Ethics, Rules of Conduct and Professionalism (L3)

Question 1

What is the role/central purpose of the RICS?

Answer 1

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.

Question 2

What Major Challenges are currently facing the RICS and are there any recent initiatives you are aware of?

Answer 2

Following the Bichard review in 2022 one of the major challenges facing the RICS is implementing the recommendations in the 7 key areas of;

1. Increased focus on public interest (public interest panel)
2. Maintaining self-regulation
3. Increased focus of diversity and inclusion
4. Undertaking review of Governance once every five years
5. Simplified governance structure
6. 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

Question 3

What is COP28 and what it the Buildings Breakthrough initiative.

Answer 3

“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.

Question 4

Why do you want to be a chartered surveyor

Answer 4

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.

Question 5

Why were the new Rules of Conduct launched in October 2021 (Feb 22)

Answer 5

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.

Question 6

What are the five rules of conduct that members and firms must adhere to?

Answer 6

1. Be Honest, Act with Integrity and comply with personal obligations and obligations to RICS
2. Maintain professional competency and ensure that services are provided by competent individuals who have the necessary expertise
3. Provide a good quality and diligent service
4. Treat others with respect and encourage diversity and inclusion
5. Act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in their profession.

Question 7

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?

Answer 7

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.

Question 8

How would you close a client practice?

Answer 8

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)

Question 9

Can anyone set up an RICS Firm

Answer 9

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.

Question 10

Do you understand the RICS approach to regulating members and firms? and what happens if there is a breach of rules or obligations.

Answer 10

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.

Question 11

Can you talk me through the disciplinary process / any procedures you are off?

Answer 11

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.

Question 12

What does the Royal Charter do?

Answer 12

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.

Question 13

What are the professional obligations to the RICS members and firms set out in appendix A of the ROC?

Answer 13

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

Question 14

What are the CPD requirements

Answer 14

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)

Question 15

What is the RICS Ethics Decision Tree?

Answer 15

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?

Question 16

What are the types of documents that promote best practice throughout the RICS and why is there a change procedure ongoing?

Answer 16

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

Question 17

What is the role of Professional Groups?

Answer 17

The purpose of the Professional Group Panels is to maintain and develop the knowledge and practice of surveying for the public advantage through:

1. RICS influence in the sector through research and thought leadership.
2. Contribution to the RICS strategy on sustainability by providing market feedback, input, and ideas to plans.
3. Development of relevant technical standards, guidance and best practice for Members and Firms.
4. Defining future skills and delivery of knowledge and CPD outputs for the sector.
5. Contribution to the competences required for relevant APC pathways and inspiring the next generation.

Question 18

Can you give an example of bodies within the RICS?

Answer 18

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.

Question 19

How would you appropriately handle client money? Why is client money handling important for RICS members? Is there a RICS statement for Client Money?

Answer 19

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

1. Holding client money
2. Providing information to clients
3. Receipts of Client Money
4. Payment from Client Accounts
5. Accounting records and controls
6. Compliance

Some examples of procedures include client accounts must be kept separately. A client must be able to have their monies on demand etc.

Question 20

What are the RICS bye laws

Answer 20

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)

Question 21

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?

Answer 21

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.

Question 22

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?

Answer 22

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.

Question 23

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?

Answer 23

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.

Question 24

Who does the 5 ROC apply to?

Answer 24

RICS regulated firms and members

Question 25

Could you give me an example where you have demonstrated two Rules of Conduct at work

Answer 25

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.

Question 26

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?

Answer 26

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.

Question 27

Imagine you set up on your own, how would you know what level of Public Liability Insurance you need?

Answer 27

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

Question 28

What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?

Answer 28

* The scope of the work * The basis on which the fee will be calculated * The liability cap

Question 29

When making ethical decisions what do you need to do?

Answer 29

Consider the facts Identify the relevant RICS standard Use professional judgement

Question 30

Can you give us an example of an RICS standard? How does this differ from a Guidance Note?

Answer 30

International Standards (Mandatory) Professional Statements (Mandatory) Practice Statements (Mandatory) Guidance Notes (best practice) Codes of Practice (mandatory or recommended)

Question 31

Could you explain to use what a firm must do in terms of complaints handling?

