Ethics submission Flashcards
What year was RICS founded and where is it based?
1868 in London. The head offices are at 12 Great George St, Parliament Square.
What is the RICS motto?
Translates to “there is measure in all things”
Who is the RICS president?
Ann Gray
Who is the RICS President Elect?
Tina Paillet
What are main the benefits that RICS regulated firms could provide?
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
What are the 3 main roles of RICS?
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
What are the three levels of Disciplinary action?
- 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)
What are the three types of penalties?
- Fixed penalty notice (failure of info)
- Regulatory compliance Order (low level of breaches)
- Action by Reg Tribunal (i.e. expulsion)
How should you handle clients’ money?
- 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- Money can only be withdrawn from client account if properly required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)
What are the 5 Rules 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 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
What are the ethical principle upon which the RoC are based?
Honesty, integrity, competence, service, respect and responsibility
What are RICS requirements for starting a new practice?
- 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
What are the Statutory requirements if you are setting up a new firm?
- 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
What do you do for closing a practice?
- 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
What information needs to be included in the RICS Annual Return?
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
What are the PII cover thresholds? and what is the run off cover requirement?
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.
What is the maximum level of insured excess?
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
What are the GDPR Rights?
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
Who is the interim RICS CEO?
Richard Collins
Would you accept a gift from a client? If so what is the procedure?
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
Who is the interim Chair of Governing Council?
Nicholas Maclean
What would you do if you were offered a gift during an instruction?
Politely decline as the instruction is not yet complete and this could impact my impartiality and also report it internally for monitoring.
What are some issues currently facing the RICS?
Lack of clarity with respect to it structure, governance and purpose
Who regulates the RICS?
The regulatory tribunal:
- Independent from RICS
- Provide the profession with an effective, fair and independent judicial body
- Consists of lay members and RICS members
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
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
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
What is PII? why is it needed?
Professional Indemnity Insurance protects clients, surveyors and third parties against negligence claims
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
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.
What would you do if you were offered a gift by a third party?
Politely decline and report it to the my Compliance Officer
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.
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
What triggers RICS disciplinary action?
- Allegation from client
- Information received or established by RICS
- Complaint to RICS
Name some examples of International Standards
RICS Valuation - Global Standards
International Property Measurement Standards`
Name some examples of Professional Statements
- Property Measurement (2018)
- Conflicts of Interest (2017)
- Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)
Name some examples of Guidance Notes
- Valuation of Development Property (2019)
- Surveying Safely 2018
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.
What are the RICS rules in relation to PII?
- Need RICS approved insurer (list on website)
- Need adequate and appropriate level for each instruction.
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.
If a firm can’t arrange PII cover what is available?
RICS assigned risk pool - emergency PII cover, but comes at a cost.
Name a guidance note relating to PII
RICS Guidance note on Risk, Liability and Insurance
What is your firms’ PII?
As my firm’s global turnover is in excess of £200,001, the PII is £1m.
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.
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.
Would you discuss fee levels with other companies?
No, I would never discuss this- it is confidential/commercially sensitive
How do you become FRICS?
- 5 or more years of service
- Academic achievement
- Professional achievement
- Leadership role
- Raise the profile of the RICS
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.
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?
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.
What is a conflict?
Anything that can be perceived to affect your impartiality
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.
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.
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
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.
