Ethics submission Flashcards
1
Q
What year was RICS founded and where is it based?
A
1868 in London. The head offices are at 12 Great George St, Parliament Square.
2
Q
What is the RICS motto?
A
Translates to “there is measure in all things”
3
Q
Who is the RICS president?
A
Ann Gray
4
Q
Who is the RICS President Elect?
A
Tina Paillet
5
Q
What are main the benefits that RICS regulated firms could provide?
A
Of regulated firms:
- Confidence for clients - firm are regulated and monitored by RICS regulation
- Professionalism - the need to ensure clear, impartial and expert advice
- Security (need to have PII & CHP in place) - recognized procedure which protects clients
6
Q
What are the 3 main roles of RICS?
A
PIS (Protect, Information & Standards)
- To maintain the highest standard of education and training
- To protect consumer through strict regulation of professional standard
- To be the leading source of information and independent advice on the property industry
7
Q
What are the three levels of Disciplinary action?
A
- Action by Head of Regulation authorized by SRB (standard level of breaches)
- Regulatory Tribunal (serious breaches)
- Appeal Panel (can review decisions made by the above levels)
8
Q
What are the three types of penalties?
A
- Fixed penalty notice (failure of info)
- Regulatory compliance Order (low level of breaches)
- Action by Reg Tribunal (i.e. expulsion)
9
Q
How should you handle clients’ money?
A
- Keep account separate/identifiable (use word ‘client’)
- Client must be able to have money on command
- Agree interest payment procedures
- Keep accurate records
- Money can only be withdrawn from client account if properly required
- All firms handling client money need to display their procedures document on their website (and in their premises if deal with residential)
10
Q
What are the 5 Rules of Conduct?
A
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 who have the necessary
expertise.
Rule 3: Members and firms must provide good-quality and diligent service.
Rule 4: Members and firms must treat others with respect 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
11
Q
What are the ethical principle upon which the RoC are based?
A
Honesty, integrity, competence, service, respect and responsibility
12
Q
What are RICS requirements for starting a new practice?
A
- Inform RICS by completing a Firm Detail Form
- Appoint a communication contact (Responsible Principal)
- Register with RICS for regulations of the firm by the Regulatory Board
- Arrange PII cover
- Set up Client’s money handling procedures, including a Protection Scheme
- Register with VRS if undertaking Red Book vals
- Appoint a complaint officer and obtain RICS approval for the CHP
- Set up a complaint log
- Use a logo kit to be used on all practice material (Regulated RICS)
- Arrange for succession is sole practitioner
- Ensure CPD staff training and that these are appropriately logged in the CPD management system
- Ensure completion of an online RICS annual return at the end of each year
13
Q
What are the Statutory requirements if you are setting up a new firm?
A
- Requirement to disclose business name
- Compliance with Equality Act 2010
- Bribery Act 2010 compliance
- Appoint AML officer
- H&S compliance
- Asbestos register (Control of Asbestos Regs 2012)
- Fire Safety compliance
- Register for data protection
- Estate agency compliance (Act 1979, CPR 2008, Act 1967)
- Inform HMRC for VAT and Tax regulation (VAT registration threshold is currently £85k turnover)
- Ensure compliance with current employment law (National living wage, pensions, gender pay gap reporting)
- Ensure insurance compliance for employer and public liability
- Financial Services compliance
14
Q
What do you do for closing a practice?
A
- Inform the RICS
- Ensure clients are informed and hand over arrangements to a new firm
- Return any monies held by clients to their account
- Inform insurer and obtain a run-off cover for a minimum of 6 years
- Keep a copy of client files for a min of 6 years
15
Q
What information needs to be included in the RICS Annual Return?
A
Make a return confirming their compliance with their obligations and information relevant to business:
- Type of business/staff details
- Statutory regulated activities
- Nature of clients
- CHP
- PII details
- Client money details
16
Q
What are the PII cover thresholds? and what is the run off cover requirement?
A
A
Below shows categories for the firm’s turnover in the preceding year and the minimum level of indemnity:
- £100,000 or less = £250,000
- £100,001 - £200,000 = £500,000
- £200,001 and above = £1,000,000
*runoff cover needs to be 6 years at £1,000,000 - PII update 1st April 2021
*to manage the risk adequately, some firms may wish to hold a higher level of indemnity.
