Ethics, Rules of Conduct and Professionalism (L3) Flashcards
What is the role/central purpose of the RICS?
To maintain the highest standards of education and training.
To protect consumers through strict regulation and professional standards.
To be leading information source and independent advice on land, property, construction, and environmental issues.
What Major Challenges are currently facing the RICS and are there any recent initiatives you are aware of?
Following the Bichard review in 2022 one of the major challenges facing the RICS is implementing the recommendations in the 7 key areas of;
- Increased focus on public interest (public interest panel)
- Maintaining self-regulation
- Increased focus of diversity and inclusion
- Undertaking review of Governance once every five years
- Simplified governance structure
- Greater leadership on issues such as sustainability and climate change.
I am aware of the Buildings Breakthrough initiative that was launched at COP28 that was was supported by RICS CEO Justin Young
What is COP28 and what it the Buildings Breakthrough initiative.
“Conference of the Parties” that signed up for the UN Climate Agreement in 1992. COP 28 was controversially held in Dubai although it was agreed to transition away from fossil fuels in energy systems. COP 21 (Paris, 2015) set out the limit of temperature rises to 1.5 C “crucial” target according the UN’s climate body the Intergovernmental Panel on Climate Change (IPCC). Window of action rapidly narrowing.
Global push for decarbonising the built environment by 2030 which accounts for c. 40 %of global greenhouse gas emissions.
Why do you want to be a chartered surveyor
Status - Confidence in professional ability
Recognition - Achieved Professional Excellence
Market Advantage - Gives a professional advantage
Knowledge - International Practice standards, professional guidance and CPD
Network - 140,000 professionals in 140 countries globally.
Why were the new Rules of Conduct launched in October 2021 (Feb 22)
Rationale – simpler structure, clear examples through case studies, focus on respect, diversity, and inclusion, understanding evolving tech, tackling global challenges.
They are based on the ethical principles of honesty, integrity, competence, service, respect and responsibility.
What are the five rules of conduct that members and firms must adhere to?
- Be Honest, Act with Integrity and comply with personal obligations and obligations to RICS
- Maintain professional competency and ensure that services are provided by competent individuals who have the necessary expertise
- Provide a good quality and diligent service
- Treat others with respect and encourage diversity and inclusion
- Act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in their profession.
If you set up on your own, what steps must you take to become an RICS regulated firm? Do you understand the RICS approach to regulating members and firms?
RICS
> Inform RICS by completing a Firm Details Form (type of business and nature of clients)
> Appoint a Responsible Principal (name disclosed)
> Register with the RICS for regulation of the firm,
> Arrange PII,
> Set or Client Money Handling Procedure,
> Complaints Handling Procedure, complaints log, and a complaints handling officer,
> Plan for succession,
> ensure CPD logged online and set up a staff training plan,
> ensure completion of an online RICS Annual Return. (profit/loss over the year)
Statutory
> Requirement to disclose business name,
> Disability discrimination compliance,
> financial services compliance,
> bribery act compliance,
> appoint a MLRO,
> Health and safety compliance,
> Asbestos register,
> fire safety compliance,
> register for data protection,
> estate agency compliance,
> inform HMRC for VAT and Tax registration,
> ensure compliance with current employment law,
> ensure insurance compliance for employer and public liability.
How would you close a client practice?
Inform RICS, ensure clients are informed and hand over arrangements are made, return any monies, inform insurers, (6 yr PII cover and 6 yr client files)
Can anyone set up an RICS Firm
The RICS Rules for the Regulation of Firms 2022 states that
If 50% of Principals of a UK firm which provides surveying services are RICS members then it has to be regulated, and if at least 25% then it can apply to be regulated.
Principals are sole practitioners, directors’ partners or board members.
Each firm must nominate a responsible principal who is obliged to ensure all reasonable steps are taken and systems are in place to ensure compliance with RICS requirements.
Do you understand the RICS approach to regulating members and firms? and what happens if there is a breach of rules or obligations.
The RICS Bye-Laws provide the power for Head of Regulation and Regulatory Tribunal (Alexandra Marks) to make disciplinary and regulatory decisions including issuing disciplinary penalties and costs. Those decisions are made in accordance with the Rules and guidance created by the Standards and Regulation Board.
Can you talk me through the disciplinary process / any procedures you are off?
A disciplinary procedure is triggered by a complaint, or allegation or information received. Not every shortcoming will give rise to disciplinary proceeding but a failure to follow any RICS guidance will.
The process is governed by the RICS Regulatory Decision Making 2022 and the RICS Regulatory Tribunal Rules 2022.
