Ethics Rules of Conduct and Professionalism (Level 2 and Level 3) Flashcards
What is equality?
Equality refers to the state of being treated the same, with fairness and impartiality, regardless of factors like race, gender, age, or disability. It ensures everyone has equal opportunities and access to resources.
What is equity?
Equity involves providing fair treatment by considering individual needs and circumstances, ensuring everyone has the resources or opportunities they need to succeed, even if it means different support for different people.
What is your company’s gift policy?
No gifts - proportionality - we donate to charity
Would you review accounts personally?
No - I would always recommend that these are checked by a qualified accountant.
How would you set up a new business with the RICS?
Inform RICS of practice by completing a Firm Details Form
Appoint a Responsible Principal for all RICS communication
Register with RICS for regulation of firm
Arrange Professional Indemnity Insurance and send details to RICS
Set up procedures for client money handling, including protection scheme
Register for the RICS Valuer Registration Scheme (VRS)
Obtain RICS approval for Complaints Handling Procedure
Set up complaints log
Appoint a Complaints Handling Officer (or elect a surveyor in another practice if a sole practitioner)
Use a logo kit from the RICS for all practice material
Plan for succession/future running of the business if a sole practitioner
Ensure CPD logged online on the RICS CPD Management System
Ensure completion of an online RICS Annual Return at the end of each year
If a client said they had just won on the horses and wanted to pay money into client account what would you do?
Refuse
RICS Professional Standard : Countering bribery, corruption, money laundering and terrorist financing 2019
Proceeds of Crime Act 2002
Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 - accept up to 10,000 euros in cash. Penalties - max 14 years in prison and/or unlimited fine for assisting with money laundering. max 5 years in prison for tipping off a person
Bribery Act 2010 - Policed by SFO - maximum 10 years imprisonment
limit on 10,000 for acceptance of cash
MLRO must report any suspicious activity to the NCA (National Crime Agency)
Customer Due Diligence, Enhanced Due Diligence
Why do you want to be a member of the RICS?
Status
Recognition
Market advantage
Knowledge
Network
6 Principles of the Bribery Act 2010
Proportionality
Top Level Commitment
Risk Assessment
Due Diligence
Communication
Monitoring and review
6 Principles of the Bribery Act 2010
Proportionality
Top Level Commitment
Risk Assessment
Due Diligence
Communication
Monitoring and review
Four types of bribery offences
Bribing
Receiving a bribe
Bribing a foreign official
Failing to prevent a bribery
Penalties for bribery?
Who is it policed by?
Policed by the SFO
maximum penalty of 10 years imprisonment / unlimited fine
Key legislation on money laundering?
Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017
RICS guidance on handling clients money?
And 6 areas of good practice?
RICS Professional Statement Client Money Handling 2019
1 Holding Client Money
2 Providing information to clients
3 Receipts of clients money
4 Payments from clients accounts
5 Accounting records and controls
6 Compliance
What is the RICS legislation for COI?
RICS Professional Standard Conflicts of Interest 2017
What are the 3 types of conflicts?
Party Conflict
Own Interest Conflict
Confidential Information Conflict
What money laundering regulations are you aware of?
RICS Professional Standard: Countering bribery, corruption, money laundering and terrorist financing 2019
Money laundering Regulations (updated 2023) - EDD and PEPs
How would you ensure compliance with the RICS PS on Client Money Handling 2019
Client accounts must be separate
The bank account must be named ‘client’
Client must be able to have their money on demand
The RICS also runs a Clients Money Protection Scheme
What steps do you need to undertake when setting up your own practice?
Inform the RICS and register for regulations
Professional indemnity insurance
Appoint Complains Handling Officer
Set up appropriate procedures for handling clients money
Compliance with statute - DDA, H&S, Money Laundering Act
Appoint a locum
If your client wanted to give you £10,000 euros in cash to hold what would you do?
Recommend that they deposited into an online bank account instead through a clear paper trail. I would be able to accept it but I would recommend this.
Why do you want to become a member of the RICS?
The RICS sets the global standard for Real Estate
To be acknowledged professionally
To expand my network
To have access to resources and training (CPD)
Commitment to ethics and standards
What must RICS members do?
Comply with CPD requirements
Cooperate with the RICS
Promptly provide all information requested by the standards and regulation board
Which Part of the Building Regulations 2010 covers accessibility and access to and use of buildings?
Part M of the Building Regulations covers accessibility and access to and use of buildings.
Bichard Review?
2022 - Followed the Levitt Review
Focussed on Governing Structure of the RICS
Focus on diversity and inclusion
Independent review of RICS governance every 5 years
How long does a Tenant have to remedy a breach after Section 146 Notice under law of property act 1925 is served?
