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Ethics, Rules of Conduct and Professionalism Flashcards

1
Q

Why do you want to become a Chartered Surveyor?

A

I would like to become a member of the Royal Institute of Chartered Surveyors because it would provide me with increased credibility in the eyes of my clients, help me maintain and further my professional competency, and provide me with access to a network of 134,000 property professionals worldwide.

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2
Q

When was the RICS Founded?

A

The Royal Institution of Chartered Surveyors was founded in 1868.

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3
Q

What was The Bichard Review and what did it recommend?

A

Reported in 2022, the Bichard review made 7 key recommendations:
(1) Renewed focus on public interest remit of RICS
(2) Maintaining self regulation, greater independence for regulatory functions
(3) Increased focus on diversity
(4) Increased empowerment and enabling of members
(5) Independent review of RICS governance and effectiveness
(6) Simplified and accountable governance structure
(7) Greater leadership on social issues such as sustainability and climate change

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4
Q

Why do you want to become chartered? What are the benefits?

A
  1. Status
  2. Recognition
  3. Market advantage
  4. Knowledge
  5. Network
    I want to be part of a prestigious organisation which allows me to progress in a career I am passionate about.
    It will give me the status and recognition, which will enhance my work with clients by promoting trust in my work.
    It will also allow me to continue to develop my knowledge and network.
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4
Q

In what year did the RICS receive its Royal Charter?

A

They received their royal charter in 1881.

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5
Q

What is the RICS ethical decision tree?

A

Assists me in making informed decisions, confirming my actions are ethical and legal.

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6
Q

What does the privy council do?

A

Grants awards and royal charter

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6
Q

Why are ethics important?

A
  • Prevents issues with consistent behaviour
  • Sets a standard of expertise and professionalism
  • Promotes trust in the company and industry
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7
Q

How do you know you are competent?

A

Having knowledge and skills to undertake an instruction. If you have dealt with that type of property and location and you have carried out that task, you are deemed as competent. This can be defined as:
* Skills
* Knowledge
* Attitude
* Training
* Experience

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8
Q

What is the status of a RICS professional statement? Who does it apply to?

A

Mandatory. RICS trainees, members, regulated firms

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9
Q

What is the Governance Structure of the RICS?

A
  1. Privy council
  2. Governing council
  3. Standards & regulatory board
  4. Management board
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10
Q

What is the role of the governing council?

A

Highest governing body, setting global strategy

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11
Q

What is role of standards and regulatory board?

A

Responsible for exercising standards and regulatory functions

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12
Q

What does RICS stand for?

A

Royal Institution of Chartered Surveyors

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12
Q

What is the RICS mission statement?

A

To be recognised in key worldwide markets as the leading body that sets and enforces standards.

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12
Q

What is role of management board?

A

To direct RICS affairs under delegated authority from governing council

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13
Q

What are the 5 principles of better regulations? What are the ethical principles?

A

PACTT (Proportionality, Accountability, Consistency, Targeting, Transparency)
1. Proportionality
2. Accountability
3. Consistency
4. Targeting
5. Transparency

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13
Q

Name some RICS faculties

A

Quantity Surveying, Building Surveying, Project Management, Valuation

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14
Q

What are the RICS Bye-Laws?

A

They provide the power for Head of Regulation and Regulatory Tribunal 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.
10 Bye-Laws:
- Membership and registration
- Designations
- Contributions to funds
- Conduct
- Governing council, offers and staff
- Procedure for general meetings
- Accounts and audit

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15
Q

How many members does RICS have?

A

140,000 members operating out of 146 countries.

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15
Q

What are the 10 RICS Bye-Laws?

A

10 Bye-Laws:
- Membership and registration
- Designations
- Contributions to funds
- Conduct
- Governing council, offers and staff
- Procedure for general meetings
- Accounts and audit

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16
Q

Who is the senior vice president of RICS?

A

Nicolas Maclean

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16
Q

Who is the president of RICS?

