Ethics, Rules of Conduct and Professionalism Part 1: RICS Requirements Flashcards
Background: When was the RICS founded and where is it based ?
1868 in London. The head offices are 12 Great George Street, Parliament Square.
Background: When did the RICS obtain royal charter ?
Granted by Privy Council in 1881
What is the RICS Motto / What does it translate to ?
“est modus en rebus” - There is measure in all things
Background: What sets out the governance of the institution ?
RICS regulations and bye-laws
Background: How many members are there currently ? (Autumn 24)
140,000
Membership: What are the 4 levels of membership ?
FRICS
MRICS
AssocRICS
Trainee/Student
Role of RICS: What are the 3 main roles of the RICS ?
- To maintain the highest standards, of education and training
- To protect consumers through strict regulation of professional standards
- To be the leading source of information and independent advice on land, property, construction and associated environmental issues. (RICS 2015)
Governance Structure: How many members are in the Governing Council ?
Over 20, running the RICS providing management and strategic direction
Governance Structure: How is the RICS currently governed ?
Under the terms of its Royal Charter, by various internal councils and boards
Governance Structure: Who reports to the Governing Council ?
The Standards and Regulation Board and the Management Board
Governance Structure: How many specialist professional groups cover property, land and constructions ?
17
Each professional group has an elected board and is responsible for outlining standards of competence and practice.
Governance Structure: Who is the current chief executive officer ?
Governance Structure: Who is the RICS President Elect ?
Governance Structure: (With effect from 1st January 2024) Who is the current president and chairs Governing Council ?
Justin Sullivan FRICS
Membership: What are the Fellowship characteristics required to be met, to become a Fellow ? (4)
Five or more years at MRICS
A leadership role
Professional/technical achievement
Academic achievement or raising the profile of the RICS
Membership: To become a fellow what must you be able to provide ?
Evidence of the 4 fellowship characteristics
A portfolio of professional achievement supporting the application including CPD record
Role of RICS: (RICS, 2020)
“The Royal Institution of Chartered Surveyors promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure.”
Role of RICS: Is the RICS accountable to both members and the public ?
Yes
Role of RICS: What two things does the RICS involve itself with ?
Policy influence and Political engagement
What are the main benefits that RICS regulated firms could provide ?
Regulated firms:
- Confidence for clients
- Professionalism
- Security
What are the 5 benefits of being an RICS member ?
Status - Your professional credentials provide unrivaled client confidence
Recognition - Promotion of your professional excellence to governments and markets
Market Advantage - RICS status and standards gives you a competitive advantage
Knowledge - International practice standards, professional guidance, CPD & knowledge sharing
Network - Access to professionals worldwide
Vision is 1 of the 5 Future Foundations set out in November 2023 following the Bichard Review. What is the vision ?
A natural and built environment that is sustainable, resilient and inclusive for all.
Mission is 1 of the 5 Future Foundations set out in November 2023 following the Bichard Review. What are the 3 Mission points ?
Inspire Members
Advance Knowledge
Uphold standards
Strategic Goals is 1 of the 5 Future Foundations set out in November 2023 following the Bichard Review. What are the 4 goals ?
Lead and influence on sustainability
Attract a diverse next generation
Strengthen trust in the profession
Enhance member and value engagement
Values are 1 of the 5 Future Foundations set out in November 2023 following the Bichard Review. What are the 4 values ?
Professional
Collaborative
Inclusive
Ambitious
A World Class Organisation is 1 of the 5 Future Foundations set out in November 2023 following the Bichard Review. What is this ?
An efficient, effective and inspiring professional body that is easy to do business with
What are the 5 Future Foundations ? (RICS 2023)
Vision
Mission
Strategic Goals
Values
A world class organisation
Registration Requirements: Information required by the RICS for registration (7)
- Type of business and staffing details
- Name of the responsible principle
- Statutory regulated activities - such as financial services
- Nature of clients
- Complaints handling procedure
- Professional Indemnity insurance details
- Whether the firm holds clients’money
Registration Requirements: Why must firms providing surveying services to the public register for regulation ?
To ensure that there is a recognised quality bench mark for all firms. If there are no RICS members, a firm cannot register
Registration Requirements: What does registration provide for clients ?
A ‘gold standard’ of quality control
Registration Requirements: What can a practice be ?