17
Q
What is the maximum level of insured excess?
A
The below may be superseded with “no excess limit now”???
The part of each claim the firm must pay itself:
Liability of up to £500,000 - max uninsured excess = greater of 2.5% or £10,000
Liability of over £500,000 = max uninsured excess = 2.5% of sum insured
18
Q
What are the GDPR Rights?
A
8 rights to the individual:
1. Right to be informed
2. Right to access
3. Right to rectification
4. Right to erasure
5. Right to restrict processing
6. Right to data portability
7. Right to object
8. Right to not be subject to automated decision making
19
Q
Who is the interim RICS CEO?
A
Richard Collins
20
Q
Would you accept a gift from a client? If so what is the procedure?
A
I would assess whether it was proportional to the type of work provided, reasonable and I would evaluate the timing of it. If it was, I would complete a Declaration form for Gifts and Entertainment, stating:
- Client details
- My relationship with the client
- Business justification
- Potential conflicts of interest
21
Q
Who is the interim Chair of Governing Council?
A
Nicholas Maclean
22
Q
What would you do if you were offered a gift during an instruction?
A
Politely decline as the instruction is not yet complete and this could impact my impartiality and also report it internally for monitoring.
23
Q
What are some issues currently facing the RICS?
A
Lack of clarity with respect to it structure, governance and purpose
24
Q
Who regulates the RICS?
A
The regulatory tribunal:
- Independent from RICS
- Provide the profession with an effective, fair and independent judicial body
- Consists of lay members and RICS members
25
How can a firm become regulated?
Firms who provide a surveying service to the public are required to register - need to have 1 member to register.
RICS Rules for Regulation of Firms (2019)
- 50% of principles from a UK firm are members then it has to be regulated
- if it has at least 25% of principles as members then it can apply
26
What are the RICS minimum procedures for CHP?
*Notify PI insurer
- Acknowledge a written complaint within 7 days
- Investigated and responded to within 28 days
- Refer to independent redress provider if unresolved (RICS dispute resolution service)
- Log in a complaints log
27
What are the RICS CPD rules?
- Non-members 48 hours per year for 2 years
- Members - min of 20 hours per year (10 hours must be formal)
- Members must maintain relevant understanding of RICS Professional & Ethical Standards during a rolling 3-year period.
- Members must record CPD on RICS CPD management system
28
What is PII? why is it needed?
Professional Indemnity Insurance protects clients, surveyors and third parties against negligence claims
29
Can you accept cash?
- No - not under my company policy - cannot accept cash or vouchers.
- However, under money laundering regulations, I am allowed to accept cash up to £10k in euros. This would need to be witnessed and ideally take place in the office.
- Suspect money laundering - large cash amount - report
30
Why is client money handling important? What does the RICS produced and do regarding Handling client's money?
- One of the Rules of Conduct for Firms - client money must be kept safe.
- RICS Professional Statement: Client Money Handling 2019
- RICS runs a Client's Money Protection Scheme for claims which an RICS regulated firm can't repay.
31
What would you do if you were offered a gift by a third party?
Politely decline and report it to the my Compliance Officer
32
What is a responsible principle (RP)?
Each firm must nominate an RP who is obliged to systems are in place to ensure compliance with the RICS regulation.
33
What are the rules for using the RICS logo?
- Only RICS members and registered firms can use the logo.
- Has to be displayed in black and white
- Mandatory requirement for regulated firms to display on business literature
34
What triggers RICS disciplinary action?
- Allegation from client
- Information received or established by RICS
- Complaint to RICS
35
Name some examples of International Standards
RICS Valuation - Global Standards
International Property Measurement Standards`
36
Name some examples of Professional Statements
- Property Measurement (2018)
- Conflicts of Interest (2017)
- Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)
37
Name some examples of Guidance Notes
- Valuation of Development Property (2019)
- Surveying Safely 2018
38
What should you do if you receive confidential information in error?
- It cannot be used for their own purposes.
- Advise sender of the error.
- Inform compliance officer.
- Delete securely.