A

Tina Paillet

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16
Q

Who is President, president elect and senior vice president of the RICS?

A

President - Tina Paillet
President Elect – Justin Sullivan
Senior vice – Nicolas Maclean

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17
Q

Who is the president elect of RICS?

A

Justin Sullivan

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18
Q

Who is the acting chief executive of RICS?

A

Justin Young

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19
Q

What is the RICS Motto?

A

Modus Est Rebes - there is measure in all things

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20
Q

What are 4 levels of RICS membership?

A
  1. FRICS
  2. MRICS
  3. AssocRICS
  4. Trainee
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21
Q

What does FRICS stand for?

A

Fellow of the Royal Institution of Chartered Surveyors.

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22
Q

What does MRICS stand for?

A

Member of the Royal Institution of Chartered Surveyors

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23
Q

How do you become a fellow?

A
  1. 5+ years as MRICS
  2. Leadership role
  3. Professional/technical achievement
  4. Raised the profile of the RICS
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24
Q

What are your company’s standards?

A
  • Act respectfully
  • Add value
  • Think creatively
  • Uphold high level of service
  • Act with integrity
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25
Q

What is included in terms of engagement?

A

Sets our proposed fee basis, payment of expenses and that a copy of the firm’s complaints handling procedure is available upon request.

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26
Q

Are guidance notes compulsory to follow?

A

No. however if there was a case of professional negligence, court would consider whether guidance notes were followed

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27
Q

Are practice notes compulsory?

A

Yes.

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28
Q

What is your firm’s gift policy?

A

Log within the gift log, I may decline the gift once taken into account timings and proportionality.

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29
Q

What is CJs maximum value of a gift or hospitality that does not need to be declared?

A

Gifts/ Hospitality to a value of less than £50 do not need to be declared:
* Individual bottles of wine
* Chocolates/cakes
* Flowers/plants
* Lunch/dinner less than £50 per head
* Vouchers with a total value less than £50

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30
Q

What is CJs maximum value of a gift or hospitality that needs to be declared?

A

Gifts/ Hospitality up to a value of £500 need to be declared (must be recorded in the Register as soon as it is received):
* Case of wine or spirits
* Lunch/dinner greater than £50 per head
* Attendance at a sporting event including shooting, racing, tennis etc

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31
Q

What are the CPD rules?

A

Qualified/MRICS member – 20hrs per year, min 10hrs formal
Student member – 48hrs per year, min 24 hrs formal
Submit 31st January
Ethics test every 3 years

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32
Q

When did the RICS Rules of Conduct 2021 come into effect?

A

February 2022

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33
Q

What are the 5 rules of conduct?

A

Integrity, Competence, Service, Respect, Public (ICSRP)

  1. Honest, act with integrity, comply with obligations (e.g., avoid conflicts of interest)
  2. Maintain professional competence (e.g., do not act beyond competence, engage specialists)
  3. Provide good quality service (e.g., use TOE)
  4. Treat others with respect, encourage diversity (e.g., do not discriminate)
  5. Act in public interest, take responsibility (e.g., question any suspect practice, be whistle blower if necessary)
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34
Q

Example of when you have acted with integrity.

A

When bidding for an industrial site in Soham I ensured I undertook sufficient due diligence and read all documents in the data room to provide sound advice to my client

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35
Q

Example of when you have promoted trust in the profession.

A

A client asked me to provide advice about securing a point of connection for EV charging. I informed them that this was not in my area of expertise and referred them to our energy team.

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36
Q

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

A

I hold and conduct myself in a way which does not ring embarrassment to the RICS. I ensure on my social media profiles there is nothing which would show the RICS in bad light.

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37
Q

Example of when you have treated others with respect.

A

A local agent I contacted was not very friendly and was stand-offish about me seeking local expertise. Regardless of what he said to me, I remained calm and polite and treated him with respect, thanking him for his time.

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38
Q

Example of providing high level of service?