A corporate body, a partnership, an LLP or a sole practitioner practice
Registration Requirements: According to RICS ‘Rules for the regulation of firms’ 2022 - What percentage of members within a practice requires mandatory RICS regulation ?
50%
Registration Requirements: According to RICS ‘Rules for the regulation of firms’ 2022 - What percentage of members within a practice can apply for RICS regulation ?
25%
Registration Requirements: According to RICS ‘Rules for the regulation of firms’ 2022 - Who are principles ?
Principles are sole practitioners, directors, partners or board members or someone who is able to at autonomously / without supervision of a firm
Registration Requirements: According to RICS ‘Rules for the regulation of firms’ 2022 - Who is the ‘responsible principle’ ?
A firm nominated staff member who is obliged to ensure all reasonable steps are taken and systems are in place to ensure compliance with regulatory and RICS requirements. Including to report to RICS as required.
Registration Requirements: According to RICS ‘Rules for the regulation of firms’ 2022 - Who responds to disputes concerning firm registration ?
The RICS Standards and Regulation Board
Registration Requirements: According to RICS ‘Rules for the regulation of firms’ 2022 - Where can Regulation details be found ?
The RICS website
Registration Requirements: According to RICS ‘Rules for the regulation of firms’ 2022 - Who can use the RICS logo ?
Only RICS members and registered firms can use the logo.
As of April 2020 there is a restriction to the use of the designation ‘Charted Surveyors’ by firms to the trading name only.
Rules of Conduct: After a period of consultation, when were the new rules published ?
October 2021
Rules of Conduct: When did the Rule of Conduct come into effect on a global basis ?
February 2022
Rules of Conduct: What documents did the new Rules of Conduct replace ?
Rules of Conduct for Members and Firms and the 5 Global Professional and Ethical Standards
Rules of Conduct: How many case studies support the Rules of Conduct ?
12
Rules of Conduct: In March 2024 what did the RICS update in the rules of conduct ?
New material providing guidance on Rule 4 in respect of Diversity, equity and inclusion
Rules of Conduct: Rule 1
Members and firms must be honest, act with integrity and comply with their personal obligations, including obligations to RICS
Rules of Conduct: Rule 2
Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
Rules of Conduct: Rule 3
Members and firms must provide good-quality and diligent service
Rules of Conduct: Rule 4
Members and firms must treat others with respect and encourage diversity and inclusion
Rules of Conduct: Rule 5
Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession
Rules of Conduct: Mandatory professional obligations in Appendix A state RICS members must ? (3)
- Comply with the CPD requirements set by RICS
- Cooperate with RICS
- Promptly provide all information reasonably requested by the Standards and Regulations board
Rules of Conduct: Mandatory professional obligations in Appendix A state RICS firms must ? (7)
- Publish a complaints handling procedure which includes RICS approved dispute resolution and maintain a complaints log
- All work covered by adequate Professional Indemnity Insurance
- If having a sole principle, have a plan in place for their professional work to continue in the event of incapacity
- Cooperate with RICS
- Promptly provide information reasonably requested
- RICS logo on literature
- Report to RICS any matter they are required to report under the Rules for Registration if Firms
Ethics Decision Tree: What is the purpose of the Ethics Decision Tree ?
Provides a framework if questions which members should ask themselves when facing a situation on which they are asked to act in a potentially unethical manner or situation
Ethics Decision Tree: What are the stages ?
- Do you have all the facts ?
- Is the transaction/advice legal ?
- Is it inline with the RICS Rules of Conduct ?
- Have you consulted a colleague ?
- Is your decision informed ?
- Would you be happy if it was publicized ?
= If all ok, continue and record the process
= If not, decline instruction
Disciplinary Procedures: What are the 3 levels of disciplinary ?
- Action by Head of Regulation
- Disciplinary Panel (drawn from the Independent Regulatory Tribunal)
- Appeal Panel
Disciplinary Procedures: Who undertakes Disciplinary Procedures ?
The Standards and Regulation Board
Disciplinary Procedures: How can a Disciplinary Procedure be triggered ? (3)
Someone complaining to the RICS, an allegation by a client or third party or because of information received or established by the RICS
Disciplinary Procedures: Who is responsible for regulating the surveying profession ?
