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Ethics Flashcards

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1
Q

What does RICS stand for?

A

Royal Institution of Chartered Surveyors

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2
Q

What are the rules of conduct?

A

The fundamental expectations for the professional practice of members and firms set out by the RICS

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3
Q

Who do the rules of conduct apply to?

A

All individual members and firms who are regulated by the RICS

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4
Q

When did the new rules of conduct come into effect?

A

February 2022

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5
Q

What are the five rules of conduct?

A
  1. Members and firms must act with honesty and integrity and must comply with their professional obligations
  2. Members and firms must maintain their professional competence and ensure services are provided by competent individuals who have the necessary experience
  3. Members and firms must provide good quality and diligent service
  4. Members and firms must treat others with respect and encourage diversity and inclusion
  5. Members and firms must act in the public interest, take responsibility for their actions and act to maintain public confidence in the profession
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6
Q

Give an example of Rule 1 (acting with honesty, integrity and complying with professional obligations)

A

Not misleading others through your actions or omissions

Not allowing yourself to be influenced improperly by others

Being open and transparent with clients about fees and services

Have effective processes to identify actual or potential conflicts of interest

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7
Q

Give an example of Rule 2 (maintaining professional competence and ensuring services are provided by competent individuals)

A

Only undertake work that you have the knowledge, skill and resources to carry out competently

Check that subcontractors have the necessary knowledge, skill and resources to carry out their tasks competently

Stay up to date with the relevant legislation, codes of practice and technical standards

Maintain and develop your knowledge and skills throughout your career. Keeping up with CPD requirements set out by the RICS

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8
Q

Give an example of Rule 3 (providing a diligent and high quality service)

A

Understand your clients needs and objectives before accepting any work

Agree the scope of works, timescales and limitations with client at the outset

Seek clients agreement if the terms of engagement or costs have changed

Encourage sustainable solutions when advising clients about projects

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9
Q

Give an example of Rule 4 (treating others with respect and encouraging diversity and inclusion)

A

Treat everyone fairly and do not discriminate against anyone

Do not bully or harass anyone

Check that supply chains do not involve modern slavery

Develop an inclusive culture in the workplace - equal access and opportunity for all

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10
Q

Give an example of Rule 5 (members and firms must act in the public interest, take responsibility and maintain public confidence)

A

Question practices or decisions that you suspect are not right or ethical

Support any employee or client who has acted in good faith to report a concern

Manage professional finances responsibly

Take appropriate action when the rules have been breached and report suspected significant breaches to the RICS

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11
Q

What is a Royal Charter?

A

A Royal Charter is an instrument of incorporation, granted by the King, which confers independent legal personality on an organisation and defines its objectives, constitution and powers to govern its own affairs

Our Royal Charter requires the RICS to act in the public interest

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12
Q

What is a bye law?

A

A bye law is a rule or law established by an organisation or community in order to regulate itself

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13
Q

What is the role of the RICS?

A

To advance the highest ethical and technical standards for professionals in land, property and the built environment

Protect and provide benefits to consumers by enforcing standards and codes of best practice

Provide expert impartial advice to governments, business and the public

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14
Q

Who is the current RICS president?

A

Nicholas Maclean

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15
Q

Who is the current RICS CEO?

A

Justin Young

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16
Q

Give an example of an RICS bye law?

A

Members must conduct themselves in a manner befitting membership of the RICS

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17
Q

What does self regulation mean?

A

The RICS is self-regulating, meaning that it operates within it’s own published regulatory framework rather than being legislated by Government

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18
Q

Which documents have the new rules of conduct replaced?

A
  1. Rules for firms
  2. Rules for members
  3. Global ethical principles
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19
Q

What disciplinary actions can the RICS impose?

A

Less serious offences - impose a Regulatory Compliance Order to ensure future compliance, such as fines or conditions of membership

More serious offences - face a disciplinary panel and levy sanctions, including fines and expulsion

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20
Q

What money laundering and bribery legislation are you aware of?

A

Bribery Act 2010

Proceeds of Crime Act 2002

The Money Laundering, Terrorist Financing and Transfer of
Funds (Information on the Payer) Regulations 2017

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21
Q

What do you know about the Bribery Act?

A

It is legislation that makes bribery illegal for companies working in UK

It also holds UK companies accountable for failing to prevent such acts by those working for or on its behalf, no matter where the act takes place

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22
Q

What is PII?

A

Professional indemnity insurance. It protects you and your business from the cost of compensating a client if you make a mistake in a piece of work for a client that causes them reputational or financial loss

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23
Q

Who does professional indemnity insurance protect?

A

The client and my employer - in the event that I make a mistake which leads to a financial loss

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24
Q

What is the RICS requirements for professional indemnity insurance, including run-off cover and levels of cover?

