

What are the Three Objectives of Handling Client Money? (3)

Answer 24

(1) Keep Client’s Money Safe

(2) Ensure Client accounts are used appropriately

(3) Firms to have appropriate procedures in place to ensure best practice.

Question 25

What are the SIX main areas of good practice as set out in RICS Professional Standard ‘Client Money Handling’ 2019?

Answer 25

1. Holding Client Money
2. Providing information to Clients
3. Receipts of Client Money
4. Payments from Client accounts
5. Accounting records and controls.
6. Compliance.

Question 26

What are the 8 Mandatory Requirements of Client Money Handling (2019)?

Answer 26

(1) Confirm that client’s money is to be held in a client account (including bank account details), that the firm has exclusive control over.

(2) Ensure client money account contains no other funds, and funds withdrawn in error are replaced.

(3) Not to hold office money in the account, unless it is in receipt of mixed monies

(4) All client money accounts include the word “client” in their name.

(5) Ensure money held in a client account is immediately available even at the sacrifice of interest.

(6) Only withdraw out of a high interest (penalty-bearing account) with written consent from the client.

(7) Confirm account operating conditions with bank (No set-off for other firm accounts, no mixing of funds)

(8) Ensure that when a client requests it, money is held in an account that the firm and client have access to. (Has to be an account established by the client, not the firm).

Question 27

What steps must be taken upon starting a new practice? RICS Compliance? (8)

Answer 27

Inform RICS of new practice through a Firm Detail Form

Appoint a Responsible Principal

Register with RICS for regulation of firm

Arrange professional indemnity and send details to RICS

Set up procedures for Client Money Handling and appoint a Complaints Handling Officer

Use logo kit

Plan succession if sole practitioner.

Ensure completion of RICS Annual Return

Question 28

What steps must be taken to close a practice?

Answer 28

Inform RICS

Ensure clients are informed at earliest convenience

Return any monies held by clients

Inform insures and procure professional indemnity insurance run off cover for a minimum of 6 years

Hold client records for 6 years.

Question 29

What are the Statutory Compliance obligations for setting up a practice? (8) THINK ‘COMPLIANCE’

Answer 29

• Requirement to disclose business name
• Disability Discrimination Compliance
• Financial Service Compliance
• Bribery Act 2010 Compliance
• Appoint AML officer
• Estate Agency Compliance
• Register for data protection
• Inform HMRC for VAT and Tax