Ethics, rules of conduct and professionalism Flashcards
What are the RICS 5 Core Values?
Act with INTEGRITY
Always provide a high standard of SERVICE
Act in a way that promotes TRUST in the industry
Always treat others with RESPECT
Take RESPONSIBILITY
What are the levels of membership in RICS?
- FRICS
- MRICS
- AssocRICS
- Trainee/Student
FRICS stands for Fellow of the Royal Institution of Chartered Surveyors, MRICS for Member, AssocRICS for Associate, and Trainee/Student is for those in training.
How many members does RICS currently have?
Over 140,000 qualified and trainee members
This number reflects the total membership including both qualified professionals and those in training.
When was the RICS founded?
Founded in 1868
RICS has a significant history and has evolved over more than a century.
What is the significance of the Royal Charter for RICS?
Granted by Privy Council in 1861
The Royal Charter represents the official recognition and authority of the RICS as a professional body.
What governs the RICS?
RICS regulation and Bye-laws
These set out the governance framework for the institution.
What is required to become a fellow (FRICS)?
Evidence of achievement of 4 characteristics:
* five+ years MRICS
* leadership role
* professional/technical achievement
* academic achievement or raising the profile of the RICS
A portfolio of professional achievement including CPD is also necessary.
What is the current governance structure of RICS?
Under terms of the royal charter, by various internal councils and board
This includes a governing council with over 20 members.
What are the reporting bodies to the Governing Council?
The Standards and Regulation Board and the Management Board
These boards provide oversight and strategic direction.
How many professional groups does RICS have?
17 professional groups
Each group has an elected board to represent its interests.
Who is the current CEO of RICS?
Justin Young (2023-)
Leadership may change, so this information is current as of 2023.
Who is the current president of RICS?
Justin Sullivan FRICS
Nick Mclean is the acting president while Sullivan is under review.
What are the 3 main roles of the RICS?
- Maintain highest standards of education and training
- Protect consumers through regulation of professional standards
- Leading source of information and independent advice
These roles highlight the core mission of RICS in the professional landscape.
What are the benefits of being an RICS member?
- Status
- Recognition
- Market Advantage
- Knowledge
- Network
These benefits contribute to professional growth and credibility in the industry.
What was the Bichard Review?
A review commissioned by RICS in 2021 to clarify its purpose and make recommendations
Lord Bichard led the review following internal failings within RICS.
What were the outcomes of the Bichard Review?
36 recommendations in 7 key areas:
* Focus on public interest
* Maintain self regulation
* Diversity and Inclusion
* Empowering and enabling
* Independent review every 5 years
* Simplified, clear governance structure
* Leadership in society matters
These recommendations aim to enhance the effectiveness and public trust in RICS.
What did the 5 Future Foundations include?
- Vision: A sustainable, resilient, and inclusive natural and built environment for all
- Mission: Inspire, Knowledge, Standards
- Strategic Goals: Sustainability, Diversity, Trust, Membership value and engagement
- Values: Professional, Collaborative, Inclusive, Ambitious
- World class organisation: efficient, effective professional body
These foundations were published in November 2023 to guide RICS’s future direction.
What information is required by the RICS for registration?
*Type of business and staffing details
*Name of Responsible Principal
*Statutory regulated activities
*Nature of clients
*Complaints handling procedure details and records
*Professional indemnity insurance details
*Whether the firm holds clients money
Statutory regulated activities refers to activities that require regulation under law, such as financial services.
When would you need to register with RICS?
Firms providing surveying services to the public must register for regulation to ensure quality
Provides a ‘gold standard’ for clients
Registration ensures that firms meet the necessary standards and regulations required in the surveying industry.
What do the RICS ‘Rules for the regulation of firms 2022’ state?
Eligibility criteria require firms to have at least 25% RICS qualified principals
Requirement for regulated firms to designate a ‘Responsible Principal’
The ‘Responsible Principal’ is responsible for oversight, accountability, and engagement with RICS standards.
When were the new RICS rules published?
October 2021
Became effective 2nd Feb 2022
The new rules replaced previous regulations and apply to both members and firms.
What accompanied the new RICS rules?
12 supporting case studies
New materials providing guidance on diversity and inclusion published in March 2024
These materials aim to assist firms in understanding and implementing the new regulations effectively.
What must RICS MEMBERS do in relation to professional obligations?
