Ethics, Rules of Conduct & Professionalism Flashcards
What are the RICS 5 Rules of Conduct?
- Act with honesty and integrity.
- Maintain professional competence.
- Good quality and diligent service
- Respect others and encourage diversity & inclusion.
- Act in the public’s interest
Provide an example of honesty & integrity
Was asked to provide details of a sale by an agent. Details had not been released to shareholders so informed them that I couldn’t share the info.
Provide example of professional competence
Roof leak in warehouse - advised client to contact building surveyor.
Provide example of good quality and diligent service.
Understand client’s objectives by having regular catch ups.
Provide example of respect and encouraging diversity & inclusion.
I work with lots of different agents, colleagues, contractors, board, tenants and ensure I always treat everyone with respect and fairly.
Provide an example of acting in the public interest and taking responsibility.
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Who is the CEO?
Justin Young
Who is the President of the RICS?
Acting - Nick Maclean
Elected - Justin Sullivan
What chairs the Governing Council?
President of RICS
What are the 4 levels of RICS Membership?
FRICS
MRICS
AssocRICS
Student/Trainee
How do you become a FRICS?
At least 4 of below:
1. Five or more years at MRICS level
2. Leadership role.
3. Professional role/technical achievement.
4. Raising profile of RICS.
5. Portfolio of professional achievement, inc CPD, is required.
When was the RICS founded?
1868
When did it receive Royal Charter?
1881
What are the benefits of being an RICS member / why do you want to become a member?
Status
Recognition
Market advantage
Knowledge
Network
What is the role of the Governing Council?
To provide strategic direction, oversight, and governance to ensure that RICS fulfills its purpose and serves the public interest.
What are the RICS Bye Laws?
The rules and regulations that govern the functioning and operations of the Royal Institution of Chartered Surveyors (RICS).
They set out the legal framework within which RICS operates and outline the rights, responsibilities, and obligations of its members.
What is the role of the RICS?
Maintain highest standards of education & training, protect consumers, leading source of info and independent advice.
What are the 6 ethical principles that the Rules of Conduct are based on?
Competence
Honesty
Respect
Responsibility
Integrity
Service
What are the core professional obligations of members to RICS?
Comply with ethical standards
Maintain professional competence
Follow RICS rules & regs
Be accountable & transparent
Act with integrity
High standards of service
What are the core professional obligations of firms to RICS?
Implement a Professional Governance Structure.
Maintain Financial Integrity
Handle Complaints Effectively
Support Staff Training and Development
Cooperate with RICS
Be Transparent and Honest
What disciplinary procedures can the RICS impose? In what circumstances
can these be imposed?
RICS Standards & Regulation Board are responsible for regulating surveying profession.
RICS Regulatory Tribunal Rules, 2022 - sets out process
1. Action by Head of Regulation either:
a. Dismiss
b. Serve fixed penalty notice
c. Make regulation compliance order (e.g. not meeting CPD requirements)
d. Direct to Disciplinary Panel if more seriousW
RICS Regulatory Decision Making, 2022 - sets out regulatory approach.
How long should you keep anti money laundering records for? What records should be kept?
5 years
Client Due Diligence (CDD) Records
Transaction Records
Internal and External Reports
Training Records
What is Professional Indemnity Insurance (PII)?
To protect clients, surveyors & third parties against negligence claim
Can you tell me about the RICS requirements in relation to PII?
Minimum indemnity:
£100,000 or less turnover: £250k min indemnity
£100,001 - £200,000: £500,000
£201,000 +: £1m
Maximum level of uninsured risk:
Turnover up to £10m – greater of 2.5% sum insured or £10,000
Over £10m – no set limit.
Must be underwritten by an RICS approver insurer.
What is a PII aggregation clause?
Determines how multiple related claims are treated under the insurance coverage.
Single claim or multiple claim
Is a PII excess usually paid for per claim?
Yes - every time a separate claim is made, the insured party must pay the excess before the insurer covers the remaining costs, up to the policy limit.
In a negligence claim, what would help to show that you acted with consideration
and due process?
Demonstrate that you followed the RICS standards and guidance.
Maintain comprehensive records of all work undertaken.
Demonstrating Competence and CPD
Have written evidence that you received clear and specific instructions from the client.
Demonstrate that you performed a risk assessment and took reasonable steps to mitigate any identified risks.
Demonstrate that you followed a robust complaints-handling procedure, in line with RICS requirements.
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?
Firstly ensure client is fully aware that it is outside usual scope and obtain consent to continue.
Inform insurer, increase cover.
What is run off cover?
Insurance that provides protection after a business has ceased trading or a professional has retired
What are the RICS requirements for run off cover?
Must maintain for at least 6 years after business ceases trading / you retire.
What changes did RICS recently make to the Minimum Approved PII Wording?
1 July 2024
Enhanced Fire Safety Coverage
Removal of RICS Cyber Exclusion Clause - use international clause to ensure consistent approach to cyber risk coverage.
What is the Assigned Risks Pool (ARP)?
Mechanism established by the RICS to provide PII coverage for RICS-regulated firms that are unable to obtain insurance from the open market.
Who might need access to ARP?
Firms that are high risk or have already had claims made against them.
How long can you have ARP for?
Max 12 months - gives time to find another provider.
Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance
(1st Edition)
Provides guidance to members/firms on how to manage primary risks.
Recommends use of liability caps to ensure a fair allocation of risk and reward between members and their clients.
