Ethics, Rules of Conduct & Professionalism Flashcards
Who is the president of the RICS
Justin Sullivan
What are the 3 roles of the RICS
- To maintain the highest standards of education and training
- To protect customers through strict regulation of professional standards
- TO be the leading source of information and independent advice on land, property, construction and associated environmental issues
What was the purpose of the Bichard Review - 3
- Clarify the purpose of the RICS
- Make recommendations on its governing structure
- Provide proposals for the incoming leadership on future culture and strategy of the institution
When did the Bichard Review take place
June 2022
What 5 future foundations were published following the Bichard Review
- Vision
- Mission
- Strategic goals
- Values
- A world class organisation
What does RICS stand for
Royal Institution of Chartered Surveyors
What are the requirements for registration of a firm- 4
- At least 25% of principles must be RICS qualified
- You must offer professional services in surveying disciplines
- You must have sufficient PI insurance
- You must comply with the Rules of Conduct
How would you register your firm with RICS - 5
- Ensure you are eligible
- Gather required documents
- Create online account and complete application form
- Pay registration fee
- Wait for approval
What are the benefits of registering your firm with the RICS - 4
- Enhanced reputation and credibility
- Wider access to opportunities
- Networking and collaboration
- Marketing and branding
Why is it important to have PI insurance - 3
- Risk mitigation (protects from financial losses if a client claims against me)
- Client confidence (instills confidence with the client knowing they are financially protected)
- Regulatory compliance (holding PI insurance is mandatory)
What are the 5 Rules of Conduct
- Be honest, act with integrity and comply with personal obligations
- Maintain professional competence and ensure services are provided by competent individuals
- Provide good quality and diligent services
- Must treat others with respect and encourage diversity and inclusion
- Must act in public interest, take responsibility for actions and maintain public confidence in the profession
When were the new Rules of Conduct implemented
2nd February 2022
What are the differences between the new Rules of Conduct and the old - 3
- Old ones hadn’t been changed since 2007
- More simple and clear structure with case studies and examples
- New ones focus on respect, inclusion and diversity
State 2 example behaviours for Rule 1: Be honest, act with integrity and comply with personal obligations including obligations to RICS
- Members don’t mislead others by their actions
- Members are open and transparent with clients about fees
State 2 example behaviours for Rule 2: Maintain professional competence and ensure services are provided by competent individuals
- Members must only undertake work they have knowledge in
- Members must develop their knowledge and skills throughout their careers
State 2 example behaviours for Rule 3: Provide good quality and diligent services
- Members must understand client’s needs and objectives before accepting work
- Members must agree the scope of service to be provided
State 2 example behaviours for Rule 4: Treat others with respect and encourage diversity and inclusion
- Members must respect the rights of others
- Members do not bully, victimise or harass anyone
State 2 example behaviours for Rule 5: Act in the public interest take responsibility for actions and act to prevent harm and maintain public confidence in the profession
- Members question practices and decisions they suspect are not right
- Members respond to complaints made about them properly
Explain the purpose of the RICS Ethics Decision Tree
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
Where is the disciplinary process set out
RICS Regulatory Tribunal Rules 2022
What are the 3 levels of disciplinary
- Action by Head of Regulation
- Disciplinary panel (drawn from the independent regulatory tribunal)
- Appeal panel
What can the Head of Regulation do
- Serve a fixed penalty notice
- Make a regulatory compliance order
- refer the matter to a single member of the regulatory tribunal for consideration
- Refer the matter directly to a Disciplinary panel
What is a fixed penalty used for
Breaches of the Rules relating only to the supply of information to the RICS by firms and members
What is a regulatory compliance order used for - 3
- Low level breaches of the Rules
- It is a written document which states terms the member must agree to and an agreement to pay a fine
- Cover issues such as non-compliance with RICS Rules including failure to undertake appropriate CPD
What is the Disciplinary panel used for - 3
- More series breaches of conduct
- Issue a regulatory compliance order
- reprimand, fine, expulsion, unlimited fine etc
What guidance note contains reference to social media
Use of social media: Guidance for RICS members 2021
What does the guidance note Use of Social Media include
- Importance of social media networks to members
- High professional behaviour expected of members
- RICS may investigate concerns about social media posts
What is replacing Guidance Notes and Professional Statements
Professional Standards
What are Professional Standards -2
- Set requirements or expectations for members and firms
- They may include mandatory requirements which use the word ‘must
How should firms work out fees - 4
- Fees should be market based and agreed on an ad-hoc basis with clients
- Healthy competition is encouraged but aggressive gee cutting is not allowed
- A fee should depend on the amount of time and resources required as well as making a reasonable profit
- You should not be seen to undercut another firms fees
Can you change your initial fee given to your client
Yes, you can enter into further negotiations with your client so long as you act in a professional manner
