Level One Flashcards
What is the current RICS Governance Structure?
RICS is currently governed, under the terms of the Royal Charter, by various internal councils and boards, including:
- Governing Council - provides management and strategic direction
- The Standards and Regulation Board and Management Board report to the Governing Council
- 17 specialist professional groups covering property, land, and construction.
Current CEO is Justin Young.
Current President is Tina Paillet.
What is the role of the RICS?
- 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.
What is the purpose of the Bichard Review and what some of the recommendations it highlights?
Following the Independent Review of internal governance failings within the RICS carried out by Alison Levitt QC in 2021, RICS commissioned Lord Bichard to undertake a further review to:
‘Clarify the purpose of RICS, including its responsibility to act in the public advantage; make recommendations on its governing structure to deliver that purpose; and provide proposals for the incoming leadership and governing body on the future culture and strategy of the Institution.’
The Bichard Review reported in June 2022, making 36 recommendations in 7 key areas, including:
1. Renewed & increased focus on the public interest.
2. Maintaining self-regulation, through greater independence for regulatory functions.
3. Increased focus on diversity and inclusion across the profession and RICS
4. Empowering and enabling members to through greater support
5. Undertake an independent review of RICS governance once every 5 years.
6. New simplified, clear, accountable governance structure.
7. Showing greater leadership on issues that matter to society, e.g., climate change
What are the RICS Future Foundations?
RICS published 5 foundations in November 2023 following the Bichard Review:
- Vision - a natural environment that is sustainable, resilient and inclusive.
- Mission - inspire members, advance knowledge, uphold standards.
3 Strategic Goals - lead and influence on sustainability, attract diversity, strengthen trust, enhance member engagement.
- Values - professional, collaborative, inclusive, ambitious.
- A world class organisation - an efficient, effective and inspiring professional body that is easy to do business with.
What is the requirement for registration?
Firms providing surveying services to the public must register for regulation to ensure there is a recognised quality benchmark.
If 50% of Principals of a UK firm which provides surveying services are RICS members, then it has to be regulated, and if at least 25% then it can apply to be.
Principals are sole practitioners, directors, partners, or board members etc.
Each firm must nominate a Responsible Principal who is obliged to ensure all reasonable steps are taken and systems are in place to ensure compliancy.
What are the 5 RICS Rules of Conduct 2021?
1 - Members / firms must be honest, act with integrity, and comply with their personal / RICS obligations.
2 - Members / firms must maintain their professional competency and ensure that services are provided by competent individuals who have the necessary expertise.
3 - Members / firms must provide good-quality and diligent service.
4 - Members / firms must treat others with respect and encourage diversity and inclusion.
- Members / firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in their profession.
What is the RICS Ethics Decision Tree?
The Decision Tree 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 of situation.
It encourages considering the legality of ones actions and their consistency with the Rules of Conduct.
The ultimate test is whether members would be content to have their decisions made public.
What are the disciplinary procedures?
A disciplinary procedure can be triggered by someone complaining to the RICS, an allegation by a client, or third party.
Three levels of disciplinary action are:
1. Action by Head of Regulation
2. Disciplinary Panel
3. Appeal Panel
Initial investigation is conducted by the Head of Regulation, who can initiate one of 4 actions upon completion of investigation if required:
1. Serve fixed penalty notice
2. Make a Regulatory Compliance Order
3. Refer matter to a single member of the Regulatory Tribunal for consideration
4. Refer matter directly to a Disciplinary Panel
Disciplinary Panels are for more serious breaches of conduct, where the penalties available to a Regulatory Tribunal Disciplinary Panel include:
1. Issue Regulatory Compliance Order
2. Reprimand
3. Fine
4. Expulsion
5. Require publication of results to RICS website local newspaper, and TRICS Modus magazine.
Appeals Panels can consider a members / firms appeal against review of a decision relating to the above.
What is the RICS Core Material? How does the RICS Professional Standards vs Practice Information?
Professional Standards & Practice Information are replacing Professional Statements, Guidance Notes and Codes of Practice etc.
Professional Standards - set requirements / expectations for RICS members / firms
Practice Information - supports the practice, knowledge and performance of RICS members and regulated firms.
Practice Alerts - new web page to collect Practice Alerts which are key tools for warning / alerting the profession to emerging areas of risk
What the steps required prior to undertaking a new instruction?
- Check I am professionally competent to undertake the work.