EW Estates is a recent disciplinary panel decision contrary to ROC 1,2 and 5. (Suspended for 15 months)
Three levels of disciplinary are:
Action by head of Regulation
Disciplinary Panel
Appeal Panel
Initial investigation stage which will lead to a fixed penalty notice (relating only to the supply of information), make a regulatory compliance order, refer to single member of the regulatory tribunal for consideration, refer directly to a disciplinary panel.
Regulatory Compliance Order low levels of breaches including non-compliance with RICS rules, including CPD, resulting in fixed penalty and disciplinary panel resulting expulsion.
Disciplinary Panel Issue a compliance order, reprimand, fine, impose an unlimited fine, impose conditions upon future RICS registration, expulsion from membership, Require publication of the results in the RICS modus magazine, on the RICS website.
Appeal Panel considers a member/firm appeal.
What does the Royal Charter do?
The Royal Charter, received in 1881, allows the RICS to be self-governed. It maintains and promotes the usefulness in the profession for public advantage
Method of incorporation of the RICS granted by the Queens Privy Council and highlights the requirement for the RICS to act into the public interest.
What are the professional obligations to the RICS members and firms set out in appendix A of the ROC?
RICS Members must
1. Comply with CPD requirements
2. Cooperate with RICS
3. Promptly provide information reasonably requested by the Standards and Regulations Board.
RICS Firms must
1. Publish a complaint handling procedure which includes an alternative dispute resolution provider approved by the RICS and maintain a complaints log.
2. All work is covered by PII that meets the standard approved by the RICS
3. If having a sole principal, make appropriate arranges in the event of incapacity.
4. Cooperate with the RICS
5. Promptly provide information
6. Display on business literature a designation denotating that they are regulated RICS firm.
7. Report to the RICS any matter under the Rules of Registration of Firms
What are the CPD requirements
minimum 20 hrs of CPD (10 must be formal)
APC min 48 hrs per 12 months.
To be recorded every calendar year until 31st Jan to submit.
Every three yrs. take CPD on ethics.
Must record CPD activity using the RICS CPD Management System (use RICS CPD Decision Tree)
What is the RICS Ethics Decision Tree?
Provides a framework of questions members should ask themselves before carrying out work, accepting gifts, social media. Would members be content to have their decisions or actions made public. RICS regulation confidential hotline offers assistance for issue with any ethical matters.
Do you have sufficient facts?
Is it legal?
Is it line with the ROC?
Have you consulted appropriate people to make an informed decision?
Have you assessed risk?
Do you have clear reasoning in reaching your decision?
What are the types of documents that promote best practice throughout the RICS and why is there a change procedure ongoing?
Two new document categories PROFESSIONALS STANDARDS and PRACTICE STATEMENTS to replace professional statements and guidance notes. The RICS is in the process of recategorizing all professional statements and guidance notes.
Professional Statements – requirements or expectations for RICS members or firms. Mandatory compliance ‘must’, and best practice ‘should’
Practice Information – Support practice, knowledge includes good practice and insight. Do not contain advice
RICS Practice Alerts – Alerting profession of emerging areas of risk
In regulatory or disciplinary proceedings, RICS will consider relevant professional standards when deciding whether an RICS member or regulated firm acted appropriately and with reasonable competence. It is also likely that during any legal proceedings a judge, adjudicator or equivalent will take RICS professional standards into account
What is the role of Professional Groups?
The purpose of the Professional Group Panels is to maintain and develop the knowledge and practice of surveying for the public advantage through:
- RICS influence in the sector through research and thought leadership.
- Contribution to the RICS strategy on sustainability by providing market feedback, input, and ideas to plans.
- Development of relevant technical standards, guidance and best practice for Members and Firms.
- Defining future skills and delivery of knowledge and CPD outputs for the sector.
- Contribution to the competences required for relevant APC pathways and inspiring the next generation.
Can you give an example of bodies within the RICS?
LionHeart is an independent charity specifically designed for past, present and future RICS professionals and their families. Their aim is to support members through difficult times, whether personal or professional, from the beginning of their career as an APC candidate or apprentice, right through to retirement.
RICS Matrics is our early career community designed to support students, apprentices, trainees and those who are newly qualified (up to 10 years), as they move into the industry.
How would you appropriately handle client money? Why is client money handling important for RICS members? Is there a RICS statement for Client Money?
It is a requirement for RICS registered firm.
Six main areas of good practice as set out in the RICS Professional Standard ‘Client Money Handling’ 2019
- Holding client money
- Providing information to clients
- Receipts of Client Money
- Payment from Client Accounts
- Accounting records and controls
- Compliance
Some examples of procedures include client accounts must be kept separately. A client must be able to have their monies on demand etc.
