Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

1. Ethics, Rules of Conduct and Professionalism > Part 1: RICS requirements > Flashcards

Part 1: RICS requirements Flashcards

1
Q

How many rules are there in the new Rules of Conduct?

A

5 rules.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

When do the new rules of conduct come into effect?

A

The new Rules of Conduct will come into effect from 2 February 2022.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the Decision Tree?

A

Provides framework of questions which should be asked which includes to:
- consider the legality of actions
- consistency with RICS Global and Professional Ethical Standards.
- consult with appropriate people.
- have a clear reasoning before making decisions.
- the ultimate test being if the decision was made public.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What assistance does the RICS offer to members with any ethical issues?

A

The RICS Regulation Confidential Hotline.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are three benefits of regulation for firms?

A
  1. Confidence - for clients as regulated firms are monitored by RICS Regulation
  2. Professionalism - firms will have to provide clear, impartial and expert advice.
  3. Security - firms have to have a recognised complaints handling procedure, access to free independent redress and PII cover.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What conditions are required for a firm to register as RICS regulated?

A
  • Offer professional services in surveying disciplines to professional, corporate, institutional and other clients who rely on such services.
  • If 50% of principals of a UK firm which provides surveying services are RICS members then it has to be regulated.
  • If at least 25% then it can apply to be regulated.
  • each firm must nominate a ‘Responsible Principal’
  • Agree to observe and comply with RICS Rules of Conduct for Firms, including working to RICS standards.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a Responsible Principal?

A

Each firm must nominate a Responsible Principal who is obliged to ensure all reasonable steps are taken and systems are in place to ensure compliance with regulatory and RICS requirements, including to report to RICS as required.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Who can use the RICS logo?

A

RICS Members and registered firms only.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What steps would you need to take when setting up a practice?

A
  1. Register with RICS for Regulation
  2. Appoint a Responsible Principal
  3. Comply with obligations for firms:
    - Set up a complaints handling procedure
    - Arrange Professional Indemnity Insurance
    - Arrange a locum
    - Set up Client Account for handling Client Money
    - Set up staff training and CPD
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the six pieces of information required to include following an annual return?

A
  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 clients’ money.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What should be considered when preparing a fee negotiation?

A
  • Firms should avoid price fixing, aggressive fee cutting or collusion with competitors.
  • Fees should be market-based and agreed on an ad-hoc basis with clients.
  • Healthy competition is encouraged but aggressive fee cutting is not allowed.
  • You should not be seen to be undercutting another firm.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is included in the terms of engagement?

A

State in writing the client’s agreement to:
- the proposed fee basis
- payment of expenses (and how calculated)
- outline that the firm’s complaints handling procedure is available.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Before starting work on the instruction what must you do? (CIT)

A
  1. check professionally Competent
  2. No conflicts of Interest or personal issues
  3. Confirm Terms of engagement in writing and get written approval from the client.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

When is it appropriate to decline an instruction? (8 points)

A
  1. You are not competent to undertake the work.
  2. You do not have sufficient facts on the issue.
  3. the proposed client will not sign your terms of engagement and/or complete AML (Anti-Money Laundering) checks.
  4. There is a conflict of interest.
  5. A Professional Indemnity Insurance liability cap cannot be agreed.
  6. The advice is for a friend or on a pro bono basis and your professional indemnity insurance will not cover work carried out on a personal basis.
  7. The potential client is included in the UK Government’s sanctions list.
  8. Would you be content for your actions to be made public - in the newspaper or internet?
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is a conflict of interest?

A

Anything that impedes or might be perceived to impede an individual’s or firm’s ability to act impartially and in the best interest of a client.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the difference between conflict avoidance and conflict management?

A
  • Conflict avoidance is when you do not accept the instruction.
  • Conflict management is when the instruction is accepted, and steps are agreed and put in place to manage the conflict, such as an information barrier, with the written agreement of all parties.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What professional statement outlines the requirements of Conflict of Interest?

A
  • RICS Global Professional Statement on Conflicts of Interest 2017
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are the three main types of Conflict of Interest?

A
  • Party Conflict: relating to work on the same or related instruction for two different parties.
  • Own Interest Conflict: relating to a personal interest.
  • Confidential Information Conflict: relating to work between two parties which is confidential.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is informed consent?

A

Consent given willingly by a party who may be affected by a conflict of interest.