Answer 31

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; 1. 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. 2. 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.

Question 32

You note you are aware of Conflicts of Interest. Are you aware of any guidance notes or professional statements?

Answer 32

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.)

Question 33

How is conflict of interest different from conflict avoidance?

Answer 33

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.

Question 34

How do you manage the conflict of interest in your case study and how do you balance client objectives?

Answer 34

Where a conflict does arise I undertake a three step process. 1. Conflict Avoidance - upon receipt of the full facts I consider whether the conflict could be properly managed maintaining transparency and openness. 2. Written Advice - I would disclose the nature of the conflict clearly stating any relevant facts and requesting written confirmation of their informed consent. 3. 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.

Question 35

If you were the government, what would you do to tackle the housing crisis?

Answer 35

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.

Question 36

Can you explain the principles of Building Safety Act?

Question 37

Can you explain the principles of the Social Value Act 2012 (Public Services Act)

Answer 37

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.

Question 38

Who in the industry do you most admire?

Answer 38

Mike Woolliscroft (Group Business Improvement Director) / Greg Fitzgerald pioneers in developing partnerships between local authorities, investors and developers.

Question 39

What has been your most enjoyable CPD event?

Answer 39

I enjoyed the seminar introducing timber frame construction and the benefits that has on operational efficiency, financial performance and sustainable delivery.

Question 40

How do you intend to continue your professional development?

Answer 40

RICS Matics, CPD events organised by my firm or prepared by trusted consultants.

Question 41

Why is it important to act within you area of expertise?

Answer 41

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.

Question 42

How would you calculate fees?

Answer 42

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

Question 43

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?

Answer 43

£10m PII cover £5m cover from each member covering subsidiary companies namely the Clapham Park (Metropolitan Countryside) LLP.

Question 44

What is your companies complaints handling procedure?

Answer 44

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.

Question 45

How is the RICS governed?

Answer 45

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.

Question 46

What are the different levels of membership and how are they achieved?

Answer 46

4 levels of membership; FRICS, MRICS, AssocRICS, Trainee FRICS – To become a fellow, need four characteristics 1. +5 yrs at MRICS, 2. in a leadership role, 3. professional/technical/academic achievement, 4. Raising profile of RICS. A portfolio of professional achievement to support the application is required

Question 47

When was the RICS founded

Answer 47

1868

Question 48

RICS Motto

Answer 48

There is measure in all things

Question 49

What is the role of the Governing Council? & How has it changed post the Bichard Review?

Answer 49

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.

Question 50

What are the key recommendations from the Bichard Review?

Answer 50

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.

Question 51

What is the role of the Standards and Regulatory Board?

Answer 51

They oversee RICS professional standards and admission to the profession.

Question 52

What is the role of the Management Board?

Answer 52

To provide day-to-day performance updates under delegated authority from Governing Council.

Question 53

Who is currently in RICS governing positions as CEO and President

Answer 53

CEO - Justin Young President - Tina Paillet (also chairs Governing Council)

Question 54

How do RICS standards ensure consumer protection?

Answer 54

By requiring members to have undertaken the APC, they can ensure high standard of ethics required. Also by regularly updating leading international standards.

Question 55

What do you mean in your submission when you say you should consider the Rules of Conduct for Members?

Answer 55

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.

Question 56

Which do you consider to be the most important?

Answer 56

ROC 1 - acting with honesty and integrity

Question 57

What do you understand by the International Ethical Standards?

Answer 57

Work the RICS is undertaking to promote consistency and clarity across different marketplaces

Question 58

Example of when you have acted with integrity?

Answer 58

1. Always reporting true information to my client

Question 59

Example of when you have promoted honesty in the profession?

Answer 59

* 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.

Question 60

How do you promote trust in the profession in your private life?

Answer 60

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

Question 61

Example of when you have treated others with respect?

Answer 61

4. Always be respectful to others and listen to people ideas and opinions

Question 62

Example of when you have provided a good-quality service?

Answer 62

* 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

Question 63

Example of when you have taken responsibility?

Answer 63

5. Keep the public informed about site activities that could disrupt them

Question 64

Why have the Rules of Conduct been updated?

Answer 64

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.

