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APC Spring 2024 > Ethics, Rules of Conduct & Professionalism > Flashcards

Ethics, Rules of Conduct & Professionalism Flashcards

1
Q

RICS’ main three roles? (3)

A
  1. Maintain the highest standards of education and training
  2. 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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2
Q

How to become FRICS? (5)

A
  • 5 or more years as MRICS
  • Leadership role
  • Professional/technical achievement
  • Academic achievement
  • Raising the profile of RICS
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3
Q

Current president of the RICS

A

Tina Paillet (passionate about sustainability)

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4
Q

Structure of the RICS Governance? (8)

A
  • Royal charter (granted by privy council in 1881)
  • Bye laws, managed by the privy council
  • Regulations, managed by RICS Governing Council
  • Rules of conduct
  • Ethical obligations
  • The decision tree
  • International standards
  • Professional standards/professional statements and Practice information and guidance notes
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5
Q

Governing Structure of the RICS

A
  • Governing Council (over 20 members and runs the RICS)
  • Then the Standards and Regulation Board and Management Board
  • Then 17 specialist professional groups, each of which has a board
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6
Q

5 benefits of being an RICS member (5)

A
  • Status
  • Recognition
  • Market advantage
  • Knowledge (professional standards, CPD)
  • Network (140,000 worldwide)
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7
Q

Bichard Review key findings (6) June 2022

A
  • Renewed and increased focus on public interest
  • Maintaining self-regulation
  • Focus on diversity and inclusion
  • Undertaking an independent review of RICS’ governance once every 5 hears
  • New, simplified, clear, accountable governance structure
  • Sustainability/climate change
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8
Q

RICS Future Foundations November 2023 (5)

A
  • Vision (sustainable, resiliant, inclusive)
  • Mission (inspire, advance knowledge, uphold standards)
  • Strategic Goals (sustainability, diversity, trust, member value)
  • Values (professional, collaborative, inclusive, ambitious)
  • World class organisation
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9
Q

Info required by RICS for registration (7)

A
  • Type of business/staffing
  • Name of responsible principal
  • Statutory regulated activities
  • Nature of clients
  • Complaints handling procedure details/records
  • Professional indemnity insurance details
  • Whether holding client’s money
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10
Q

Rules of Conduct (5)

A
  1. Members and firms must be honest, act with integrity and comply with their personal obligations, including obligations to RICS
  2. Members and firms must maintain their professional competency and ensure that services are provided by competent individuals who have the necessary expertise
  3. Members and firms must provide good-quality and diligent service
  4. Members and firms must treat others with respect and encourage diversity and inclusion
  5. Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in their profession
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11
Q

Professional obligations (RICS members must) (3)

A
  1. Comply with CPD requirements
  2. Cooperate with RICS
  3. Provide info reasonably requested by the Standards and Regulation Board promptly
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12
Q

Professional obligations (RICS-regulated firms must) (7)

A
  1. Publish complaints handing procedure (including alternative dispute resolution provider)
  2. Make sure previous and current work is covered by professional indemnity insurance
  3. If sole principal, make arrangements for work to be continued in case of no longer working
  4. Cooperate with RICS
  5. Provide info reasonably requested by the Standards and Regulation Board promptly
  6. Display that regulated by RICS
  7. Report to RICS any matter that is required to under Rules for the Registration of Firms
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13
Q

Why new Rules of Conduct in October 2021? (5)

A
  • Simpler structure
  • Clear examples
  • Focus on respect, D&I
  • Technology advancements
  • Global challenges such as sustainability and climate change
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14
Q

Decision tree examples (3)

A
  1. Do you have all the facts?
  2. Have you approached others?
  3. Would you be happy if it was to be made public?
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15
Q

Three levels of disciplinary action (3)

A
  1. Action by Head of Regulations
  2. Disciplinary Panel
  3. Appeal Panel
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16
Q

Head of Regs Initial investigation stage (4)

A
  1. Serve a fixed penalty notice
  2. Make a Regulatory Compliance Order
  3. Refer the matter to single member of the Regulatory Tribunal
  4. Refer the matter directly to a disciplinary panel
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17
Q

3 steps to follow before taking on instruction (3)

A
  1. Check professional competency
  2. Check conflicts of interest
  3. Confirm terms of engagement in writing and get written approval from client before commencement of work
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18
Q

Terms of engagement requirements (2)

A
  • Must confirm client’s agreement to proposed fee basis, payment of expenses
  • Copy of complaints handling procedure is available upon request
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19
Q

Conflicts of interest types (3)

A
  1. Party conflict
  2. Own interest conflict
  3. Confidential information interest
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20
Q

Conflict of interest document (2)

A

RICS Global Professional Standard on Conflicts of Interest 2017
RICS Professional Statement: Conflicts of Interests, UK 2017

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21
Q

What is dual agency?

