Ethics Rules of Conduct & Professionalism Flashcards
What Are The 5 Rule of Conduct
Rule 1 – Members and Firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
Rule 2 – Members and Firms must maintain their professional competence and ensure that services are provided by competent individuals with the necessary expertise.
Rule 3 – Members and Firms must provide good-quality and diligent service.
Rule 4 – Members and Firms must treat others respectfully and encourage diversity and inclusion.
Rule 5 – 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.
What’s Rule 1 and Give me an examples of behavior
Rule 1 – Members and Firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
Example behaviors include not being improperly influenced by others and being transparent with clients about fees and services;
What is Rule 2 and Give me an example of behavior
Rule 2 – Members and Firms must maintain their professional competence and ensure that services are provided by competent individuals with the necessary expertise.
Example behaviors include only undertaking work where a Member has the relevant knowledge, skills and resources and undertaking sufficient CPD each year;
What is Rule 3, and Give an Example of Behavior
Rule 3 – Members and Firms must provide good-quality and diligent service.
Example behaviours include understanding clients’ needs and objectives before accepting work and communicating clearly with clients;
Whats Rule 4 and Give an example of behaviour
Rule 4 – Members and Firms must treat others respectfully and encourage diversity and inclusion.
Example behaviours include treating others courteously and respectfully and developing an inclusive workplace culture;
Whats Rule 5 and Give an Example of Behaviour
Rule 5 – 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.
Example behaviours include managing professional finances responsibly and responding to complaints promptly, openly and professionally.
What is Appendix A
Appendix A of the Rules of Conduct lists the core professional obligations of Members and Firms to RICS.
For Members, these include cooperating with RICS, complying with CPD requirements and providing information promptly to the Standards & Regulation Board.
For firms, these include publishing a written Complaints Handling Procedure, ensuring adequate Professional Indemnity Insurance is held and cooperating with RICS.
Only serious breaches of the Rules are likely to result in disciplinary action. RICS states that minor breaches will be handled through self-correction or revised firm-wide processes.
Whats is IESC and What is the Fundamental Principles
RICS is also a member of the International Ethics Standards Coalition (IESC), alongside many other professional and governing bodies.
The IESC publish the International Ethics Standards (IES), which provide a global set of ethical principles for property-related professions.
The fundamental principles of IES are:
Accountability;
Confidentiality;
Conflict of interest;
Financial responsibility;
Integrity;
Lawfulness;
Reflection;
Standard of service; Transparency;
Trust.
RICS Member must report to RICs tin hat regard
RICS Members must report to RICS any unethical or unprofessional behaviour or practices of other Members.
This duty sits alongside any reporting or whistleblowing procedures set out by a surveyor’s employer or other organisations they work with or for.
When reporting a potential issue to RICS, surveyors need to consider their duty of confidentiality towards any clients, which could include anonymising confidential information or seeking the client’s permission to disclose information.
Lemen, Jen. Mandatory Competencies: APC Essentials (p. 18). CRC Press. Kindle Edition.
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Provide anu overview of your understanding of professional Guidance
Professional Guidance sets requirements or expectations for RICS Members and Regulated Firms about how they provide services or the outcomes of their actions.
Where requirements are mandatory, guidance will use ‘must’, whereas best practice will use ‘should’. Surveyors must have a robust understanding of relevant guidance. This is because, in regulatory or disciplinary proceedings, RICS will take account of relevant Professional Standards in deciding whether a Member acted appropriately and with reasonable competence.
What has and is being changes since the BICHARD Reviews with regards to Guidance Documents
Following the Bichard Review, the RICS has overhauled the different categories of professional guidance.
Existing guidance, e.g., Professional Statements (mandatory), Guidance Notes (best practice) and Information Papers (broader information or context), is being replaced or updated with new types of guidance as time goes on, and all new guidance is published in the new forms.
Professional guidance is now split into Professional Standards and Practice Information.
Professional Guidance sets requirements or expectations for RICS Members and Regulated Firms about how they provide services or the outcomes of their actions.
