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RICS APC - YN > Ethics, Rules of Conduct & Professionalism - Part 1: RICS Requirements > Flashcards

Ethics, Rules of Conduct & Professionalism - Part 1: RICS Requirements Flashcards

1
Q

What are the four levels of membership?

A
  1. FRICS
  2. MRICS
  3. AssocRICS
  4. Trainee/Student
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2
Q

When was the RICS founded?

A

1868

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3
Q

When was the Royal Charter granted?

A

It was granted in 1881 by the Privy Council

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4
Q

How many current members are there? (roughly)

A

137,000

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5
Q

What do you need to become a Fellow (FRICS)?

A
  • Evidence of achievement of FOUR Fellowship characteristics:
    1.Five or more years at MRICS
    2. A leadership role
    3. Professional/technical achievement
    4. Academic achievement or raising the profile of the RICS
    5. A portfolio of professional achievement to support the application is required to include your CPD record
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6
Q

How is the RICS governed?

A

By the terms of its Royal Charter, various internal councils and boards

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7
Q

What is the purpose of the Governing Council?

A

It runs the RICS, providing management and strategic direction

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8
Q

How many members are on the RICS Governing Council?

A

20

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9
Q

Who reports to the Governing Council?

A

The Standards and Regulation Board and Management Board

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10
Q

How many specialist professional groups covering property, land and construction are there?

A

17

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11
Q

Who is the current CEO of RICS?

A

Justin Young

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12
Q

Who is the current President of RICS?

A

Ann Gray FRICS

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13
Q

Who chairs the RICS Governing Council?

A

The President of RICS

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14
Q

What did the Levitt Review call for?

A

Full independent review of the “purpose, governance and strategy” of RICS

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15
Q

What is the three main roles of RICS?

A
  1. To maintain the highest standards, of education and training
  2. To protect consumers through strict regulation of professional standards
  3. To be the leading source of information and independent advice on land, property, construction and associated environmental issues
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16
Q

Who is the RICS accountable to?

A

Both members and the public

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17
Q

What were the findings of the Levitt Review?

A

Internal governance failings within RICS

Lack of clarity, structure and purpose of RICS governance arrangements

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18
Q

When was the Levitt Review?

A

2021

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19
Q

Who did RICS appoint to conduct a further review following the Levitt Review?

A

Lord Michael Bichard

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20
Q

What was Lord Bichard commissioned to review?

A
  1. Clarify the purpose of RICS - including its responsibilities to act for the public
    advantage
  2. Make recommendations on its governing structure to deliver that purpose
  3. Provide proposals for the incoming leadership and governing body on the future
    culture and strategy of the Institution
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21
Q

Who did the Bichard Review consult?

A

Members and external stakeholders

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22
Q

What are the 7 key recommendations of the Bichard Review?

A
  1. Increased focus on the public interest remit of RICS
  2. Maintaining self-regulation through greater independence for regulatory functions
  3. Increased focus on diversity and inclusion across the profession and within RICS governance
  4. Empowering and enabling members through greater support for regional boards, alongside increased member engagement with renewed focus on younger members
  5. Undertaking an independent review of RICS governance and effectiveness at delivering against its Charter for the public advantage once every five years
  6. A new simplified, clear, accountable governance structure
  7. Showing greater leadership on issues that matter most to society - such as sustainability and climate change
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23
Q

When did Bichard report the findings and how many key recommendations were there?

A

June 2022

Seven key recommendations

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24
Q

Have the RICS agreed to adopt all of the Bichard recommendations?

A

Yes

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25
Q

What are the five key themes from the Bichard Review?

A
  1. Governance
  2. Strategy
  3. People
  4. Culture and Values
  5. Member Service
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26
Q

What are the five benefits of being a RICS member?

A
  1. Status - Your professional credentials provide unrivalled client confidence
  2. Recognition - Promotion of your professional excellence to governments and markets
  3. Market Advantage - RICS status and standards gives you a competitive advantage
  4. Knowledge - International practice standards gives us a competitive advantage
  5. Network - Access to 125,000 professionals worldwide
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27
Q

How will the Bichard Review be adopted?

A

A quick and phased approach to the adoption of clear responsibilities for governance by key individuals

Recruiting a new Management Board (including with external membership)

Holding elections for key RICS committees and groups

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28
Q

What information is required by RICS for Firm Registration?

