Ethics, Rules of Conduct & Professionalism (Part 1) Flashcards
1
Q
What is the Role of the RICS?
A
- To maintain the highest standards of education and training
- To protect consumers through strict regulation of professional standards
- To be the leading source of information and independent advice on land, property, construction and associated environmental issues
2
Q
What was the purpose of the 2021 Bichard Review?
A
- Clarify the purpose of RICS
- Make recommendations on its governing structure
- Provide proposals for the incoming leadership on the future strategy and culture
3
Q
What are the strategic goals of RICS?
A
- Lead and influence on sustainability
- Attract a diverse next generation
- Strengthen trust in the profession
- Enhance member value and engagement
4
Q
What are the RICS values?
A
- Professional
- Collaborative
- Inclusive
- Ambitious
5
Q
What are the benefits of Being and RICS member?
A
- Status: Professional Standards provide client confidence
- Recognition: Promotion of your professional excellence to governments and markets
- Market advantage: RICS status and standard gives you a competitive advantage
- Knowledge: International practice standards, professional guidance
- Network: Access to professionals worldwide
6
Q
What are the RICS Rules for the regulation of firms?
A
- Mandatory regulation if 50% of Principals of a UK which provides surveying services are RICS members
- If at least 25% of principals are RICS members they can apply to be registered.
7
Q
Who is a Principal?
A
Sole practitioners, directors, partners or board members who are able to act autonomously/without supervision in a firm.
8
Q
What is a ‘Responsible Principal’?
A
A principal who is obliged to ensure all reasonable steps are taken and systems are in place to ensure compliance with regulatory and RICS requirements.
9
Q
Who can use the RICS logo?
A
Only RICS members and registered firms.
10
Q
A
11
Q
What information is required by the RICS for Registration?
A
- Type of business and staffing details
- Name of the Responsibility Principal
- Statutory Regulated Activities
- Name of clients
- Complaints handling procedure details and records
- Professional indemnity insurance details
- Whether the firm holds clients’ money
12
Q
What are the RICS Rules of Conduct?
A
- Honesty & Integrity: Members must be honest, act with integrity and comply with their personal obligations, including obligations to the RICS
- Competence: Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
- Service: Members and firms must provide good-quality and diligent service.
- Respect, DEI: Members and firms must treat others with respect and encourage diversity and inclusion.
- Public Interest: Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
13
Q
What are th RICS mandatory professional obligations for Firms?
A
- Comply with RICS CPD requirements.
- Cooperate with RICS
- Promptly provide all information reasonably requested by the Standards and Regulations Board
14
Q
What are the mandatory professional obligations for RICS firms?
A
- Publish a complaints handling procedure and maintain a complaints log
- Ensure all work is covered by PI cover
- Continuity of Service for sole principals in case of emergency
- Cooperate with RICS
- Promptly provide reasonable requested information by the Standards and Regulation Board
- Display RICS regulation on their business literature
- Report to RICS any matter required under Rules for the Registration of Firms
15
Q
A
16
Q
What is the RICS decision tree?
A
A framework of questions which members should ask themselves when facing a situation in which they are asked to act potentially unethically.
17
Q
What are some of the questions in the RICS Ethics Decision Tree?
A
- Do you have sufficient facts?
- Is it legal?
- Is it in line with the RICS Rules of Conduct?
- Have you consulted with appropriate people to make an informed decision?
- Do you have clear reasoning in reaching your decision?
18
Q
What are the 3 levels of disciplinary action?
A
- Action by Head of Regulation
- Disciplinary Panel (drawn from the independent Regulatory Tribunal)
- Appeal Panel
19
Q
Who is the current RICS president?
A
Nicholas Maclean
20
Q
What 4 Actions can the Head of Regulation take?
A
- 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
21
Q
What is a Fixed Penalty Notice?
A
Procedure used for breaches of the Rules relating only the supply of information to the RICS by firms and members. It consists of a fine and/or caution.
22
Q
What is the role of the Standards and Regulation Board?
A
The independently led SRB provides assurance to the profession, public and stakeholders that RICS members and regulated firms meet professional standards, including those set out in RICS’ Rules of Conduct.
23
Q
What is a Regulatory Compliance Order?
A
It is used for ‘low level’ breaches. It is a written document which states the terms upon the member or firm must take or desist from taking certain actions in a specified time period and an agreement to pay a fine.
24
Q
What action can a Regulatory Tribunal Disciplinary Panel take?
A
- Issue a Regulatory Compliance Order
- Reprimand
- Caution - a warning against repeating the activity or conduct
- Fine - Impose an unlimited amount of fine per breach that is proportional to the offence
- Impose condition upon future continued RICS registration
- Expulsion from membership or remove a firm
- Require publication of the results of the hearing on the RICS website and in the local newspaper where the firm is present.
25
What social media posts will the RICS investigate?
1. Discriminatory
2. Dishonest
3. Abusive or threatening behaviour
4. Bullying, harassment or victimisation
5. A pattern of frequent concerning communications
6. Ignoring previous advice or warnings about concerns
26
What posts will the RICS unlikely investigate?
- Posts critical of an organisation, its policies and performance
- Use of professional and respectful language
- Are removed if requested to do so
27
What fee negotiations are prohibited?
- Firms should avoid price fixing, aggressive fee cutting or collusion with competitors
28
What steps should be undertaken before commencing an instruction?
1. Check that you are professionally competent
2. No conflicts of interest or personal interests
3. Confirm terms of engagement and get written approval from the client BEFORE you start work on the instruction
29
What should be included in a Terms of Engagement?
1. The client’s agreement to the proposed fee basis,
2. Payment of expenses (how they are calculated)
3. A copy of the firm’s complaints handling procedure is available on request
4. Money Laundering Checks will the carried out (Money Laundering Regulations 2017)
5. Consumer Rights Act allows for a cooling off (cancellation) period of 14 days from the date of the agreement
30
What is a conflict of interest?