- Comply with CPD requirements
- Cooperate with the RICS
- Promptly provide all information requested
CPD refers to Continuing Professional Development, which is essential for maintaining professional competence.
What must RICS regulated FIRMS do for professional obligations?
- Publish complaints handling procedures
- Ensure previous and current work is covered by PI cover
- Ensure appropriate arrangement of work cover to continue if sole principal
- Cooperate with RICS
- Promptly provide all information requested
- Display in accordance with RICS and regulated
- Report to RICS any matters that are required to report
PI cover refers to Professional Indemnity insurance, which protects firms against claims of negligence.
What’s the purpose of the Ethics Decision Tree?
- Provides a framework of questions to help situations that should ask themselves
- Encourages consideration of actions
The Ethics Decision Tree is a tool designed to support ethical decision-making in professional practice.
Why does the RICS need to protect and regulate the profession?
Protect the public, uphold public confidence, uphold professional standards
Who regulates the profession?
The Standards and Regulation Board
What can trigger a Disciplinary Procedure?
Complaining to the RICS, allegation made by a client or third party
What are the 3 levels of disciplinary action?
- Action by Head of Regulation
- Disciplinary Panel
- Appeal Panel
What is the initial stage of disciplinary review?
Formal investigation by the Head of Regulation of the RICS
What are the 4 disciplinary actions?
- Service a Fixed Penalty Notice
- Make a regulatory compliance order
- Refer the matter to a single member of the Regulatory Tribunal
- Refer the matter directly to a Disciplinary Panel
When would a fixed penalty be used?
Breaches in relation to supply of information to the RICS
Can you talk through a recent disciplinary hearing?
Giovani Rossato was found in breach of Rule 1 Integrity and Rule 4 Respect through inappropriate messages to colleagues and the investigator
Also failed to update RICS on employment status breaching Rule 1 Integrity
Expelled from RICS and ordered to pau costs
What is a regulatory compliance order?
Written document outlining terms for low-level breaches
What is a Disciplinary Panel used for?
Used for more serious breaches of conduct
What are the penalties available to the tribunal panel?
- Issue a regulatory compliance order
- Reprimand
- Fine
- Impose an unlimited fine per breach
- Impose conditions upon future continued RICS registration
- Expulsion from membership
- Require publication of the result
What does the appeal panel do?
Considers appeals against disciplinary procedures, includes lay members
What is the RICS stance on social media use?
Guidance updated in 2024 to maintain professional standards across platforms
What is an example of social media use which could lead to reputational damage?
An RICS trainee falsely claims qualifications on LinkedIn
What is the new RICS document structure?
- Professional standards
- Practice Information
What are RICS practice alerts?
Tool to alert the profession of emerging areas of risk or concern
How to establish Fee negotiations?
- Transparency and honesty
- Use professional judgement
- Respectfully without undermining competitions
- Consistent with professional standards
What do Terms of engagement need to state?
Proposed fee basis, payment of expenses, and complaints handling procedure
What are the 3 steps to follow when accepting an instruction?
- Check professional competence
- No conflicts of interest
- Confirm terms of engagement in writing
What compliance is required for agency work?
Section 18 of the Estate agent act 1979 and money laundering checks
When would you decline an instruction?
Outside of limitations, insufficient facts, conflict of interest
When would a conflict of interest arise?
When independence and impartiality are threatened
What is the difference between conflict avoidance and conflict management?
Conflict avoidance is not accepting; conflict management involves steps to manage
What are the 3 types of conflicts?
- Party Conflict
- Own Interest Conflict
- Confidential Information Conflict
How to get informed consent for conflicts of interest?
In writing, once the position is explained
What are the 3 steps in handling a conflict of interest?
- Conflict avoidance
- Disclosure of the nature of the conflict
- Conflict management with information barrier
How should an information barrier be operated for conflict management?
Robust barrier to ensure no information passing between parties
What are the key items outlined in the RICS standard: Conflicts of Interest - UK commercial property market investment agency 2017?
- Dual Agency should not be done
- Multiple Introductions must have consent
- Increment Advice only with consent
- Personal Interest must be declared
What does confidentiality mean in the context of your role?
Protecting sensitive client information from unauthorized disclosure
How long should files be held for?
Held for a minimum of 6 years before disposal
What are the key RICS regulations that govern confidentiality?