What is the RICS CPD Policy Requirements
All RICS members (AssocRICS, MRICS and FRICS) must undertake at least 20 hours of CPD each year.
This must be completed by 31st December and recorded online (or using the RICS mobile app) by 31st January.
At least ten hours must be formal (structured) CPD, and every three years, CPD relating to ethics must be undertaken.
What is Formal CPD
Formal CPD includes more than just formal training courses; it includes anything with a clear learning objective or outcome. Examples include online training, webinars, structured discussions, technical authorship and undertaking academic courses.
What must firms ensure for staff training for the CPD policy
Firms must ensure that staff training is structured and promotes the provision of professional work to the required standards of skill, care and professionalism.
This will likely include a structured training programme, appraisal system and support for personal development.
Firms must declare that this is in place as part of their Annual Return to RICS.
What do RICS publish for Conflicts of Interest
The RICS set out mandatory requirements relating to conflicts of interest in the Professional Standard Conflicts of Interest (1st Edition).
This relates to the actions of Firms and Members and provides guidance on how to comply with the requirements of the Rules of Conduct.
Please explain and Define a conflict of interest
There are three types of conflict of interest.
- Party conflict – a situation in which the duty of an RICS Member (working independently or within a non-Regulated Firm or a Regulated Firm) or a Regulated Firm to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another client or party in relation to the same or a related professional assignment;
- Own interest conflict – a situation in which the duty of an RICS Member (working independently or within a non-Regulated Firm or a Regulated Firm) or a Regulated Firm to act in the interests of a client in a professional assignment conflicts with the interests of that same RICS Member/Firm (or in the case of a Regulated Firm, the interests of any of the individuals within that Regulated Firm who are involved directly or indirectly in that or any related professional assignment);
- Confidential information conflict – a conflict between the duty of an RICS Member (working independently or within a non-Regulated Firm or a Regulated Firm) to provide material information to one client, and the duty of that RICS Member (working independently or within a non-Regulated Firm) or of a Regulated Firm to another client to keep that same information confidential.
Defined Bribery
Bribery – The offer, promise, giving, demanding or acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust;
What is Corruption
Corruption – The misuse of public office or power for private gain or abuse of private power concerning business practice and performance;
What is a facilitation Payment
‘Facilitation payment’ – A payment made to a government official to speed up a routine administrative action. Such payments are customary and legal in some countries, but in many jurisdictions, they are criminalised;
What is Money Laundering
Money laundering – Concealing the source of the proceeds of criminal activity to disguise their illegal origin. This may occur through hiding, transferring and/or recycling illicit money or other currency through one or more transactions or converting criminal proceeds into seemingly legitimate property;
Structure of RICS
What are the mandatory professional guidance to my area of practice
The role of professional Groups
What are the bodies within RICS
List Policy Documents
What Government, Legislation and Regulations applicable to my area of practice
Recent Relevant Case law/common law
Ethical Review
Would you be content for you action to be made public ?
What are RICS International Standards
These are Manadatory and cover IVS,IPMS,IES,ICMS
What are RICS Professional Statements
The are mandatory for example, Conflict of interest Global 1st Edition
What is the Black BOOK
Contain Best Practice Guidance for Quantity Surveying and Construction Professionals
What is the ETHICAL Decision tree
- Do you have sufficient fact on the issue before proceeding with an instruction
- Is it Legal
- Is the work compliant with RICS Global and professional and ethical standards
- RISK Appraisal (financial, ethic, competence)
- Final Decision
- Ethical Review; Would you be content for you action to be made public ?
Please provide Examples of Behavior for Rule 1
1.1 Members and Firms do not mislead others by their actions or omissions, or by being complicit in the action or omissions of others. (Truthful and Honest)
1.2 Members and Firms do not allow themselves to be **influenced improperly by others or by their own self interest. **(Giving or receiving work referrals, gifts, hospitality or payment) Protect myself against Bribery. This is related to the countering bribery and corruption, money laundering and terrorist financing.
1.3 Members and Firms **identify and potential conflicts of interest **throughout a professional assignment and do not provide advice or services where a conflict of interest or a significant one arises, unless the do so in accordance with current edition of conflict of interest, RICS professional statement.