What are the RICS bye laws
Laws approved by the members and made under the Royal Charter to allow the RICS to self regulate (without intervention from external bodies)
Bye law 3 = Chartered members shall be entitled to use Designations (MRICS & FRICS)
You’ve advised your client on the market rent for their property, but they want to make an opening offer in negotiations with the other party that is higher, even though the tenant is a charity. Can you do this under the Rules?
When making ethical professional decisions I would consider the facts, identify the relevant standards in the ROC and other guidance and use my professional judgement, which may require me to balance different interests and principles.
Considering Rule 1, 3, 4 and 5 I could negotiate on behalf of clients, ensuring that I do not take unfair advantage of vulnerability.
In the course of working for a client, you’ve found evidence they are breaking the law by dumping hazardous waste instead of disposing of it properly. What should you do?
I would consider whether the risk of harm outweighs my duty of client confidentiality, I would refer to the ROC, ethics decision tree, or even the RICS Regulation Confidential Hotline. I would also consider the outcome if my actions or advice would be made public.
Maintaining confidentiality would result in significant harm to the public of confidence in the profession it would be my duty to report concerns to the relevant law enforcement or environmental protection body.
You’ve got an opportunity to do a new type of work. You’ve some of the knowledge and enthusiasm you need and can do some training to get the rest, but you’ve never done this type of work before. Are you allowed to take up the offer?
I would ensure I was open and honest with my client about the level of my experience ensuring I work within the limits of my competence. If I had the knowledge, skills, and resource to be able to take on new areas of work the instruction is something I would consider although I would ensure that I had PII that covered the area of work.
Who does the 5 ROC apply to?
RICS regulated firms and members
Could you give me an example where you have demonstrated two Rules of Conduct at work
Acting in accordance with Rule 1 and 2 I always act within my area of expertise and ensure I honestly inform my client where I do not have the necessary skills to carry out an instruction.
You are advising on development matters for your client. Your client is on a tight budget and they suggest cutting corners and not installing the latest solar panels, you disagree. What do you do?
Acting in the client’s best interest is essential to good client care, however I would refer to the ethics decision tree, consider the ROC, look to establish the facts and consider if it is legal or in breach of planning permission. If unsure I would consult a specialist planning consultant.
If I still disagreed and would not be content if my actions were made public I would put forward my suggestions of reducing costs.
If the client was insistent I would refer to the RICS regulation confidential helpline.
Imagine you set up on your own, how would you know what level of Public Liability Insurance you need?
I would refer to the Risk, liability and insurance Practice Statement (October 23) which sets out risks and best practices associated with RICS professionals in the working environment.
I would use liability caps to manage risk associated with professional work.
I would seek specialist advice.
My firm’s public liability is capped at £100m
What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?
- The scope of the work
- The basis on which the fee will be calculated
- The liability cap
When making ethical decisions what do you need to do?
Consider the facts
Identify the relevant RICS standard
Use professional judgement
Can you give us an example of an RICS standard? How does this differ from a Guidance Note?
International Standards (Mandatory)
Professional Statements (Mandatory)
Practice Statements (Mandatory)
Guidance Notes (best practice)
Codes of Practice (mandatory or recommended)
Could you explain to use what a firm must do in terms of complaints handling?
Details set out in RICS guidance Note on Complaints Handling 2016.
Requirement to have a published CHP that meets the RICS ROC. If a complaint is raised PII insurers should be notified.
A complaints log must be maintained, and Firms must include an ADR method (Alternative Dispute Resolution) mechanism. Standard minimum procedures are set out below;
- Stage One:
> Details of CHP should be issued when the firm receives a complaint from a valid complainant to who the firm owes a duty of care
> Procedure must be quick, clear, transparent and impartially implemented.
> Details of nominated person will investigate (The Complaints Handling Officer) must be stated as the person to be contacted.
> The complaint must be made in writing
> Procedures and timescales should be recorded
> A complaint should be acknowledged within 7 days and investigated within 28 days. - ADR:
> If the complaint is not happy with the review the complaint will be issued to the ADR. Such as the Centre for Effective Dispute Resolution or the RICS Dispute Resolution Service.
You note you are aware of Conflicts of Interest. Are you aware of any guidance notes or professional statements?