A

When undertaking a valuation of a flat in Haringey, I spoke to agents to verify information when collecting comparables, to ensure I provided most accurate opinion of value.

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39
Q

Example of when you have taken responsibility.

A

I always take responsibility for conducting conflict of interest checks on any work I undertake so I can be satisfied I can conduct the work objectively.

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40
Q

What are the 3 obligations for members?

A
  1. CPD – comply with requirements
  2. Cooperate with RICS
  3. Provision – provide all info requested by Standards & Regulation Board
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41
Q

What are the 7 obligations for firms?

A

CPS - CPDR
2. 1. Complaints – must have a procedure
2. PII – all professional work covered by PII
3. Sole principal – make arrangements for work to continue in event of death etc
4. Cooperate with RICS
5. Provision – info requested by Board
6. Designation – display on literature designation to denote they are regulated by RICS
7. Report – report any matter they are required to under Rules for Registration of Firms

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42
Q

What do you know about the new rules of conduct?

A
  • Released in Oct 21, came into effect Feb 22.
  • Replace rules for individuals and firms and rules of conduct
  • Based on behaviours and sustainability
  • A simpler structure
  • Clear examples
  • Focusing on respect, diversity, and inclusion
  • Understanding evolving technology
  • Tackling global challenges
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43
Q

What is the point of the RICS Rules of Conduct for members?

A

It sets out the standards of professional conduct and practice expected of members.

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44
Q

What do the new rules state about the use of the RICS logo and designation?

A
  • Use of logo restricted to members and regulated firms only
  • The ‘regulated by RICS’ designation must be displayed clearly to ensure visibility
  • Prescribed text that must be included in the TOE
  • Companies only allowed to use ‘chartered surveyor(s)’ designation in trading name not company name
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45
Q

What is integrity?

A

The quality of being honest and having strong moral principles.

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46
Q

How can a disciplinary procedure be triggered?

A

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.

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47
Q

What are the levels of Disciplinary Action

A

Action by Head of Regulation, Regulatory Tribunal, Appeal Panel.

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48
Q

What is the first stage of disciplinary action?

A

First stage is a formal investigation which will consider if the following is required
* Serve a Fixed Penalty Notice
* Make a Regulatory Compliance Order
o For low level breaches which can be corrected
o States what the member must take to rectify the issue and an agreement to pay fine
o E.g. failure to complete appropriate CPD, non compliance with RICS rules
* Refer matter to a Disciplinary Panel

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49
Q

If a breach of Conduct is Referred to the Disciplinary Hearing, what Penalties can be Imposed on the Breaching Party?

A

Referral to the Disciplinary panel is used for more serious breaches, the head of regulation can consider that a hearing is required under the discipline rules, 50% of this panel are lay members (i.e. not RICS). Penalties can be:
i. Issue a consent order
ii. Impose an unlimited (but proportionate) fine for each breach.
iii. Conditions on Continued Membership of the RICS.
iv. Expulsion from Membership or Remove a firm.
v. 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.

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50
Q

When may the RICS investigate social media posts

A

When it involves:
* Discrimination
* Dishonesty
* Abusive or threatening behaviour
* Bullying
However, they will not investigate those which are critical of an organisation, are professional and are removed if requested.

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50
Q

What legislation is there regarding use of Social Media

A

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.

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51
Q

What must you do before starting any work?

A
  1. Check competence
  2. No COIs or personal interest
  3. Confirm TOE
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52
Q

How do you set a fee?

A
  1. Assess resource required
  2. Assess time needed to complete
  3. Assess value of property
  4. Level of PII required
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53
Q

Can you alter your fee?

A

Technically yes if you behave in a professional manner. However, it should have been correctly assessed before as still need to provide high standard of service.

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54
Q

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

A
  1. Assess competence
  2. No COIs or personal interest
  3. Issue ToB (terms of business)
  4. Get signed ToB
  5. Conduct AML checks
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55
Q

Why might you decline an instruction?