39
What are the RICS rules in relation to PII?
- Need RICS approved insurer (list on website)
- Need adequate and appropriate level for each instruction.
40
In relation to PII, what does retroactive mean?
Policy covers claims that are made within the insurance period, regardless of when the negligent act occurred.
41
If a firm can't arrange PII cover what is available?
RICS assigned risk pool - emergency PII cover, but comes at a cost.
42
Name a guidance note relating to PII
RICS Guidance note on Risk, Liability and Insurance
43
What is your firms' PII?
As my firm's global turnover is in excess of £200,001, the PII is £1m.
44
Within your firm, how do you undertake conflict of interest checks?
- We have an internal system where I would search the client's name and property details.
- In some instances I would also send a general email to all offices.
45
If a prospective purchaser called you during the tender process requesting a heads up on the levels of bids received, what would you do?
- Not at liberty to discuss any other offers
- Bid to a level comfortable with and that if they lose out they are comfortable with the figure they bid.
46
Would you discuss fee levels with other companies?
No, I would never discuss this- it is confidential/commercially sensitive
47
How do you become FRICS?
- 5 or more years of service
- Academic achievement
- Professional achievement
- Leadership role
- Raise the profile of the RICS
48
Why do we have the Rules of Conduct?
Rules of conduct for members and firms, have been estabilished to promote and enforce the highest ethical standards and to guide members in doing what is right.
49
RICS Ethical Decision Tree
- It provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner.
1. Sufficient facts
2. Is it legal?
3. In line with RICS RoC
4. Consulted with enough people to be able to make informed decision
4. Clear reasoning to support decision?
5. Would you be happy for your actions to be made public?
50
Negligence case this year?
Large vs Hart Jan 2021:
Did not communicate all of the information.
- Failed to identify and report the extensive damp at the Property. Whilst there was no evidence of damp at the time of Mr Large’s inspection, he noted in his report that he could not see whether damp-proof membranes had been installed and he should therefore have advised that further investigations were required.
- Crucially, Mr Large should have recommended that a PCC be obtained prior to purchase of the Property, particularly as this was a newly reconstructed property. Without it, the Harts had no contractual rights against the contractors engaged in the build.
51
What is a conflict?
Anything that can be perceived to affect your impartiality
52
What is the difference between formal and informal CPD?
- Formal includes structured learning that has clear learning objectives and outcomes.
- Informal is self-managed learning related to the role.
53
What does the Bribery Act 2010 state about hospitality?
Hospitality is not prohibited by the act. It states offering a client reasonable and proportionate hospitality will not be an offence, as long as it is accurately recorded in a gift/hospitality register.
54
What must you do if you are acting for a client and you are in receipt of a referral fee?
Must disclose to the client as soon as this arises
55
If you completed on your property, sold for £402,000 so £8k fee. If I came into the office with £8k in cash to pay the fee, what would you do?
We cannot receive cash within my firm. I would ensure they had my firm's bank details and ask them to pay it into their bank account and transfer it to that. I would also inform my MLRO as it would be quite suspicious receiving such a high amount of cash.
56
Talk me through the action you would take if you’re on site and you think someone is trying to bribe you? What legislation would you have regard to?
I would decline and inform my line manager, leave site, contact Serious Fraud Office.
Bribery Act 2010
57
What is intellectual property?
Intellectual property is a branch of law that includes all the rules applicable to "intellectual" or "intangible" creations, which are "intangible assets".
58
What would you do if your fees for a job went over an agreed level?
- Don't lower standard of service
- Investigate why it happened
- If error - put in place measures to ensure doesn't happen again
- Keep track of any additional fees not within scope of service
59
What is the Clients Money Protection Scheme?
Run by RICS - any member of public to be reimbursed directly for loss of funds - RICS insurance policy
60
What would you do if a client paid in advance for services?
Need to change this answer
- Identifiable client account
- Statement of account
- Services and associated fees
- Transparency once complete
61
What are the professional obligations set out in appendix A of RoC?