- RICS rules of conduct
- RICS professional standard on Conflicts of Interest
- RICS Valuation Global Standards
What is the purpose of a complaint handling procedure?
Ensures complaints are handled fairly, transparently, and efficiently
What are the key requirements of a complaint handling procedure?
- Stage 1 in house review: Details of CHP made clear to the complainant, Quick and impartial implementation, in writing, recorded, Complaint acknowledged in 7 days & responded within 28 days
- Stage 2: refer to an independent redress scheme such as RICS Dispute Resolution Service
A client complains about a piece of work being inaccurate. How would you handle the situation?
Acknowledge, review work, respond professionally
Have you ever dealt with a complaint in your role? How did you resolve it?
Follow RICS Complaint Handling Procedure steps, acknowledge, investigate, respond, escalate if required
What are the RICS requirements for CPD
*Minimum of 20 years each year with 10 hours being formal
* Understanding of the Rules of Conduct
Examples of Formal CPD?
Structured trainings with learning outcomes
Examples of Informal CPD?
Self managed learning, private study, on the job training, informal seminars etc.
What is professional negligence?
*Fail to exercise reasonable skill and care leading to client loss of damage
* Duty of care breached - loss - damages (negligence claim)
Relevant case law on negligence?
Burgess v Lejonvam (2020) - provided free landscaping advice which led to financial loss, established that duty of care exists even without contractual agreement
What are the limitation periods in the Limitation Act 1980?
*Contract - 6 years from date of breach
* Tort - 6 years from date of loss suffered
How can you avoid negligence?
- Define scope of work in contract & ToE
*Ensure competent
*Keep thorough record - Follow RICS advice
- Carry PII insurance
Why is PII important?
Protects against claims of professional negligence
What does RICS require in terms of PII coverage?
Adequate coverage for size of the firm and potential liabilities
*£100,000 or less turnover - £250,000 PII
* £200,000 and more - £1m PII
Maximum level on uninsured excess?
- up to 10m turnover - greater of 2.5% of the sum insured or £10,000
- Over 10m - no set limit
Does PII cover all types of claims?
No not all types, excludes fraud/criminal, employment disputes and dishonesty
What is a “run off” policy in PII?
An extension of coverage that applies when a firm ceases trading or practicing, typically for a 6 year period
What happens if a firm doesn’t have PII?
Could face disciplinary action as it is required by the RICS
What are the 6 areas of good practice for handling clients money?
- Holding clients money
- Providing information
- Receipts of money
- Payments from client
- Accounting records and control
- Compliance
What are some key procedures for handling clients money?
- Client accounts kept separate and identifiable
- ‘Client’ on bank account and cheque books
- Monies available on demand
- Accurate records & annual audit/reporting
What steps would you take when closing a practice?
- Notify clients and settle any accounts
- Notify RICS
- Inform insurance/HMRC etc
- Retain records for min. of 6 years
What steps would you take when starting a new practice?
- Inform RICS via Firm Details Form
- Appoint responsible principal
- Register with RICS for regulation
- Obtain PII
- Set up client money and complaints handling procedures
- Ensure compliance with statutory regulations: H&S, Data Protection, Employment law etc.
What does the UK Bribery Act 2010 outline?
*Aims to reduce bribery in businesses
4 offences:
* Bribing
* Receiving a bribe
* Bribing a foreign official
* Failing to prevent a bribe
What are the 6 principles of the Bribery Act 2010?
- Proportionality
- Top level commitment
- Risk assessment
- Due Diligence
- Communication
- Monitoring and review
What are the penalties under the Bribery Act 2010?
- Up to 10 years imprisonment
- Unlimited fine
Example of when you had to accept/decline a gift?
Following planning approval of MSP, gifted a hamper, discussed with manager as value was over £25 I entered it into the charity raffle and noted in on our gift receiving register
What is your firms gift and bribery procedure?
- Ranked based on value, anything over £25 should be noted on our gift receiving register, discussed with manager and if appropriate donated to charity raffle
What is money laundering
Process of disguising the proceeds of a crime or converted then realised as a legitimate asset
What are they key provisions of the Terrorist Financing and Transfer of Funds Regulation 2017, amended 2023?
- Requirement to have written money laundering and terrorist financing risk assessment
- Implement systems and policies
- Staff training
- Record keeping
- Comply with PEP requirements
- Comply with new customer requirements
What are the levels of Due Diligence checks in relation to AML?