A
  1. Not competent
  2. Not enough resource to complete in timescales required
  3. There is a COI
  4. Not enough facts
  5. Work is for a friend and PPII will not cover for personal interests
  6. PII cannot be agreed
  7. Would not be happy if it were made public
55
Q

What do the RICS By Laws state regarding confidentiality?

A

Client confidentiality must be maintained for all client affairs.

56
Q

What does the Consumer Rights Act 2015 allow and state?

A
  • A 14-day cooling off period upon the signing of Agency Instruction Agreements.
  • Letting agents must clearly display a summary of their charges both in their office and on the website for the letting and management of property.
  • Information must be provided based on the calculation of the charges and who is responsible for payment.
  • Policed by Local Authority.
57
Q

What should you do if you receive confidential information in error?

A

It cannot be used for their own purposes. Need to advise client and sender of the error. Inform compliance officer. Delete securely.

58
Q

When may a surveyor be negligent?

A

When a duty of care to client or third party has been breached and there is a loss, they can claim for damages.

59
Q

How can a surveyor avoid negligence?

A
  • Understand client’s instruction
  • Be competent
  • Undertake work in accordance with RICS Standards & Guidance Notes
  • Make detailed notes and take photos
  • Keep up to date with market knowledge
60
Q

What Did the RICS Publish on Conflicts of Interest?

A

The RICS published a global professional statement: “Conflicts of Interest (2017)”

61
Q

Where might a conflict of interest arise?

A

Examples of a conflict of Interest may include, a financial interest, a personal interest, commercial relationships, or acting on both sides of a transaction.

62
Q

In what circumstances might a conflict of interest not cause you to decline an instruction?

A

If you identify a conflict, but believe that despite the conflict it is in the best interests of all those involved for you to proceed with the instruction and you have the informed consent of your client, then you may proceed despite the conflict.

63
Q

According to RICS Global Professional Statement on Conflicts of Interest, 2017, what three types of conflict might arise?

A

The three types are:
1. Party Conflict – same instruction for multiple clients
2. Own Interest Conflict – personal interest
3. Confidential Information Conflict – work between two parties that is confidential.

64
Q

If a conflict arises, what are the steps that must be taken?

A

Step One – Conflict Avoidance
* Is the conflict irresolvable as impartiality is compromised, or can it be managed with transparency and openness.
Step Two – Written Advice to both parties
* Notice to both parties must occur outlining
o Disclose nature of conflict, circumstances and proposal to deal with conflict
o Be clear and ensure each party can make their own decision
o Require confirmation of each firm’s informed consent that you can proceed.
Step three – conflict management
* Once received written consent, set up an information barrier in accordance with provisions agreed with both clients

65
Q

What does “RICS Professional Statement Conflicts of Interest – UK Commercial Property Market Investment Agency, 2017” say about incremental advice?

A

The statement says that in such instances, advice can only be provided in circumstances where there is written informed consent and information barriers are created internally.

65
Q

How might a conflict of interest be managed, should you receive written consent and proceed with an instruction?

A

If you receive written consent from all parties involved to proceed with the instruction despite the identified conflict, information barriers should be put in place, including keeping all related information securely, ensuring physical separation of the two professionals involved, and keep adequate audit trail of the acceptance written consent.

66
Q

What does “RICS Professional Statement Conflicts of Interest – UK Commercial Property Market Investment Agency, 2017” say about dual agency?

A

It should not happen under any circumstances for RICS members, as of the 1st January 2018.

67
Q

What does “RICS Professional Statement Conflicts of Interest – UK Commercial Property Market Investment Agency, 2017” say about Multiple Introductions?

A

The statement says that this can happen and that in all circumstances the agency agreement (Terms of Engagement) must state whether the instruction is on an exclusive or non-exclusive basis.

68
Q

How Long should you retain clients files prior to securely destroying them?