6 months
How would you undertake conflict of interest checks?
Alert both parties of conflicts
Communication
Conflict avoidance vs conflict management
Get informed consent
How can you manage a conflict?
COI check software
Information barrier
Parties acting on two sides must be different and they must be physically separated
Virtual IT barrier
All information should be stored securely
Keep a clear audit trail of the conflict check process and all written and oral communication- firms compliance officer must oversee.
What is the adequate and appropriate run off cover following cessation of trading?
£1,000,000 of aggregate cover over a period of 6 years
6 main areas of good practice as set out in the RICS PS Client Money Handling, 2019?
Holding client money
Providing information to clients
Receipts of client money
Payment from client accounts
Accounting records and controls
Compliance
What would you request from a new client before agreeing terms of engagement?
What is the legislation/guidance from Government and RICS
Terrorist financing and transfer of funds (information on the payer) regulations, 2017
RICS Professional Standard: Countering bribery and corruption, money laundering and terrorist financing 2019
CDD checks - identify client and verify their identity (passport, drivers licence), person with significant control, names of directors
EDD checks - high risk 3rd country, politically exposed person (PEP)
What are some of the other requirements under money laundering regs
Limit of 10,000 euros for the acceptance of cash
Detailed record keeping
Monitor the business relationship
Must be a compliance officer
Must be a Money Laundering Reporting Officer who reports any suspicious activity to the NCA - National Crime Agency
A firm maintains records for a minimum of 5 years and reports to Companies House any discrepencies between the information the firm holds and that held in the Companies House Register.
What are RICS byelaws?
The rules that govern how the Royal Institution of Chartered Surveyors (RICS) and its members must operate. They set out the legal framework for membership, regulation, conduct, and disciplinary procedures.
What is the information required by the RICS for Registration?
- Type of business and staffing details
- Name of the responsible principle
- Statutory related activities - such as for financial services
- Nature of clients
- Complaints handling procedure
- Professional indemnity insurance details
- Whether the firm holds client’s money
What is modern slavery?
Modern slavery is the exploitation of people through force or coercion, and RICS members can face disciplinary action if they are involved or fail to address related risks in their work.
What is the limitation Act 1980?
The current limitation periods for negligence are:
Contract - 6 years from the date of the negligent act
Tort - 6 years from the date the claimant suffered loss.
How long should data be stored for?
It would depend what type of data it was.
As a rule of thumb, employment and financial data should be stored for a minimum of 6 years
Personal data should only be stored for as long as necessary.
What are the fines for Money Laundering?
Maximum 14 years prison sentence and/or unlimited fine for assisting with money laundering.
Maximum 5 year prison sentence and/or unlimited fine for tipping off a person
What are the fines for Bribing somebody?
Who is it policed by?
Maximum penalty of 10 years imprisonment or an unlimited fine
Policed by the Serious Fraud Office
What are the 4 offences under the Bribery Act 2010?
Bribing
Receiving a bribe
Bribing a foreign public official
Failing to prevent a bribery
How do you ensure that you comply with bribery legislation?
I ensure compliance with bribery legislation by following my firm’s anti-bribery policy, undertaking regular training, and reporting any concerns immediately.
How do you ensure that you comply with money laundering regulations?
I look out for indicators of illicit activity
Conduct customer due diligence
Enhanced due diligence
Alert my firms compliance officer/money laundering reporting officer
How do you ensure you comply with your firms bribery and gift policy?
I understand what constitutes a bribe under the Bribery Act 2010
I also ensure that I receive regular training from my firm
Our gift policy is that we accept no gifts
How would you keep clients money secure and safely held?
In a separate bank account
Labelled client
Use cyber security
Clear audit trail
Reconciled regularly
Tell me about how you handle a client complaint?
Stage 1 - In house
Complaint must be made in writing
Notify PII insurers as soon as possible
Notify the complaints handling officer
Must be acknowledged within 7 days and responded to within 28 days
Keep a complaints log
Stage 2 - Third Party Resolution
Use an RICS approved Alternative Dispute Resolution (ADR)
The RICS Dispute Resolution Service
What is your firms process for escalating a complaint to Alternative Dispute Resolution (ADR)?
Our firm’s process involves first attempting to resolve the issue internally by addressing the complaint promptly and professionally.
If an agreement cannot be reached through direct communication or internal review, we would then provide the client with details of an appropriate ADR provider, such as an ombudsman or independent mediator, to facilitate a resolution.