The RICS
Disciplinary Procedures: For what reason is the surveying profession regulated ? (3)
To protect the public, uphold public confidence in the profession and uphold professional standards
Disciplinary Procedures: Following formal investigation by the Head of Regulation of the RICS, what are the 4 options if disciplinary action is required ?
- Serve a fixed penalty notice
- Make a regulatory compliance order
- Refer the matter to a single member of the Regulatory Tribunal for consideration
- Refer the matter directly to a disciplinary panel
Disciplinary Procedures: What is a fixed penalty ?
Procedure used for breaches of the Rules relating only to the supply of information to the RICS by firms and members. These may consider a fine or caution
Disciplinary Procedures: What is the purpose of Regulatory Compliance Orders ?
For low level breaches of the rules, such as for some minor breaches which could be easily corrected
Disciplinary Procedures: What is a Regulatory Compliance Order ?
A written document which states the terms upon which the member or firm must take or desist from taking certain actions in a specified time period and an agreement to pay a fine
Disciplinary Procedures: What does a Regulatory Compliance Order cover ?
May cover issues such as non-compliance with RICS rules, including failure to undertake CPD
Disciplinary Procedures: When is Action by Disciplinary Panel used ?
More serious breaches of conduct
Disciplinary Procedures: Name the 7 penalties available to a Regulatory Tribunal Disciplinary Panel
- Issue a Regulatory Order
- Reprimanded
- Fine
- Impose an unlimited amount of fine per breach but it must be proportionate to the offence
- Impose conditions upon future continued RICS registration
- Expulsion from membership or remove a firm
- Require publication of the results of the hearing in the RICS Modus Magazine, on the RICS website and in the local newspaper where the firm/member are based
Disciplinary Procedures: What is an Appeal Panel ?
Appeal Panels can consider a member/firm appeal against review of a decision relating to prior levels of disciplinary procedure
Social Media: What does the ‘Use of social media: The Guidance for RICS members 2021’ document ?
RICS notes in this document the importance of social media networks to members and firms. It reminds members of the high standards of professional behavior expected by RICS members and that the Rules of Conduct protect the interests of members and the profession as a whole.
Social Media: When does the RICS investigate concerns about social media posts ?
When the post involves Discrimination, dishonesty, abusive or threatening behaviour, bullying, harassment or victimisation.
And ignoring previous warnings or advice about concerns
Social Media: What is the RICS unlikely to investigate ?
Social media post which are critical of an organisation m its policies and performance rather than of individuals.
Use professional and respectful language
Are removed if requested to do so
Fee Negotiations: What should firms avoid when negotiating/agreeing fees ?
Firms should avoid price fixing, aggressive fee cutting or collusion with competitors
Healthy competition is encouraged but aggressive fee cutting is not allowed
Fee Negotiations: How should fees be based ?
Fees should be market-based and agreed on an ad-hoc basic with clients
Fee Negotiations: How do you decide on a fee ?
Consider the amount of time and resources required that you have the appropriate expertise. You might wish to make a reasonable profit.
Terms of Engagement: What must these state in writing ?
Clients agreement to:
- The proposed fee basis
- payment of expenses (and how calculated)
- and that a copy of firms complaint handling procedure is available on request
Terms of Engagement: What are the 3 steps to follow when setting up Terms of Engagement ?
- Check you are professionally competent
- No conflicts of interest or personal interests
- Confirm terms of engagement in writing and get written approval from the client BEFORE you start work on the instruction
Terms of Engagement: When may it be appropriate to decline an instruction (7 examples) ?
- You are not competent to undertake the work [Rule 2]
- You do not have sufficient facts on the issue
- The proposed client will not sign your ToE and/or complete AML checks
- There is a conflict of interest or personal interest
- A professional indemnity insurance cap cannot be agreed
- The potential client is included in the UK Gov sanctions list
- Would you be content for your actions to be made public - in newspapers or internet?
Think about the RICS Ethics decision tree
Conflicts of Interest: When does a Conflict of Interest arise ?
When a member or firms independence and impartiality is threatened due to the existence of a conflict between two clients.
