Ethics, Rules Of Conduct & Professionalism

Question 1

What is the RICS Royal Charter?

Answer 1

• Granted by the privy council in 1881
• Requires the RICS to promote the usefulness of the profession for the public advantage

Question 2

What is the structure of the RICS?

Answer 2

• Governing council manage & agree the strategy for the RICS
• Regulatory board, management board and audit committee sit below the governing council and execute the strategy

Question 3

What is the difference between RICS ethics and rules?

Answer 3

Ethics are a set of moral values.
Rules provide a framework that we all work to.

Question 4

What are the RICS rules of conduct?

Answer 4

1. Be honest, act with integrity and comply with professional obligations including those to the RICS
2. Maintain professional competence and ensure services are provided by competent individuals with the necessary expertise.
3. Provide a good quality and diligent service.
4. Treat others with respect and encourage diversity and inclusion.
5. Act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.

Question 5

What are the professional obligations of members?

Answer 5

1. Comply with CPD requirements set by the RICS.
2. Cooperate with the RICS.
3. Provide information to the standards and regulation board as requested.

Question 6

What are the professional obligations of firms?

Answer 6

1. Publish a complaints handling procedure, complaints log and ADR provider.
2. Ensure they have appropriate PI cover.
3. Sole principal - arrangements for death or incapacitation.
4. Cooperate with the RICS.
5. Provide information to the standards and regulations board as requested.
6. Must show ‘regulated by the RICS’ designation on all business literature.
7. Report any matters to the RICS that they are required to under the rules for the registration of firms.

Question 7

Why does the RICS have rules of conduct?

Answer 7

To provide a framework for all members to work to and ensure they client knows they are getting a set level of service.

Question 8

What is the procedure for a breach of the rules of conduct and what are the penalties?

Answer 8

Not all breaches give rise to proceedings but if it does the first step is a formal investigation by the standards and regulations board.

• Fixed fine
• Consent order (written agreement, can require the member to take certain actions)
• Disciplinary panel

Question 9

What is the procedure for starting up a new practice?

Answer 9

1. Inform the RICS and register for regulation.
2. Appoint a contact officer for all communications.

3 . Prepare a complaints handling procedure.

4. Obtain PI insurance.
5. Abide by rules of conduct
6. Use ‘regulated by RICS on all business material.

Question 10

What information do firms have to provide the RICS annually?

Answer 10

Called an nnual return which includes:
- type of business and staff
- nature of clients
- training procedures
- complaints handling procedures and records
- PI details
- whether clients money is held

Question 11

What process would you put in place for handling clients money?

Answer 11

1. Agree terms with the client for holding the money.
2. Ensure the money is dealt with by someone with experience of handling clients money.
3. Hold the money in a separate account that is clearly identifiable with client included in the bank account name.
4. Ensure all accounting systems and data are secure.
5. Ensure the account is never overdrawn and that the client has access to funds at all times.
6. Maintain client ledgers and provide a running balance.

Question 12

What are the different client money accounts?

Answer 12

General account - holds money for more than one client

Discrete account - reference a single named client

Question 13

What is negligence?

Answer 13

A failure to provide a duty of care.

Question 14

What was Merritt vs Babb 2001?

Answer 14

Related to the importance of run off cover

Babb was found to be negligent to a former client. The company Babb worked for no longer existed and the court rules the surveyor could be individually pursued for damages.

Question 15

What must a complaints handling procedure include?

Answer 15

1. Specify an independent redress mechanism. (ombudsman, arbitration, adjudication)
2. Be clear, quick and free of charge for the first stage.
3. Contact details of the complaints handling officer.
4. PI Insurers must be notified.
5. Must be investigated within 28 days and recorded in the complaints handling log.
6. Must have minimum of 2 stages. (Internal investigation/independent redress mechanism)

Question 16

What is the clients money protection scheme?

Answer 16

A scheme run by the RICS that gives provision for any member of the public to be reimbursed their direct loss of funds when using an RICS regulated firm.

Question 17

What are the CPD requirements for members?

Answer 17

Minimum of 20 hours a year, at least 10 hours of which must be formal.

Must undertake learning on ethics on a 3 year rolling period.

Question 18

What is the difference between formal and informal CPD?

Answer 18

Formal - Clear learning objective from the outset and is structured such as a formal seminar.

Informal - self managed learning such as private study or reading.

Question 19

What is a recent article you have read from the RiCS?

Answer 19

A modus article on EPC and the recommendation from the BRE to overhaul the process. More relevant to actual energy use age and easier to understand.

A modus article published a few weeks ago on practical completion and its importance on a construction project.

• triggers process for agreement of final account
• 50% of retention is released
• triggers commencement of defects liability period
• contractor no longer required to insure or secure the works

Question 20

What is the purpose of Professional Indemnity Insurance?

Answer 20

Provides financial cover for the client, surveyor and firm in the case of a breach of duty such as negligence.

Question 21

What are the PI requirements set by the RICS?

Answer 21

Minimum level of PI cover:

Turnover of:
£0-£100k = min £250k cover
£100k-£200k = min £500k cover
Over £200k = min £1million

Minimum level of uninsured excess:

Turnover in preceding year:
£10million or less = the greater of 2.5% of sum insured or £10k
Over £10million = no limit

Question 22

What are the main elements of a fee proposal?

Answer 22

Terms and conditions
Scope of services
Assumptions
Exclusions

Question 23

What would you do if a client asks you to reduce your fee?

Answer 23

Explain the fee was calculated based on the time and resources required to complete the task.

Would only reduce it if there was a reduction in the scope.

Question 24

What is a conflict of interest?

Answer 24

Where a person has competing personal or professional interests that may reduce impartiality.

Question 25

What are the different types of conflict?

Answer 25

Own interest conflict - where a duty to act in the interests of a client conflicts with your own interests.

Party conflict - where a duty to act in the interests of one client conflicts with the interests of another client.

Confidential information conflict - when a duty to provide information to one client conflicts with the duty to another client to keep that information confidential.

Question 26

What are the main principles of the Bribery Act 2010?

Answer 26

Offences are:
- Making a bribe
- Receiving a bribe
- Bribing a foreign public official
- Failure by a corporate entity to prevent bribery on its behalf

6 principles of prevention:
1. Proportionate procedures
2. Top level commitment
3. Risk assessments
4. Due diligence
5. Communication
6. Monitoring and review

Facilitation payments are only allowed under duress. (Life threatened etc)

Question 27

What is the Bichard Review?

Answer 27

A review into the purpose and governance of the RICS. 36 recommendations including increased focus on diversity and inclusion.

Question 28

What is the Levitt review?

Answer 28

A review into allegations that the RICS tried to suppress a critical internal report.

Found the RICS did not follow sound governance. Four non executive board members were wrongly dismissed.