- Customer Due Diligence (CDD)
- Enhanced Due Diligence (EDD)
What is the difference between CDD and EDD?
- CDD: Verifying a clients identity, source of funds and business background
*EDD: Higher risk clients, more detailed examination of background and purpose
What type of evidence is required for a CDD based on type of organisation?
- Public Limited Company > London Stock Exchange listing
- Private Limited Company > Certificate of Incorporation, review details of the business against Companies House ie name, address, directors
What is a Suspicious Activity Report (SAR) and when should one be submitted?
*An report on suspicious activity should be submitted to the National Crime Agency if client or transaction is suspected
*Examples: Unusual payment structures, reluctance to provide ID or info on funds
What are Politically Exposed Persons (PEP’s?
*Higher risk due to being in a high profile or public position so may be involved in bribery, corruption or financial crimes
*Conduct an EDD
What penalties can be faced for failing to comply with AML laws?
- Up to 14 years imprisonment
- Unlimited fines
What steps should an RICS regulated firm take to prevent money laundering?
*Appoint a money laundering reporting officer
* Provide regular AML training
*Carry out CDD and EDD checks when required
* Maintain records
* Submit SAR when necessary
What are some red flags associated with AML?
*Inability or unwillingness to provide ID docs
*Changes to parties involved in transaction
* Unusual transaction features ie unexpected urgency
*Payments in unusual currencies
What is the Sanctions and Anti-Money Laundering Act 2018?
*Wider sanctions issued in light of geopolitical activities such as the Ukraine conflict
*Strengthens the UK AML laws
What is the Proceeds of Crime Act 2002?
*Provides powers for enforcement authorities to seize, freeze and recover proceeds of crime
* Sets 3 main areas of offence: concealing criminal property, arrangements, acquisition use and possession
Name a time you had an unconscious bias?
I tend to go to older members of the team as unconsciously associate age with wisdom, when there could be younger members of staff who have more expertise and knowledge in that specific area
What is the RICS policy on receiving gifts?
Members should only accept gifts that are proportionate and reasonable in value, should never accept gifts that could improperly influence decisions or impartiality.
Have you ever faced a situation where confidentiality was at risk?
Pre-let opportunity, had access to the client’s confidential business information, including operational methods. As part of the process, we were developing floorplans for the project. The project team requested access to certain confidential details to assist with the design and planning process. However, this information had not been explicitly approved for wider distribution.
*Explained to the project team that the information was confidential and could not be shared without the client’s consent.
*Immediately consulted the client, informing them about the request who gave consent under an NDA
*Arranged for an NDA to be put in place before sharing any information.
Who is the current chair of the governing council?
Martin Samworth is the chair or the RICS board
What is a bye law and an example?
A bye law is a regulation made by an institute to control the action of its members.
Example: 5.2.1 requires members to conduct themselves in a manner befitting of the RICS
How do you ensure you comply with the RICS Rules of Conduct?
I keep up to date with RICS standards and professional updates, follow company procedures and policies, undertake relevant CPD, seek guidance from senior colleagues or RICS
Can you explain a time where you have acted within the RICS rules of conduct?
I was approached to give advice on a residential scheme at Melbourn Science Park, as I have limited experience in the residential market I advised that this should be referred to a more qualified colleague or an external expert, by acknowledging my competence I upheld professional integrity and ensured my client received a high standard of service
What would you do if you witnessed a colleague breaching RICS ethical standards?
I would first address it with my colleague directly and remind them of RICS ethical obligations. If the issue continued I would escalate it to my line manager or compliance officer. If necessary I would report the breach to the RICS using their complaints procedure
What are the key questions in the Ethics Decision Tree?
*Do you have sufficient facts on the issue?
*Is it legal?
*Is it inline with RICS Rules of Conduct?
*Have you consulted the appropriate people?
*Do you have clear reasoning
*Would you be content for your actions to be made public?
Can you give me an example of where you have seen conflict of interest managed in your firm?
I would follow the conflict of interest procedure, check if my firm has any existing relationships that could affect impartiality, if conflict arises I would disclose it to all the relevant parties and seek written consent before proceeding. If the conflict cannot be managed then I would refuse the instruction in line with the RICS professional standard on conflicts of interest
