Mandatory Competency - Flash Cards - Ethics
1
Q
Who is the president of the RICS?
A
Tina Paillet
2
Q
Who is the president elect of the RICS?
A
Justin Sullivan
3
Q
Who is the CEO of the RICS?
A
Justin Young
4
Q
What is the RICS motto?
A
Est Modus in Rebus - There is measure in all things.
5
Q
What is the RICS mission statement?
A
Develops & enforces international standard to protect consumers and businesses across the built and natural environment. Royal Charter granted by the Privy Council allows the RICS to have independent legal personality to define objectives, constitution and powers to govern its own affairs.
6
Q
What is the structure of the RICS?
A
Governing Council, RICS governing body, delegates responsibilities to the RICS board. Oversees the RICS Board and Standards & regulations Board.
7
Q
What is the RICS Board’s functions?
A
Delegated responsibility for delivery of the business plan and oversight of operations (excluding standards and regulation).
8
Q
What is the Standards & Regulations board functions?
A
Exclusive responsibility for exercising RICS’ regulatory functions, including strategy, governance, structure, policy and operational oversight in the public interest.
9
Q
What are the RICS ethical principles?
A
Honesty, integrity, competence, service, respect and responsibility. The rules of conduct are based on these.
10
Q
What are the RICS rules of conduct?
A
1) Honesty, act with integrity and comply with professional obligations, 2) maintain professional competence, ensuring services are provided by competent individuals, 3) good quality service, 4) treat others with respect, 5) act in the public interest
11
Q
What are the different types of RICS documents?
A
Professional Standards & Practice Information.
12
Q
What is an RICS professional standard?
A
These are the documents which set requirements for competent and ethical practice e.g. our existing professional statements and guidance. Documents include Rules of Conduct & regulatory rules i.e. Conflicts of Interest 1st Edition March 2017
13
Q
What is an RICS practice information?
A
These documents provide advice or practice support to RICS members and firms.
Documents that provide users with recommendations or approaches for accepted good practice as followed by competent and conscientious practitioners. E.g. Black Book, Acceleration 2nd Edition, February 2024.
14
Q
What are the RICS CPD requirements?
A
20 hours CPD each calendar year, 10 hours must be formal - recorded by 31 Jan. Professional & ethical standards refreshed every 3 years.
15
Q
What are penalties of not complying with CPD requirements?
A
1st - Caution on record for 10 years, 2nd - further caution and fixed penalty, 3rd - referral to disciplinary panel.
16
Q
What are RICS professional groups?
A
Provide technical advice across the organisation within their speciality, 4 main areas; standards, professional standards, market insight, what we regulate.
17
Q
Name the bodies within the RICS?
A
Matric (early careers), LoinHeart (charity for RICS professionals)
18
Q
What are the aims of PII?
A
Protect firm from financial loss, protect member or firm against consequents of liability to pay damages, ensure the firms clients do not suffer financial loss.
19
Q
What must a PII policy include?
A
each and every claim basis, RICS minimum policy wording, minimum level of indemnity based on firms turnover.
20
Q
What are the minimum PII levels of cover?
A
Based on firms annual turnover the previous year;
£100k or less - £250k min
£100k - £200k - £500 min
£200k+ - £1m min
21
Q
What are the maximum levels of uninsured excess?
A
Indemnity £10m or less - excess 2.5% of sum insured or £10,000
Indemnity 10m or more - excess no set limit.
22
Q
What are recent changes to the RICS PII requirements?
A
UK and Ireland sperate, added fire safety claims for professional services for building of 5 stories and above; negligence, error, on or after 1st July 2024, cover in aggregate. External wall assessments and fire risk appraisals of external walls have also been added.
23
Q
PII insurer requirement of the RICS?
A
Policy must be underwritten by an insurer detailed by RICS.
24
Q
What must the PII cover for employees?
A
Must cover past and present employees?
25
What is run off cover?
Run off cover is for when a company ceases trading, required for a minimum of 6 years with a min of £1m.
26
What are the RICS Bye-laws?
Set of rules all members must follow which were produced following the implementation of the royal charter.
27
What is an examples of one of the RICS bye-laws?
Bye-law 2 - Membership & registration; classes, eligibility, and procedures. Or Bye-law 4 - Contributions to funds - Subscription fees and requirements.
28
What are the principles of better regulation?
PACTT - Proportionality, accountability, consistency, transparent, targeting.
29
Name some international ethical principles?
Accountability, confidentiality, conflict of interest, diversity, integrity.