Question 65

What are Countryside's Values

Answer 65

Care, Integrity and Quality

Question 66

The Levitt Review - when was it, what was it and what did she find?

Answer 66

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.

Question 67

What is your opinion on the outcome of the Alison Levitt QC enquiry?

Answer 67

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.

Question 68

What are the benefits of a firm being regulated? (3)

Answer 68

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.

Question 69

RICS ‘Rules for Registration of Firms’ (2022) - What are the requirements for firms regulation registration?

Answer 69

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.

Question 70

Who are company/ responsible principles and what do they do?

Answer 70

Someone who can act without supervision e.g. Board members They ensure all compliance with regulation and report to the RICS.

Question 71

Who can use the RICS logo?

Answer 71

RICS members and registered firms

Question 72

Who controls disputes about becoming a registered firm?

Answer 72

Standards and Regulation Board

Question 73

What information is required by the RICS for registration/ within an annual return?

Answer 73

Need to include the following in an annual return: Type of business and staffing details Name of responsible principle Statutory regulated services Nature of clients CHP details and records PII details Whether the firm handle’s client’s money

Question 74

What are the mandatory professional obligations of RICS regulated firms?

Answer 74

Publish CHP and maintain a complaints log Ensure all work is covered by adequate PII cover If a sole principal = make appropriate arrangements for professional work to continue in the event of their inability to work. Cooperate with RICS Display ‘regulated by RICS’ on business literature

Question 75

How do you demonstrate implementation of the Rules of Conduct?

Answer 75

I comply with the CPD requirements. I provide a high level of service.

Question 76

What are the mandatory professional obligations of RICS members?

Answer 76

Comply with RICS CPD requirements Cooperate with RICS Promptly provide all info reasonably requested by the Standards and Regulation Board

Question 77

What is the RICS Ethical Decision Tree and tell us three aspects?

Answer 77

The decision tree provides a framework of questions that members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner. Is it legal? Is it in line with the RICS ethical standards? Happy for it to be made public?

Question 78

How can Disciplinary procedures be triggered for not following the Rules of Conduct?

Answer 78

Someone complaining to RICS Allegation by a client Or from information established by RICS

Question 79

What are the three levels of disciplinary action?

Answer 79

Action by Head of Regulation Disciplinary Panel (where the head has referred a matter) Appeal Panel

Question 80

What are the most common RICS breaches?

Answer 80

Professional behaviour, CPD and Protecting Clients Money.

Question 81

What four actions can the Head of Regulation initiate following their investigations?

Answer 81

Fixed penalty notice Regulatory Compliance Order Refer matter to a member of the Regulatory Tribunal for consideration Refer to Disciplinary Panel

Question 82

What are fixed penalties (1)?

Answer 82

Fine or caution for breaches of the Rules

Question 83

What are Regulatory Compliance Orders and what are they used for?

Answer 83

Used for low-level breaches of the RICS Rules. A Compliance Order is a written document that states what a member or firm must stop doing.

Question 84

When is action by the Disciplinary Panel/ Regulatory Tribunal taken? + what are some of the penalties?

Answer 84

On more serious breaches of conduct. > Regulatory Compliance Order > Unlimited fine per breach > Conditions on future RICS registration > Expulsion > Publication of results in Modus/website/newspaper

Question 85

What is the role of the regulatory tribunal?

Answer 85

Used for less serious breachs, can be just one member. Regulates the RICS Independent/ fair judicial body Consists of lay members and RICS members

Question 86

Who comprises the Regulatory Tribunal/ Appeal Panel?

Answer 86

Lay people (not RICS members)

Question 87

What does the Appeal Panel do?

Answer 87

Will hear a firm or member’s appeal. They can allow the appeal and vary the penalty imposed.

Question 88

Examples of International Standards?

Answer 88

RICS Valuation - Global Standards (2021)

Question 89

Examples of Professional Statements?

Answer 89

Conflicts of Interest, Global (2017) Property measurement 2018 (incorporating IPMS)

Question 90

Examples of Practice Statements?

Answer 90

Surveyors acting as Expert Witnesses 2014

Question 91

Examples of Guidance Notes?

Answer 91

Surveying Safely (2018) Comparable Evidence in Real Estate Valuation (2019)

Question 92

Examples of Codes of Practice?

