Scenario A Flashcards
Insufficient records
Look over company accounts, check the companies levels of insurance, look at bank statements, see CHP levels, KYC, find list of clients, look at client agreements.
Two bank accounts, 1 company
Client and company accounts should always be separate, using client money is not in line with the ethical rules of conduct.
Guilty party should admit and accept responsibility to their fault and admit that it wasn’t in line with the ethical rules of conduct.
Firm should then investigate why this became apparent and make sure it will never happen again. For the meantime though, the firm will return all of the money used with immediate effect and notify the client of the mistreatment.
To stop this from happening again, the company should introduce a multiple signature policy on accounts in order to eliminate pressure of a particular person
Dealing with potential conflicts of interest (your sister making a bid for the same property)
This is a CONFLICT OF INTEREST. RICS recommend to avoid these at all costs. If it cannot be avoided the company must first, advise each client in writing about the possibility of the conflict. Secondly, tell both clients to obtain independent professional advise and finally get client confirmation that you can act unconditionally.
However if the conflict cannot be avoided then the company should set up an information barrier. This means that parties shall work in desperate areas of the office, use separate support staff, create an IT barrier and get supervision by the company compliance officer.
What PI insurance does the company have?
PI insurance is mandatory and is needed by firms in order to protect the client, 3rd parties and the firm itself from claims.
Current minimum requirement is £250,000 and the maximum coverage is £1,000,000.
If you haven’t got it, you can work with RICS in order to obtain Pi insurance
No due diligence checks made
Poor financial management which goes against RICS rules of conduct, which states you must act with integrity, must provide a high standard of service and act in a way to promote trust in your profession, which this does not.
What to do with client complaints
All information regarding client complaints procedures should have been drawn up in the terms of engagement. RICS rules of conduct and estate agents act 1979 states that a terms of engagement must be made
As it is unresolved, arrange a meeting with the client and apologise for the late report, especially if it has caused any financial issues, which you then must look to your levels of PI insurance to ensure that you and your firm are covered for your incompetence
Poor records of CPD, red book valuations and anti-bribery compliance.
RICS recommend that all companies have a programme in place to encourage CPD training in order to keep their professionals up to date with current market climates.
Bribery act 2010, any employee who receives what they think may be a bribe must report it immediately, firstly to their line manager and if worse then to the RICS. Some gifts may be allowed but will need to be passed through the company before being accepted.
Red book valuations are mandatory and it will show good professional practice