A

6 years. If third parties want access to client files, it requires Client’s approval unless you are subject to a statutory duty.

69
Q

Can you give an example of where a conflict of interest has been managed by you / your firm?

A

THINK ABOUT THIS

69
Q

If you are asked to value a property next door to one you’ve just done, is this a conflict?

A

No, not necessarily. In fact, you would be well placed to inform on the value of the property

70
Q

How did you Carry Out a Conflict of Interest Check?

A

Using my company’s internal software I searched any instructions relating to the parties involved and the address. I also sent a COI email to all partners and to the closest relevant office.

71
Q

What is included in a complaint handling procedure?

A
  1. A firm must have a CHP and a CHP officer and log
  2. Must include redress system
  3. Must include Alternative Dispute Mechanism
  4. Sole traders cannot deal with complaints themselves
  5. Complaints must be acknowledged within 7 days, replied within further 21 days (28 total), referred to 3rd party is client dissatisfied
72
Q

Can the Property Ombudsman take legal action?

A

No, they’re regulators

73
Q

What is PII? Turnover limits?

A

Covers financial loss, personal injury and property damage resulting from your negligent act or error while you are working for a client.
* <100,000 = £250,000 cover
* <100,001 – 200,000 = £500,000 cover
* <200,001 = £1 million cover

74
Q

What is the Property Ombudsman?

A

Independent government approved body who provides redress to consumers whose complaints are considered case by case. Not regulators, cannot take legal action.

75
Q

How many years after an instruction has been completed can a PI claim be made?

A

15 years (limitations act)

75
Q

What are the new RICS Professional Indemnity Insurance Requirements for 2022?

A
  • The requirements for professional indemnity insurance were updated following issue of the UK Professional indemnity insurance requirements Version 9 with effect from 1st April 2022.
  • The new requirements introduced a change to the maximum uninsured excess of Professional indemnity insurance.
  • This means that for larger companies with a turnover in excess of £10m, there is no maximum limit of uninsured excess.
  • Whereas for companies with a turnover of less than £10m, the maximum uninsured excess is the greater of £10,000 or 2.5% of the insured sum.
76
Q

What case law is relevant to PII and discusses the liability of individuals?

A
  • Merrett v Babb – considered if employee vulnerable to claims brought directly against them for advice given on behalf of their employers. E.g., an individual provided valuation advice and was negligent. The firm the person worked for did not have adequate run off insurance, company shut down and client made a claim which was passed to the employee that gave advice.
77
Q

What is the Assigned Risk Pool?

A

A facility for members/firms who find themselves unable to obtain insurance in the open market.
Comprises a panel of a RICS chairperson, members of PI insurers and RICS members.
Initial period of cover is 12 months to allow firm time to return to open PII market.

78
Q

What is the name of the RICS journals?

A

MODUS

79
Q

What type of cover would you need to cover a claim brought after a firm or member ceases to trade?

A

Run off cover (must be held for minimum 6 years for a limit of £1 million). This is insurance needed to close down a practice.

80
Q

What is meant by claims made basis?

A

When insurance policy covers when claim is made not from when work was carried out.

81
Q

Are you aware of any new RICS guidance on liability and insurance?

A

RICS Guidance Note: Risk, Liability, and Insurance 2021
From May 2021, insurers must provide cover for fire safety claims on a property 4+ storeys.

81
Q

Is PII needed for pro-bono work?

A

Yes

82
Q

What should a PII policy contain?

A
  • Must be on a claim made basis
  • Must be on an each and every claim basis
  • Policy wording is written on a full civil liability basis
  • Underwritten by a listed insurer (e.g., Miller Insurance Services)
  • Covers past and present employees
  • Run off cover
  • Minimum level of indemnity required by the RICS
82
Q

What does have the PII policy written on a full civil liability basis mean?

A

If a claim is not specifically excluded, its included

82
Q

What steps must be taken upon starting a new practice?