A
  1. Type of business and staffing details
  2. Name of the Responsible Principal
  3. Statutory regulated activities - e.g. financial services
  4. Nature of clients
  5. Complaints handling procedure details and records
  6. Professional indemnity Insurance details
  7. Whether the firm holds clients’ money
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29
Q

Why must new firms providing surveying services to the public register to the RICS?

A

This is to ensure that there is a recognised quality benchmark for all firms
If there are no RICS members, a firm cannot register

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30
Q

If a UK firm has 50% Principles that are RICS members and provides surveying services, do they need to be regulated?

A

YES

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31
Q

If a UK firm has at least 25% Principles that are RICS members and provides surveying services, do they need to be regulated?

A

They can apply to be regulated

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32
Q

Who can be a Principal as defined by RICS?

A

A sole practitioner, or. a partner, a director or a member of a limited liability partnership,

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33
Q

What is ‘Responsible Principal’? What is their responsibility?

A

Each firm must nominate them

Must 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

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34
Q

Who can use the RICS logo?

A

Only RICS members and registered firms - new rules came into effect in April 2020

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35
Q

Who will hear any disputes concerning the registration of a firm?

A

RICS Standards & Regulation Board

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36
Q

When were the new Rules published?

A

October 2021

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37
Q

When did the Rules become effective from?

A

2nd February 2022

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38
Q

What was the rational for developing the new Rules of Conduct?

A
  1. Simpler Structure
  2. Clear examples
  3. Focus on respect, diversity and inclusion
  4. Understanding evolving technology
  5. Tackling global challenges - including sustainable development and tackling climate change
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39
Q

Who do the Rules apply to?

A

Members and Firms

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40
Q

What are the FIVE Rules of Conduct?

A

Rule 1 - Members and firms must be honesty, act with integrity and comply with their personal obligations, including obligations to RICS

Rule 2- Members and firms must maintain their professional competency and ensure that services are provided by competent individuals who have the necessary expertise

Rule 3 - Members and firms must provide good-quality and diligent service

Rule 4 - Members and firms must treat others with respect and encourage diversity and inclusion

Rule 5 - Members and firms must act in the public interest, take responsibility for their actions and act to prevents harm and maintain public confidence in their profession

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41
Q

What do the new Rules of Conduct provide?

A

A simpler structure with a clear example behaviour for each rule

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42
Q

What does Appendix A to the Rules of Conduct set out?

A

Sets out mandatory professional obligations which are to be followed by members and regulated firms

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42
Q

What must RICS Regulated Firms follow? Under the ROC App A (7 things)

A
  1. Publish a complaints-handling procedure - including an alternative dispute resolution provider approved by RICS and maintained a complaints log
  2. Ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS
  3. If having a sole principal, make appropriate arrangements for their professional work to continue in the event of their incapability, death, absence from or inability to work
  4. Cooperate with RICS
  5. Promptly provide all information requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf
  6. Display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS
  7. Report to RICS any matter that they are required to report under the Rules for the Registration of Firms
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42
Q

What RICS Regulated Members must follow? Under the ROC App A (3 things)

A
  1. Comply with the CPD requirements set by the RICS
  2. Cooperate with RICS
  3. Promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf
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43
Q

What RICS Regulation applies to firms registration?

A

Rules for the registration of firms Regulation Version 7 with effect from 2 February 2022

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44
Q

What is the purpose of the RICS Ethics Decision Tree?

A

Provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner or situation

It encourages considering the legality of one’s actions and their consistency with the Rules of Conduct

Ensures clear reasoning before making decisions

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45
Q

How can a disciplinary procedure be triggered?

A
  • Someone complaining to the RICS
  • An allegation by a client or third party
  • Information received or established by the RICS
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46
Q

What is the regulation that sets out the disciplinary process? When did it become effective from?

A

RICS Regulatory Tribunal Rules with effect from 2 February 2022

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47
Q

Are you aware of any recent disciplinary hearings?

A

Peter Heath [1167554] - Disciplinary Panel - 24 August 2023
Failed to comply with RICS’ requirements in respect of CPD
Sanction:  Reprimand and Fine 

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48
Q

What are the 3 levels of disciplinary action?

A
  1. Action by Head of Regulation
  2. Disciplinary Panel (drawn from the independence Regulatory Tribunal
  3. Appeal Panel
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49
Q

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

A
  1. Serve a Fixed Penalty Notice
  2. Make a Regulatory Compliance Order
  3. Refer the matter to a single member of the Regulatory Tribunal for consideration
  4. Refer the matter directly to a Disciplinary Panel
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50
Q

What issues might a Regulatory Compliance Order cover?