Answer 92

Code of Measuring Practice (2015)

Question 93

What would you need to do if you were starting a new practice from RICS point of view?

Answer 93

1. Inform RICS by completing a Firm Details Form 2. Appoint Responsible Principle for RICS communication 3. Register for regulation 4. Arrange PII and send details to RICS 5. Set up how you will handle client’s money 6. Register for the RICS Valuer Registration System 7. Seek RICS approval for CHP 8. Set up a complaints log 9. Appoint Complaints Handling Officer

Question 94

What info are firms required to send the RICS annually?

Answer 94

Type of business and staffing Nature of clients Training procedures CHP details PI insurance details Whether firm holds Client Money

Question 95

What RICS compliance do you need to follow to close a practice?

Answer 95

Inform RICS Inform Clients Return any money held Inform PI insurers Get PII run-off cover for a minimum of 6 years with minimum of £1,000,000 aggregate cover Retain files for a minimum of 6 years

Question 96

Why is it important for RICS members to undertake CPD? and what are the RICS CPD requirements? Where would this be recorded?

Answer 96

RICS Obligation for members - But means we can continue to offer the best service possible to clients by being up to date and in the know on latest guidance and information. 20 hours minimum. 50% formal. Ethics CPD every 3 years RICS CPD Management System

Question 97

Where would you go and what do you need to provide to source PII?

Answer 97

To an insurance broker with the relevant details such as: - Name and address - Length of business trading - Whether the business is ltd, PLC or sole trader - and estimated turnover in the past year

Question 98

What is the difference between informal and formal CPD?

Answer 98

Self-managed learning Vs. Structured learning with clear learning objectives i.e. training courses, seminars, courses

Question 99

Who is the RICS ultimately accountable to?

Answer 99

The Public

Question 100

What are some of the RICS considerations for fee negotiations for consultants?

Answer 100

Firms need to avoid price fixing, aggressive fee cutting or collusion with competitors. Healthy competition is encouraged. Consultants can enter further fee negotiations once the initial fee has been submitted, as long as they act professionally. Not to undercut other firms. To be transparent e.g. informing the client if they are in receipt of a referral fee.

Question 101

What would you do if a client suggested you reduced your fee by £3,000 to get an instruction?

Answer 101

Refer to the RICS Ethical Decision Tree… - I would ask whether the scope of work had changed, as I would want to understand if this could be a reason for the revision e.g. timescales to complete have increased. - If not this would be undercutting my competitors, not be treating other surveyors with respect and not acting with integrity. - Therefore no as unfair competition.

Question 102

What would a consultancy need to assess in order to set a fee for a client?

Answer 102

Assess: 1. resource required to undertake the project 2. time needed to complete 3. value of property 4. level of PII required

Question 103

What must you do prior to starting an instruction?

Answer 103

CIT Check COMPETENCE Confirm no conflicts of INTEREST Confirm TERMS of Engagement in writing

Question 104

What do you understand by a Conflict of Interest? + example of one?

Answer 104

When an someone in a position of trust has a competing professional/ personal interest meaning they cannot fulfil their duties IMPARTIALLY. Chartered Surveyor must make clients aware of this. e.g. Party Conflict = on a scheme I was working on in Andover, the planning consultant undertook a COI check prior to instruction as they had worked for another developer in the locality.

Question 105

Difference between conflict avoidance and conflict management?

Answer 105

Conflict avoidance = not accepting an instruction Conflict management = instruction is accepted and steps are agreed to manage the conflict

Question 106

When were the RICS COI produced and why are there two? What are the key things they state?

Answer 106

RICS Global PROFESSIONAL STATEMENT on COI, 2017 = sets out high level principles for identification and management of conflicts. RICS PROFESSIONAL STATEMENT: COI - UK commercial property market investment agency, 2017 = main function is to deal with dual agency.

Question 107

What is informed consent?

Answer 107

Can be given in writing if both clients are fully aware about the material facts of the COI meaning your firm can act with no COI.

Question 108

Name the different types of COI?

Answer 108

‘Party Conflict’ - when you owe a duty to two different parties/ clients when working on the same instruction. ‘Personal Interest Conflict’ - when acting for a family member or someone you have a personal interest with. ‘Confidential info Conflict’ - work between two parties that is confidential.