A

A number of steps must be taken including
* Inform RICS of new practice through a Firm Detail Form
* Appoint a Responsible Principal for all RICS communication
* 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
* Disclose business name
* Appoint a Money Laundering Reporting Officer
* Register for data protection
* Adhere to disability discrimination compliance.

83
Q

What steps must be take to close a practice required by the RICS?

A
  • 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.
84
Q

What offences are in bribery act?

A
  1. Giving a bribe
  2. Taking a bribe
  3. Bribing a foreign official
  4. Not having systems in place to prevent bribery
84
Q

What are your Company’s Policies on Bribery?

A

A. We have a company gift register and guidelines, these include never to give or receive cash equivalents such as vouchers, you may only give and receive gifts up to a value of £50.
B. If a client offered me a gift then I would act with integrity by following my company’s gift register.

84
Q

What would you consider if you were invited to a sporting event?

A

I would considered the value of the gift, the situation in which I was being entertained (not alone) and the scope of ongoing and future works with that client. I considered whether it was appropriate for me to attend and whether it would impact on my integrity as a practitioner. Would ensure that any gift accepted would not be during a current instruction and any fees payable would already made.

84
Q

What are the SIX principles of the bribery act?

A

PTR &DCM
1) Proportionality
2) Top level commitment
3) Risk assessment
4) Dye diligence
5) Communication
6) Monitoring and review

84
Q

What happens if you commit an act of bribery?

A

Up to 10 years in prison, excluded from RICS, unlimited fine, banned from being director of any company

84
Q

RICS Professional Statement – Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019). Effective from 01 September 2019. This details the requirement to:

A
  • Not accept or offer anything that could constitute a bribe
  • Report any suspicious activity to a relevant authority
  • Undertake basic ID checks
  • Act with due diligence
  • Consider: Who you act for, What you are doing, Why you are being asked to do something
84
Q

What is the RICS Guidance on Bribery?

A

RICS Professional Statement – Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019). Effective from 01 September 2019.

84
Q

What is Carter Jonas duty in regards to Money Laundering?

A
  • Carry out Due Diligence by verifying the identity of our clients and monitoring the business relationship.
  • Keep records of such due diligence.
  • Maintain systems to identify and prevent money laundering.
  • Appoint a Money Laundering Reporting Officer and maintain a system for reporting suspicious circumstances relating to the handling of the proceeds of crime.
  • Provide training for relevant staff on Money Laundering and our procedures
84
Q

What are BCM’s AML regulations?

A

Raise red flags, do not accept cash payments, carry out risk assessments, report cash payments over £10k EUROS

84
Q

What do you ask for / check when undertaking an Anti Money Laundering (AML) check?

A

Public Limited Company
* proof of London stock exchange listing

Public accountable body
* Government ownership/control

Private limited company
* Certificate of incorporation- this includes full name, registered office, names of all the directors

Private individual
* Copy of valid passport or driving licence with photo of bank statement or credit bill to prove address

84
Q

When to undertake AML checks for sales?

A
  • Our client – at time of instruction.
  • The counterparty – on or before exchange
85
Q

When to undertake AML checks for lettings?

A
  • Our client – at time of instruction for new tenancies issued after 10/01/20.
  • The tenant (where required) – on or before the lease is signed. This is required where the monthly rental is greater or equal to £8500 pcm OR/ where there is a high value payment (excluding deposit) greater than £8500 (this includes if monthly rent is for example £1000 pcm but paid once a year, therefore a £12,000 payment).
86
Q

When to undertake AML checks for auctions?

A
  • Successful bidders only.
87
Q

What three agency instructions require AML checks?

A
  1. Sales
  2. Lettings
  3. Auctions
88
Q

For how often do you have to complete AML checks?

A

Must complete AML checks at least every 5 years or whenever there is a significant material change with a customer e.g. Merger with another business, new significant business partner.

89
Q

What year did the Money Laundering Regulation come into force in UK?