RICS Global Professional Standard on COI states members must not advise or represent a client, where doing so would involve a conflict of interest, other than informed consent has been provided. CPE is an example of ‘Party Conflict’ other examples include ‘Own Interest Conflict or Confidential Information Conflict’
Informed Consent - entire transparency about any material factors, confirmed in writing
All conflicts must be managed in accordance with the Professional Standard, Must have effective systems and controls (information barrier, record keeping, etc.)
How is conflict of interest different from conflict avoidance?
Examples of COI include financial, personal, commercial, acting on both sides. Conflict avoidance is when you do not accept. Conflict management is when it is accepted, and steps are agreed and put in place to manage the conflict such as an information barrier and written agreement of all parties.
How do you manage the conflict of interest in your case study and how do you balance client objectives?
Where a conflict does arise I undertake a three step process.
- Conflict Avoidance - upon receipt of the full facts I consider whether the conflict could be properly managed maintaining transparency and openness.
- Written Advice - I would disclose the nature of the conflict clearly stating any relevant facts and requesting written confirmation of their informed consent.
- Conflict Management - where there is confidential information I would set up an information barrier.
Ensuring I act in a client’s best interest and in accordance with the ROC, I would seek to gain an understanding of objectives from the outset acting with honesty and transparency throughout. I ensure a clear audit trail is kept in place.
If you were the government, what would you do to tackle the housing crisis?
Target of over 300,000 homes a year
Supply side (real issue)
> Restriction on land (Green Belt, height restrictions, conservation areas etc.)
> Simplify the planning systems
> Pro development policies incentivising local communities to accept more housing
Demand side policies (not sustainable)
> Help to Buy
> SDLT Relief
> Inflationary pressure etc.
Can you explain the principles of Building Safety Act?
Can you explain the principles of the Social Value Act 2012 (Public Services Act)
Requires all public sector organisations and their suppliers to look beyond the financial cost of a contract to consider how the services they commission and procure can improve the economic, social and environmental wellbeing of an area.
Who in the industry do you most admire?
Mike Woolliscroft (Group Business Improvement Director) / Greg Fitzgerald pioneers in developing partnerships between local authorities, investors and developers.
What has been your most enjoyable CPD event?
I enjoyed the seminar introducing timber frame construction and the benefits that has on operational efficiency, financial performance and sustainable delivery.
How do you intend to continue your professional development?
RICS Matics, CPD events organised by my firm or prepared by trusted consultants.
Why is it important to act within you area of expertise?
Reputation and Acting in accordance with ROC owing good quality and diligent service and competence. A duty of care is also owed.
When a duty of care is breached and a there is a loss, a claim for damages arises. A duty of care exists to clients and third parties, using a ‘reasonable care and skill’ (Yianni v Edwin Evans)
Limitation Act 1980 – Contract 6yrs from the date of negligent act, Tort 6 from the date the claimant suffered the loss
Avoidance of negligence – clearly understand the client’s objectives (toe), ensure competence in accordance with professional standards and practice statement, detailed record keeping, keep up to date with market knowledge and cap liability on your PII policy.
How would you calculate fees?
CMF Fees 2% of total construction costs
PMF Fees 1% of Total GDV
Accounting and administration £200k per annum
Sales and marketing Fee 1% of Private income
What level of PII does the Clapham Park LLP hold and what is covered? If you worked for an RICS registered form what is the minimum PII required based on turnover?
£10m PII cover £5m cover from each member covering subsidiary companies namely the Clapham Park (Metropolitan Countryside) LLP.
What is your companies complaints handling procedure?
All complaints will be acknowledged within 4 days, in 10 days of receipt advising on next steps, within 28 days a complaint assessment and full response will be provided. If unsatisfied the complainer will inform within 5 days, so it is escalated. Within 14 days of escalation a response will be given, escalating again within 10 days. If unresolved follow warranty provider complaints handling procedure.
How is the RICS governed?
Governed under royal charter which requires the RICS to act in the public interest and by internal councils and boards.
Governing Council responsible for approving RICS strategy and vision, overseeing the effective delivery of strategy, standards, and regulation (RICS President and chair of governing council – Tina Paillet).
Standard and Regulation Board report to Governing Council (RICS Board – Justin Young CEO, Martin Samworth Chair).
17 professional groups covering a broad spectrum of surveying services.
What are the different levels of membership and how are they achieved?
4 levels of membership; FRICS, MRICS, AssocRICS, Trainee
FRICS – To become a fellow, need four characteristics
- +5 yrs at MRICS,
- in a leadership role,
- professional/technical/academic achievement,
- Raising profile of RICS.
A portfolio of professional achievement to support the application is required
When was the RICS founded
1868
RICS Motto
There is measure in all things
What is the role of the Governing Council? & How has it changed post the Bichard Review?