1.4 Firms have effective **processes to identify actual and potential conflicts **of interest, to enable appropriate decisions to be made on whether to accept work, and keep records of decisions made about actual and potential conflicts of interests. (ethical decision tree)
1.5 Members and Firms providing advice and opinion in a professional context do so honestly and objectively based on relevant and reliable evidence and firms have processes to ensure that directors, partners and employees do so. (not in a business of guessing and don’t be swayed by client pressure)
1.6 Members and Firms are** open and transparent** with client about their fees and services.
1.7 Members and Firms act to prevent others being **misled about their professional opinion **
1.8 Members and Firms do not take unfair advantage of others
1.9 Members and Firms** protect confidential information** and only use or disclose it for the purpose for which it was provided, where they have the necessary consent to do so or where required or permitted by law.
1.10 Firms keep client money safe and have appropriate accounting controls
1.11 Members do not misuse client money and comply with controls intended to keep it safe.
1.12 Members and Firms **do not facilitate any financial crime **including money laundering, tax evasion, bribery or corruption. Firms have effective processes to prevent directors or employees
from doing so.
What is the Rule of Conduct
The rule of conduct are effective from 2 February 2022.
The five rules provide a structure for making
ethical decisions about how to behave as a professional.
The Rules of Conduct support positive change in the built and natural environments, through
promoting and enforcing the highest ethical standards in valuation, the development and
management of land, real estate, construction and infrastructure. The Rules of Conduct are based on
ethical principles of honesty, integrity, competence, service, respect and responsibility.
Under its Royal Charter, RICS is required to maintain the usefulness of the profession for the public
advantage, and the practice of surveying is defined as including ‘securing the optimal use of land and
its associated resources to meet social and economic needs’. Professional ethical practice by RICS
members and firms provides a foundation for effective markets, pioneers better places to live and
work, and is a force for positive social impact.
State what Rule 2 Is and Provide example of behaviours
Members and firms must maintain their professional competence and ensure
that services are provided by competent individuals who have the necessary
expertise.
** Example behaviours**
3.2.1 Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.
2.2 Members and firms **supervise **any employees undertaking work for them and ensure that these employees have the necessary knowledge, skills and resources to do their tasks competently.
2.3 Members and firms check that subcontractors have the necessary knowledge, skills and resources to do their tasks competently.
2.4 Members and firms **reflect **on the work they have undertaken and its impacts, and consider how they might apply what they have learned to their future work.
2.5 Members maintain and develop their knowledge and skills throughout their careers. They identify development needs, plan and undertake continuing professional development (CPD) activities to address them and are able to demonstrate they have done so. Firms encourage and support directors, partners and employees to maintain and develop their knowledge and skills, and check that they are complying with CPD requirements set by RICS.
2.6 Members and firms stay up to date and comply with relevant legislation, codes of practice and other professional and relevant technical standards. Firms ensure that their directors, partners and employees do so.
State what rule three is and give example of behaviours
Members and firms must provide good-quality and diligent service.
Example behaviours
3.1 Members and firms understand clients’ needs and objectives before accepting any professional work.
3.2 Members and firms agree with clients the scope of the service to be provided and its limitations, and timescales for the work.
3.3 Firms **inform clients that they are regulated by RICS and that they may need to disclose records to RICS **where required for regulatory purposes.
3.4 Members and firms inform clients promptly and seek their agreement if it is proposed that any of the terms of engagement or estimated fees or costs be changed.
3.5 Members and firms undertake their work in a timely manner; with due care, skill and diligence, and in accordance with RICS technical standards.
3.6 Members and firms communicate to clients the material information on which their professional advice and opinion is based.
3.7 Members and firms **communicate with clients and others clearly **and in a way they can understand.
3.8 Members and firms ensure that any referral or introduction they make for a client is in the best interests of the client and inform clients about any financial or other** benefits to the member or their firm from a referral or introduction.**
3.9 Members and firms keep proper records of their work and decisions in enough detail to allow them to answer questions from clients and to allow their work to be **audited for quality assurance **or regulatory purposes.