30
What must RICS regulated firm have?
Compliant handling procedure, independent redress provider, PII, annual return submitted to RICS, 50 percent or more partners need to be RICS, contact officer.
31
What is an independent redress provider and who is your companies?
ADR provider that must be listed in the complaint handling procedure, Centre for Effective Dispute Resolution
32
What must you do in order to setup a practice?
Inform RICS, appoint contact officer, register with RICS regulation, arrange PII, setup client money account, setup complaint handling procedure and log, staff training and CPD, compliant practice material.
33
What is the Anti Money Laundering Act 2018?
Set of laws and regulations aimed at preventing money laundering and the financing of terrorism.
34
What is the Health & Safety at Work Act 1974?
Primary piece of legislation in the UK for which puts duties in employers to eliminate, reduce and control health and safety risks, put plans in place etc.
35
What must you do if you close a practice?
Inform RICS, return client money, inform PII insurer, maintain run off cover min 6 years, return client information.
36
What must you consider when dealing with gifts, hospitality and promotional activity?
It is generally acceptable and considered a part of doing business, however it is linked to the Bribery Act 2010
37
What is the Bribery Act 2010?
UK Legislation that makes bribery and corruption illegal. Act prohibits, offering or giving a bribe to gain an advantage, requesting, receiving or accepting a bribe to receive an advantage, bribing a public official, not reporting or implementing a system to record bribes.
38
What is the definition of acceptable hospitality within the Bribery Act 2010?
Reasonable and proportionate, includes modest occasional meals, sport and cultural events, must not be lavish or frequent.
39
What is the definition of acceptable gifts within the Bribery Act 2010?
Nominal in value, offered openly, must not be regular, cash or to influence decisions.
40
What are the penalties as a result of the Bribery Act 2010?
Unlimited fines, prosecution, imprisonment up to 10 years.
41
What actions must you take when dealing with gifts and hospitality?
Be open and transparent, keep records i.e. gift register in excess of £100, considerate i.e. value, timing proportionate, giver, receiver.
42
What is the UK Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017?
set out the obligations on businesses and individuals to prevent their services being used for money laundering, terrorist financing or proliferation financing purposes.
43
What does money laundering mean?
Exchanging money or assets that were obtained criminally for other money/assets that are ‘clean’. Also means money to fund terrorism.
44
What is your responsibility to prevent money laundering?
Undertake customer due diligence, keep records, maintain internal procedures, report suspicious activity internally and externally, train employees.
45
What are the money laundering regulations 2017 requirements on cash payments over £10k?
You will need to sign a register with HMRC.
46
Are you able to accept cash payments?
No prohibited by RICS.
47
What is a client money account?
RICS-regulated firm holds for or receives on behalf of another person, including money held by a regulated firm as stakeholder and is not immediately due and payable on demand to the RICS-regulated firm for its own account
48
Where would you find further information on handling Client Money?
RICS guidance on handling client money, professional standard.
49
What must RICS regulated firms do to handle client money?
Set clear segregation, principle oversees, secure system, must not be overdrawn.
50
What is negligence?
Failure to take proper care when doing something. A duty of care is owed to all clients and 3rd parties using reasonable skill and care
51
Under a construction contract how could a client claim for negligence?
Limitations Act 1980 - 6 years if signed under hand, 12 years if signed as a deed.
52
Provide an example of case law for negligence?
Merit V Babb 2001 - Surveyor sued for negligence by former client when firms PII cover was cancelled when the firm became solvent.
53
What is the RICS?
Royal Institution of Chartered Surveyors is a professional body promoting and enforcing the highest international standards in the valuation, management and development of land, real estate, construction and infrastructure
54
How was the RICS established?
Established in the UK by Royal Charter, RICS has been raising industry standards since 1868 Our professional credentials, underpinned by ethical principles and independent regulation, are in global demand
55
What is the RICS mission statement?
To be recognised in key worldwide markets as the leading body that sets and enforces standards and offers access to the most sought-after professional status in land, property and construction. To advance and enforce standards in land, property and the built environment, and to promote the usefulness of the profession for the public good.
56
When was RICS founded?
1868
57
What is the Royal Charter?
Royal Charter was granted by the Privy Council – Profession is self-regulated, internally monitored and inspected. Not regulated by government.
58
What is the difference between ethics and rules?
Ethics are a set of moral values, rules are set to we worked to.
59
What is your definition of integrity?
Being honest and having strong moral principles - not being influenced by others to make decisions.
