Ethics, Rules Of Conduct & Professionalism Flashcards
1
Q
When was the RICS founded?
A
1868
2
Q
When was the RICS given its Royal Charter?
A
1881
3
Q
What do the RICS regulations and bye laws?
A
Set out the governance of the institution
4
Q
Approximately how many members does the RICS have?
A
113,000 qualified and 28,000 trainee members (141,000)
5
Q
What are the four levels of membership within the RICS?
A
FRICS
MRICS
Assoc RICS
RICS student
6
Q
What are the requirements to become a fellow?
A
Evidence of four fellowship characteristics, portfolio of professional achievement, CPD record
7
Q
What is the governance structure of the RICS?
A
Governed under the terms of the royal charter, various internal councils and boards.
8
Q
What is the highest governing body within the RICS
A
Governing council. 29 members which has the goal of of providing management and strategic direction to ensures its royal charter is fulfilled.
9
Q
Who do the standards and Regulation board and management board report to?
A
Governing council
10
Q
How many specialist professional groups are there covering property, land and construction? What are there responsibilities?
A
17 & are responsible for outlining standards of competence and practice
11
Q
Who is the CEO of the RICS?
A
Justin Young
12
Q
Who is the president of the RICS
A
Justin Sullivan
13
Q
What are the major challenges facing the RICS and recent initiatives?
A
Finding of the Bichard Review which reported 36 recommendations. Recent initiative’s include the relaunch of the RICS matrix, improving D&I within the professional. Major challenges include sustainability and D&I.
14
Q
What is the role of the RICS?
A
Maintain the highest standards of education and training.
Protect consumers through strict regulation of professional standards.
Be the leading source of information and independent advice in the built environment.
15
Q
What was the purpose of the Bichard Review?
A
Clarify the purpose of the RICS, including its responsibility to act for public advantage, recommendations on its governing structure and proposals for the income leadership for the culture/strategy of the RICS.
16
Q
What are the five key themes of the RICS from the Bicahrd Review?
A
- governance
- people
- strategy
- culture and values
- Member service
17
Q
How many recommendations were included within the Bichard Review?
A
36 recommendations
18
Q
What were the seven key areas from the Bichard Review?
A
- Increased focus on the public interest remit of RICS
- Maintaining self regulation
- Increased focus on D&I in the profession/RICS
- Empowering/enabling members through greater support for regional boards/younger members
- Undertaking a independent review against delivering its royal charters once every five years.
- Simplified governance structure.
- Better leadership in areas of significance, i.e. Sustainability.
19
Q
What are the five future foundations following the Bichard Review?
A
- Vision
- Mission
- Values
- Strategic goals
- World class organisation
20
Q
What are the benefits of being a member of the RICS?
A
- Status / recognition - professional credentials
- Market advantage - provides a competitive advantage
- Knowledge - from training and CPD events
- Network - access to professional worldwide
21
Q
What are the RICS requirements for registration?
A
50% of principles provide surveying services are RICS members a firm must register. If 25% of principles are RICS members it can apply.
Director, sole practitioner, partner or equivalent role.
22
Q
What is a responsible principal?
A
Nominated person who is obligated to ensure all reasonable steps are taken to ensure compliance with with regulatory and RICS requirements.
23
Q
Who is your firms responsible person?
A
Commercially sensitive information
24
Q
What information is required by the RICS for registration?
A
- Type of business & staffing details
- Responsible principal
- CHO details / records
- PI Insurance details
- Statutory for regulatory activities
- Nature of clients
- Does the firm hold clients money
25
What are the five RICS rules of conduct
1. Be honest, act with integrity and comply with their professional obligations
2. Maintain professional competence and ensure services are provided by competence individuals
3. Provide a good and due diligent service
4. Treat others with respect and promote D&I
5. Act in the publics best interest, take responsibility for their actions and act to prevent and maintain confidence within the profession
26
What is appendix A in the rules of conduct?
Mandatory obligations of members and firms
27
What are the mandatory obligations of members of the RiCS?
- CPD requirements (20 hours per annum. 1/2 must be formal)
- Cooperate with the RICS
- Promptly provide all information requested by the standards and regulation board.
28
What are the mandatory obligations of firms?
- Publish CHP
- All previous and current work has PI insurance that meets RICS standards
- Arrangements for sole principle if unable to continue work if applicable
- Cooperate with RICS
- Promptly provide all information requested by the standards and regulation board.
Display on business literature in accordance with RICS
- Report any any matter they are required to under the rules of registration
29
What is the purpose of the RICS decision tree?
To ensure members doe not act in a unethical manor. The framework for members to ask themselves when facing situations in which are asked to act in a potentially unethical manner or situation.
30
31
What is the ultimate test of the RICS decision tree?