- Check for conflicts of interest and personal interest.
- Confirm Terms of Engagement in writing and get written approval from the client before I start work on the instruction.
How would you handle a Conflict of Interest?
Step One - Conflict Avoidance:
Upon receipt of the full facts, I would consider whether the conflict if irresolvable because my impartiality is compromised, or whether it can be properly managed. I would then decide to accept or decline the instruction.
Step Two - Written Advice to Both Parties:
If I accept the instruction, I would set out in writing to the parties the nature of the conflict / relevant facts, set out my proposals for how intend to deal with the conflict (info barriers), and request written confirmation from both clients of their informed consent that my firm can act in accordance with the provisions of the proposed procedure.
Step Three - Conflict Management:
Once written consent is received, set up an information barrier with the provisions of the procedure proposed.
What is the minimum procedure for the handling of a complaint?
Stage One - In House:
- Details of CHP issued when the firm receives a valid complaint.
- Procedure must be quick, clear, transparent, and impartially implemented.
- Details of nominated person who will investigate the complaint (The Complaints Handling Officer) must be stated as the person of contact.
- Complaint must be made in writing.
- Procedures and timescales for the investigation of the complaint should be recorded.
Complaint should be acknowledged within days and investigated within 28 days.
Stage Two - ADR Third Part Resolution:
- If complainant isn’t happy with the review, the second stage of the CHP involves using an independent redress scheme that the firm has chosen to use.
- Name of relevant appropriate redress mechanism must be provided to the complainant e.g., The Centre for Effective Dispute Resolution (CEDR), and the RICS Dispute Resolution Service.
What needs to have occurred in order for a negligence claim to be made?
A Duty of Care exists to clients and third parties, using a ‘reasonable care and skill’. When breached, and there is a loss, a claim for damages can be made (negligence claim).
What is Professional Indemnity Insurance and what are the current minimum requirements?
PII is mandatory for surveyors working in practice to protect clients, surveyors, and third parties against negligence claims when there is a duty of care breached and a claim for damages arises.
Minimum requirements based on turnover of the firm:
£100,000 or less = £250,000 cover
£100,001 - £200,000 = £500,000 cover
£200,001 + = £1,000,000 cover
Maximum level of uninsured excess required by RICS (based on turnover):
Up to £10 million = The greater of 2.5% of the sum insured or £10,000
Over £10 million = No set limit
Adequate and appropriate run-off cover is required following cessation of trading:
For consumer claims - min. of £1m of aggregate cover over 6 years
For commercial claims - firms must consider what is appropriate for a min of 6 years.
Firms unable to obtain run-off cover from their insurer or open market will be able to apply for coverage to the RICS Run-Off Pool.
What are some of the best practices when handling clients’ money?
Client accounts must be kept separately & clearly identifiable.
Client must have access to their monies when demanded.
Accurate records are kept with a running balance available.
Payment of interest is agreed with a client and accounts must be kept in credit.
The word ‘client’ is on the bank account and cheque book.
How would you set up a new RICS regulated practice, abiding by RICS compliance?
- Inform RICS of new practice by completing a Firm Details Form.
- Appoint a Responsible Principle for all RICS communication.
- Register with RICS for regulation.
- Arrange PII cover and send details to RICS
- Set up procedures for Client Money Handling, including Protection Scheme.
- Register the RICS Valuer Registration Scheme if undertaking Red Book Global valuation work.
- Obtain RICS approval for CHP.
- Set up complaints log.
- Appoint Complaints Handling Officer.
- Use logo kit from RICS for all practice material.
- Plan for succession . future running of the business if a sole practitioner.
- Ensure CPD logged online & set up staff training plan.
- Ensure completion of RICS Annual Return at the end of each year.
How would you set up a new RICS regulated practice, abiding by statutory compliance?
- Disclose business name.
- Disability discrimination compliance.
- Financial services compliance.
- Bribery Act 2010 compliance.
- Appoint a Money Laundering Reporting Officer.
- Health and Safety compliance.
- Asbestos Register.
- Fire Safety compliance.
- Register for data protection.
- Estate Agency compliance.
- Inform HMRC for VAT and Tax registration.
- Ensure compliance with current employment law e.g., National Living Wage, working hours, gender pay gap etc.
- Ensure insurance compliance for employer & public liability.
How would you close a practice?
- Inform RICS of retirement / closure and deregister.
- Ensure clients are informed at the earliest.