A
  • Non-compliance with RICS Rules e.g. failure to undertake appropriate CPD.
  • Failure to appropriate CPD may result in sanctions such as a Fixed Penalty and Disciplinary Panel action resulting in expulsion
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51
Q

What penalties are available to a Regulatory Tribunal Disciplinary Panel?

A
  1. Issue a Regulatory Compliance Order (as above)
  2. Reprimand
  3. Fine
  4. Impose an unlimited amount of fine per breach but it must be proportionate to the offence
  5. Impose conditions upon future continued RICS registration
  6. Expulsion from membership or remove a firm
  7. 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 or member is based
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52
Q

What can the Appeal Panel do?

A

They can allow the appeal and vary the penalty previously imposed

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53
Q

What is the first step in disciplinary action?

A

A formal investigation by the Head of Regulation of the RICS

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54
Q

What is a Regulatory Compliance Order?

A

A Regulatory Compliance Order is an agreement between RICS and a Regulated Member (either an RICS professional or a RICS-regulated firm) that they are liable for disciplinary action.

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55
Q

What are Fixed Penalties?

A

Procedures used for breaches of the Rules relating only to the supply of information to the RICS by firms and members.

These may consist of a fine and/or a caution

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56
Q

Why does the RICS regulate the surveying profession?

A
  1. Protect the public
  2. Uphold the public confidence in the profession
  3. Uphold professional standards
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57
Q

What RICS Regulation is there on Social Media?

A

Use of social media: Guidance for RICS members 2021

58
Q

When is RICS is likely to investigate concerns about social media posts?

A

Where they involve:
1. Discrimination
2. Dishonesty
3. Abusive or threatening behavior, or are likely to cause significant harm, distress or offence to a person
4. Bullying, harassment or victimisation of a person or people
5. A pattern of frequent or a large number of concerning communications
6. Ignoring previous advice or warnings about concerns

59
Q

What is highlighted in the Use of Social Media: Guidance for RICS members regulations?

A

The importance of social media networks to members and firms

It reminds members of the high standards of professional behaviour expected of RICS members and that the Rules of Conduct protect the interests of members and the profession as a whole

60
Q

When is the RICS unlikely to investigate social media posts?

A
  1. When they are critical of an organisation, its policies and performance, rather than of individuals
  2. Use of professional and respectful language
  3. Are removed if requested to do so
61
Q

What are the two new RICS categories of core material?

A

1.Professional Standards
2.Practice Information

62
Q

What is a RICS Professional Standard?

A
  • They are mandatory documents
  • Set requirements for competent and ethical practice for RICS members + regulated firms

‘set requirements or expectations for RICS members and regulated firms about how they provide services or the outcomes of their actions’

63
Q

Are RICS Professional Standards mandatory?

A

Yes - mandatory requirements that surveyors must follow, where the word ‘must’ is used

64
Q

Are RICS practice information mandatory?

A
  • No - the guidance is not mandatory and does not provide explicit recommendations.
  • These papers can include but are not limited to, good practice advice, information, insights + processes
65
Q

What is RICS Practice Information?

A

This is information to support the practice, knowledge and performance of RICS members and regulated firms

66
Q

Who is the Standards & Regulation Board (SRB), chaired by?

A

Nigel Clarke
(Interim Chair)

67
Q

What does the RICS Professional Standards and Practice Information replace?

A

It replaces all the current RICS core material, to include International Standards, Codes of Practice, Professional Statements and Guidance Notes

68
Q

Why have the RICS introduced these two new document categories?

A

Because of the Bichard Review - CHECK THIS

69
Q

Give an example of a current Professional Statement that has become a Professional Standard?

A

For example, Conflicts of interest. This document was reissued in July 2023 as a professional standard. It had previously been published in March 2017 as a Professional Statement.
CHECK

70
Q

What is the Three Step Process to follow for TOE?

A
  1. Check professionally competent
  2. No conflicts of interest or personal interests
  3. Confirm terms of engagement in writing and get written approval from the client BEFORE you start work on the instruction
71
Q

When would it be appropriate to decline an instruction?