Would you be happy for your actions to be made public
32
Who undertakes RICS disciplinary procedures?
Standards and regulation board
33
Three levels of disciplinary action?
1. Head of regulation
2. Disciplinary panel
3. Appeal panel
34
What are the four actions of the initial investigation stage?
1. Fixed penalty notice
2. Regulatory compliance order
3. Refer to Regulatory Tribunal
4. Refer the matter directly to disciplinary panel
35
When is each action of an initial investigation stage used?
1. Fixed penalty notice
2. Regulatory compliance orders
3. Action by a disciplinary panel
4. Appeal panel
1. Breaches of supply of information
2. Low level breaches of the rules
3. More serious breaches
4. Appeal against review decision
36
What are the penalties / sanctions available to the disciplinary panel?
1. Regulatory panel compliance
2. Monetary fine
3. Reprimand
4. Caution
5. Condition upon continued future RICS registrations
6. Expulsion
7. Publication of the hearing results in the RICS platform and local newspapers
37
Can you provide an example of where social media activity may cause reputational damage to the profession?
The estate agent who worked for a large firm who racially abused Bukayo Saka after the Euro 2020 final
38
When was guidance published regarding social media?
September 2024
39
When are the RICS likely to investigate social media posts?
- Discriminatory
- Dishonest
- Abusive
- Bullying / harassment
- Ignoring previous advice regarding social media
- Damaging public confidence
40
What is the difference between a professional standard and practice information/guidance note?
Professional standards set requirement and expectations for RICS members and firms which they must abide by, whilst guidance notes provide recommendations for professional tasks and sets out good practice.
41
42
If you are in receipt of or offering a referral fee, does this need to be disclosed in the terms of engagement?
Yes - should be considered along side the Bribery Act 2010 & RICS rules of conduct
43
What are terms of engagement?
State in writing the client’s agreement to the proposed fee basis, payment of expenses and that a copy of the firms CHO is available upon request
44
What are the three steps to issuing TOE?
1. Check professional competence
2. Check COI
3. Agree TOE in writing
45
How long is the cooling off period in the Consumer RIghts Act 2015?
15 days
46
What section of the Estate Agents Act 1979 relates to TOB?
Section 18
47
When may you need to decline an instruction?
- Not a competent individual
- Do not have sufficient facts
- There is COI
- PI insurance cap cannot be agreed
- If you would not be happy for your actions to be made public
48
What is a COI?
Where a member or firm’s impartiality and independence is threatened due to the interest of another party or situation.
49
What are the three types of COI?
1. Personal - personal interest
2. Party - relating to work on the same or related instruction
3. Confidential information - work between two parties that is confidential
50
Can you provide an example of a COI?
Acting for the Vendor and Purchaser in the same transaction
51
Can you proceed if there is a COI?
Yes, only if it is in the interest of both parties to do so and informed consent has been gained from both parties
52
What is process of handling a COI
1. Conflict avoidance - decide weather to proceed or not
2. Written advice to parties - disclose the conflict and request written confirmation of informed consent
3. Conflict management - I.e. information barrier
53
Do you have example of where you have seen a COI managed?
54
What section of the Estate Agents Act 1979 relates to COI?
Section 21 - requires an estate agent to disclose any personal interest they have in a transaction
55
What are the RICS hierarchy of documents?
- Royal Charter
- Bi-Laws (managed by privy council)
- Regulations
- Rules of conduct
- International standards
- Professional standards
- Practice information
56
When do not need to get your clients approval for a third party to access their files?
Statutory duty overnighting the client’s confidentiality right - i.e. a police investigation
57
How long should files be held for as a minimum?
Six years
58
What does a complains log show?
Details of the complaint, progress and outcome of any complaints
59
What is the RICS complaints handling procedure
Stage one
- acknowledge in 7 days and investigated within 28 days.
Stage two
- ADR
Savills
Stage 1
- Acknowledge in 5 days and investigation within 10 days
- Complaint must be made in writing, acknowledged by the CHO in writing with a copy of the CHP.
PII insurers must be informed
- Recorded on the complaints log - initially, progress and outcome
Stage 2
- ADR (Alternative Dispute Resolution)
60
What should a sole practitioner approach complaints handling?
It is advised they have a nominated complaints handling officer from another firm
61
What are the RICS requirements for CPD?
20 hours per annum, 10 hours must be formal, must be recorded by 31st January and maintain relevant and current understanding of the rules of conduct.
62
What is the difference between formal and informal CPD?
Formal CPD is structured learning with clear objectives, whilst informal CPD is self managed learning relatable to my professional role.
63
What needs to have occurred for a negligence claim to be made?
When a duty of care is breached, causing a loss leading to damages resulting in a claim for negligence.
64
What is negligence?