A

Minimum level of indemnity:
Turnover of £100,000 or less - £250,000 min. cover
Turnover of £100,001 to £200,000 - £500,000 min. cover
Turnover of £200,001 and above - £1,000,000 min. cover

‘Each and every’ claim basis

Run off cover ensures firms, members and their customers are not exposed if a firm ceases to trade - min. run-off cover is 6 years

Use an RICS approved provider - RICS publishes a list

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25
Where can you go if you can't secure PII?
Assigned Risk Pool ARP panel is a facility for trading members or firms who are unable to obtain insurance in the open market It comprises a panel of a RICS chairman, members of the professional indemnity insurers and RICS members. The initial period of cover is 12 months, to allow the firm time to return to the open PII market
26
What are the professional obligations of RICS members?
Annual CPD requirements - 20 hours (minimum 10 hours formal) Co-operate with the RICS Provide information to the RICS promptly when requested
27
What are the professional obligations of RICS-registered firms?
Have a complaints handling procedure Have PII Firms with a sole principal have arrangements for a Locum Co-operate with the RICS Provide information to the RICS promptly when requested Must display 'regulated by the RICS' on their business literature
28
Why does the RICS have rules of conduct and why were they updated?
The previous rules had been in place since 2007 To provide a single document to enable greater clarity for RICS members and firms There is now a greater focus on clearer example behaviours, tackling climate change and understanding evolving technology
29
What steps would you need to take when setting up a new practice/firm?
Inform the RICS that you are registering as a regulated practice Notify companies house Obtain PII (professional indemnity insurance) Obtain employers liability insurance Set up a client account for handling clients money Appoint a Locum Set up a complaints handling procedure Set up arrangements for CPD and staff training
30
What are the requirements for handling client's money?
Clients must always have access to their funds Clients money must be kept in a separate account and be clearly identifiable Interest on the account must be agreed with the client Maintain a clear running balance of any transactions and advise the client on the details Account must never be overdrawn
31
What sort of information do registered firms have to provide the RICS with annually?
Annual return Nature of clients Complaints procedure and up to date log PII details Details on whether any clients money is being held
32
What are the main components of a complaints handling procedure?
Two stage process Stage one - your company reviews the complaint in full and attempts to resolve Stage two - if one if unsatisfactory to the client then they have the opportunity for the complaint to be reviewed by an independent RICS-approved party Listen to the complaint, take any many details as possible and try to resolve with the client - acknowledge receipt of complaint within 7 days and give full response within 28 days Inform your PII providers of the complaint
33
What are the five principles of better regulation?
1. Proportionality 2. Accountability 3. Consistency 4. Targeting 5. Transparency PACTT
34
What are the various RICS membership statuses?
Trainee Student Graduate Assoc RICS Member RICS Fellowship RICS
35
What is the RICS governance structure?
The Governing Council is also responsible for approving changes to RICS’ constitution. Governing Council is supported by the Executive Board and expert governance bodies populated by active RICS members, RICS employees and independent non-executives.
36
What is an RICS professional statement?
A mandatory requirement for RICS members and regulated firms
37
What is run-off cover?
Run off cover ensures firms, members and their customers are not exposed if a firm ceases to trade - min. run-off cover is 6 years
38
What is the name of the RICS journals?
Modus
39
What is the RICS motto?
Est modus in rebus There is measure in all things
40
What is a conflict of interest?
Anything that may impede (or be could be seen to impede) the ability of a firm or an individual to act impartially and in the best interest of the client
41
When was the RICS founded?
1868
42
What is your firm's complaints handling procedure?
A senior director is appointed to take charge We are committed to acknowledging any complaint within 3 days We request a written statement from the client, this is reviewed by the senior director and they provide a response within 7 days of receipt of the statement Clients who are still dissatisfied can contact our CEO who will then undertake another review We maintain a complaints log to learn from mistakes and take corrective actions
43
What is an NDA?
Non-disclosure agreement - a legally binding contract that establishes a confidential relationship which is usually based upon sensitive information
44
What is Lionheart?
A charity and support organisation for past and present RICS members and their families. Provides financial support, health and well-being support and counselling
45
What is the junior branch of the RICS called and what does it do?
Matrics - it provides educational support and networking activities for students and surveyors (including chartered surveyors) with less than 10 years post-qualification experience
46
Can you give an example of a conflict of interest?
Being approached to represent a tenant in a dilapidations claim against a landlord who is former/current client in another capacity 3 types of conflict are **party** (acting behalf of two business with the same interests - like 2 supermarket chains), **own interest** (your own personal interests conflict with the clients - including personal relationships) and **confidential information** (where the obligation to provide information to one party conflicts with confidential agreements of another)
47
How do you manage a conflict of interest?
Surveyors must check they have no conflicts of interest before accepting client instructions TFT carry out a check of the client's identity, property ownership and whether we have had any previous involvement with the client Need to be open and transparent - if a conflict is identified then the RICS professional standard should be followed and the instruction is to be declined if necessary We would need to obtain informed consent from the client in order to proceed if our process has highlighted a conflict May need to set up an information barrier within the company
48
What are the two pieces of case law that govern negligence for surveying?