Clearly define in their contracts that their advice is intended solely for the named client, thereby controlling and limiting third-party reliance
Importance of clearly outlining the scope of work, limitations, and responsibilities in engagement terms to manage client expectations and reduce potential liabilities.
Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying.
a. Firstly, register as a sole trader with HMRC and register for VAT.
b. Inform RICS of new practice by completing Firm Details Form.
c. Appoint myself as a Responsible Principle
d. Register with the RICS for regulation.
e. Arrange PII and send to RICS
f. Client money procedure
g. CHP – obtain approval from RICS.
h. Set up complaints log.
i. Elect a surveyor in another practice to be CHO.
j. Succession plan for future running of business.
k. CPD logged.
l. Complete online RICS annual return at end of each year.
m. Ensure I have complied with Stat requirements – AML, Bribery, H&S, etc.
If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.
Reject and inform compliance officer.
What would you do if you were asked by a client to reduce a fee proposal to win new work?
I would check if the new proposed fee aligned with industry standards and competitors.
If it did, I would then review if reducing the fee would still allow me to deliver a service at a high standard and aligns with the RICS ethical standards.
If not, I would decline the instruction.
What would you do if you became suspicious that a client was involved in money laundering?
a. I would assess the red flags, check our DD records (KYC and CDD) are complete, and also try and verify the source of the funds with the client.
b. Report the suspicion internally following our AML policy and complete an internal suspicious activity report (SAR).
c. If required, submit the SAR to the UK National Crime Agency.
d. Considering withdrawing from the transaction – seek legal advice on how to do this appropriately.
e. Maintain records for at least 5 years.
What would you do if you became suspicious that a client was involved in terrorist activities?
a. Similar to the AML– but file under the Terrorism Act 2000.
b. Consider a Defence Against Terrorist Financing Request.
If you were to set up in practice on your own, tell me about the types of insurance you’d need.
a. Professional Indemnity Insurance
b. Employers Liability Insurance – minimum cover £5 million but usually £10 million.
c. Public Liability Insurance - £1 million to £5 million
d. Office & Business Insurance
e. Cyber Insurance
What steps should you follow when closing a firm?
Inform client, RICS & insurer
Return client money
Set up ‘run off’ cover
Hold accounts and client info for 6 years.
What do you understand by the term self-regulation?
When a professional body establishes and enforces its own rules and standards for its members.
What is a Bye-Law?
Rules and regulations that govern the RICS.
They set out the legal framework which outlines the rights, responsibilities, and obligations of its members.
Explain to me the new RICS Rules of Conduct and why were they replaced?
5 rules of conduct which replaced the Rules of Conduct for Members and Firms in 2020.
Provide a simpler structure with clear examples and a focus on respect, diversity and inclusion.
What are some examples of professional obligations members must adhere to?
CPD requirements
Cooperate with the RICS when requested.
Promptly provide information reasonably requested by the Standards and Regulation Board.
What are some examples of professional obligations firms must adhere to?
CHP - including APR provider and complaints log.
PII
Sole principal must make appropriate arrangements for professional work to continue if they die/inability to work.
Cooperate with RICS
Promptly provide information reasonably requested by the Standards and Regulation Board.
Display on business literature, in accordance with RICS published policy, that they are regulated by RICS.
Report to RICS any matter required under Rules for the Registration of Firms.
What is the Bribery Act 2010?
Came into effect July 2011 and aims to combat bribery both within the UK and abroad and applies to individuals and companies.
What are the six key principles of the Bribery Act 2010?
- Proportionality
- Top-level commitment
- Risk assessment
- Communication
- Monitor and review
- Due diligence
What are the four offences of the Bribery Act 2010?
Bribing
Receiving a bribe
Bribing a foreign public official
Not preventing bribery
What are the penalties for the Bribery Act 2010?
Max 10 years in prison or an unlimited fine.
Policed by Serious Fraud Office.
What is a bribe?
Giving, offering, promising or receiving a gift/payment/service in exchange of an action which is illegal / breach of trust.
e.g. Being offered hospitality or money in exchange for appointing an agent on a sale/letting.
What is the RICS CPD policy?
20 hours - MRICS
48 hours - APC
At least 50% formal
Submit by 31st Jan
What is the requirement for registration with the RICS?
50% of Principals are RICS members.
What is the Misrepresentation Act 1967?
Provides remedies to individuals who have entered into a contract based on a misrepresentation.
How do you comply with the Misrepresentation Act 1967?
Take proactive steps to ensure that all statements and information I provide are accurate, honest, and not misleading.
Include a disclaimer in marketing particulars that states that brochure have been produced in good faith and are believed to be correct.
INCLUDE DATE IN BROCHURE
What was the specification of the industrial unit in Dartford?
30,000 sq ft. industrial unit.
Steel portal frame - low level brick and high level cladding.
5.5m eaves
50% site cover
1960s build
What was the specification of the industrial unit in Braintree?
80,000 sq ft industrial unit
Steel portal frame - metal cladding.
14m eaves height
40% site cover
10 dock level doors and 2 level access doors
2006 build
Talk me through the property management inspection at Braintree.
- Ensured I was competent to inspect the building.
- Obtained lease docs and property details.
- Contacted site manager to request access and confirm PPE requirements.
- Informed colleague of my whereabouts.
- Checked in with site manager on site.
- Completed an internal and external inspection of the building.
- To the rear west of the unit, I noticed some cracking along the concrete floor slabs.
- Took photos and noted location.
- Informed the client and recommended a structural engineer was appointed to investigate the cracking and provide a solution.
Was due to subsidence - a special resin was injected into the cracking to restrengthen the foundations below ground.