Question 109

What is Dual Agency (double dipping) in relation to COI and what RICS Core Material did it originate from?

Answer 109

When an agent has a relationship with both the seller & buyer at the same time. MUST NOT HAPPEN! RICS Professional Statement = Conflicts of Interest - UK Commercial Property Market Investment Agency 2017.

Question 110

What is meant by multiple introductions?

Answer 110

This is when an agent acts for several buyers. Within the TOE, it must be agreed where the agent makes it clear if they are acting exclusively (can only advise one buyer) or on a non-exclusive basis (must obtain informed consent from the clients).

Question 111

Example of incremental advice? + when is this allowed to be provided?

Answer 111

Savills market land and I approach them for planning/ sales advice. This can only be provided if there’s transparency and they have consent from the seller.

Question 112

What would you do prior to acting for a client for agency purposes?

Answer 112

Assess competence No COIs or personal interest Issue ToE Get signed ToE Conduct AML checks

Question 113

Reasons why you might decline an instruction?

Answer 113

it is acceptable to decline an instruction if you are not competent, you don’t have the facts, the proposed client will not sign or complete AML checks, COI, PII liability cap cannot be agreed, po bono basis and PII will not cover it, included in the UK gov sanctions list, actions made public.

Question 114

What does the Consumer Rights Act 2015 allow?

Answer 114

A 14-day cooling-off period upon the signing of Agency Instruction Agreements.

Question 115

What is a cooling-off period?

Answer 115

Period of time following a purchase when the purchaser may choose to cancel a purchase, and return goods which have been supplied

Question 116

What should you do if you receive confidential information in error

Answer 116

Information cannot be used. Need to advise the client and sender of the error. Delete securely.

Question 117

When may a surveyor be negligent and how could this be avoided?

Answer 117

Duty of care exists for clients and third parties. If it is breached and there is a loss, they can claim damages. understanding the client’s instruction - accurate & signed terms of engagement competence make sure dont have excessive work load undertake work in accordance with RICS Standards & Guidance Notes make detailed notes of meetings and take photographs

Question 118

Why are Terms of Engagement important? and what should be included?

Answer 118

Confirm a clients agreement to the proposed fee basis, so avoid any misunderstanding. Confirms payment of expenses, copy of a firms CHP. Must state in writing: - clients agreement to the proposed fee basis - payment of expenses (and how calculated) - a copy of the firm’s complaints handling procedure, is available upon request.

Question 119

How would you deal with a complaint from someone to whom you owe a duty of care?

Answer 119

Stage 1 - IN HOUSE. The CHO should be identified and noted as the person to contact in the first instance. Complaint must be made in writing. Should be acknowledged within 7 days and investigated with 28. Stage 2 - THIRD PARTY RESOLUTION. If the client is not happy with the review, the second option involves an independent redress scheme. Alternative Dispute Resolution (ADR) mechanism which is identified within the CHP outlined within the Terms of Business.

Question 120

What does the RICS Complaints Handling Guidance Note say about CHP? What are the RICS minimum timing procedures for CHP?

Answer 120

RICS Guidance Note on Complaints Handling 2016. A firm’s written CHP must be approved by the RICS. Notify PII insurers as soon as possible if a complaint arises. Details of CHP issued same time as ToE. Complaints log must be maintained showing details, status and outcomes of a complaint. CHP must include an RICS-approved Alternative Dispute Resolution. Complaints Handling Officer should be notified Acknowledge a written complaint within 7 days Investigate within 28 days

Question 121

If you are a sole practitioner who can you use as your complaints handling officer?

Answer 121

A surveyor from another firm.

Question 122

What is professional indemnity insurance for? What is the core RICS material? Requirement for all policies?

Answer 122

Insurance to protect clients, surveyors and third parties against negligence claims for damages after a Duty of Care is breached. RICS “Professional Indemnity Insurance Requirements” effective from April 2022. All policies need to be underwritten by an RICS approved insurer.

Question 123

What are the minimum PII level requirements?