Examples include;
- Any financial interest
- Any personal interest
- Commercial relationships
- Acting on both sides of a transaction
Conflicts of Interest: Describe Conflict Avoidance
Conflict avoidance is when you do not accept the instruction
Conflicts of Interest: Describe Conflict Management
Conflict management is when the instruction is accepted, and steps are agreed and put in place to manage the conflict, such as an information/ethical barrier, with the written agreement of all parties.
Conflicts of Interest: What do the RICS Global Professional Standard: Conflicts of Interest, 2017 state ?
‘a member must not advise or represent a client where doing so would involve a conflict of interest or a significant risk of a conflict of interest, other than where all those who are, or may be affected have provided their informed consent’
Conflicts of Interest: Name 3 types of Conflicts of Interest
- A ‘Party Conflict’ relating to work on the same or related instruction for two different parties
- An ‘Own Interest Conflict’ relating to a personal interest
- A ‘Confidential Information Conflict’ relating to work between two parties that is confidential
Conflicts of Interest: What is informed consent ?
Transparently and in writing, explaining any material factors regarding a conflict making sure the party affected understands the situation.
Surveyors should only seek informed consent if happy all relevant parties are best served by doing so
Conflicts of Interest: How to handle conflicts of interest - Step 1 ?
Step 1: Conflict avoidance
Having received all the facts, consider whether the conflict is irresolvable because your impartiality is compromised and should be avoided OR whether it can be properly managed maintaining transparency and openness
Conflicts of Interest: How to handle conflicts of interest - Step 2 ?
Step 2: Written advice to both Parties
Set out in writing as soon as possible the following to client A and client B;
- Disclose the nature of the conflict, circumstances around it and any other relevant facts. Including methods of dealing with the conflict (like an information/ethical barrier)
- Be as clear as you can whilst informing clients they can seek independent advice
- Request written confirmation from both clients of their informed consent that your firm can act in accordance with the provisions of the procedure proposed
Conflicts of Interest: How to handle conflicts of interest - Step 3 ?
Step 3: Conflict Management
Once you have received written consent to your declaration of the conflict and your proposals in respect of the proposed management of the conflict from Client A and Client B, set up an information barrier in accordance with the provisions agreed with both clients
Conflict of Interest: What are Information / Ethical barriers
Working from a different floor if conflict is internal to company
or IT Barrier, removing access to files
or passing the work on to a colleague in a different office
Starting a New Practice: RICS compliance
- Inform RICS of new firm with Firm Details Form
- Appoint responsible principle
- Register with RICS for regulation of firm
- Arrange PII and send details to RICS
- Set up procedures for the requirements for client money handling, including a protection scheme
- Register for RICS Valuer Registration Scheme (VRS) if undertaking Red book vals
- Obtain RICS approval for complaints handling procedure
- Set up a complaints log
- Appoint complaints handling officer
- Use a logo kit from the RICS for all practice material to comply with the designation ‘regulated by RICS’
- Plan for succession/future running
- Ensure CPD logged online on RICS CPD Management System and set up staff training plan
- Ensure completion of an online RICS Annual Return at the end of each year
Starting a new practice: Statutory compliance
- Disclose business name
- Disability discrimination compliant (Equality Act 2010)
- Financial services compliance
- Bribery Act Compliance
- Appoint Money Laundering Officer
- 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
Closing a practice: RICS Compliance
- Inform RICS of your retirement / closure and deregister
- Ensure clients are informed and handover outstanding arrangements
- Return any monies held by clients to their own accounts
- Inform insurers and procure PII Run-off cover for a minimum of 6 years from expiry of policy
- retain a copy of the client files and records for a minimum of 6 years
Confidentiality: What do RICS Bye Laws State ?
That ‘client confidentiality must be maintained for all client affairs’
Including historic information and information provided by a client prior to instruction
Confidentiality: If a third party wants access to your file what must you do ?
Must get clients approval first unless you are subject to a statutory duty overriding client confidentiality rights - like HMRC investigation
Confidentiality: How long should old files be held onto ?
6 years minimum before being securely disposed/destroyed.
Confidentiality: If you over hear or find out confidential information what must you do ?
Cannot use the information for your own purposes.
Client and sender should be told about the error.
Matter should be recorded in a note to firms compliance officer.
Confidentiality: What should you do if you receive confidential information in error ?
Dispose of securely
Complaints Handling Procedure: As and RICS accredited firm, do you need a Complaints Handling Procedure ?