3.10 Members and firms, when advising clients about projects, encourage solutions that are sustainable in that they minimise harm and deliver balanced economic, social and environmental benefits.
3.11 Members and firms understand the** risks and benefits of using relevant technology.**
3.12 Members and firms check that all **data used is accurate and up to date, is kept securely, and that they have proper legal rights to use it and, where required, share it. **
3.13 Firms have effective quality assurance processes for their work
State what Rule 4 is and give example of behaviours
Members and firms must treat others with respect and encourage diversity and inclusion
4.1 Members and firms respect the rights of others and treat others with courtesy.
4.2 Members and firms treat** everyone fairly** and do not discriminate against anyone on any improper grounds, including age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.
4.3 Members and firms do not bully, victimise or harass anyone.
4.4 Firms check that supply chains do not involve modern slavery or other abuses of the workforce.
4.5 Members and firms** report abusive labour practices** to proper and recognised authorities if they become aware of, or suspect, them.
4.6 Members and firms work cooperatively with others.
4.7 Members and firms develop an inclusive culture in their workplaces, **support equal access **and opportunity for all, and identify and address unconscious bias.
State what rule 5 is and give example of behaviours
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.
Example behaviours
6.5.1 Members and firms** question practices and decisions that they suspect are not right,** and raise concerns with colleagues, senior management,clients, RICS or any other appropriate person, body or organisation where they believe in good faith that it is necessary to do so. Firms **provide processes to allow and support individuals within the firm to raise concerns with senior management. **
5.2 Members and firms support directors, partners, employees, colleagues or clients who have acted in good faith to report concerns.
5.3 Members and firms ensure that public statements made by the firm, or in which members are (or could be) identified as members of the profession, do not undermine public confidence in the profession.
5.4 Members and firms respond to complaints made against them promptly, openly and professionally.
5.5 Members and firms do not dissuade complainants from approaching an alternative dispute resolution provider, RICS or any other regulatory body.
5.6 Members and firms cooperate with investigations into complaints or concerns, and provide information where it is reasonably requested and they can do so lawfully.
5.7 Members consider the effect that any health conditions may have on their competence or ability to undertake professional work, and inform management or clients where they require reasonable adjustments or are unable to continue to undertake work competently.
5.8 Members and firms manage their professional finances responsibly.
5.9 Members and firms take appropriate action when they consider that the rules have been breached, and report suspected significant breaches of the Rules of Conduct by themselves or others to RICS
Talk through and explain appendix A
This appendix sets out the **core professional obligations for members and firms. **
Additional professional obligations are found in the mandatory requirements of RICS professional statements relevant to a member or firm’s practice.
The following professional obligations to RICS are mandatory for RICS members.
- Members must comply with the CPD requirements set by RICS.
- Members must cooperate with RICS.
- Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
The following obligations are mandatory for RICS-regulated firms.
- Firms must publish a complaints-handling procedure, which includes an** alternative dispute resolution provider approved by RICS, and maintain a complaints log.**
- Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS.
- Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
- Firms must cooperate with RICS.
- Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
- Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
- Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
What the Mandatory Requirment document for Corruption
These are set out in the Professional Standard Countering Bribery and Corruption, Money Laundering and Terrorist Financing (1st Edition, 2019)
What ar the mandatory Requirements for Countering Bribery and Corruption, Money Laundering and Terrorist Financing (1st Edition 2019) for members and Firms
Firms must have processes adn procedur in place to carry out due dilligence on clients.
Customer/Client Due Diligence or Know your Customer; Firms ned to take appropriate steps to asertain who the customer or client is and if relevant theri ultimate beneficial owner.
Under the Money Laundering and Terrorist Financing (Amendment) Regulations 2022, a surveyor must undertake due diligence on clients (including the beneficial owner of the client company) before accepting instructions.
Other key legislation includes the Terrorism Act 2000, where individuals must report knowledge or suspicion of terrorist financing to the National Crime Agency under POCA 2002.