Name 5 standard terms that should be included within terms of engagement
- Scope and nature of the service being offered
- Conflict of interest
- Basis of the fee
- Assumptions
- Copy of the firm’s complaint handling procedure
Name the legislation which is required for agency work
Compliance with Section 18 of the Estate Agents Act 1979 and Money Laundering Regulations 2017, as amended
Which act allows a cooling off period of 14 days from the date of agreement
The Consumer Rights Act 2015
Name 3 reasons why you would decline an instruction
- You are not competent to undertake the work
- There is a conflict of interest
- A PI insurance liability cap cannot be agreed
Explain what a conflict of interest is
Conflict of Interest arises when a member or firm’s independence and impartiality is threatened due to the existence of a conflict between two clients
Name 2 examples of a conflict of interest
- Financial interest
- Personal interest
What is the difference between conflict avoidance and conflict management
Conflict avoidance is when you do not accept the instruction, conflict management is when the instruction is accepted and steps are agreed and put in place to manage the conflict e.g. information/ethical barrier
What is the RICS mandatory standard relating to conflict of interest
RICS GLobal Professional Standard: Conflicts of Interest 2017
What are the 3 types of conflict of interest
- Party conflict
- Own interest conflict
- Confidential information conflict
Explain what Party Conflict is
Relates to work on the same or related instruction for two different parties
Explain what Own Interest conflict is
Relates to a personal interest
Explain what Confidential Information Conflict is
Relates to work between two parties that is confidential
What is informed consent
This can 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 part affected understands what they are doing
How would you handle a conflict of interest - 3
- Conflict avoidance - consider whether the conflict is irresolvable and should be avoided or whether it can be properly managed maintaining transparency and openness
- Written advice to both parties - set out in writing an informed consent (disclose nature of conflict and request written confirmation from both clients)
- Conflict management - Set up an information barrier in accordance with the provisions agreed
How does an information barrier work - 4
- Barrier must be robust enough to offer no chance of information passing between the two parties
- Take reasonable steps to operate an effective barrier
- Virtual IT barrier
- Surveyors acting on the two sides must be different and physically separated e.g. different buildings
What is dual agency
Where an agent has a contractual agency relationship with both the seller and the buyer at the same time
What is incremental advice
Where an agent is approached by another party to provide advice (valuations, surveys or planning) related to a purchase or disposal that is incremental to an existing instruction
How long should old files be kept for
6 years
When should the CHP be issued
At the same time as the Terms of business
What is formal CPD
Structured leaning that has clear objectives and outcomes
What is informal CPD
Self-managed learning that is relevant
What needs to have occurred for a negligence claim to be made
When a duty of care is breached = loss = damages (negligence claim)
Give an example case study where a negligence claim was filed
Hope Capaital Ltd v Alexander Reece Thompson LLP (2023)
What is the current limitation period for negligence
Tort: 6 years from the date the claimant suffered the loss
Contract: 6 years from the date of the negligent act, breach of contract or omission
How can a negligence claim be avoided or reduced - 3
- Clearly understanding the clients objectives and confirm instructions in writing (terms of engagement)
- Ensure you are competent to undertake the instruction
- Keep up to date with CPD
How much PI insurance is needed for a firm with a turnover of £100,00 or less
£250,000
How much PI insurance is needed for a firm with a turnover for £200,000 or more
£1,000,000
What is professional indemnity insurance
Protects clients, surveyors and third parties against negligence claims when there is a duty of care breached and a claim for damages arises
What standard sets out handling client money
RICS Professional Statement: Client Money Handling 2019
What are the six main areas of good practice for handling clients money
- Holding client money
- Providing information to clients
- Reciepts of client money
- Payments from clients accounts
- Accounting records and controls
- Compliance
State 4 RICS compliance requirements in starting a new practice
- Inform RICS of your new practice by completing a Firm Details Form
- Set up a complaints log
- Arrange for PI insurance and send to RICS
- Appoint a complaints handling officer
State 4 legal requirements in starting a new practice
- Requirement to disclose business name
- Inform HMRC for VAT and Tax registration
- Register for data protection
- Bribery Act 2010 compliance
State 4 RICS compliance requirements in closing a practice
- Inform RICS of your closure and deregister
- Ensure clients are informed at the earliest opportunity
- Return any monies held by clients to their own accounts
- Retain a copy of the client files for 6 years
What legislation refers to Bribery in the workplace
Bribery Act 2010
What are the two levels of due diligence checks
- Customer due diligence
- Enhanced due diligence
What legislation refers to AML
Terrorist financing and transfer or funds Regulations 2017 (as amended in 2023)
Provide a summary of the AML regulations - 4
- Have a written AML and terrorist financing risk assessment
- Implement systems and policies to address AML and terrorist financing
- Provide staff training
- Comply with new customer due diligence requirements
What is the RICS professional standard for AML
Countering bribery, corruption, money laundering and terrorist financing 2019
