Ethics, Rules of Conduct & Professionalism

Question 1

Why do you want to become a member of RICS? What is the role of RICS?

Answer 1

・The RICS is a trusted and professional body. I want to gain the trust of my clients as a professional with high ethical standards, thus improving and building on those relationships.
・Be part of a professional body that is recognised across the globe, broadening my horizons in terms of international job opportunities.
・MARKS (Market Advantage, Recognition, Knowledge, Status)

Question 2

What are the key functions of RICS?

Answer 2

・Regulation
・Training (professional and ethical)

Question 3

What is a Royal Charter?

Answer 3

・RICS has a seat on the privy council to advise the Crown (& government)
・Royal Charter requires members to promote a profession for public benefit

Question 4

What are the 5 Rules?

Answer 4

1. Honesty, integrity & compliance with professional obligations
2. Professional competence
3. Diligent Service
4. Respect and diversity
5. Public interest & responsibility

Question 5

What are the 6 ethical principles that the Rules of Conduct are based on?

Answer 5

・Honesty, integrity, competence, service, resepect, responsbility
・(One per rule except for the first which has 2 - honesty and integrity)

Question 6

Give an example behaviour for each Rule of Conduct

Answer 6

1. Not allowing yourself to be influenced by gifts or hospitality
2. Supervising sub-contractors or lower level employees when they don’t have the necessary experience
3. Ensuring client requirements and your scope of services are understood by all parties before acting
4. Do not discriminate on grounds of gender, sex etc
5. Question practices that you don’t think are right & raise any concerns

Question 7

What are the core professional obligations of firms and members to RICS?

Answer 7

・3 for members:
1. Comply with CPD requirements
2. Must cooperate with RICS
3. Must provide all information reasonably requested by the Standards & Regulation Board

・7 for firms:
1. Must publish a complaints handling procedure
2. All work must be covered by PII that meets minimum standards
3. Firms with a sole principal must have appropriate arrangements for their work in the event of death etc
4. Must cooperate with RICS
5. Must provide all information reasonably requested by the Standards & Regulation Board
6. Must denote on business literature that they are regulated by RICS
7. Must report to RICS any matter as required under the rules for registration of firms

Question 8

Give me an example of when you have acted with integrity?

Answer 8

28 Boulogne Road, Croydon
・A purchaser asked me to request my firm’s building surveyors to undertake a survey for them. I deemed thgis not appropriate to seek informed consent as it was not in the purchaser’s best interests

Question 9

Tell me about when you have provided a high standard of service.

Answer 9

Portland Road, South Norwood
・I established client objectives and my scope of services
・I advised the client that to increase the value of the property they should look to submit a new planning application - I didn’t just advise them to continue so I could get a fee quicker

Question 10

Tell me about how you have promoted trust in the profession.

Answer 10

・I have refused to act where an instruction is outside of my competence and recommended alternative specialists

Question 11

Explain how you have taken responsibility in your current role.

Answer 11

・I take responsbility by making sure the data we hold is kept up to date and is destroyed when no longer needed

Question 12

Tell me about how you treat clients with respect.

Answer 12

・I have never discriminated or treated a client differently based on their physical attributes

Question 13

Tell me about how you treat other surveyors with respect.

Answer 13

・I listen to their opinions and recommendations
・I don’t discriminate or treat other sruevyors differently

Question 14

Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying.

Answer 14

・Register firm with RICS
・Arrange a locum policy in case I am incapacitated
・Arrange PII with run off cover in case of death or the practice closing
・Write up a written complaints handling policy with an ADR service

Question 15

If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.

Answer 15

・I would decline and report the bribe to my internal compliance officer

Question 16

What would you do if you were asked by a client to reduce a fee proposal to win new work?

Answer 16

・I would politely refuse, advising that doing so may impact our ability to provide the best standard of service

Question 17

What would you do if you became suspicious that a client was involved in money laundering?

Answer 17

・I would send a Suspicious Activity Report (SAR) to the National Crime Agency (NCA)
・I wouldn’t tip off the client

Question 18

What would you do if you became suspicious that a client was involved in terrorist activities?

Answer 18

・I would send a Suspicious Activity Report (SAR) to the National Crime Agency (NCA)

Question 19

If you were to set up in practice on your own, tell me about the types of insurance you would need.