When someone fails to act with the care a reasonable person would exercise in a similar circumstance.
65
What Act relate to the timescale which can be taken for the breaches of law?
The Limitation Act 1980
66
What are the limitation periods in the Limitation Act 1980?
6 years from when the service was provided or loss was suffered. Or a long stop position if the client didn’t know a loss was suffered earlier than 12 years.
67
What steps can be taken to reduce the chances of a claim of negligence
- Clear TOB
- Clear understanding of the clients objectives
- Undertaken work in relation to RICS professional standards and information
- Keep up to date with recent market events
68
Who does PI insurance protect?
Clients, surveyors and third parties against negligence - set out in PI insurance professional requirements 2024
69
Who can underwrite PI insurance for RICS firms?
RICS approved insurers - found on the RICS website
70
What are the minimum requirements of PI insurance?
Based on turnover
Less 100 - £250,000
100k - 200k - £500,000
200k+ - £1,000,000
71
How would a new business judge there PI insurance levels?
Estimate turnover and then adjust as needed.
72
Maximum levels of uninsured excess required by RICS?
Up to £10,000,000 - the greater of 2.5% of the sum or insured or £10,000
Over £10,000,00 - no limit set
73
How often does the PII certificate need to be sent to the RICS?
Annual basis
74
What is run-off cover & what are the minimum requirements of the RICS?
PI insurance that protects firms or individuals after they cease trading. For both commercial and consumer claims the period is six years.
75
What is RICS Run off pool?
Run-off cover available at a cost for members who can't arrange cover.
76
How would manage risks associated with professional work?
Setting liability caps
77
What RICS professional standard relates to Client Money Handling? What are the main areas of good practice.
Client Money Handling, 2019.
1. holding client money
2. providing information to clients
3. receipts of client money
4. payment from client accounts
5. accounting records and control
6. compliance
77
What are the requirement for starting a RICS practice?
Inform RICS of the new practice by completing a firms details form
Appoint a responsible principal
Register with RICS for regulation of the firm
Arrange PI insurance and send details to RICS
Set up procedures for requirements of client money
Obtain approval from RICS for CHP
Set up complaints log
Appoint complaints handling officer
Plan for succession if sole practitioner
78
What are the statutory compliance requirements for starting a new practice?
Disclose business name
Disability discrimination requirements
Financial service compliance
Bribery Act 2010 compliance
Appoint Money Laundering officer
H&S compliance
Asbestos register
Fire safety register
Register for data protection
Estate agency compliance
Inform HMRC and tax registration
Ensure compliance with current employment law
Ensure insurance compliance for employer and public liability.
79
What is involved in closing an RICS compliant firm?
Informing the RICS and clients of closure
Returning any client monies
Informing insurance companies and arrange run off cover from time of cessation for six years
Retain a copy of the clients files and records for a minimum of six years
80
What you name the differences between the statutory requirements for setting up a new practice the RICS ones?
Statutory compliance includes informing the HMRC for taxation and VAT if applicable, disclosing business name, insurance compliance, H&S compliance, fire safety compliance and an asbestos register; whilst RICS compliance includes informing the RICS of a new practice, appointing a responsible principal, registering with RICS for regulation of a firm, arrange PI insurance and obtain an approved CHP from RICS.
82
What is the key legislation regarding bribery in the UK?
Bribery Act 2010
83
What is the aim of the Bribery Act 2010?
Reduce bribery in the UK and abroad
84
What is a bribe?
The giving, offering, promising or receiving of an advantage, i.e. payment, gift or a service for an action which is illegal or a breach of trust.
85
What should be considered when deciding weather to accept a gift?
- Proportionality
- Top level commitment
- Risk assessment
- DD
- Communication
- Monitoring and review
86
What are the four offences under the Bribery Act 2010?
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent a bribe
87
What are the key considerations when consider whether to accept a bribe?
It the gift proportionate and reasonable. As well as will it impact my professional judgement
88
What is are penalties if those / companies found guilty of Bribery?
Individuals - 10 years in prison / unlimited fine
Companies - unlimited fine
89
What regulation has regard to money laundering?
The money laundering, Terrorist Financing and Transfer of Funds Regulations 2017
90
What is money laundering?
Is when the proceeds of criminal activities are disguised or converted and then realised / used as legitimate assets
91
Who does The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 apply too?
Estate agents and relevant financial business work i.e. accountants
92
What are the key provisions of the Money Laundering, Terrorist Financing and Transfer of Funds 2017 Regulations?
- Requirement for a written money laundering and terrorist financing risk assessment
- Implement systems, policies, controls and procedures to address risks
- Provide staff training
- Comply with DD requirements
- Comply with requirements of PEPs
- Appropriate record keeping, policies and procedures
- AML checks: identity of the purchaser and check source of funds by the vendor’s agent before contracts are exchanged
93
What are the estate agents obligations under the money laundering, terrorist financing and transfer of funds regulations 2017?