Tell me about a conflict of interest check you have carried out
I review the management agreements/terms of engagement to ensure there are no overlapping interests or relationships that could compromise impartiality or objectivity. This involves checking if the client or any involved parties are linked to other ongoing matters within the firm. If a potential conflict is identified, I inform the client and seek their consent to proceed or suggest alternatives.
If you identified a potential or actual conflict of interest, how would you handle this?
Conflict avoidance vs conflict management
Can be a party conflict, an own interest conflict and a confidential information conflict
Transparency
Informed consent
Information barrier
Data security/encryption / virtual IT barrier
Keep files separate
If the contractor took offense to the refusal of the gift, how would you manage that?
I would explain my firms gift policy
Office Central London
What are your company’s conflict of interest guidelines?
How would you describe a conflict?
A conflict of interest arises when personal interests, relationships, or activities could compromise, or appear to compromise, an individual’s ability to make objective and impartial decisions in their professional role.
Our company’s conflict of interest guidelines involve disclosing any potential conflicts to management or compliance teams, avoiding situations where personal interests could affect professional responsibilities, and ensuring transparency in decision-making processes. All employees are required to complete regular conflict-of-interest training.
If there was a conflict, how would you mitigate this?
Get the full facts
Conflict avoidance or conflict management
Informed consent
If a conflict was identified, could you still act for a new client?
Yes if they provided informed consent in writing.
Use of an information barrier
What is involved in an anti-money laundering check?
Verifying the identity of clients (often referred to as Know Your Customer, or KYC) through CDD and EDD.
Collecting and verifying personal details such as name, address, date of birth, and potentially the source of funds, often through government-issued identification and supporting documents.
Businesses are also required to report any suspicious activity to the relevant authorities, such as the National Crime Agency (NCA) in the UK
Look for any indicators of illicit activities
When have you acted with integrity?
As a property manager, I acted with integrity by ensuring transparency and accuracy when preparing and presenting service charge accounts, ensuring that all costs were fair, clearly communicated to tenants, and in line with the lease terms.
When have you taken responsibility in your current role?
Ensuring that budgets and reconciliations are issued in a timely manner to tenants.
What would the steps be if you decided to set up in practice as a sole trader after qualifying?
Register with the RICS
Register with HMRC as a sole practitioner
Responsible principle
Professional Indemnity Insurance
Complaints handling procedure
Plans in place for holding client money
Locum in place
CPD
What would you do if you were asked by a client to reduce a fee proposal to win new work?
My firms fees are fixed as per our fee matrix.
Depends how much by and what the context was.
What would you do if you became suspicious that a client was involved in money laundering?
Follow the Firm’s Procedures: Report the suspicion internally to the designated Money Laundering Reporting Officer (MLRO).
Gather Information: Ensure that I have all relevant details and context of the transaction or behaviour that raised suspicion, without alerting the client.
Do Not Continue the Transaction: If the suspicion is strong, I would avoid continuing with any transactions or actions related to the suspicious activity until further guidance is received.
Make a Suspicious Activity Report (SAR): The MLRO would assess the situation and, if deemed necessary, file a Suspicious Activity Report (SAR) with the National Crime Agency (NCA).
Cooperate with Authorities: If the NCA or any relevant authorities request information, I would cooperate fully while maintaining confidentiality.
What would you do if you became suspicious that a client was involved in terrorist activities?
Report the suspicion to the designated Money Laundering Reporting Officer (MLRO) in line with the firm’s anti-money laundering (AML) policy.
Gather Relevant Information.
Cease Involvement with the Client: If appropriate.
File a Suspicious Activity Report (SAR): The MLRO would assess the situation and, if deemed necessary, file a SAR with the National Crime Agency (NCA) or the relevant authorities.
Cooperate with Authorities.
If you were to set up in practice on your own, what types of insurance would you need?
Professional Indemnity Insurance (PII): To protect against claims of negligence, errors, or omissions in the professional services I provide to clients.
Public Liability Insurance: To cover claims made by third parties for injury, property damage, or accidents that occur on my business premises or due to my work.
Employers’ Liability Insurance (if employing staff): To cover legal costs and compensation claims if an employee is injured or becomes ill due to their work.
Office Central London
What part of the transaction were you unable to advise on?
What did the lease say about alienation?
I had concerns about some of the financial figures on the balance sheet.
They passed the profits test but I had reservations about the future so I recommended that my client sought professional advice from their accountant.
The lease said that assignment was permitted with landlord consent (not to be unreasonably withheld or delayed). Fully qualified covenant.
Office Central London - assignment
Did you offer advice to the client on risk?
Yes I recommended to consider an AGA
Rent Deposit
I also advised to consult an accountant
Office Central London - Assignment
If the matter is delayed, what are the implications?