Answer 123

In-line with the RICS “Professional Indemnity Insurance Requirements” April 2022 they are based on firm preceding years turnover as follows: Less than £100k = £250k min £100,001 to £200k = £500k min >£200,001 = £1,000,000

Question 124

How would you set your PII cover for your first year of trading?

Answer 124

*if new business estimate turnover and adjust accordingly*

Question 125

What does the RICS require in regards to PI?

Answer 125

Must be made on an each and every claim basis; Sets out the minimum levels of indemnity required; Sets out maximum levels of uninsured excess; Sets out run-off cover requirements

Question 126

What are the maximum levels of uninsured excess required by the RICS?

Answer 126

Limit of indemnity / Maximum uninsured excess is: If turnover up to £10 million then = greater of 2.5% of the sum insured or £10,000 If over £10 million then no set limit.

Question 127

In relation to PII, what does retroactive mean?

Answer 127

The policy covers claims that are made within the insurance period, regardless of when the negligent act occurred.

Question 128

At what point should your firm notify insurers once a complaint has been received?

Answer 128

Immediately when the complaint has been received. Make sure transparent and that there could be a claim being made

Question 129

What are the RICS rules regarding PII?

Answer 129

Mandatory requirement - Rules of Conduct for Firms Need RICS approved insurer (list on website) Need adequate and appropriate level for each instruction.

Question 130

What is run-off cover? Different levels and length required?

Answer 130

Cover required following cessation of trading. It is split for consumer & commercial claims. For consumer claims = min £1,000,000 of aggregate cover for min of 6 years. For commercial claims = firm must consider what is adequate for min 6 years.

Question 131

What if the loss exceeds the cover provided by the PII?

Answer 131

The firm is liable for the difference and would need to cover this using the assets they own.

Question 132

Why do firms have PII? How long should work be saved on file?

Answer 132

One of the Rules of Conduct. Protects against negligent behaviour. Protects clients, the firm and me. Minimum 6 years, then destroyed securely. PII claims can be made up to 15 years after work was undertaken.

Question 133

What does ‘pro-bono’ mean? And what would a consultant need to ensure prior to providing pro-bono advice?

Answer 133

Unpaid work. Sufficient PI cover is needed for this.

Question 134

Can you accept cash?

Answer 134

FIRSTLY MAKE SURE TO REGISTER IT/ REPORT IT TO LINE MANAGER THEN CONSIDER THE RICS ETHICAL DECISION TREE - INEVITABLE POINT IS HOW WOULD IT LOOK IF IT WAS MADE PUBLIC NEED TO CONSIDER IF IT COULD IT BE CONSIDERED A BRIBE?

Question 135

How would you want a client to pay for your work and why?

Answer 135

Ensure payment are paid by bank transfer, allowing for a record to be kept.

Question 136

Name two key legislation that relate to gifts, bribery and corruption?

Answer 136

Bribery Act 2010 Proceeds of Crime Act 2002 RICS Professional Standard - Countering Bribery, corruption, money laundering and terrorist financing (2019)

Question 137

What is a bribe?

Answer 137

The giving or receiving of an advantage such as payment for an action - which is illegal.

Question 138

You mentioned the Bribery Act 2010, what are the main principles of bribery prevention within the Act? What are the offences under the Bribery Act 2010?

Answer 138

1. Proportional procedures when compared to the bribery risk to the organisation. 2. Top level of management commitment is required. 3. Risk assessment - organisation must assess the nature and extent of its exposure within a risk assessment. 4. Due diligence - of third parties to mitigate risk. 5. Communication - training procedures to imbed bribery prevention. 6. Monitoring and review - constantly improve procedures where necessary. OFFENCES Include: Bribing Receiving a bribe Bribing a foreign public official Failure to prevent bribery

Question 139

Who polices the the Bribery Act 2010 and what are the penalties?

Answer 139

Policed by the Serious Fraud Office. Maximum 10 years in prison and /or unlimited fine

Question 140

What would you do if rejecting the gift would offend the client?

Answer 140

Would report it to my Head of Department and compliance team. The Head of Department would either donate the item to charity or distribute or raffle the item among a large group of employees.

Question 141

Are businesses responsible for employees corrupt acts?

Answer 141

Yes unless they can show they had adequate bribery prevention policies and procedures in place to mitigate.

Question 142

What can companies do to prevent bribing?