60
What are the professional obligation of members?
Comply with CPD, cooperate with the RICS, provide information requested by Standards and Regulation board.
61
What are the professional obligations of firms?
Publish complaints handling procedure with ADR and keep log, have PII, make arrangements for incapacity, Cooperate with the RICS, provide information requested by Standards and Regulation board, display business literature in accordance with RICS, report matters as required under rules for the regulations of firms.
62
What is the definition of the Rules of Conduct?
To provide a framework that we can all work to and so the client knows he is getting a set level of service. Helped guide members.
63
What actions can be imposed by the RICS?
Fixed penalty, consent order, disciplinary panel.
64
What are consent orders?
Written agreement between RICS and member or firm correcting an issue or restricting them from doing something.
65
Other than PII what other insurances would you require to setup a firm?
Employer liability, public liability, buildings insurance.
66
What information do registered firm have to send to the RICS annually?
annual return - type of business and staffing, clients, training provision, complaints detail, PI insurance, whether client money is held.
67
What is meant by negligence?
Failure to provide the duty of care that is owed to the client.
68
What is the Merit V Babb case law?
Importance of having run off cover, surveyor sued by negligence by a former client because the surveying firm was no longer in existence therefore the individual surveyor was sue for negligence.
69
What must a complainants handling procedure include?
RICS model form, redress mechanism, details should be provided in terms of business, clear, quick and fee in stage 1, must be investigated within 28 days, must be recorded, inform PI insurers immediately.
70
How many stages must a complaints handling procedure have?
Stage 1 - senior member of firm to deal with or complaint handling officer. Stage 2 - Independent third party.
71
What is an independent redress?
It is a consumer scheme designed to handle small issues that would be disproportion expensive to take to court.
72
What would you do if you received a letter of complaint?
Acknowledge receipt, and forward to complaint handler as per procedure. Highlight the importance if informing PII.
73
What is the clients money protection scheme?
Operated by RICS, provision for any member of the public to be reimbursed by direct loss of funds when using RICS regulated firms.
74
Why would you have joint names on a client account?
For dual authorisation.
75
How would you define different types of CPD?
Use the RICS CPD decision tree.
76
What is your CPD strategy?
Meet with manager to discuss career strategy, build CPD around these objectives.
77
On what basis is PII required in the UK?
On a claims made basis - the policy that is in place now is responsible for providing indemnity.
78
What are the RICS PII requirements?
Policy cover must be each and every claim, minimum levels of indemnity, maximum levels of uninsured excess, run off cover must be in place for 6 years, cover needs to be for past and present employees.
79
What measures can be taken to avoid PI claims?
Keep concise records, record advice given, use proper terms of engagement, don’t advise on items outside your field of experience, use RICS guidance.
80
If you make a mistake in making advice, what would you do?
Notify the client streight away, provide a revised report etc.
81
How can you limit liability when agreeing terms of appointment?
Base appointment on reasonable care and skill rather than fitness for purpose, sign underhand rather than deed.
Fee vlaue, got to be proportionate to the work being carried out, could be at fee value or mutiple of the fee value.
Written agreed terms, agreed scope and terms of buisness.
e.g. asbestos advice / RAAC
82
What are the main elements of a fee proposal?
Terms and conditions, scope of services, exclusions, assumptions.
83
What is a conflict of interest?
When someone in a position of trust has competing personal or professional interests making it difficult for them to fulfil their duties impartially.
84
How could a COI be managed if two departments of the same company were working for the same client?
Procedures to ensure exclusivity of staff, separate communication lines to the client, separate offices and storage of data, NAD agreements, monitor conflict and keep client up to date.
85
If the client was insistent that you worked for them despite an existing COI, how would you proceed?
Ensure client understands the COI, make them aware of reduced impartiality, seek letter of instruction from client to continue, agree working procedures to manage COI.
86
Under the Bribery Act, under what circumstances is a facilitation payment permitted?
If there is a risk or danger to life, limb or liberty. Report matter immediately afterwards.
87
What is the Levitt report?
Commissioned by RICS following treasury management audit in 2018, RICS had overdraft of £3m due to inaccurate cashflow forecasting. Recommendations included Governing council to have more of an oversight of internal dealings, briefed by management board, oversee executive management bonuses. Greater transparency.
88
What is the Bichard Review?
Commissioned by RICS Governing board, in Dec 2021 into purpose, governance and strategy of the RICS. Commissioned following Levitt review and aimed to create new sense of purpose and direction. 36 recommendations including RICS Matrix should be given stronger voice, Diversity and including panel setup, Improved technology within RICS, Governance structure to be updated.