- Return monies held by clients to their own accounts.
- Inform insurers and procure professional indemnity insurance un-off cover for min. 6 years from expiry of the policy in force.
- Retain copy of the client files and records for a min. 6 years.
What guidance is there on Conflicts of Interest, why do we run conflict checks, and how do you carry out a Conflict of Interest Check?
RICS Global Professional Standard on Conflicts of Interest, 2017
Conflict checks are undertaken to identify the existence of conflicts so to ensure a firms independence, impartiality, and ethical practice. protect clients’ interests, and maintain professional standards.
By entering information into Salesforce. This includes the client’s name, any 3rd party connections, and the postcode. I can also speak with my team / office to see if there is a conflict.
- Identify parties involved
- Check on your system e.g. we use salesforce for any past or present instructions in relation to the party
- Do the same for the property
- Assess whether these give rise to a conflict and then inform the client
What is a Know Your Client Check?
It is the process that involves verifying current of prospective client’s identities. It requires a valid proof identity and proof of current address of the client.
Customer Due Diligence checks are ongoing processes designed to assess client risk, and is a component of KYC checks. It involves identifying the client, beneficial owners of the client, its name, company number, address of registered office, names of Directors (unless listed), and inf on the purpose of the business relationship.
What are the benefits of being an RICS member?
- Status - professional credentials.
- Recognition - promotion of professional excellence.
- Market Advantage - RICS status and standards.
- Knowledge - International practice standards, guidance, CPD.
- Network - access to professionals worldwide.
Under the Disciplinary Procedures, what are Regulatory Compliance Orders?
For low level breaches of the Rules, e.g., minor breaches that could easily be corrected, like non compliance with CPD.
It is a written document stating the term upon which the member or firm must take or desist from taking certain actions in a specified time period, and an agreement to pay a fine.
What is the cooling off period in respect of Terms of Engagement?
A cooling off period relates to the time frame during which a consumer can change their mind and cancel a contract without any penalty.
The Consumer Rights Act 2015 allows a cooling off period of 14 days from the date of the agreement.
What are the best practices with fee negotiations?
Firms should avoid price fixing, aggressive fee cutting, or collusion with competitors.
Fees should be market based and agreed on an ad hoc basis.
Healthy competition is encouraged but aggressive cutting is not allowed.
You can enter further fee negotiations with a prospective client, after you have submitted your initial fee proposal, having regard to the above so long as its professional.
May wish to vary proposed level of service when renegotiating initial fee proposal.
Should not to be seen to undercut another firm
Must be completely transparent with clients / consumers so they understand service offering and fees.
Granting / accepting referral fees should be considered in the context of the Bribery Act 2010 / Rules of Conduct.
Once qualified, what are the requirements for CPD?
- Undertake a minimum of 20 hours CPD per calendar year.
- At least 10 hours must be formal CPD.
- All members must maintain a relevant and current understanding of the RICS Rules of Conduct during a rolling 3 year basis.
- Members must record CPD using the RICS CPD Management System available online by 31st January each year.
What is your firms Complaints Handling Procedure?
Colliers’ CHP offers an efficient and effective service, encompassing the minimum requirements of the RICS:
- Complaints made in writing to the
Complaints Handling Officer - Once Colliers shave received a written summary of the complaint, Colliers will contact the complainant within 2 working days to inform them of our understanding or the circumstances leading to the complaint.
- If, following discussions with the CHP the complaint remains unresolved, it will be investigated by the CHO and passed to the appropriate Director.
- The person dealing with the complaint will respond within 28 days with a written summary, outcome, and actions taken.
- If the matter is still dissatisfied, the complainant can request for it to be reviewed by the CEO or by a third party ADR mechanism, including a Property Redress Scheme, or CEDR.
Are you aware of any guidance that applies to RICS members when using Social Media?
The RICS introduced the Guidance Note ‘Use of Social Media: Guidance for Members, 2021’ - Effective from 30th June 2021.
The standards expected of members do not change because they are communicating through social media rather than face-to-face or other traditional media.
RICS is likely to investigate concerns where they involve:
- Discrimination
- Dishonesty
- Abusive / threatening behaviour
- Bullying, harassment, victimisation
- Frequent number of concerning communications
- Ignoring previous advice or warnings
RICS is unlikely to investigate posts which:
- Are critical to an organisation / its policies and performance
- Use professional and respectful language
- Are removed if requested to do so.