A

1994

90
Q

What RICS Professional Statement recently got Produced on the topic of Money Laundering? And from When is it Effective?

A

RICS Professional Statement – Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019). Effective from 01 September 2019. This details the requirement to:
* Have a written money laundering and terrorist financing risk assessment
* Implement systems and controls to address money laundering and terrorist financing risks
* Provide staff training
* AML checks on any clients, especially proposed purchaser of properties and their sources of funds
* Comply with regulation on PEPs.

91
Q

What RICS Guidance Note recently got Produced on the topic of Money Laundering? Have there been any updates to this legistation?

A

Guidance note ‘Anti Money Laundering Sanctions Update, March 2022’ which reinforces the above, noting importance of:
- understanding risk factors and red flags
- importance of software in engaging with high risk clients
- checking existing clients regularly if they present a higher risk.

92
Q

What legislation allows authorities to recover the proceeds of crime in the UK?

A

The Proceeds of Crime Act (2002)

93
Q

Can you name any Money Laundering Red Flags?

A
  • Cash only buyers
  • An unusual sale price (too low/high)
  • Payments from multiple/difference source to counterparty
  • Funds provided by unknown third parties
94
Q

What is money laundering?

A

Hiding, transferring, or recycling illicit money through transactions.

95
Q

How should you hold client money?

A
  1. Held separately with an authorised bank
  2. Account needs to be entitled with the client’s name and Client
  3. Money held must be immediately available
  4. Provide written communication of any money movement
96
Q

What is a PEP?

A

Politically exposed person

97
Q

What are the principles of the Money Laundering Regulations?

A

Sets obligations for private firms working in areas of high money launder risk. You have a duty to report cash payments over £10k. carry out risk assessments to make sure take necessary procedures when working with high-risk clients.

98
Q

What are the three types of due diligence?

A
  • Simplified – where you determine the business relationship is low risk of money laundering/terrorism
  • Enhanced – for high-risk customers and transactions with greater threat to financial sector
  • New customer – doing the checks to ensure your client is who they say they are
99
Q

How long should files be kept for?

A

Minimum of 6 years before disposing and destroying (can be sued for negligence up to 15 yrs.)

100
Q

What is the RICS Professional Statement on Clients Money Called and What does it do?

A

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

101
Q

What are the Three Objectives of Client Money Handling (2019)?

A

(1) Keep Client’s Money Safe
(2) Client accounts are used appropriately
(3) RICS – regulated firms have appropriate procedures in place to ensure best practice.

102
Q

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

A

RICS Regulated firms must provide the following to clients in writing:
(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).

103
Q

What happens if you have surplus client’s money in a Client Account?

A

If after at least 6 years no claimant has come forward for the money and every effort has been made to identify that person then it can be donated to a registered charity. The RICS has a registered charity, LionHeart, which you can donate to. Ideally the charity will provide an indemnity, so that if a claimant comes forward at a later date then they can be paid.

104
Q

What changes were implemented to the RICS Client Money Protection Scheme in April 2019?

A

As of April 2019, the scheme split into two parts:

1st Part: General Surveying = Client Money Protection for Surveying Services, provides cover for general surveying activities in England.
2nd Part: Resdintial Agency = the Client Money Protection for Residential Agents covers residential agency activity in England, under the new Client Money Protection Schemes for Property Agents (Approval and designation of Schemes) Regulations 2018.

105
Q

What are the 9 protected characteristics of the Equality Act 2010?

A
  1. Race & ethnicity
  2. Disability
  3. Religion or belief
  4. Age
  5. Sexual orientation
  6. Gender
  7. Gender reassignment
  8. Pregnancy and maternity
  9. Marriage and civil partnership
106
Q

When are you protected under the Equality Act 2010?

A

Within and outside of work

106
Q

What would you do if you considered your directors advice to be incorrect?