Answer 142

Identify potential risks, staff training & regular reviews.

Question 143

How can hospitality not be constituted as a bribery offence?

Answer 143

If it seeks to genuinely promotes the image of the firm and is REGISTERED in accordance with a firms anti-bribery procedures.

Question 144

What is your company’s policy on gifts?

Answer 144

Below £100 do not need to be declared and may be accepted at your discretion £100 or more must be declared on the gift register and approved by regional MD.

Question 145

What is money laundering?

Answer 145

Proceeds of criminal activities are disguised/ converted and then realised as legitimate assets.

Question 146

What is the key national legislation for money laundering? What professional practice does this mainly cover?

Answer 146

Money Laundering, Terrorist Financing, and Transfer of Funds Regulations (2019) It covers estate agency.

Question 147

What are some of the key components of the National Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2019)?

Answer 147

1. Introduced the requirement to have a written money laundering and terrorist financing RISK ASSESSMENT. 2. Comply with customer and enhanced due diligence checks 3. Provide staff training 4. AML checks must be undertaken to confirm the identity of a purchaser and check source of funds 5. Ensure appropriate record keeping procedures

Question 148

What are the two money laundering due diligence checks?

Answer 148

Customer due diligence Enhanced due diligence

Question 149

What does a customer due diligence check involve?

Answer 149

Verification of a clients identity Identify the clients beneficial owners Company name, company number, registered office address Names of directors Info on their proposed funding arrangements

Question 150

What is enhanced due diligence and when is it required?

Answer 150

Further financial and personal research on an individual. If the person is a PEP (politically exposed person) If there are Red Flags

Question 151

What is a Politically Exposed Person?

Answer 151

Someone who has been entrusted with a prominent public function. Has a higher risk of potential involvement in bribery and corruption by virtue of their position.

Question 152

What would class as a ‘red flag’ in regards to due diligence?

Answer 152

> Unwillingness to provide documents > Unusual patterns of transaction i.e. undue urgency, potential loss-making > Changing currencies/ unusual currency > Changes to parties involved

Question 153

What are the penalties under the Money Laundering, Terrorist Financing and Transfer of Funds Regulation 2019?

Answer 153

Assisting with ML = MAX 14 YEARS imprisonment and/or unlimited fine Tipping off someone if you know they are under investigation = MAX 5 YEARS imprisonment and/or unlimited fine

Question 154

What are some of the UK Government requirements for firms regarding money laundering?

Answer 154

10,000 euros is the maximum cash payment Must nominate a senior member of staff as the Money Laundering Reporting Officer to report Suspicious Activity Reports to the National Crime Agency Detailed record keeping procedures Keep records for min 5 years

Question 155

What money laundering checks do you need to do for private individuals?

Answer 155

Passport/drivers licence Utility bill from last 3 months

Question 156

What money laundering checks do you need to do for Private Limited companies?

Answer 156

Find their registered number, office and name of Directors.

Question 157

Where would you go for a PLC money laundering check? And what information would you need to note?

Answer 157

London Stock Exchange Listing Certificate of incorporation Full name Registered Office Registered number Business address Name of all shareholders with over 25% stake. (report discrepancies to Companies House)

Question 158

What money laundering checks do you need to do for public bodies?

Answer 158

Government ownership / control

Question 159

How long does AML information need to be held for?

Answer 159

5 years

Question 160

Who polices the Money Laundering and Terrorist Financing and Transfer of Funds Regulations?

Answer 160

National Crime Agency

Question 161

What would you do if you had Money Laundering related concern?

Answer 161

I would first speak to my manager and seek out their advice on the matter. If we both believed there was a sufficient concern then I would notify my firm’s legal secretary - Clare Bates If she was also suspicious, then she would file a Suspicious Activity Report (SAR) and send to the National Crime Agency.

Question 162

What is the Proceeds of Crime Act 2002? What is an offence under the Proceeds of Crime Act 2002?

Answer 162

Provides power for enforcement authorities to recover money and assets deemed to be the proceeds of crime

Question 163

What would you do if you suspect suspicious Money Laundering activity?

Answer 163

Report to a Money Laundering Reporting Officer They would raise a Suspicious Activity Report Send it to the National Crime Agency

Question 164

What is an offence under the Proceeds of Crime Act 2002?