A

If:
1. You are not competent to undertake the work - it is outside your limitations
2. You do not have sufficient facts on the issue
3. The proposed client will not sign your terms of engagement and/or complete AML check
4. There is a conflict of interest or personal interest
5. A Professional Indemnity Insurance liability cap cannot be agreed
6. The advice is for a friend or on a pro bono basis (for example free of charge for a charity) and your professional indemnity insurance will not cover work carried out on a personal basis
7. The potential client is included in the UK Government sanctions list
8. Would you be content for your actions to be made public

72
Q

What must Terms of Engagement state?

A

Must be in writing:
1. The Client’s agreement to proposed fee basis
2. Payment of expenses (an how calculated)
3. A copy of the firm’s complaints handling procedure is available upon request

73
Q

What must you ensure during fee negotiations?

A

That you are able to provide a high standard of service

Transparency

You can vary your proposed level of service when renegotiating your initial fee proposal be beware of still providing a high standard of service

74
Q

What should fees be based on?

A

Market based

Agreed on an ad-hoc basis with clients (made or happening only for a particular purpose or need)

75
Q

How must referral fees be dealt with?

A
  • You must be transparent with your client or consumers so they are aware that you may be in receipt of or offering a referral fee
  • State so in the terms of engagement if applicable
  • Granting & acceptance of referral fees should be considered in the context of the Bribery Act 2010 and the RICS ROC
76
Q

Name examples of COI between two parties

A
  1. Any financial interest
  2. A personal interest
  3. Commercial relationships
  4. Acting on both sides of a transaction
77
Q

What is conflict avoidance?

A

When you do not accept the instruction

78
Q

What is conflict management?

A

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.

79
Q

What RICS guidance is there on COI?

A

RICS Professional Standard Conflicts of Interest - Global 1st edition, March 2017 Effective from 1 January 2018 reissued in July 2023

This document was reissued in July 2023 as a professional standard. It had previously been published in March 2017 as a Professional Statement.

80
Q

What are the three types of COI?

A
  1. A Party Conflict
  2. Own Interest Conflict
  3. Confidential Information Conflict
81
Q

When can informed consent be given? (with regards to COI)

A

Only be given in writing by the party
If the person explaining the position to them is entirely transparent about any material factors and sure that the party affected understands what they are doing

82
Q

When should surveyors seek informed consent?

A

If satisfied that all relevant parties are best served by doing so

83
Q

What is the three step process for when a conflict arises?

A
  1. Conflict Avoidance
  2. Written advice to both parties
  3. Conflict Management
84
Q

Explain Step 1 of dealing with a COI

A

Conflict Avoidance

  1. Request full facts
  2. Consider if your impartiality is compromised
  3. Can it be properly managed maintaining transparency and openness
  4. Decide whether you want to accept or decline the instruction
85
Q

Explain Step 2 of dealing with a COI

A

Written Advice to Both Parties

Set out in writing to both clients

  1. Disclose the nature of the conflict - relevant facts/proposals for how the firm intends to deal with the conflict e.g. info/ethical barrier
  2. Be as clear as you can - ensure that both parties can make their own decisions (inform them to seek independence advice if needed)
  3. Request written confirmation from both clients of their informed consent that your firm can act in accordance with the provisions of the procedure proposed
86
Q

Explain Step 3 of dealing with a COI

A

Conflict Management

  1. Upon receiving written consent to your declaration of the conflict and your proposals for the management of the conflict
  2. Set up an info barrier in accordance with the provisions agreed with both clients
87
Q

What is an example of conflict management?

A

Information/ethical barrier

88
Q

Example of where you have seen a conflict of interest managed in your firm?

A

PREPARE AN EXAMPLE

89
Q

When do personal interest / own interest conflicts arise?

A
  • Arises when acting for a family member, close business associate or someone with whom you have a financial or personal interest or benefit (known as a ‘connected person’)
  • You must not let a personal interest interfere with your professional judgement - full transparency is required
  • Declare facts promptly and in writing before you accept the instruction
  • Section 21 of the Estate Agents Act 1979 declaration required for Agency Work
90
Q

What are the four requirements for CPD?

A
  1. Minimum of 20 hours of CPD
  2. At least 10 hours must be Formal CPD
  3. All members must maintain a relevant and current understanding of RICS ROC
  4. All members must record their CPD activity using the RICS CPD Management System on the RICS website
91
Q

What is formal CPD?

A

Structured learning

Clear learning objectives and outcomes

Examples: online training/courses/seminars

92
Q

What is informal CPD?