Appendix A sets out professional obligations
Members:
* Comply with CPD requirements
* Cooperate with RICS
* Provide information reasonably requested
Firms
* Publish CHP and maintain complaints log
* Ensure or current/previous work covered by approved PII cover
* Co operate with RICS
* If have a sole principal ensure professional work continues in the event of absence, death & incapacity
* Provide information reasonably requested
* Display a designation that they are regulated by RICS
* Report to RICS any matters required to report under Rules for the Registration of Firms
62
When agents provide you with info on property transaction are they breaching confidentiality?
Are you able to give any details out if you do not have clients say so/agreement to do so?
I am not able to disclose info if I have agreed to keep details confidential.
However, If another agent asks me for details of a sale that has already been completed, I would pass on, as it is likely this information would be available in the public domain (costar, land registry etc)
63
What ADR does LSH use?
In the case of residential and small consumer complaints we use The Property Ombudsman although can also use CEDR if it is not residential. In the case of commercial disputes we use IDRS. All of these organisations details are listed in the template. I am pleased to day that referrals for final resolution are very rare indeed.
64
What are the benefits of being an RICS member?
The benefits of being a member are:
- Status and professional recognition - professional credential which provide client's confidence
- Market advantage and Knowledge - access to a wide range of resources and papers which help me to stay informed (CPD)
- Global Network - ability to connect with other professional at a global level
65
What is the rule underpinning Handling Client's money? what does it say?
It's one of the example behaviours stated under Rule 1 of RoC;
- Firms keep client money safe and have appropriate accounting controls.
- Members do not misuse client money and comply with controls intended to keep it safe.
66
What is the PS regarding Client's money?
- RICS Professional Statement Client Money Handling, 1st Edition 2019
67
Give me n.2 example under Rule 1
- members must no be influenced improperly by others actions (eg. gifts) and by their self-interest
- Members do not fair advantage of others
- Members must keep client money safe and not facilitate any financial crime
- Members must identify CoI and be transparent about service and fees
68
Give me n.2 examples under r.2?
- Members only undertake work that they knowledge and skills to carry out competently
- Member must maintain their knowledge throughout their career (CPD)
69
n.2 example under Rule 3
- members to understand clients' needs and objectives before any professional work
- Members must maintain accurate records and encourage solutions that deliver sustainable and balanced economic, environmental and social solutions
- member undertake work in timely manner and with due care in line with technical standards
- Members agree with client the scope of service to be provided and its limitations
70
Two examples under R.4
- members must develop inclusive culture in the workplace and address unconscious bias
71
Two example under Rule 5
- members should question practices and decision that are not right and raise/report concerns with colleagues and their firms
- members must consider the effect that any health condition may have on their competence or ability to undertake the work
72
What are the time limits for negligence claims? are the any extensions?
- A claim for damages arising from negligence must be brought within 6-years from the date on which the cause of action accrued or omission.
- In the case the cause of action may not become apparent until a later date, the Act provides a longer limitation period of 3 years from the date on which the claimant has become aware, subject to an overall limit of 15-years from the date of the negligent act/omission
73
What is the difference between an omission and negligence?
- negligence refers to the failure to exercise reasonable care (breach of a duty of care) i.e. adopting the wrong valuation methodology
- omission refers to the failure to act when there is a duty to act; i.e. Surveyor not highlight a serious issue of the building when inspecting it
Both can overlap and cause damages/losses
74
What are the general steps for avoiding negligence claims?
- Clearly understand client's objectives and confirm precisely instructions (ToE)
- Ensure to be competent when undertaking work
- Follow RICS Standards and guidance
- Make detailed notes and photographs
- Keep up to date with market and CPD
- Cap the Professional liability excess on your PII (for high risk jobs)
75
What happens if a firm is unable to obtain run-off cover from their incumbent insurer?
In such cases, firms may be able to apply for coverage to the RICS Run-off Pool
76
Name some examples of International Standards
RICS Valuation - Global Standards
International Property Measurement Standards`
77
Name some examples of Professional Statements
- Property Measurement (2018)
- Conflicts of Interest (2017)
- Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)
78
Name some examples of Guidance Notes
- Valuation of Development Property (2019)
- Surveying Safely 2018
79
What should you do if you receive confidential information in error?
- It cannot be used for their own purposes.
- Advise sender of the error.