A

Where an agent has a contractual agency relationship with both the seller and the buyer at the same time

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22
Q

What is incremental advice?

A

Where an agent is approached by another party to provide advice related to a instruction that is incremental to an existing instruction

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23
Q

Complaints handling procedure document

A

RICS Guidance Note, Complaints Handling, 2016

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24
Q

RICS minimum procedures for handling a complaint

A
  • Stage One (In House): Complaint should be acknowledged within 7 days and investigated within 28 days
  • Stage Two (Alternative Dispute Resolution): If the complainant is not happy, the name of the relevant redress scheme must be provided to the complainant
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25
Q

If a complainant still isn’t happy after an official complaint has been made, what are their options? (2+1)

A
  • If a business, then they could go to mediation through the Centre for Effective Dispute Resolution or the RICS Dispute Resolution Service
  • If a consumer, they can contact the Property Ombudsman
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26
Q

Savills complaints handling procedure (5)

A
  • The complaint will be acknowledged within 5 working days
  • A written response within 10 working days
  • The complainant then has 10 working days to confirm in writing whether they want to take it further
  • Then within 5 working days, Savills will provide our suggested resolution to their complaint
  • If still unsatisfied, alternative dispute resolution can be considered
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27
Q

What needs to have occured for a negligence claim to be made? (3)

A
  • Dute of care is breached
  • Loss
  • Damages
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28
Q

Negligence case law

A

Yianni vs Edwin Evans - instructed valuer owed a duty of care to receiver of valuation in tort

29
Q

How long is the limitation period for negligence and why? (2/3)

A

Due to the Limitation Act 1980:
- Contract is 6 years from the date of the negligent act or 3 years from the date of knowledge of the damage subject to 15 years long stop
- Tort is 6 years from the date the claimant suffered the loss

30
Q

Why PII?

A

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

31
Q

PII document

A

RICS Regulation Professional Indemnity Insurance Requirements 2022

32
Q

Minimum requirements for PII

A

Firms turnover in preceding year:
£100k or less = £250k minimum for each claim
£100,001-£200k = £500k min
£200,001+ = £1mil

33
Q

What is the case law surrounding run-off PII cover?

A

Merrett vs Babb

34
Q

Run-off cover

A
  • This is insurance cover for businesses that have stopped doing business to ensure clients can still be compensated for claims after a firm has closed
  • For consumer claims, a minimum of £1 million over 6 years
  • For commercial claims, firms must consider what is appropriate/adequate for a minimum of 6 years
35
Q

What should firms do that are unable to obtain run-off cover?

A

Can apply for coverage to the RICS Run-off Pool

36
Q

Handling Client’s Money document

A

RICS Professional Standard ‘Client Money Handling’ 2019

37
Q

What is a bribe?

A

Giving, offering, promising or receiving an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust

38
Q

6 principles of the bribery act? (6)

A
  1. Proportionality
  2. Top level commitment
  3. Risk assessment
  4. Due diligence
  5. Communication
  6. Monitoring and review
39
Q

Four offences under bribery act (4)

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent a bribe
40
Q

Who is the Bribery Act policed by?

A

Serious Fraud Office

41
Q

Bribing punishment?

A

Maximum penalty of 10 years imprisonment and/or unlimited fine

42
Q

Money laundering document (2)

A

Terrorist Financing and Transfer of Funds Regulations, 2017
RICS Professional Standard: Countering Bribery, Corruption, Money Laundering and Terrorist Financing, 2019

43
Q

What does the RICS Professional Standard: Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019 set out?

A
  • Sets out the mandatory requirements for RICS members and firms concerning bribery, corruption, money laundering, and terrorist financing
  • Split into 3 sections: mandatory requirements, guidance, and supplementary guidance
44
Q

What is money laundering?