- Letting agents to register with HMRC if they let individual properties for more than the equivalent of $10,000 per month.
- Must be approved and remain registered with HMRC to trade.
- Customer DD checks on vendors, purchasers, landlords and tenants will have to be undertaken on new sales and any letting.
- Requirement for enhanced DD if red flags occur
94
In what scenario would a firm need to scrunintise a transactions?
- Complex or unusually large
- Contain unusual patterns of transactions
- Are without apparent economic or legal purpose
95
What are the two levels of DD checks?
- Customer DD
- Enhanced DD
96
What is involved in the Customer due diligence?
- Identify the client & verify their identity based on a reliable independent source (passport, driving licence etc)
- Make reasonable endeavours to identify the beneficial owners of the client
- For a company, its name, company number and address of its registered office is required
- Name of directors, unless the company is public
- Obtain information on the purpose and intended nature of the business relationship and proposed funding arrangements as required
97
When is enhanced due diligence required?
Any transaction or business relationship involving a person established in a high risk third country or politically exposed person or a PEP family member / business associate.
98
What is a politically exposed person?
Someone entrusted with a prominent public function
99
100
Under Money laundering, terrorist financing and transfer of funds regulations who does the money laundering person report any suspicious activity too?
National Crime Agency
101
What are the penalties for failing to comply with money laundering regulations?
- Maximum of 14 years in prison or unlimited fine or assisting with money laundering
- Maximum of 5 years in prison or unlimited fine for tipping off a person they are under suspicion of money laundering
102
What are the customer DD checks for money laundering (AML) for Ltd company?
- certificate of incorporation
- Full business name, registration number and registered office
- Names and ID of all shareholders with 25% + holing.
- identification of higher risk clients
103
104
What are the customer DD checks for money laundering (AML) for private individuals?
- Copy of valid photo ID
- Copy of a bank statement, credit card bill, council tax statement or utility bill to show evidence of address (no more than three months old)
105
What is a red flag more money laundering?
- Inability or unwillingness to provide identity documents
- Changes to parties involved in transactions
- Unusual transaction feature, i.e. unexpected urgencies, potential loss making or unusual transaction for the client
- Payment of fees, purchase or rental fees in unusual currencies
106
What is the Proceeds of Crime Act 2002 & what are three areas of offence?
- Provides the power to recover in criminal / civil proceedings money and other assets which are deemed to to the proceeds of crime (recover money and assets gained from criminals activities)
1. Concealing criminal property
2. Arrangements
3. Acquisition use and possession
107
What RICS professional standard relates to money laundering?
Counter bribery, corruption, money laundering and terrorist financing 2019
108
What does the RICS counter bribery, corruption, money laundering and terrorist financing 2019 set out?
The Mandatory, globally applicable requirements for the RICS members and regulated firms in relation to the topic area.
109
What are the three parts of the countering bribery, corruption, money laundering and terrorist financing?
Mandatory requirements (not accepting a bribe), guidance (set up a gift register / keep up to date register) and supplementary guidance (who you act for / what you are doing)
110
What are the requirement for regulated firms for bribery and corruption?
- Not offer or accept any possible of constituting a bride
- Having procedures in place to comply with law
- Report suspicion activity to thee relevant authority
- Act with DD to perform periodic evaluations of the risks
- Retain records to show firms have met the requirements of the professional statement (5 years)
111
What are the requirements for the money laundering and terrorist financing for RICS regulated firms?
- Not facilitate or be complicit to money laundering or terrorist financing
- Have systems in place
Report Suspicion
- Evaluate and review the risks presented to the firm
- Use third party checks only where there is a level of confidence for the quality of information
- Take measures to understand the scope of work
- Verify the client by undertaking client ID checks
- Retain records to show firms have met the requirements or the professional statement
112
Who is the complaints handling officer at your firm
This is commercial sensitive information, and unable to provide an answer (Charlotte Fairman)
113
What is the outcome of the RICS decision tree?
Would you be happy for your actions to be made public, if so Act and Record. If not do not proceed
114
115
What are the CPD requirements for members?
1. Minimum of 20 hours CPD per annum (01.01 - 31.12)
2. 10 hours must be formal
3. Must be recorded / logged online by 31/01.
4. Maintain a current understanding of relevant and current RICS rules of conduct on a three yearly basis.
116
What are the consequences for not complying for with the CPD requirements
First time: Caution that stays on your disciplinary record for 10 years
Second time: Further caution and fixed penalty notice of £150 as well RICS publish a list of people who have not complied with the requirements for a second time.
Third time: Fixed penalty notice of £250 as well as the possibility of be expelled from the RICS
117