Answer 19

・PII
・Public liability insurance
・Buildings insurance
・Contents insurance
・Employer liability cover
・Director and officers cover
・Business interruption insurance

Question 20

Croydon – how did you consider the cash inducement?

Answer 20

・I considered the inducement as a bribe, declined and reported this to my firm’s internal compliance officer

Question 21

How do you ensure that you comply with bribery legislation?

Answer 21

I ensure the 6 principles of anti-bribery laid out in the Bribery Act 2010 are followed:
・Proportionality
・Top-level commitment
・Risk assessment
・Due diligence
・Communication
・Monitoring and review

・Policy - I have read and understood my firm’s anti-bribery policy (if you have doubts, would you mind it becoming public knowledge, refer to your immediate manager etc)
・I have attended training provided by my firm on bribery & corruption
・I declare gifts & hospitality in our register

Question 22

How do you ensure you comply with money laundering regulations?

Answer 22

・I ensure I keep up-to date with current training & regulation
・I attend semi-regular AML training from our AML officer
・I have read and comply with my firm’s AML policy
・I know to keep reports of any suspicious activity (SAR) and report this to the NCA

Question 23

How do you ensure you comply with your firm’s bribery and gifts policy?

Answer 23

・Do not accept bribes
・If I were to receive a gift - input on firm’s gifts and hospitality register

Question 24

Tell me about an instance of when you have been offered a gift or hospitality by a client.

Answer 24

・I was given a bottle of wine by a client for Christmas as a thanks for my work

Question 25

Tell me about what you would do if you felt that an instruction was outside your scope of experience or knowledge.

Answer 25

・I would defer to a colleague if they were able to undertake the work. If not, I would decline the instruction or refer them to an external specialist.

Question 26

How would you keep client’s money securely and safely held?

Answer 26

・I would ensure accounts are kept separate from other client accounts and were clearly identifiable, with the client’s name on the account
・I would ensure monies were available on demand
・I would ensure an annual audit was carried out by an RICS accountant

Question 27

Tell me about how you would handle a client complaint.

Answer 27

・If the complainant is unhappy with the initial response, I would suggest mediation or conciliation
・If they are still not happy, they would be referred to a consumer redress mechanism (SHW use the Centre for Effective Dispute Resolution (CEDR))
・If they were still dissatisfied, it would be referred to the Surveyors Arbitration Scheme

Question 28

Tell me about a conflict of interest check you have carried out.

Answer 28

・Whenever I intend to take on a new agency instruction, I circulate this information on our intranet to all fee earners requiring that they confirm there is no conflict of interest with their obligation to the same client or a related party

Question 29

If you identified a potential or actual conflict of interest, how could you handle this?

Answer 29

・Identify what the conflict is
・Inform the client of the conflict and decline the instruction

Question 30

Farnham – how did you act ethically in terms of offers put forward? Why did you not disclose the offers?

Answer 30

“・Acted ethically by reporting offers immediately at the deadline
・Did not disclose offers as this is unethical and promotes gazumpering

Question 31

What money laundering regulations or legislation are you aware of?

Answer 31

・RICS professional statement: Countering Bribery and Corruption, Money Laundering & Terrorist Financing 1st Edn. 2019
・UK Money Laundering Regulations 2017
・Proceeds of Crime Act 2002

Question 32

What is a red flag of money laundering?

Answer 32

・Large cash payments
・Speedy sales
・No reason behind the purchase
・Paying more than market rate
・Reluctance to provide AML info

Question 33

What bribery legislation are you aware of?

Answer 33

・Bribery Act 2010

Question 34

What is a bribe?

Answer 34

・The offer or acceptance of an advantage as an iducement for an action that is illegal, unethical or a breach of trust

Question 35

How long should you keep anti money laundering records for?

Answer 35

・5 years from date of business relationship ends or transaction completes

Question 36

Can you tell me about the RICS requirements in relation to PII?

Answer 36

・Minimum cover is dictated by turnover of the firm:
・<£100,000 = min £250,000 cover
・£100,000 - £200,000 = min £500,000 cover
・>£200,000 = min £1mil
・SHW’s cover is £10 million

・Maximum uninsured excess also dictated by turnover:
・£10mil or less = the greater of 2.5% of the sum insured, or £10,000
・£10mil or more = No limit set

Question 37

What is a PII aggregation clause?