- Inform compliance officer.
- Delete securely.
80
What are the RICS rules in relation to PII?
- Need RICS approved insurer (list on website)
- Need adequate and appropriate level for each instruction.
81
In relation to PII, what does retroactive mean?
Policy covers claims that are made within the insurance period, regardless of when the negligent act occurred.
82
If a firm can't arrange PII cover what is available?
RICS assigned risk pool - emergency PII cover, but comes at a cost.
83
Name a guidance note relating to PII
RICS Guidance note on Risk, Liability and Insurance
84
What is your firms' PII?
As my firm's global turnover is in excess of £200,001, the PII is £1m.
85
Within your firm, how do you undertake conflict of interest checks?
- We have an internal system where I would search the client's name and property details.
- In some instances I would also send a general email to all offices.
86
If a prospective purchaser called you during the tender process requesting a heads up on the levels of bids received, what would you do?
- Not at liberty to discuss any other offers
- Bid to a level comfortable with and that if they lose out they are comfortable with the figure they bid.
87
Would you discuss fee levels with other companies?
No, I would never discuss this- it is confidential/commercially sensitive
88
How do you become FRICS?
- 5 or more years of service
- Academic achievement
- Professional achievement
- Leadership role
- Raise the profile of the RICS
89
Why do we have the Rules of Conduct?
Rules of conduct for members and firms, have been estabilished to promote and enforce the highest ethical standards and to guide members in doing what is right.
90
RICS Ethical Decision Tree
- It provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner.
1. Sufficient facts
2. Is it legal?
3. In line with RICS RoC
4. Consulted with enough people to be able to make informed decision
4. Clear reasoning to support decision?
5. Would you be happy for your actions to be made public?
91
Negligence case this year?
Large vs Hart Jan 2021:
Did not communicate all of the information.
- Failed to identify and report the extensive damp at the Property. Whilst there was no evidence of damp at the time of Mr Large’s inspection, he noted in his report that he could not see whether damp-proof membranes had been installed and he should therefore have advised that further investigations were required.
- Crucially, Mr Large should have recommended that a PCC be obtained prior to purchase of the Property, particularly as this was a newly reconstructed property. Without it, the Harts had no contractual rights against the contractors engaged in the build.
92
What is a conflict?
Anything that can be perceived to affect your impartiality
93
What is the difference between formal and informal CPD?
- Formal includes structured learning that has clear learning objectives and outcomes.
- Informal is self-managed learning related to the role.
94
What does the Bribery Act 2010 state about hospitality?
Hospitality is not prohibited by the act. It states offering a client reasonable and proportionate hospitality will not be an offence, as long as it is accurately recorded in a gift/hospitality register.
95
If you completed on your property, sold for £402,000 so £8k fee. If I came into the office with £8k in cash to pay the fee, what would you do?
We cannot receive cash within my firm. I would ensure they had my firm's bank details and ask them to pay it into their bank account and transfer it to that. I would also inform my MLRO as it would be quite suspicious receiving such a high amount of cash.
96
Talk me through the action you would take if you’re on site and you think someone is trying to bribe you? What legislation would you have regard to?
I would decline and inform my line manager, leave site, contact Serious Fraud Office.
Bribery Act 2010
97
What is intellectual property?
Intellectual property is a branch of law that includes all the rules applicable to "intellectual" or "intangible" creations, which are "intangible assets".
98
What would you do if your fees for a job went over an agreed level?
- Don't lower standard of service
- Investigate why it happened
- If error - put in place measures to ensure doesn't happen again
- Keep track of any additional fees not within scope of service
99
What is the Clients Money Protection Scheme?
Run by RICS - any member of public to be reimbursed directly for loss of funds - RICS insurance policy
100
What would you do if a client paid in advance for services?
Need to change this answer
- Identifiable client account
- Statement of account
- Services and associated fees
- Transparency once complete
101
What are the professional obligations set out in appendix A of RoC?