Hart v Large (2020) - Highlights the need to spell out any limitation on the advice given and, if necessary, recommend further investigation. Watts v Morrow (2004) - This case established that a surveyor can be found negligent if their report fails to identify major defects, leading to financial losses for the buyer.
49
What is the RICS guidance regarding accepting gifts and hospitality? What is your firms policy?
You must not accept gifts or hospitality from anyone which might reasonably be seen to compromise your judgement or integrity Any gifts are recorded and declared in order to manage any possible conflict of interest TFT rule - modest is good. Low value or company branded items are likely to be acceptable eg. lunch or social event where the host is present. Anything more expensive than a bottle of wine is likely to be unacceptable If ever in doubt - a polite but firm refusal is the right action and speak to your senior director
50
What needs to be in place if a business is to cease trading?
PII run off cover Return any client money Hold client files for minimum 6 years Hand over work to another company to ensure continuity of work **Need to inform the RICS**
51
What would you do if you suspected money laundering?
Report it to a senior manager or compliance officer Notify the PII provided and police if necessary
52
What is the difference between ethics and rules of conduct?
Ethics are a set of moral values Rules of conduct are a framework that we work to
53
How would you limit the risk of working with a client who may be financially unstable?
Have a screening process and carry out a credit check
54
What are the benefits of being chartered?
Status - validates your professional standards and ethics Professional recognition - RICS is a trusted mark of excellence Market advantage - status and competitive advantage Network - over 120,00 members worldwide Knowledge - access to standards and CPD
55
What are the benefits for firms to be regulated by the RICS?
Confidence - for clients that regulations firms are monitored by RICS Professionalism - can be viewed as being able to provide clear, impartial, expert advice Security - need to have CHP & PII
56
What are the two types of documents produced by the RICS?
Professional standards - Set out requirements for competent and ethical practice. Members must comply with an RICS professional standard. Practice information - Provide advice or practice support to RICS members and firms. Non mandatory.
57
What must be included within terms of engagement?
Terms of engagement are a written record of the agreement between the client and the firm. Good terms of engagement can help to avoid later misunderstandings with your client. - Scope - Timescales - Cost - Limitations - Exclusions
58
In what situation would you decline an instruction?
You are unable to offer the services they are requesting. The client entity or source of funds is suspect and raises alarms. Previous poor working experience with the client - disputes or lack of payment.
59
A client says that a competitor is offering a cheaper cost than you - what do you do?
Ask for clarification of what services the competitor are offering. State that can offer lower our cost but that the scope of service would need to be reduced.
60
What three disciplinary procedures are available in the RICS?
- Regulatory compliance order/consent order (least serious) - Referral to a single memeber of the regulatory tribunal - Referral to the disciplinary panel (most serious)
61
What types of gifts and hospitality are acceptable?
Consider **Intention, Value and Timing** Modest lunch or drinks, low value branded items, UK-based social events with the host present
62
What is client sanctioning?
A screening process to check clients (prospective clients) and related entities against lists of sanctioned individuals and organisations. This is a legal obligation for all businesses.
63
What are the timescales involved in an RICS approved Complaints Handling Procedure?
Acknowledged within 7 days. Responded to within 28 days.
64
What would you do if a client called you up and made a complaint about your work?
Acknowledge their concerns. Explore the cause and gather all information. Offer any possible solutions. Escalate if necessary - first step of CHP (senior manager to investigate) Document everything and manage the clients expectations
65
What is meant by the term Client Money?
Money of any currency (whether in the form of cash, cheque, draft or electronic transfer) that: - An 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, excluding fees paid in advance for professional work agreed to be performed, and clearly identifiable as such.
66
What standards does your company adhere to for quality assurance for services provided?
ISO 9001
67
What standards does your company adhere to for environmental management?
ISO 14001
68
What is the Decision Tree?
Supports the rules of conduct. An aide-memoire that raise questions that can point you towards the correct decision. 'Is it legal?', 'Do I have all of the information?' 'Is it in line with the RICS rules for conduct?'
69
What would you do if a client tried to pay you in cash? What is the maximum amount?
I know that the maximum for a cash payment is £10k, but I would make it clear that I (or TFT as a company) do not take cash payments.
70
Are you insured if you offer advice to a friend or family member?
No. The best course of action is to politely decline to offer advice, unless it has been cleared to do so with your company and there are clear terms of engagement set out.
71
What limitation periods are associated with underhand and deed forms of contract?
6 years for underhand (signed contract). 12 years for deed executed. In Scotland, claims against surveyors are subject to the Prescription and Limitation (Scotland) Act 1973, which sets time limits for bringing legal actions.
72
What happened in the case of Merrett v Babb?
The defendent, a surveyor, did not have run off cover. The courts found that the surveyor was personally liable for their negligence.
73
Explain negligence. What is it and how would you know if you have been negligent?
A duty of care is owed to all clients and 3rd parties using reasonable skill and care. Negligence is a failure to provide the duty of care that is owed to the client. You have not been negligent if you acted with reasonable skill and care, even if a problem has occured.
74
What power does the Government Privy Council have over the RICS?
The RICS is self-regulated, but important changes to its constitution have to be ratified by the UK Government, through the Privy Council.
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