Answer 37

・Governs what happens if there is more than one claim in the same year

Question 38

What is a PII aggregation clause?

Answer 38

・Governs what happens if there is more than one claim in the same year

Question 39

What does ‘claims made’ mean in terms of PII?

Answer 39

・It is the policy in place at the time of the claim, not neccesarily the policy in place at the time of the incident pays out

Question 40

Is a PII excess usually paid for per claim?

Answer 40

・Depends if the policy was ‘any one claim’ or an aggregate basis

Question 41

In a negligence claim, what would help to show that you acted with consideration and due process?

Answer 41

・Provide records of meetings and conversations
・Show evidence of recommendations and advice

Question 42

Can good record keeping help to provide a defence in a PII claim?

Answer 42

・Yes - if you provide evidence of how you came to conclusions this can help defence

Question 43

If you were providing services outside of your usual scope to a client, what might you need to do in relation to your PII cover?

Answer 43

・Get your PII insurance updated by the provider
・Cannot act when not covered by PII

Question 44

What is run off cover?

Answer 44

・Covers work undertaken by a firm after it ceases to operate

Question 45

What RICS requirements are there relating to run off cover?

Answer 45

・Firms must have run-off cover for a minimum of 6 years
・Must have an aggregate limit of £1m

Question 46

How long can a PII claim arise after the work is undertaken?

Answer 46

・6 years for breach of contract or negligence under the Limitations Act

・PII is agreed on a ‘claims made’ basis so it is the policy in place when the claim is made rather than when the services were provided that covers the work. Policies are usually fully retroactive so will cover the all previous work by the firm.

Question 46

What changes did RICS recently make to the Minimum Approved PII Wording?

Answer 46

・Removal of the maximum uninsured excess for larger firms (over £10m turnover)

Question 47

Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance (1st Edition).

Answer 47

“・Sets out guidance for managing the risk associated with undertaking professional work:
・Breach of contract and negligence claims
・PI

Question 48

How would set out third party reliance in Terms of Engagement?

Answer 48

・Should include a clause preventing third party reliance as standard.
・The more people that are permitted to rely on e.g the valuation, the more risk there is to claims by third parties under tort of negligence and thus, more risk
・Sometimes disclaimers seeking to remove third party reliance are not held up in court if it is not fair and reasonable to apply them (under the Unfair Contract Terms Act 1977) e.g precedent set in [Smith v Bush 1990] is that valuers acting for the lender owe a duty of care to the borrower for the purchase of a residential property regardless of disclaimers

Question 48

Explain when you might agree a liability cap.

Answer 48

・Wording should state limitation on liability if the surveyor’s work is used for another purpose other than the one intended
・Proportionate liability clauses may be included in terms of engagement to transfer the risk of a related party to a claim not being able to contribute financially to a loss and their share thus transferring to you.
・E.g both you and conveyancing solicitors provide advice to a client in respect of a property purchase. If a negligence claim is made against both of you but the solicitors’ firm goes insolvent, you are liable for the whole claim unless the contract stated a proportionate liability clause

Question 49

What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?

Answer 49

・RICS ‘Risk, Liability & Insurance, 2021’ states these should always be included in terms of engagement:

・Scope of work
・Fee basis
・Liability cap

Question 50

Tell me what you understand about Complaints Handling Procedures (CHP).

Answer 50

・Every firm must have a CHP
・Must acknowledge in 7 days & respond in 28 days
・If the complaint can’t be dealt with in-house, should consider mediation/conciliation, then ADR before litigation
・Must have a ‘redress system’ (usually the Property Redress Scheme) that complaints can be escalated to rather than going to the courts

Question 51

When and how can the RICS be involved in a complaint about a firm or member?

Answer 51

・If the complaint is from a consumer, the firm must signpost to an Alternative Dispute Resolution provider approved by RICS

Question 52

What is whistleblowing?

Answer 52

・Where an employee reports or reveals information about activities deemed illegal, immoral, illicit or unsafe

Question 53

Explain what you understand by the RICS Bichard Review.

Answer 53

・Independent review into the RICS’s purpose, governance and strategy following the Levitt Review, which damaged RICS’ reputation