89
What are the key Principles of the Data Protection Act 2018?
The act ensures that data is:- Used fairly, lawfully and transparently, Used in a way that is adequate, relevant and limited to only the purpose it is intended, Is retained for no longer than is necessary, Processed securely including the protection against unlawful use, loss or destruction.
90
What is the RICS Ethics Decision Tree and how can it be used?
To determine whether a decision is ethical or not - Use the tree to help make a correct ethical decision.
91
What is ISO 9000 and how do you ensure compliance?
International standard provides basic concepts principles and terms for quality management systems and standards.
92
Why do RICS have a code of conduct?
To ensure members are completing services as required, to instil confidence in clients and the public that members are regulated.
93
What are the three types of conflict of interest?
Conflicts between parties, own-interest conflicts and confidential information conflicts.
94
What is a party conflict of interest and provide an example?
Single regulated firm accepts two or more professional assignments in connection with the same project or activity and the respective clients interests conflict.
95
What is an own conflict of intertest and provide an example?
Views or circumstances of an RICS member conflict with the interests of a client in a professional contexed when working on a project or activity. For example, if one of my friends worked for a contractor that was tendering a project for a clinet.
96
What is a confidential information conflict of intertest and provide an example?
Where an RICS member is required to provide information to a client but is required to keep the same information confidential by another client.
97
What guidance could you refer to for bribery?
RICS Professional Standard on countering bribery, corruption, money laundering and terrorist financing
98
What is modern slavery?
Describes various forms of exploitation of people for gain including human trafficking and forced labour.
99
What is an escrow account?
Where money is held by a neutral third party on behalf of two other people in the process of completing a transaction.
100
How should you inform a client of client money transactions?
Provide receipt immidietly of transactions, provide statements of movement of client money.
101
How would you become more involved with the RICS?
Become a councillor, assessor and assist in development of professionals.
102
What are the deadlines required under the RICS complaints handling procedure?
Notify PII, acknowledge in writing within 7 days, respond within 28.
103
What is the responsibility of the RICS?
Professional body promoting and enforcing the highest international standards across the construction industry, aims to uphold professional ability and reliability of members and firms to uphold public confidence within the profession.
104
L2 - Provide an example how you act with honesty and integrity?
I provided a client with a RIBA report which had an error within it which was not spotted during the QA process. I approved the client and informed them of the error and provided them with a revision correcting the error.
105
L2 - What would you do if a project was turning out to take more time than the fee allows?
Unless there is additional work, I would need to complete the work for the agreed fee.
106
L2 - Provide an example of when you have identified that you are not competent to undertake an activity?
Case study - structural engineer needed to specify floor strengthening and lintel works. HDP, mechanical and electrical.
107
L2 - Provide an example when you have needed to upskill to be competent?
Undertake training for condition survey software, ensures data is captured as client requires it.
108
L3 - How do you provide ethical practice?
Declined manufacturer dinner requested - during tender process. Considered a bribe.
109
L3 - Which rule of conduct is bribery not in line with?
Rile 1 - Honest and act with integrity, Rule 5 - Act in public interest and take responsibility, maintain public confidence.
110
L3 - Provide an example of when you have acted with integrity and taken responsibly?
Ladders or window incident at Haywards Heath Library.
111
What pre-conditions does a firm need to meet to be regulated by the RICS?
Offer professional services, have at least 25% of principles as RICS qualified, and agree to observe and comply with ROC and standards set by RICS.
112
What is a locum agreement?
Where a firm with a sole principle has an agreement where another professional will stand in for the surveyor if they are unable to work.
113
If your client insistent in continuing with a project where a conflict of interest has arisen what would you do?
Ensure that the client is aware of the COI, ensure it would still be legal and ethical to proceed, obtain informed consent of the relevant parties, ensure my business had steps in place to ensure that there is no crossover i.e. separate staff member, ensure information is not accessible by each party.
114
What is informed consent?
Process of communication between two parties where a COI is explained raising the risks and available alternatives before the client is in agreement to proceed.
115
What is the client money protection scheme?
The RICS scheme provides protection, as a last report, in the unlikely event that the firm is unable to repay a clients money, up to the limits and exceptions set out in the scheme rules.
116
What is a civil liability policy?
Covers negligence, breach of contract, breach of trust, breach of fiduciary duty, breach of statutory duty.