What are RICS PII minimum requirements
- Provide cover for any one claim or be on an aggregate plus unlimited round-the-clock reinstatement basis;
- Fully retroactive (‘each and every claim made’ basis), covering claims made during the term of insurance cover irrespective of when the original act occurred;
- Include RICS’ minimum policy wording. In 2022, this included specific fire safety exclusions;
- Being written on a full civil liability basis; Provide at least the minimum level of indemnity based on the firm’s turnover i the previous year (or estimated for a new firm);
- Provide for a maximum level of uninsured excess based on the sum insured; Underwritten by an RICS-approved insurer;
- Provide cover for past and present employees.
What are RICS minium Limts fo indemnity based on last years turnover
As of 2023, the RICS specifies minimum limits of indemnity, based on the last year’s turnover:
£100,000 or less (last year’s turnover) = £250,000 (minimum limit of indemnity);
£100,001 to £200,000 = £500,000;
£200,001 and above = £1,000,000.
As of 2023, RICS also specifies maximum levels of uninsured excess, based on last year’s turnover:
£10,000,000 or less (last year’s turnover) = greater of 2.5% of the sum insured
or
£10,000 (maximum uninsured excess); £10,000,001 and above = no limit.
If a firm cannot obtain adequate PII (or run-off cover), it can apply to use the RICS Assigned Risks Pool (ARP).
What is Run off cover and whats the requirments and related case law
When an RICS Regulated Firm or Member (sole trader) stops trading, they must have a
minimum of £1,000,000 of run-off PII cover. This is required for a minimum of six years for consumer claims, although a more extended period may be required in certain circumstances.
Having run-off cover is an essential part of risk management for closed firms, particularly given the case of Merrett v Babb [2001] QB 1174.
In this case, a valuation surveyor conducted a mortgage valuation for a lender. His firm was subsequently closed due to bankruptcy with no run-off cover. The house purchaser successfully brought a negligence claim against the surveyor personally, even though the purchaser had not seen the valuation report and was unaware of the surveyor’s identity when they purchased the property.
Essentially, following the case of Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, a duty of care is established so where run-off cover is not in place, a surveyor could be held personally liable for negligence relating to work undertaken in a former company.
RICS LOGO Requirements
In the Rules for the Use of the RICS Logo and Designation by Firms (Version 6), effective February 2022, it is a mandatory requirement to state that the firm is regulated by RICS on all business material.
Whats a LOCUM
Sole practitioners or sole directors in a corporate practice should have in place arrangements in the event of death, incapacity or other extended absences (e.g., holiday or sabbatical) from the business.
This is generally achieved through having a locum, another professional appointed to ‘stand in’ for the surveyor if they cannot work.
A sole practitioner may appoint a locum as their complaints handling officer to ensure their Complaints Handling Procedure is run fairly and impartially. Typically, a locum will be another Chartered Surveyor, although they could also be a solicitor or accountant by trade, i.e. a trusted professional.
Level 3 Questions Examples
In your submission, you gave an example of a conflict of interest. Talk me through the advice you gave to manage this;
Your submission gave an example of being offered a gift during a tender. How did you deal with this ethically?
When asked by your client to increase your valuation figure, explain the advice you gave on how to act ethically and professionally.
Examples of Level 2 Questions
Being involved with RICS through a board, committee or other activity;
Identifying a conflict of interest and taking appropriate action to manage it or to decline the instruction;
Agreeing transparent and reasonable professional fees;
Undertaking pre-instruction checks, including those for anti-money laundering;
Agreeing Terms of Engagement when taking on new work; Dealing with an offer of a gift or corporate hospitality;
Complying with RICS CPD requirements; Ensuring that an employer’s processes comply with RICS requirements,
including the Rules of Conduct.
Level 1 Examples:
In your submission, you gave an example of agreeing a reasonable fee basis.
Which Rule(s) of Conduct did you apply?
What pre-instruction checks did you carry out at the valuation example in your submission?
How did you check for conflicts of interest in the letting example in your submission?
What are the RICS Rules of Conduct?
What RICS guidance do you comply with when agreeing a new instruction?
What RICS guidance relates to bribery?
Lemen, Jen. Mandatory Competencies: APC Essentials (p. 38). CRC Press. Kindle Edition.