Governing Council is the highest governing body, setting RICS strategy and vision, ensuring RICS fulfils its Royal Charter obligations.
Following the Bichard RICS Review, Governing Council has agreed a series of measures to create a clear and accountable governance structure.
Governing Council has confirmed that the RICS President will also chair Governing Council, in line with Lord Bichard’s recommendation.
What are the key recommendations from the Bichard Review?
For increased focus on the public interest remit of RICS, including creating a public interest panel to advise the Governing Council.
Increased focus on diversity & inclusion across the profession.
Increased member engagement with renewed focus on young members.
What is the role of the Standards and Regulatory Board?
They oversee RICS professional standards and admission to the profession.
What is the role of the Management Board?
To provide day-to-day performance updates
under delegated authority from Governing Council.
Who is currently in RICS governing positions as CEO and President
CEO - Justin Young
President - Tina Paillet (also chairs Governing Council)
How do RICS standards ensure consumer protection?
By requiring members to have undertaken the APC, they can ensure high standard of ethics required.
Also by regularly updating leading international standards.
What do you mean in your submission when you say you should consider the Rules of Conduct for Members?
The rules set out the standards of professional conduct and practice expected for all members, they are mandatory, so members should consider them in all private and personal life.
Which do you consider to be the most important?
ROC 1 - acting with honesty and integrity
What do you understand by the International Ethical Standards?
Work the RICS is undertaking to promote consistency and clarity across different marketplaces
Example of when you have acted with integrity?
- Always reporting true information to my client
Example of when you have promoted honesty in the profession?
- Don’t mislead others by actions or omissions
- Don’t allow myself to be influenced improperly
- Identify actual and potential conflicts of interest
- Act to prevent others being misled
- Don’t take unfair advantage of others
- Protect confidential information
- Don’t facilitate any financial crime including money laundering, tax evasion, bribery etc.
How do you promote trust in the profession in your private life?
I hold and conduct myself in a way which does not bring embarrassment to the RICS.
In line with the RICS use of Social Media Guidance for members 2021, I make sure my actions online promote trust in the profession and to treat others with respect
Example of when you have treated others with respect?
- Always be respectful to others and listen to people ideas and opinions
Example of when you have provided a good-quality service?
- Understand client needs and objectives and agree with clients the scope of works, limitations, and timescales
- Undertake work in a timely manner.
- Keep proper records in detail to allow for their work to be audited for QA or regulatory purposes
- Encourage solutions that are sustainable and minimise harm whilst delivering benefits
- Understand risks and benefits of using relevant technology
- Check all data is accurate and up-to date, kept securely and have proper rights to use
Example of when you have taken responsibility?
- Keep the public informed about site activities that could disrupt them
Why have the Rules of Conduct been updated?
STREAMLINED DOCUMENT. Replaced the previous Rules of Conduct for Members and Firms and the 5 Global Professional and Ethical Standards.
Updated to address challenges relating to sustainability, the use of data (understanding technological advances), and diversity and inclusion.
What are Countryside’s Values
Care, Integrity and Quality
The Levitt Review - when was it, what was it and what did she find?
RICS’ current governance arrangements are under review following The Levitt Review’s (2021) of very public exposure of the lack of clarity, structure and purpose of RICS governance arrangements.
Levitt called for a full independent review of the “purpose, governance and strategy” of RICS = RICS commissioned Lord Michael Bichard to review.
What is your opinion on the outcome of the Alison Levitt QC enquiry?
I am aware of the very public nature of the events which showed a lack of governance and transparency.
As members, we adhere to strict ethical standards, which the RICS didn’t do in this instance.
However, I am happy that action has been made and that the Governing Council has accepted all the recommendations.
What are the benefits of a firm being regulated? (3)
Confidence - for clients as regulated firms are monitored by RICS.
Professionalism - firms must provide clear, impartial, expert advice.
Security - firms must have a recognised CHP and PII cover.
RICS ‘Rules for Registration of Firms’ (2022) - What are the requirements for firms regulation registration?
Registering for regulation is to ensure a quality benchmark for all firms.
- if no RICS members = cannot register.
- 25% of principles are RICS members = it can apply to be regulated.
- 50% of principles are RICS members = has to be regulated.
Each firm also has to nominate a ‘Responsible Principal’ to ensure all systems are in place to comply with RICS requirements.
Who are company/ responsible principles and what do they do?
Someone who can act without supervision e.g. Board members
They ensure all compliance with regulation and report to the RICS.
Who can use the RICS logo?
RICS members and registered firms