If the Landlord does not respond in a reasonable time (typically 28 days)
Under the Landlord and Tenant Act 1988 (if applicable)/Code for leasing business premises 2020 if a landlord does not respond to an assignment request within a reasonable time (typically 28 days), they may be deemed to have given consent, unless the lease specifically states otherwise.
Breach of lease: Failing to respond within the time frame stipulated in the lease can be considered a breach of the landlord’s obligations under the lease.
Potential legal action: The tenant may seek legal action if the landlord unreasonably withholds or delays consent, especially if it results in the tenant being unable to assign the lease.
Compensation claims: If the tenant can prove that the lack of response has caused them financial loss, they may seek compensation.
If the assignee didn’t meet the satisfactory review, what would you advise?
Not proceeding with the assignment.
Investigating the current covenant strength of the tenant
Looking at the market rent
How do you work out what a rent deposit would be?
3-6 months - depending on the covenant strength
Office Central London
Talk to me about the pitch you were working on
It was a pitch for the management of a new property with a new client
Office Central London
What was the tender process for?
For the management of a new property with a new client
Office Central London - COI
If you were only assisting, is it a big deal?
Yes it was still a conflict
Office Central London
If your director didn’t have a problem with the conflict, would you continue?
All parties would have to be happy - informed consent
Office Central London
Did you offer advice on how you could be kept apart from the matter?
Yes - information barrier etc
In the end separate team and different floor.
Who polices money laundering?
Who polices bribery?
Money laundering - National Crime Agency
Bribery - Serious Fraud Office
What are the requirements/levels for PII in practice?
Turnover of business £100,000 or less - £250,000 cover
£100,000 - £200,000 = £500,000 cover
£200,000 + = £1,000,000
Sanctions for not maintaining Professional Indemnity Insurance Cover?
It breaches the RICS’ Rules of Conduct.
Fines, loss of regulation status, or referral to a disciplinary panel.
Fixed penalty notice
Regulatory compliance order
Regulatory tribunal
Disciplinary panel
Setting up a new firm. What would you provide to RICS?
Register with RICS
PII and Complaints Handling Procedure
Client money handling details
Succession plan / Locum
Complaints handling log and complaints handling officer
Money laundering reporting officer
CPD
What are the fines for Data Breaches?
£17.5 million or 4% of the global annual turnover. Whichever the greater.
What must Landlord provide for grounds F and G under Section 30?
For F (Demolition/reconstruction) the Landlord must provide firm intention, prove funding and planning, substantial work, necessity to gain vacant possession and to redevelop
For G (Owner occupation) - Landlord must have owned property for FIVE years and prove intention to occupy and run business
What are the 3 levels of disciplinary action?
Action by head of regulation of RICS
Disciplinary Panel (drawn from independent Regulatory Tribunal)
Appeal Panel
What disciplinary procedures can be completed by the RICS
Fixed Penalty Notice
Regulatory Compliance Order
Refer the matter to member of regulatory tribunal
Refer to disciplinary panel
Reprimand
Fine - unlimited amount but must be proportional to offence
Expulsion from membership
Publication of results of hearing in RICS Modus magazine/newspaper/RICS website
What is an inclusive environment?
An environment where all individuals feel valued, respected, and supported, regardless of their background, identity, or differences.
What is the word for gifts - that they should be in relation to the work carried out.
Proportionality
What was the legislation that was brought in to help tenants during Covid 19?
The Commercial Rent (Coronavirus) Act 2022
- Rent
- Sets out specific arbitration process
- Only refers to rent due in actual ‘lockdowns’ - March 2020-July 2021
Aimed for Landlords and Tenants to discuss and come to a conclusion.
Relief from payment in regard to ringfenced arrears
Writing off debt in whole or part
Additional time for payment instalments, monthly rent etc
Reduce/remove interest on unpaid rent
Who is a responsible principle?
A Responsible Principal is an individual within a regulated RICS firm who is accountable for ensuring the firm complies with RICS rules, standards, and regulations.
What are the 3 main roles of the RICS
To be the leading source of information and independent advice on land, property and construction
To protect consumers through strict regulation of the professional standards
To maintain the highest standards of education and training
What are BPR’s and CPR’s
Business Property Regulations (BPRs)
RICS guidance regulating firms: covers client money handling, PII, terms of engagement, conflicts of interest, and complaints handling.
Ensures professional conduct and protection of client interests.
Conduct and Practice Regulations (CPRs)
RICS rules for individual members: sets out ethical obligations, including acting with integrity, competence, and transparency.
Applies regardless of role or firm – governs personal professional behaviour.