A

Any self-managed learning that is relevant or related to your professional role

93
Q

What is the RICS guidance on complaints handling procedures?

A

RICS Guidance Note on Complaints Handling 2016

94
Q

When should a complaint be acknowledged?

A

Within 7 days

95
Q

When should a complaint be investigated in?

A

Within 28 days

96
Q

Who is the Complaints Handling Officer for a sole practitioner?

A

A nominated surveyor in another firm

97
Q

Where do the RICS outline confidentiality and what do they state?

A

RICS Bye Laws

Client confidentiality must be maintained for all client affairs

98
Q

What information is covered under confidentiality?

A

Historic information and information provided by a client prior to instruction

99
Q

Are third parties allowed to access your files?

A

Must get your client’s approval first

Unless you are subject to a statutory duty overriding the client’s confidentiality rights e.g. police or HRMC investigation

100
Q

How long should files be held for before disposal or destroyed securely?

A

6 years

101
Q

As a surveyor you receive a confidential email with information regarding a different party who is not your client - what do you do?

A

I know that this cannot be used for my own purposes

Client and sender should be advised of the error

Matter should be recorded in a note to the firm’s compliance officer

Any confidential material received in error should be disposed of securely

102
Q

What is the two step process for handling a complaint ?

A
  1. In House
  2. ADR - Third Party Resolution
103
Q

What is the process in Stage 1 of handling a complaint?

A
  1. In House
    - Details of the CHP should be issued whenever the firm receives a complainant to whom the firm owes a duty of care
    - The procedure must be quick, clear, transparent and impartially implemented
    - Details of the nominated person who will investigate the complaint ( The Complaints Handling Officer) must be stated as the person to be contacted in the first instance
    - The complaint must be made in writing
    - Procedures and strict timescales for the investigation of the complaint should be recorded
104
Q

What is the process in Stage 2 of handling a complaint?

A
  1. ADR - Third Party Resolution
    - If the complainant is not happy with the review,
    - The second stage of CHP involves using an independent redress scheme that the firm has chosen
    - The name of the redress mechanism must be provided to the complainant e.g. The Centre for Dispute Resolution (CEDR), The Property Redress Scheme and the RICS Dispute Resolution Service
105
Q

What is included in the CHP Guidance Note?

A
  • A firm’s written CHP must be approved by RICS
  • Always notify your PII insurers asap if there is a complaint as this could lead to a claim for negligence
  • Details of the CHP should be issued to a client at the same time as Terms of Business
  • A complaints log must be maintained to show the deatils, progress and outcome of any compliants
  • Firms must include an RICS approved Alternative Dispute Resolution (ADR) mechanism in their CHP
106
Q

Is Professional Indemnity Insurance mandatory?

A

Yes mandatory for all surveyors working in practice

107
Q

What is the purpose of Professional Indemity Insurance ?

A

To protect clients, surveyors and third parties against negligence claims when there is a duty of care breached and a claim for damages arises

108
Q

What is the RICS regulation for PII?

A

RICS “Professional Indemnity Insurance Requirements” Version 9 (April 2022)

109
Q

What do the PII regulations outline?

A

All members must ensure to have adequate and appropriate level of insurance in place for each instruction having considered the potential liabilities which may exist

All policies must be underwritten by an RICS approved insurer

110
Q

What are the current minimum limit of indemnity based on the turnover of the firm:

A

£100,000 or less requires £250,000 minimum level of indemnity required for each and every claim

£100,001 to £200,000 requires £500,000 minimum level of indemnity for each and every claim

£200,001 and more requires £1,000,000 minimum level of indemnity for each and every claim

111
Q

Is PII required for Pro bono work?

A

Yes

112
Q

How do new businesses know the appropriate levels of PII?

A

If a new business, estimate the turnover and adjust in due course accordingly

113
Q

What is the RICS Assigned Risk Pool?

A

The ARP is open to all UK RICS regulated firms that are unable to obtain PII, which meets the minimum requirements of the RICS, in the insurance market

It is available at a cost for members who cannot arrange cover

114
Q

Five Key points for PII

A
  1. The policy should be fully retroactive (it means that the policy covers ALL work done in the past by the policyholder)
  2. Certificates are sent to the RICS on an annual basis as part of the Firm’s annual return to RICS
  3. Early notification to firm’s insurers is required when a potential claim arises
  4. “Adequate and appropriate” run-off cover is required following the end of trading
  5. Most firms aim to cap their liability with clients for individual instructions
115
Q

Who does the Duty of Care exist to?