The party should understand:
- that there is a risk of a conflict.
- that it may affect the ability of the RICS member or firm.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the three step process for handling a conflict of interest?

A

Step one - Conflict avoidance
Step two - Written advice to both parties
Step three - Conflict management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is step one of handling a conflict of interest?

A
  • Consider whether the conflict is irresolvable with your impartiality compromised and should be avoided; or
  • Whether it can be properly managed maintaining transparency and openness.
  • Decide whether you want to accept or decline the instruction from client A and client B.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is step two of handling a conflict of interest?

A

If accepting the instruction, set out in writing as soon as possible the following to both clients:

  1. Disclose the nature of the conflict and how firm proposes to deal with the conflict.
  2. Request informed consent from both parties so that you can act in accordance with the procedure proposed.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is step three of handling a conflict of interest?

A

Once informed consent has been received, set up the information barrier/implement conflict management as agreed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is double-dipping?

A

A practice known as dual agency where an agent has a contractual agency relationship with both the seller and the buyer at the same time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

If a third party wants access to your files what must you obtain and what else should you consider?

A

You must get client approval first unless you are subject to a statutory duty overriding the clients confidentiality rights, such as the police or HMRC investigation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

How long should old job files be held for?

A

minimum of 6 years before disposal and destroyed securely.

27
Q

What should be done with confidential information received in error?

A
  • The client and sender should be advised of the error.
  • The matter should be recorded to firms compliance officer.
  • Material received should be disposed of securely.
28
Q

Who should be notified as soon as possible if there is a complaint?

A

PII Insurers should be notified as soon as possible if there is a complaint as this could lead to a claim for negligence.

29
Q

When should the complaints handling procedure be issued to a client?

A

The details of the CHP should be issued at the same time as the terms of engagement.

30
Q

A firms complaints handling procedure should be approved by who?

A

The RICS

31
Q

What should be recorded within a complaints log?

A
  • The DETAILS of the complaint.
  • The PROGRESS of the complaint.
  • The OUTCOME of the complaint.
32
Q

What RICS approved mechanism must firms include within their complaints handling procedure?

A

An RICS approved Alternative Dispute Resolution Procedure mechanism.

33
Q

What are the two stages for handling complaints?

A

Stage 1: in house
Stage 2: ADR - third party resolution

34
Q

What is the job title of the person within a firm nominated to investigate complaints?

A

The Complaints Handling Officer

35
Q

What is the timeline when a complaint is received?

A

A complaint should be acknowledged within 7 days and investigated within 28 days.

36
Q

What is the CEDR?

A

The Centre for Effective Dispute Resolution. An independent redress scheme which the firm has chosen to use.

37
Q

When will the RICS become involved in a complaint?

A
  • If a member fails to respond to the complainant.
  • If a member prevents the party from gaining access to an independent redress mechanism.
38
Q

Who is the Complaints Handling Officer for a sole practitioner?

A

A sole practitioner must nominate a surveyor in another firm to act as their Complaints Handling Officer.

39
Q

What is Professional Indemnity Insurance for?

A

To protect clients, surveyors and third parties against negligence claim when there is a duty of care breached and a claim for damages arises.

40
Q

Is Professional Indemnity Insurance optional?

A

No. PII is mandatory for all working surveyors.

41
Q

For each instruction, what should you ensure when determining the level of insurance?

A

Ensure that an adequate and appropriate level of insurance is in place for each instruction having considered potential liabilities which may exist.

42
Q

What are the RICS requirements for insurers?

A

All policies must be underwritten by an RICS approved insurer.

43
Q

What are the minimum levels of indemnity based on the firm’s turnover in the previous year?

A

Turnover - Minimum limit of indemnity

£100,000 or less = £250,000
£100,001 to £200,000 = £500,000
£200,001 and above = £1,000,000

44
Q

In a new business, how is the minimum level of indemnity to be determined?

A

Estimate the turnover and adjust in due course accordingly.

45
Q

What is the maximum level of uninsured excess required by RICS?

A

Limit of indemnity - Maximum uninsured excess

Liability of up to £500,000 = The greater of 2.5% of the sum insured or £10,000
Liability of over £500,000 = 2.5%

46
Q

What is a retroactive professional indemnity insurance policy?

A

This means that the policy covers claims that are first made against the insured during the period of insurance regardless of when the negligent act occurred.