Yes, it is a requirement for RICS regulated firms to have a published Complaints Handling Procedure that meets the requirements of the RICS Rules of Conduct, 2021
Complaints Handling Procedure: When should you notify a client of you Complaints Handling Procedure ?
Whenever an RICS Regulated firm issues Terms of Engagement, is should be made clear to the client that the firm operates a Complaints Handling Procedure
Complaints Handling Procedure: What should you do if you receive a complaint that could lead to a claim for negligence ?
Notify your PII insurers as soon as possible
Complaints Handling Procedure: What must be maintained as part of being an RICS regulated firm ?
Complaints log - showing details, progress and outcome of any complaints
Complaints Handling Procedure: What must be included and RICS approved in a Complaints Handling Procedure ?
Alternative Dispute Resolution (ADR) mechanism
Complaints Handling Procedure: Stage One (In House) procedures for handling the complaint
- Complaints Handling Procedure should be issued whenever a complaint from a valid complainant is made.
- Procedure must be quick, clear, transparent and impartial
- Nominated Complaints handling officer must investigate complaint
- Must be in writing
- Procedure and strict timescale for investigation should be recorded
- Complaint should be acknowledged within 7 days and investigated within 28 days
Complaints Handling Procedure: When would the RICS get involved in a complaint ?
- If a member fails to respond or prove 3rd part assistance/details
Complaints Handling Procedure: Stage Two (Third Party Resolution (ADR)) procedures for handling the complaint
- If complainant not happy with review - second stage is third party = 3rd party redress scheme that the firm has chosen to use
- name of third party must be provided to complainant
e.g The Centre for Effective Dispute Resolution, The Property Redress Scheme or the RICS Dispute Resolution Service
Continued Professional Development (CPD): How many hours must you do a year ?
20 Hours minimum
Continued Professional Development (CPD): How much of your CPD must be formal ?
At least 10 hours must be Formal CPD
Continued Professional Development (CPD): What must members maintain for a rolling 3-year period ?
A relevant and current understanding of RICS Rules of Conduct
Continued Professional Development (CPD): Where, how and when do you record your CPD ?
Record RICS CPD Management System available online on RICS website by the 31st Jan each year
Continued Professional Development (CPD): What is Formal CPD ?
Structured learning with clear learning objectives and outcomes.
E.g Online Training / professional courses / seminars
Continued Professional Development (CPD): What is Informal CPD ?
Self managed learning that is relevant to your professional role
E.g private study, on the job training and informal seminars / events
Negligence: What is Negligence ?
When a duty of care is breached.
Duty of care exists to clients and third parties, using a ‘reasonable care and skill’. When breached, and there is a loss, a claim for damages arises.
Negligence: According to the Limitation Act 1980, What are the current limitation periods for Negligence ? (2)
Contract - 6 years from date of negligent act, breach or omission. [Section 14a alternative limitation period of 3 years from date of knowledge of the damage subject to the 15 years long stop from the negligent act/omission]
Tort - 6 years from the date the claimant suffered the loss
Negligence: How can Negligence claims be avoided or reduced ?
- Clearly understanding clients objectives/instructions, in writing as terms of engagement
- Make sure you are competent
- Undertake work in accordance with RICS advice, PS and Practice infomation
- Make detailed file notes and take photographs
- Keep up to date on market knowledge / legislation / CPD
- Cap the professional liability excess on your PII policy in ToE
Professional Indemnity Insurance: If a firm’s turnover for the year prior is less than £100,000 what is the minimum level of indemnity required for each and every claim ?
£250,000
Professional Indemnity Insurance: If a firms turnover for the year prior is less than £100,001 to £200,000 what is the minimum level of indemnity required for each and every claim ?
£500,000
Professional Indemnity Insurance: If a firms turnover for the year prior is more than £200,001 what is the minimum level of indemnity required for each and every claim ?
£1,000,000
Professional Indemnity Insurance: What are the maximum uninsured excess rules set by the RICS ?
Company turn over for proceeding year is up to £10 million - max uninsured excess is the greater of 2.5% of the sum insured or £10,000
Company turn over for proceeding year is over £10 million - there is no set limit
Professional Indemnity Insurance: What is Run-off cover ?
‘Adequate and appropriate’ run-off cover is required following cessation of trading.