A

Clients and Third Parties

116
Q

Surveyors must act with…

A

Reasonable care and skill

117
Q

When does a claim for damages arises?

A

When breached, and there is a loss

118
Q

What did Yianni V Edwin Evans (1981) establish?

A

It established that a residential valuer instructed by a mortgagor lending institution could owe a duty of care in tort to a mortgagee purchaser relying on a valuation

119
Q

What did Scullion V Bank of Scotland plc (t/a Colleys) (2010) show?

A

A breach of duty of care owed to Mr.Scullion in relation to a valuation report prepared for a flat in Cobham, Surrey

Court of Appeal held that a surveyor who provides advice on value to a lender in respect of a buy-to-let purchase does not owe a duty of care to the borrower who is seeking funding to purchase the property.

It over-turned the original court decision in the case of a “commercially astute” borrower

120
Q

What did Burgess V Lejonvarn (2020) establish?

A

It established that professionals providing professional services pro bono and without a contract owe a duty of care in tort to act with reasonable care and skill in respect of the service they provide.

However, the Court of Appeal also determined that they are not under a duty to advise or give warnings, nor are they liable for work they do not do.

121
Q

What needs to be established for a negligence claim to be made?

A

A duty of care - Breach of that duty - Loss (which is caused by the breach) - Damages (negligence claim)

122
Q

What is the relevant case law for negligence?

A

Yianni V Edwin Evans (1981)
Scullion V Bank of Scotland plc (t/a Colleys) (2010)
Burgeess V Lejonvarn (2020)

123
Q

Difference between Contract Law and Tort Law?

A

Contract - deals with contracts and the failure to complete what was agreed
Tort - deals with the duty of care that the law imposes on us

124
Q

What is the Act which applies to negligence?

A

Limitations Act 1980

125
Q

What are the current limitation periods for negligence? (Contract & Tort)

A

Contract - 6 years from the date of the negligent act, breach of contract or omission.

Also, Section 14A provides an alternative limitation period of 3 years to the date of knowledge of the damages subject to the 15 years long stop from negligent act or omission

Tort - 6 years from the date the claimant suffered the loss

126
Q

How can negligence claims be avoided or reduced?

A
  • Clearly understand the client’s objectives confirm precise instructions in writing in the terms of engagement
  • Ensure you are competent to undertake the instruction
  • Undertake the work in accordance with the relevant Professional Standards and information
  • Make detailed file notes and take photographs
  • Keep up to date with market knowledge and legislation and undertake and record
  • Cap the professional liability excess on your policy in the Terms of Engagement
127
Q

The importance of complying with client money requirements is outlined in what?

A

Rules of Conduct 2021

128
Q

What does the ROC say on Clients Money?

A

“Firms keep client money safe and have appropriate accounting controls”

129
Q

What can client money include?

A
  • Holding deposits
  • Rent
  • Service charges
  • Retentions
130
Q

What is the RICS Professional Standard on Client Money?

A

RICS Professional Standard ‘Client Money Handling’, 1st edition, 2019

131
Q

What six areas of good practice are set out in the Professional Standard ‘Client Money Handling’ 1st Ed 2019?

A
  1. Holding client money
  2. Providing information to clients
  3. Receipts of client money
  4. Payments from client accounts
  5. Accounting records and controls
  6. Compliance
132
Q

What procedures do surveyors need to be aware of when dealing with clients’ money?

A
  • Client accounts must be kept separately & clearly identifiable
  • The word ‘client’ is on the bank account and cheque book
  • A client must be able to have their monies on demand
  • Payment of interest is agreed with a client and accounts must be kept in credit
  • Regular bank reconciliation checking that payments received are transferred to the bank account and expenditure records are checked at least monthly
  • Accurate records are kept with a running balance avaliable
  • Annual audit and reporting obligations by certified accountant employed by the RICS are met
  • Money can only be withdrawn from a client account if properly required
  • If cash receipts are made to settle transactions, make sure your records show all cash transactions
  • Signatories must be agreed with authorised staff and two signatures should be required
  • A discrete account is for a single named client account only
  • RICS Regulatory Review Visits of inspection can be undertaken by RICS usually on a routine 3 yearly basis by an accountant employed by the RICS
  • All firms handling client money need to display their procedures document on their website (residential agencies handling client money also need to display their scheme membership certificate in their premises)
133
Q

What is the Client’s Money Protection Scheme used for?