Appendix A sets out professional obligations
Members:
* Comply with CPD requirements
* Cooperate with RICS
* Provide information reasonably requested
Firms
* Publish CHP and maintain complaints log
* Ensure or current/previous work covered by approved PII cover
* Co operate with RICS
* If have a sole principal ensure professional work continues in the event of absence, death & incapacity
* Provide information reasonably requested
* Display a designation that they are regulated by RICS
* Report to RICS any matters required to report under Rules for the Registration of Firms
102
When agents provide you with info on property transaction are they breaching confidentiality?
Are you able to give any details out if you do not have clients say so/agreement to do so?
I am not able to disclose info if I have agreed to keep details confidential.
However, If another agent asks me for details of a sale that has already been completed, I would pass on, as it is likely this information would be available in the public domain (costar, land registry etc)
103
What ADR does LSH use?
In the case of residential and small consumer complaints we use The Property Ombudsman although can also use CEDR if it is not residential. In the case of commercial disputes we use IDRS. All of these organisations details are listed in the template. I am pleased to day that referrals for final resolution are very rare indeed.
104
What are the benefits of being an RICS member?
The benefits of being a member are:
- Status and professional recognition - professional credential which provide client's confidence
- Market advantage and Knowledge - access to a wide range of resources and papers which help me to stay informed (CPD)
- Global Network - ability to connect with other professional at a global level
105
What is the rule underpinning Handling Client's money? what does it say?
It's one of the example behaviours stated under Rule 1 of RoC;
- Firms keep client money safe and have appropriate accounting controls.
- Members do not misuse client money and comply with controls intended to keep it safe.
106
What is the PS regarding Client's money?
- RICS Professional Statement Client Money Handling, 1st Edition 2019
107
Give me n.2 example under Rule 1
- members must no be influenced improperly by others actions (eg. gifts) and by their self-interest
- Members do not fair advantage of others
108
Give me n.2 examples under r.2?
- Members only undertake work that they knowledge and skills to carry out competently
- Member must maintain their knowledge throughout their career (CPD)
109
n.2 example under Rule 3
- members to understand clients' needs and objectives before any professional work
- Members must maintain accurate records and encourage solutions that deliver sustainable and balanced economic, environmental and social solutions
110
Two examples under R.4
- members must develop inclusive culture in the workplace and address unconscious bias
111
Two example under Rule 5
- members should question practices and decision that are not right and raise/report concerns with colleagues and their firms
- members must consider the effect that any health condition may have on their competence or ability to undertake the work
112
What are the time limits for negligence claims? are the any extensions?
- A claim for damages arising from negligence must be brought within 6-years from the date on which the cause of action accrued or omission.
- In the case the cause of action may not become apparent until a later date, the Act provides a longer limitation period of 3 years from the date on which the claimant has become aware, subject to an overall limit of 15-years from the date of the negligent act/omission
113
What is the difference between an omission and negligence?
- negligence refers to the failure to exercise reasonable care (breach of a duty of care) i.e. adopting the wrong valuation methodology
- omission refers to the failure to act when there is a duty to act; i.e. Surveyor not highlight a serious issue of the building when inspecting it
Both can overlap and cause damages/losses
114
What are the general steps for avoiding negligence claims? in terms of PII is there something you can do?
- Ensure to be competent when undertaking work
- CoI
- Clearly understand client's objectives and confirm precisely instructions (ToE)
- Follow RICS Standards and guidance
- Make detailed notes and photographs
- Keep up to date with market and CPD
- Cap the Professional liability excess on your PII (for high risk jobs)
115
What happens if a firm is unable to obtain run-off cover from their incumbent insurer?
In such cases, firms may be able to apply for coverage to the RICS Run-off Pool
116
When do buildings need asbestos surveys?
If building built before 2000, likely needs asbestos survey.
117
What information is required by the RICS for regulation?
1. Type of business and staffing details
2. Statutory regulated activities (such as for financial services)
3. Nature of clients
4. Complaints handling procedure details and records
5. Professional indemnity insurance details
6. Whether the firm holds client’s money
118
What does integrity mean?
The quality of being honest and having strong moral principles.
119
What is the difference between ethics and integrity?
* Ethics can be defined as rules and regulations that have been formed which allow an individual to work in accordance to moral principles.
* Integrity can be defined as the quality of being honest and fair.
* Ethics are more external whereas integrity is internal.