A

Consider:
* the implications of the advice
* is it legal
* discuss with managers
* refer to ethics decision tree

107
Q

Example of dealing with a bribery attempt and you would manage

A
108
Q

Where does your duty of care lie? Tell me whether your duty of care lies with client or public?
What is a good example of duty of care?

A
109
Q

What has happened in 2022/2023 that has changed in terms of RICS regulation procedures on ethics?

A
110
Q

How has the RICS supported members over the last 2 years?

A
111
Q

What is the Lionheart Fund?

A

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.

112
Q

What could change under the government in relation to property?

A
113
Q

What is the Hierarchy of RICS documents?

A
  • International Standards
  • Global Professional Statement
  • UK Professional Statements
  • Guidance Notes
  • Codes of Practice
114
Q

What are the THREE main roles of RICS?

A
  1. Maintain highest standards of education and training
  2. Protect consumers through strict regulation of professional standards
  3. Be leading source of information and independent advice on land, property, construction and environment issues
115
Q

What are the requirements for registration?

A
  1. Must have RICS members
  2. Must annually makea return to the RICS confirming their compliance with their obligations
  3. Can be a corporate body, partnership an LLP or sole pracitioner practice
116
Q

When must a firm register with RICS?

A

When they provide surveying services to public.
When they have RICS members

117
Q

What does RICS ‘Rules for regulation of firms’ 2022 state?

A
  • If 50% of Principals of a UK firm (which provides services are RICS members) then it has to be regulated.
  • If only 25% are RICS members, they can still apply to be regulated
  • Principals are sole practitioners, directors, partners or board members (peolle with authority / no supervision)
  • Must nominate a ‘reasonable principal’ - obliged to ensure all reasonable steps are taken and systems in place to ensure compliance
118
Q

What information is required by RICS for Registration?

A
  1. Type of business and staffing details
  2. Name of responsible principal
  3. Statutory regulated activies
  4. Nature of clients
  5. Complaints handling procedure - details and records
  6. Professional indemnity insurance details
  7. Whether the firm holds clients money
119
Q

What is conflict avoidance?

A

When you do not accept the instruction

120
Q

What is conflict management?

A

When you accept the instruction, but steps are agreed and put in place to manage the conflict, such as an information / ethical barrier with written agreement of all parties

121
Q

What is dual agency?

A

Where agent has contractual agency relationship with both seller and buyer at same time

122
Q

What does RICS say about dual agency?

A

Must not be undertaken in any circumstance. Put in place Jan 2018.

123
Q

What is incremental advice?

A

When an agent is approached by another party to provide advice, to include valuation, building surveying or planning in relation to a purahce or disposal that is incremental to existing instruction

124
Q

What is an example of incremental advice?

A

When an agent is acting for the seller for a disposal, but is approached by the buyer or its lender to provide a valuation

125
Q

Can RICS members provide incremental advice?

A

Yes if consent is given and an information barrier is put in place before providing incremental advice to prospective buyers

126
Q

What are the stages of handling a complaint?

A
  1. In House
  2. ADR - Third Part Resolution
127
Q

What is formal CPD?

A

Includes all forms of structured learning that has clear objectives.
Examples include online training, professional courses etc

128
Q

What is informal CPD?

A

Self managed learning that is relevant or related to professional role
Can include private study

129
Q

What are the 5 principles of better regulation?

A
  1. Proportionality
  2. Accountability
  3. Consistency
  4. Targeting
  5. Transparency
130
Q

What are the 5 first steps of the Ethics Decision Tree?

A
  1. Do you have sufficient facts
  2. Is it Legal
  3. Is it in line with the RICS Rules of Conduct
  4. Have you consulted with appropraite people to make an informed decision
  5. Do you have clear reasoning in reaching your decision
131
Q

Offences for Anti Money Laundering

A

Concealing - concealing criminal property. If a person conceals, disguises, converts or transfers criminal property
Arranging - if a person enters into or becomes concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control or criminal property by or on behalf of another person
Acquiring - use and possession. If a person acquires, uses or has possession of criminal property

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