A

It provides last resort protection in instances where an RICS Regulated firm is unable to repay a client’s money.

134
Q

What are the two types within the RICS Clients Money Protection Scheme?

A
  1. “Client Money Protection for Surveying Services”: General client money protection, covering money held by firms undertaking any surveying activities
  2. “Client Money Protection for Residential Agents”: Residential agency activity in England protection, covering areas under the Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2020.
135
Q

What is the RICS Compliance for starting a new practice?

A
  • Inform RICS of your new practice by completing a Firm Details Form
  • Appoint a Responsible Principal for all RICS communication (previously known as the Contact Officer)
  • Register with RICS for regulation of the firm
  • Arrange Professional Indemnity Insurance and send detail to the RICS
  • Set up procedures for the requirements for Client Money Handling, including a Protection Scheme
  • Register for the RICS Valuer Registration Scheme (VRS) if undertaking a Red Book Global valuation work
  • Obtain RICS approval for the Complaints Handling Procedure
  • Set up a complaints log
  • Appoint a Complaints Handling Officer (or elect a surveyor in another practice if a sole practitioner)
  • Use of logo kit from the RICS for all practice material to comply with the designation ‘Regulated by RICS’
    -Plan for succession/future running of the business if a sole practitioner
  • Ensure CPD logged online on the RICS CPD Management System and set up staff training plan
  • Ensure completion of an online RICS Annual Return at the end of each year
136
Q

Statutory Compliance for starting a new practice?

A
  • Requirement to disclose business name
  • Disability discrimination compliance (Equality Act 2010)
  • Financial Services and Markets Act 2000, Financial Services Act 2012, Bribery Act 2010 compliance
  • Appoint a Money Laundering Reporting Officier (Money Laundering Regulations 2017, as amended)
  • Asbestos register (Control of Asbestos Regulations, 2012)
  • Fire Safety compliance (Regulatoru Reform (Fire Safety) Order 2005) et al
  • Register for data protection (General Data Protection Regulation 2016 and Data Protection Act 2018)
  • Estate agency compliance (Estate Agents Act 1979, Consumer Protection Regulations 2008, Misrepresentation Act 1967) et al
  • Inform HMRC for VAT and Tax registration (VAT registration threshold is currently £85,000 p.a. turnover) pensions, gender pay gap reporting etc.
  • Ensure insurance compliance for employer and public liability
137
Q

What actions are required by RICS when closing a practice?

A
  1. Inform RICS of your retirement/closure
  2. Ensure clients are informed at the earliest opportunity
  3. Hand over arrangements made to a new firm
  4. Return any monies held by clients to their own accounts
  5. Inform insurers and procure professional indemnity insurance run-off cover for a minimum of 6 years from the expiry of the policy in force at the time of cessation in accordance with RICS requirements
  6. Retain a copy of the client files and records for a minimum of 6 years
138
Q

What is the governance structure?

A
  1. Privy Council
  2. Governing Council
  3. Standards + Regulations Board
  4. RICS Board (management)
  5. Audit, Risk Assurance and Finance Commitee
  6. Nominations and Reumeration Comittee
  7. World Regional Boards + Market Advisory Panel
139
Q

What is the RICS moto?

A

Est Modus in Rebus (there is a measure in all things.)

140
Q

What do you need to be an assesor?

A

You need to be three years post-qualified MRICS.
Day training course

141
Q

What is a locum?

A

A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work, e.g. in the event of an accident/illness, unforeseen circumstances, prolonged absence (e.g. holiday or a sabbatical) or death.

142
Q

What do you understand by the term self-regulation?

A
  • It means the ability to monitor and control oneself

· The RICS self regulates but schemes such as the valuer registration scheme where they monitor current members and how they are practicing

· Its to review ones self

143
Q

What is a Bye-Law?

A

Rule or regulation made by a professional body to control its members

144
Q

Give an example of one of the RICS Bye-Laws.

A

To conduct themselves in a manner befitting membership of the RICS (B5.2.1)

145
Q

Evidence of the impact of the Bichard Review recommendations in actions?

A
  • New Governing Council elections took place in April 2023 to better reflect the geographical location and disciplines of members
  • RICS has recruited a new Chair of the RICS Diversity, Equity, and Inclusion (DEI) Board Louise Brooke-Smith

RICS APC - YN (22 decks)

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