47
Q

What basis should professional indemnity insurance be underwritten?

A

On a claims made basis.

48
Q

What is a claims made basis insurance policy?

A

It is the insurance policy that is in place at the time the breach is discovered that is claimed.

(You are covered by the insurance policy at the time the claim is made, not the insurance policy in place when the breach was made).

49
Q

What is Merrett vs Babb?

A
  • Babb had done a valuation as an employee of a company for a house purchased by Merrett.
  • Valuation later found to be negligent.
  • The original company no longer existed.
  • The court ruled that Merrett could pursue the individual - Babb - for the losses.
50
Q

What is the significance of Merrett vs Babb?

A
  • Professional employee is vulnerable to claims brought directly against them for advice given on behalf of their employers.
  • Highlights importance of run off cover.
  • Professional individuals must ensure run off cover is in place once they leave a firm or if firm ceases to exist.
  • Individuals should ensure that their ex companies keep up this cover on their behalf.
51
Q

How long should run off cover be in place and what is the minimum cover required?

A

Depends on type of contract the professional has been involved with.

  • Usually 6 years if contract is executed under hand.
  • 12 years if executed as a deed.
  • Can be up to 15 years.

Minimum of £1m of aggregate cover.

52
Q

What are the requirements regarding professional indemnity by the RICS?

A
  1. Made on an ‘each and every’ claim basis.
  2. Gives minimum wording.
  3. Sets out minimum levels of indemnity.
  4. sets out maximum levels of uninsured excess.
  5. Run off cover must be in place for at least 6 years.
  6. Should include cover for past and present employees.
53
Q

What measures should be undertaken to try to avoid PI claims?

A
  • Keep full and detailed records of meetings, conversations etc.
  • Record recommendations and advice given.
  • Use proper terms of engagement.
  • Don’t advise on areas outside your experience.
  • Use RICS guidance
  • Avoid poor management and excessive workloads.
54
Q

How is insurance for pro-bono work undertaken?

A
  • Firms must confirm with their insurance provider that they are covered to carry out pro-bono work.
  • If so, they are to notify their insurer that they intend to carry out pro-bono work.
55
Q

What is open to all UK RICS regulated firms that are unable to obtain PII?

A

The assigned risk pool which can provide terms up to a limit of £1m. Either for a ‘full period’ (12 months) or ‘provisional period’ (a minimum of 120 days).

56
Q

When should insurers be notified of any claims?

A

Early notification required when a potential claim arises.

57
Q

What does the RICS provide for members being sued personally and have no access to professional indemnity insurance protection?

A

Member Support Service

58
Q

What are the 6 main areas of good practice as set out in the RICS Professional Statement ‘Client Money Handling’?

A
  1. Holding client money
  2. Providing information to clients
  3. Receipts of client money
  4. Payments from client accounts
  5. Accounting records and controls
  6. Compliance
59
Q

What steps must you take for the handling of clients money?

A
  • Clients must always have access to funds.
  • Client money must be kept separate and clearly identifiable.
  • Client money accounts must include the word ‘client’ and the name of the firm in the title of the account.
  • Interest on the account must be agreed.
  • Maintain client ledger or running balance of any transactions.
  • Agree the terms and advise client on bank details.
  • Must not be overdrawn.
60
Q

What scheme provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client’s money?

A

RICS Client Money Protection Scheme

61
Q

What actions should be carried out upon retirement or ceasing to practice?

A
  • Inform the RICS
  • Ensure that clients are informed at the earliest oppertunity and hand over arrangements made to new firm.
  • Return client money to their own accounts.
  • Inform insurerers and procure professional indemnity insurance run-off cover for a minimum of 6 years.
  • Retain a copy of client files and records for a minimum of 6 years.
62
Q

What are the four CPD requirements?

A
  1. Members shall undertake a minimum of 20 hours CPD per annum.
  2. Of the 20 hours, at least 10 hours must be formal CPD.
  3. Maintain understanding of Professional and Ethical standards every 3 years.
  4. Record CPD online by 31 January.
63
Q

What counts as formal CPD?

A

Structured learning with clear objectives and outcomes.
Examples:
- Structured online training
- Courses
- Seminars

64
Q

What counts as informal CPD?

A

Self managed that is relevant to professional role.

1. Ethics, Rules of Conduct and Professionalism (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions