1
Q
- What are the 5 rules of conduct?
A
1) Rule 1 - Honesty and Integrity - Be honest, act with integrity and comply with their professional obligations to the RICS.
2) Rule 2 - Competence - Ensure services are provided by competent individuals who have the necessary expertise.
3) Rule 3 - Service - Provide good quality and diligent service.
4) Rule 4 - Respect - Treat each other with respect and encourage diversity and inclusion.
5) Rule 5 – Responsibility- Act in the public interest, take responsibility for their actions and maintain public confidence.
2
Q
- Can you provide an example behaviour for each RoC?
A
Honesty
– Open and transparent with clients about their fees and service
- Conflicts of Interest
Competence
– Only undertake work that they have knowledge on
- Check subcontractors have knowledge
Service
– Understand client objectives
- Communicate clearly
Respect
– Respect rights of others
- Do not bully or victimise
Responsibility
– Respond to complaints promptly, openly and professionally
- Do not persuade ADR
3
Q
- Why were new Rules of Conduct introduced?
A
Simpler, Clear examples, Diversity focus, Understanding changing Tech, ESG challenges
4
Q
- What is the RICS Ethics Decision Tree?
A
Framework members can use if facing an ethically challenging decision
5
Q
- What must you do before undertaking an instruction?
A
CIT – Competency, Interest, Terms of Engagement
Check competency, CoI, confirm ToE
6
Q
- What sections must you be compliant with for agency work?
A
S.18 – of Estate Agents Act 1979 and Money Laundering Regulations 2017
7
Q
- What should the ToE set out?
A
Agreement of fees, payment of expenses, CHP on request
8
Q
- What are the benefits of ToE?
A
Legally binding document, reduce misunderstandings and set clear expectations
9
Q
- How long is the cooling off period of Consumer Rights Act 2015?
A
14 days
10
Q
- When might you decline an instruction?
A
Conflict, not competent, client will not sign ToE or do AML checks, PII liability cap cannot be agreed
11
Q
- What should you avoid when negotiating a fee?
A
Price fixing, cutting or collusion
12
Q
- What should the fee be?
A
Market-based and agreed on ad-hoc basis
13
Q
- What should be considered when agreeing a fee?
A
The level of service
14
Q
- When should you be transparent in fees?
A
When there is a referral fee involved
15
Q
- What should you keep in mind when granting/accepting referral fee?
A
Bribery Act 2010 and RICS Rules of Conduct
16
Q
- What is the Professional Standard for Conflicts?
A
RICS Professional Standard: Conflicts of Interest 2017
17
Q
- What is a conflict of interest?
A
Arises when a member or firm’s independence and impartiality is threatened due to existence of conflict between two clients
18
Q
- What are the three types of CoI?
A
Party conflict, Own interest conflict, Confidential Information conflict
19
Q
- When can informed consent be given?
A
When all the facts are given and there is transparency
20
Q
- What steps must you take if that is a conflict?
A
- Is conflict irresolvable? No = Conflict Avoidance, Yes = conflict management
- Management - Disclosure nature of conflict and get informed consent from both parties and then conflict management e.g. information/ethical barriers
21
Q
- What is the guidance for commercial investment agency work?
A
RICS Professional Standard: Conflicts of Interest – UK Commercial property market investment agency 2017
22
Q
- What does Professional Standard: Conflicts of interest – UK commercial property market investment agency state?
A
- Dual agency is prohibited
- Multiple introductions allowed if on “non-exclusive basis”
- Incremental advice allowed if consent given and info barrier must be in place
23
Q
- What states that Client confidentiality must be maintained?
A
RICS Byelaws
24
Q
- What must you get before you can share information?
A
Permission, unless under investigation
25
25. How long must files be held?
6 years before disposal
26
26. What should happen if confidential information overheard?
- Cannot be used for own purposes
- Info disposed securely
- Clients must be notified of error and matter recorded
27
27. What is the PS for handing client money?
RICS Professional Standard Client Money Handling 2019
28
28. What are the 6 main areas of good practice set out in the Professional Standard Client Money Handling 2019?
1) Holding client money
2) Providing info to client
3) Receipts of client money
4) Payment from client accounts
5) Accounting records and controls
6) Compliance
29
29. What procedures should be followed with holding Client Money?
- Keep accounts separate and identifiable
- Client must be able to have monies on demand
- Money only to be withdrawn if properly required
- Keep accurate records
- Outline interest payments procedures
30
30. What are some examples of when you may hold client money?
Rent collection, service charge, rent deposit
31
31. What is the Professional Standard which provides advice on Complaints?
RICS Professional Standard: Complaints Handling 2016
32
32. When should details of CHP be issued to a client?
At the same time as the Terms of Business
33
33. How should complaints be tracked?
In a complaints log
34
34. What should you do when you receive a complaint?
Notify PII insurers and undertake CHP (approved by RICS)
35
35. What are the minimum procedures for handling complaint?
Stage 1) IN HOUSE: Ensure the complainee has the Complaints Handling Officer details so they can contact them, must be acknowledged in 7 days, and investigated in 28 days
Stage 2) Alternative dispute resolution (3rd party): If not happy with Stage 1, uses independent redress scheme such as The Property Redress Scheme and the RICS Dispute Resolution Service (DSR)
36
36. What are CBRE’s policies for CHP?
Must be acknowledged in 5 days and 20 days investigated, then respond with an action
Use the Property Redress Scheme for ADR
37
37. What are benefits of ADR?
Fair, quick, cost-effective
38
38. What could be some alternative dispute resolutions (ADRs)?
* Mediation - neutral mediator facilitates discussions between parties, not binding
* Arbitration – independent arbitrator expert, assesses evidence, decision is final and legally binding
* Independent Expert Determination - appointed by two parties, undertakes own investigations both parties bound be decision, can be binding or non-binding
39
39. What is PII cover?
Professional Indemnity Insurance – Protects clients, firms, surveyors and 3rd parties against negligence claims when duty of care is breached
40
40. What period should PII cover?
Claims made basis – policy should be retroactive
41
41. What is the PII cap?
The amount that the insurer will pay, after which they will stop making payments (banks tend to want higher PII cap for LSV)
42
42. What are the RICS PII requirements?
- Adequate and appropriate for each instruction
- All policies underwritten by RICS approved insurer
43
43. How often should you send your certificate of PII to RICS?
Annually
44
44. What are the minimum insurance requirements?
Turnover of >£100k = minimum indemnity of £250k
Turnover between £100,001 to £200k = minimum indemnity of £500k
Turnover of £200,001+ = minimum indemnity of £1m
45
45. What is the maximum level of uninsured excess required by RICS?
Turnover up to £10m = Greater of 2.5% of sum insured or £10,000
£10m+ Turnover = No set limit
46
46. What is CBRE’s PII levels?
Maximum aggregate liability - the lower of:
1) 25% of value
2) £20m
47
47. What is run off cover?
Minimum of £1m of aggregate cover over 6 years minimum (RICS recommends 15 years)
48
What should a firm do if it cannot obtain cover in the open market?
Apply for cover through the RICS Run-off Pool
49
49. What does the RICS Practice Information: Risk, Liability and Insurance 2021 state?
- Recommends use of liability caps to manage risks
- Be wary of 3rd party reliance
50
50. Who does a surveyor have a duty of care to?
The Client and all interested parties, as per the CPR 2008
51
51. What can happen if there is negligence?
Can claim for damages
52
52. What does the Limitations Act state?
Provides timescales within which action can be taken for breaches in law -
6 years from date of negligent act / 3 years from date of knowledge / 15 years long stop date.
53
53. What does the Tort law state?
6 years from the date the claimant suffered the loss
54
54. What is a bribe?
Giving, offering or receiving an advantage for an action which is illegal or a breach of trust (gifts, payments etc)
55
55. What are the 6 principles of the Bribery Act 2010?
1. Proportionality
2. Top level commitment
3. Risk Assessment
4. Due diligence
5. Communication
6. Monitoring and Review
56
56. What are the four bribery offences?
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent bribery.
57
57. What are the penalties for bribes?
10 years in prison and/or unlimited fine
58
58. Who policies the Bribery Act?
Serious Fraud Office
59
59. What can a company do to defend itself in regards to a bribery offence?
If the company demonstrates adequate procedures to prevent bribery
60
60. What is CBRE’s gift policy?
- No cash or equivalent
- Gifts up to £100
- Must be declared beyond this
61
61. What must you consider before accepting a gift?
- Consider Bribery Act
- CBRE procedures
- Professional objectivity
- Tax implications and sanctions
- Contract details and proportionality
62
62. What is money laundering?
When proceeds of criminal activities are disguised or converted and then realised as legitimate assets
63
63. What are the government regulations for money laundering?
Money laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (amended 2023)
64
64. Why were the ML, TF & ToF Regulations 2017 amended in 2023?
To include guidance on weapons in 2022 following the Ukraine war
65
65. What is the ML, TF & ToF regulations key provisions?
- Must have a written ML and TF risk assessment
- Have appropriate internal controls, policies and training to address ML
- AML checks are mandatory – must check who client is and their source of funds
- Comply with requirement for Politically Expose Persons (PEP) = require enhanced DD, more stringent investigation and monitoring
66
66. Why do PEP require more investigations?
As more exposed to bribery
67
67. What are an estate agents’ legal obligations?
1) Register with HMRC (if let property more than 10,000 euros a month
2) Have policies to identify suspicious transactions (e.g. without legal/economic purpose, unusually large)
3) Undertake a customer DD on everyone or enhanced DD if red flags
4) Have a cash limit of 10,000 Euros
5) Monitor business relationships
6) ML Reporting Officer must be appointed to report any suspicions
7) Seek evidence of funds
8) Maintain records for min of 5 years
68
68. Who must you undertake CDD on?
Vendor, purchaser, LL, tenant
69
69. What are the penalties for failing to comply with the ML, TF and ToF Regulations?
- For ML - Max 14 years in prison and/or unlimited fine
- For assisting – Max 5 years and/or unlimited fine
70
70. What are some typical money laundering checks for a publicly listed company?
London Stock Exchange listing
71
71. What are some typical money laundering checks for a Publicly accountable body?
Government ownership control
72
72. What are some typical money laundering checks for a private listed company?
Certificate of incorporation, full name, ID, registered address and office, organisational chart structure
73
73. What are some typical money laundering checks for a private individual?
Passport/driving licence, bank statement not more than 3 months old
74
74. What are some red flags for money laundering?
- Unwillingness to provide identity documents
- Changes to parties in transaction
- Unusual transaction features, sudden urgency, overpayment
- Payment in unusual currency
75
75. What are the three areas of offence of the Crime Act 2002?
1) Concealing criminal property
2) Arrangements – facilitates criminal property for a person
3) Acquisition/use/possession of criminal property
76
76. What is RICS guidance on ML, bribery etc?
RICS Professional Standard: Countering bribery, corruption, money laundering and terrorist financing 2019
77
77. What is the RICS Professional Standard: Countering bribery, corruption, money laundering and terrorist financing 2019 requirements?
- Do not accept anything that constitutes a bribe
- Procedure must comply with the law and suspicion reported
- Use 3rd party checks if level of confidence there
- Understand the client and the purpose of the transaction
- Retain records to show the firm has met requirements
78
78. What are RICS’ requirements for starting a new practice?
1) Inform RICS and appoint ‘Responsible Principal’
2) Register with RICS regulatory board.
3) PII and CHP details to RICS.
4) Procedures for client money handling.
5) Complaints Handling Officer and log.
6) Comply with use of RICS logo.
7) Succession plan
8) CPD logged and RICS annual return completed.
79
79. What are statutory requirements for starting a new practice?
1) Disclose business name.
2) Compliance with Equality Act 2010, Financial services Act 2012, Bribery Act 2010.
3) Compliance with Money Laundering Regulation 2017 - appoint MLRO.
4) Compliance with Health & Safety Act 1974, Control of Asbestos Regulations 2012 (Asbestos register)
5) Fire safety compliance
6) Compliance with Estate Agents Act 1979.
7) GDPR regulation and Data Protection Act 2018 compliance.
8) Inform HMRC for VAT and tax registration (VAT threshold = £85k per annum)
9) Compliance with current employment law e.g. National living wage, gender pay gap reporting etc
80
80. What are RICS’ requirements for closing a practice?
1) Inform RICS and clients.
2) Return any money held.
3) Inform insurers and procure ‘run-off cover’ for min of 6 years.
4) Retain a copy of client’s files for a minimum of 6 years.