* Ethics is not a choice whereas integrity is a personal choice.
* Ethics can be imposed on individuals, but integrity cannot be imposed on.
120
What is a conflict of interest?
A situation where your impartiality and objectivity is impacted.
121
What are the three types of conflict?
Party conflict - work on same instruction for two parties
Own interest - relating to a personal interest
Confidential information - work between two parties that is confidential
122
What is incremental advice?
This is where an agent is approached by another party to provide advice (valuation, Building surveying, planning) related to a purchase or disposal that is incremental to an existing instruction.
123
Can you give me an example of incremental advice?
Where an agent is acting for the seller in relation to a disposal but is approached by the buyer, or its lender, to provide a valuation.
124
Can incremental advice be given?
Members can only provide incremental advice if consent is given and an information barrier is in place before providing any incremental advice to the prospective buyer
125
What is personal interest?
This arises when acting for a family member, a close business associate or someone with whom you have a financial or personal interest (Connected person)
126
What are multiple introduction?
Where an agent has competing contractual relationships simultaneously with several buyers for commercial property investment opportunities
127
What is important to establish when an agent is instructed to acquire a commercial investment?
An agent must clearly state and agree in writing whether the agent is on an exclusive or non-exclusive basis
128
What does the agent needs to do if is agreed a ToE on exclusive basis?
Agent must advise all the other clients that was in contact with that the agent is no longer able to advise
129
What does the agent needs to do if is appointed on a non-exclusive basis with an additional client?
The agent needs to obtain informed consent from the all the clients that he will be acting for
130
What does the agent needs to do in respect of the seller's agent, if he has multiple introduction agreements?
The seller or seller's agent must be advised accordingly
131
What is a referral fee? and what should you do with respect of a client?
An agent receiving a commission, fee from a third-party provider for recomending them to the buyer or seller.
An agent must be completely transparent with clients and cosumers so they understand that you may in receipt of, or offering a referral fee and state so in ToE
Thi is to be considered in the context of Bribery and RoC
132
If you were to set up your own RICS practice, what type of insurance would you need?
- PII: to cover me against any duty of care breaches caused by negligence/omission
- Public Liability Insurance: to cover against any claims for damages or injury caused to third parties as a result of business operations
- Employers' Liability Insurance: to cover against any claims for injury or ilness caused to my employees as a result of their work
- Cyber Insurance: to cover against financial losses resulting from cyber attacks or data breach
- Property Insurance: to cover against any physical damages to property I own or lease
133
What are the recommendation of Risk, Liability and Insurance GN 2021?
- Liability Caps: RICS recommends that firms use liability caps as a way to manage risk and to ensure that there is a fair allocation of risk and reward
- Third Party reliance: to make it clear that he works is restricted to the named client and is not third party reliant
- Terms and conditions: 3 important elements to be considered from a risk perspective: Scope of work, basis on which the fee will be calculated, liability cap.
134
What is the difference between conflict of avoidance vs conflict management?
- Conflict of Avoidance is when you do not accept
- Conflict management is when you accept the instruction and you agree certain steps to manage the conflict such as barrier
135
What are the 3 steps for handling a conflict?
1. Conflict avoidance: receive full facts and consider whether the conflict is resolvable
2. Written advice to both parties: disclose conflict and intention on how to manage conflict, and receive informed consent
3. Conflict management: implement barriers and monitor the conflict
136
What is an information barrier? What sort of barrier exist?
It can take many forms, and is use to avoid conflict arising. It must be robust enough.
- The surveyors acting on the two sides must be different and physically separated (preferably in different building or floors and with different supports teams).
- Information should be securely stored
- keep a clear audit trail of the conflict check process and written and oral communication; the compliance officer must oversee all actions
137
What is important to establish if a multiple introduction can go ahead or not?
- whether the appointment is exclusive or non-exclusive basis and obtain informed consent from all clients involved.
138
What is money laundering?
It's converting money generating from criminal activities into legitimate assets
139
What sort of red flags transactions can be identified?
- Complex or unusually large transactions
- Contain unusual patterns of transactions
- No consistency with the type of business
- Unwillingness to meet or provide identity documents
- Changes to party involved in unusual transactions