A

When proceeds of criminal activities are disguised or converted and then realised as legitimate assets

45
Q

What must you do if you suspect someone is money laundering? (2)

A
  • I would raise it with my company’s Money Laundering Reporting Officer
  • Complete a Suspicious Activity Report (SAS) to the National Crime Agency
46
Q

Why is property susceptible to money laundering? (2)

A
  • As real estate is a liquid asset, it has previously been targeted for money laundering
  • Puts illicit funds into the legitimate financial system, whilst providing the criminal with a relatively safe investment
47
Q

What is the minimum rent needed for AML checks?

A

10,000 Euros (about £8,500)

48
Q

What is the max acceptance of cash?

A

10,000 Euros

49
Q

AML Customer Due Diligence for for public limited company

A

London Stock Exchange Listing

50
Q

AML Customer Due Diligence for publicly accountable body

A

Government ownership/control

51
Q

AML Customer Due Diligence for private limited company

A
  • Full name
  • Registered number
  • Registered address
  • Name of all directors and names or shareholders with 25% or more
52
Q

AML Customer Due Diligence for private individual

A
  • Copy of valid passport or driving licence with photo
  • Copy of bank statement, credit card bill, council tax statement not more than 3 months old to show evidence of address
53
Q

Money laundering penalties (2)

A
  • Maximum 14 year prison sentence and/or unlimited fine for assisting with money laundering
  • Maximum 5 year prison setence and/or unlimited fine for tipping off a person
54
Q

Typical red flags

A
  • Inability or unwillingness to provide identity documents
  • Changes to parties involved in transactions
  • Unusua transaction features such as unexpected urgency, potential loss making or unusual transaction for a client
  • Payment of fees, purchase or rental monies in unusual currencies
55
Q

Can you name an example of each of the 5 Rules of Conduct?

A

Rule 1: Be transparent with clients about fees and services
Rule 2: Only undertake work where I have the knowledge to carry out competently
Rule 3: Understand the client’s objectives before accepting any professional work
Rule 4: Respect the rights of others and treat others with courtesy
Rule 5:

56
Q

What is your firm’s gift policy? (2+2)

A
  • Cannot accept a gift with a nominal value of more than £50 or £100 over 12 months
  • Entertainment: £125 per head must be approved by the head of the team, events over £1,000 per head must be approved by the CFO
57
Q

Can you name 5 items you would include in a Terms of Business? (5)

A
  • Responsibilities
  • Fees (not transaction specific)
  • Indemnity
  • Compliance (e.g. CPRs/BPRs)
  • RICS compliance
58
Q

What is the difference between terms of engagement and terms of business?

A

Terms of business set out a business’s standard terms for a certain practice, whereas terms of engagement refer to a specific project or transaction specifying the specific fees for that transaction

59
Q

What is integrity?

A

The quality of being honest and having strong moral principles

60
Q

What is the difference between ethics and integrity?

A

I believe ethics are principles that guide behaviour, whereas integrity is something you live by in your day-to-day life

61
Q

What do you think are the biggest challenges facing the RICS today? (3)

A
  • Keeping up with its commitment to sustainability
  • Keeping up with its commitment to adapting to D&I
  • Changing the public’s perception of RICS and property being a quite closed bookshop with regards to D&I
62
Q

What should a sole practitioner do in case of death or incapacity?

A
  • Arrange a locum agreement - this is an agreement with another professional who would be able to stand in
63
Q

Who is your company’s responsible principle?

A

Nicola McGinnis

64
Q

Who is your company’s compliance officer?

A

Melissa Shaw

65
Q

What does the Proceeds of Crime Act 2002 show? (2)

A
  • Created a set of criminal offences to combat AML offences
  • E.g. Illegal to conceal criminal property
66
Q

How do you proceed if there is a conflict of interest? (3)

A
  • Satisfy that it is in the interests of all parties to proceed
  • Disclose the nature of the conflict and how you intend to deal with the conflict including barriers
  • Request written confirmation from all affected clients of their informed consent
67
Q

What does informed consent include? (6)

A
  • Party details
  • Project/transaction detail
  • Details of the conflict
  • Why it is in their interest to proceed
  • How to manage the conflict
  • Signed by both parties
68
Q

What is your company’s gender and ethnicity pay gap? (2)

A
  • Gender pay gap has reduced from 24% in 2022 to 20% in 2023
  • The ethnicity pay gap has increased from 18% in 2022 to 19% in 2023, however, this is a result of an increase in hiring more ethnically diverse employees, especially from graduate/apprentice level

APC Spring 2024 (17 decks)

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