Answer 164

Concealing criminal property: concealing, disguising, converting or transferring criminal property. Arrangements: if a person enters into an arrangement which they suspect facilitates the acquisition, retention or use of criminal property Acquisition, use and possession of a criminal property

Question 165

What is the RICS professional statement for bribery & money laundering + date? and what does it do?

Answer 165

RICS professional statement on countering bribery, corruption, money laundering and terrorist financing 2019. Sets out mandatory, global requirements for RICS members and firms

Question 166

What does the RICS Professional Statement say firms must do in relation to Bribery, Corruption, Money Laundering and Terrorist Financing?

Answer 166

Divided into 3 parts. Part 1 = regulated firms must: - Not offer or accept bribes - Have procedures in place to comply with the law - No ML or TF - Report suspicions Part 2 = Guidance: - Gifts register - Training of staff Part 3 = - Three W’s. Who, why and what. - Deals with PEP’s.

Question 167

Are you allowed to pitch for work over coffee?

Answer 167

No, could be seen as a bribe even though it is small. Should be done in an appropriate workplace setting.

Question 168

When can you allow a third party to access your files?

Answer 168

Only if you get prior approval from the client. OR There is a statutory duty overiding the client’s confidentiality rights, such as a police or HMRC investigation.

Question 169

What would you do if you were offered dinner at a Michelin Restaurant?

Answer 169

I would need to consider if it was ‘reasonable’. If I were invited by a client who I completed a high-value instruction for successfully I might accept. However, if I was invited by a client during an instruction, or for a low-value fee, I wouldn’t. I would also need to gain approval in line with company policy.

Question 170

What would you do if you were offered a gift after an instruction had been completed?

Answer 170

Check company gift policy. Check reasonableness. Accept if reasonable.

Question 171

What would you do if you were offered a gift during an instruction?

Answer 171

Politely decline as the instruction is not yet complete and this could impact my impartiality.

Question 172

How would you deal with friends asking for advice on property matters?

Answer 172

Duty of care is owed even if providing pro-bono advice, so in theory if advice is given without my consideration of all the factors of the case I could be liable for negligence. I would say that to advise on this it would require agreement of terms of engagement in order to establish the scope of instruction and so they understand what can be relied on from the professional advice given. I would also explain whether I consider myself competent enough to advise. If I was I would need to undertake a site visit/ gain a better understanding of the facts. Also whether I had sufficient PII cover.

Question 173

What is the Assigned Risks Pool (ARP)?

Answer 173

Firms that are unable to obtain professional indemnity insurance (PII) in the insurance market

Question 174

What is a phoenix firm?

Answer 174

* Firms which close in a disorderly way and * then rapidly re-establish themselves as a new trading entity.

Question 175

What is a locum and who might need one?

Answer 175

* A locum is effectively another professional who is appointed to 'stand in' for the surveyor if they are unable to work. A sole trader.

Question 176

What do RICS set out as good practice for the use of social media in their Regulation document (June 2021)?

Answer 176

* RICS is more likely to start investigations into social media posts that: o are discriminatory o are dishonest o are abusive or threatening, or likely to cause significant harm, distress or offence to a person o bully, harass or victimise a person or people

Question 177

Explain your understanding of the RICS Levitt review.

Answer 177

* Independent Review by Alison Levitt QC * Investigate articles in the press 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’ * Conclusions: o sound governance principles were not followed by RICS. o Non-Executive Board members’ concerns were legitimate and that they were wrongly dismissed. * Recommendations: o Greater oversight for Governing Council, with the provision of minutes o Any complaint against a member of the senior leadership team to be referred to an independent third party. o Financial bonuses at senior executive level should be reviewed if they are appropriate

Question 178

What does good governance mean to you?

Answer 178

* Professional * Responsive * Transparent * Ethical * Inclusive

Question 179

Explain what the Pandora Papers are and the ethical issues raised within them?

Answer 179

Not illegal but immoral. Confidentiality exposed. Client confidentiality must be maintained for all client affairs, this includes historic information. You must get client approval first if a third party wants access to information subject to statutory duty overriding client confidentiality such as an HMRC or police investigation.