A term used to describe a scenario where a member of firm’s independence and impartiality is threatened due to financial, personal or commercial interests.
31
What are the three types of conflicts of interest?
1. Party Conflict
2. Own Interest Conflict
3. Confidential Information Conflict
32
What is a Party Conflict of Interest?
Conflict occurring when a member of firm is asked to work on the same or related instruction for two different parties.
33
What is an Own Interest Conflict?
A conflict of interest that relates to personal interests. When a client’s interest conflicts with a family member who is a counter party in a transaction.
34
What is a Confidential Information Conflict?
It is a conflict of interest that relates to the sharing of confidential information to two different clients.
35
What is informed consent?
Explicit, written permission that should the sought by the surveying firm from the relevant parties to continue with an instruction in spite of a conflict of interest.
36
When should informed consent be sought?
1. When there is a conflict of interest
2. When the surveyor is satisfied that all relevant parties are best served by doing so.
37
What was be included in informed consent?
1. It must be in writing
2. Disclose the nature of the conflict, the circumstances surrounding it and any other relevant facts and set out your proposal fro how the firm intends to deal with the conflict.
3. Be as clear as you can
4. Request written confirmation from both clients of their informed consent
38
What step must be taken after informed consent is given?
An information barrier must be set up.
39
What are the features of an information barrier?
- Must be robust
- You must take reasonable steps to operate an effective barrier
- Physical separation (preferably in separate buildings)
- There is a virtual barrier
- All information regarding the instruction should be securely stored
40
How long should files be kept on file?
A minimum 6 years before disposal and destroyed completely
41
How should an in house complaint be handled?
1. Issue details of the CHP
2. Procedure must be quick, clear, transparent and impartial
3. Details of the Complaints Handling Officer must be stated as a contact
4. The complaint must be made in writing
5. A Complaint should be acknowledged within 7 days
42
How should complaints be handled by a 3rd party?
- The complaint should be escalated to a 3rd party redress scheme
- The name of the relevant appropriate redress mechanism must be provided to the complainant
- Example: The Centre of Effective Dispute Resolution (CEDR)
43
What are the RICS CPD requirements?
1. Members must undertake a minimum 20 hours of CPD per calendar year
2. 10 hours must be Formal CPD
3. Members must maintain relevant and current understanding of RICS Rules of Conduct during a rolling 3-year period
4. All members must record their CPD using the RICS CPD Management System
44
What is Formal CPD?
- Structured learning that has clear learning objectives and outcomes
45
What is Informal CPD?
- Self-managed learning that is relevant to your professional role
- Private Study, on the job-training etc
46
Scullion v Bank of Scotland (2010)
- A surveyor who provides advice on value to a lender in respect to a buy-to-let purchase does not owe a duty of care to the borrower
47
Burgess v Lejonvarn (2020)
- Professionals providing professional services pro-bono and without contract owe a duty of care to act with reasonable care and skill
48
Hope Capital Limited vs Alexander Reece Thompson (2023)
The purpose of the valuation is central to the extent of the valuer’s duty when considering a negligence claim
49
Key points of the Limitation Act 1980
In England & Wales there is a limitation period of:
- 6 years from then the service was provided
- 6 years from when a loss was suffered
- A long-stop position of 15 years if the claimant did not know a loss was suffered
50
What is the purpose of Professional Indemnity Insurance (PII)?
To protect clients, surveyors and third parties against negligence claims where a duty of care is breached and a claim for damages arises.
51
What are the minimum levels of PII cover?
- Turnover £100,000 or less = £250,000
- Turnover £100,001 to £200,000 = £500,000
- Turnover £200,001 = £1 million
52
What is the maximum levels of uninsured excess required?
- Turnover Up to £10 million = higher of 2.5% of the sum insured or £10,000
- Turnover over £10 million = No set limit
53
What are the PII requirements following cessation of trading?
- For consumer claims a minimum of £1 million of aggregate cover is required over a period of 6 years
- For commercial claims, firms must consider what is adequate and appropriate for a minimum 6 years
- PII is required for pro-bono work
54
What is the proceedure of Handling Client’s Money?
- Client accounts must be kept separately & clearly identifiable
- The word ‘client’ in on the bank account and cheque book
- A client must be able to have their monies on demand
- Regular bank reconciliation is checked monthly
- Accounts need to be audited by a chartered accountant
55
What are the RICS regulations for starting a new practice?
1. Inform the RICS of your new practice by completing a Firm Details Form
2. Appoint a Responsible Principle
3. Register with RICS for regulation of the firm
4. Arrange for PII and send details to the RICS of
5. Set up procedures for the requirements for client money handling and protection
6. Register with RICS Valuer Registration if undertaking Red Book Valuations
7. Set up an RICS approved Complaints Handling Procedure
8. Set up a complaints Log
9. Appoint a Complaints Handling officer (can be a surveyor at another firm)
10. Comply with RICS annual CPD requirements
11. Pay RICS annual subscription fees
56
What is the statutory compliance for starting a new practice?
- Requirement to disclose business name via Companies House
- Appoint a Money Laundering Reporting Officer
- Register for data protection
- Inform HMRC for VAT and Tax registration (VAT threshold is turnover of £90,000 pa)
- Compliance with current employment law i.e., National Living Wage, working hours
57
What are the RICS requirments for closing a practice?
- Inform RICS of firm closure (deregister)
- Ensure clients are informed and arrangements made to a new firm
- Return client monies
- Inform insurers and procure ‘run-off’ cover for a minimum 6 years post expiry
- Retain a copy of client files and records for a minimum 6 years
