APC Valuation (Rating) > Ethics > Flashcards

Ethics Flashcards

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1
Q

What is Rule one of the RICS Rules of Conduct

A

Members and firms must be honest, act with integrity and comply with their Professional Obligations, including obligations to RICS.

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2
Q

What is Rule two of the RICS Rules of Conduct

A

Members and Firms must maintain professional competence and ensure that services are provided by competent individuals who have the necessary expertise.

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3
Q

What is Rule 3 of the RICS Rules of Conduct

A

Members and Firms must provide good quality and diligent service

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4
Q

What is Rule 4 of the RICS Rules of Conduct

A

Members and firms must treat others with respect and encourage diversity and inclusion

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5
Q

What is Rule 5 of the RICS Rules of Conduct

A

Members and Firms must protect public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in.thr profession.

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6
Q

What are the 4 main principles of the Civil Service code

A

Honesty
Integrity
Objectivity
Integrity

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7
Q

What are the new CPD requirements of the RICS

A

Members must record a minimum of 20 hours CPD per calendar year, with at least 10 hours structured.
This must be digitally recorded
It must be relevant, adequate and appropriate.

Mandatory topics every 3 years are
Ethics
Sustainability
Data, AI and technology.

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8
Q

What are offences under the Bribery Act

A

Making a bribe
Receiving a bribe
Bribery of foreign public official
Failure to prevent a bribe

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9
Q

What are some Bribery prevention principles (6 principles under Bribery Act 2010)

A

Proportionate procedures
Top level commitment
Risk assessments
Due diligence
Communication
Monitoring and review

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10
Q

How would you preserve security of clients money

A

The principle oversees clients money
Principle cannot override controls
Clients money processed by competent and knowledgeable staff
Accounting system is secure
Clien t money must be in a separate bank account
Clients must have access to funds.
Account must not be overdrawn
Clear ledgers and running balance

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11
Q

When was RICS founded

A

1868

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12
Q

When was the Royal Charter of RICS granted?

A

1881

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13
Q

What is the structure of RICS

A

Governing council of up to 28 members
This oversees the Standards and Regulations Board
And RICS executive board

Executive board oversees other boards including audit, risk assurance and finance committee.

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14
Q

What are the five principles of RICS?

A
  • Proportionality
  • Accountability
  • Consistency
  • Targeting
  • Transparency

These principles guide the ethical standards and practices of RICS members.

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15
Q

What is the mission statement of the organization?

A

The mission statement aims
-to qualify and equip members to offer the highest standards of service,
- promote and enforce standards,
and- lead solutions to major challenges facing the built environment through professional expertise.

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16
Q

Apart from CPD what are the professional obligations of members to RICS

A

Members must co-operate with RICS
Members must promptly provide all information reasonably requested by the Standards and Regulations Boars

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17
Q

Name some of the Professional Obligations of firms

A

Firms must
Cooperate with RICS
Provide all information to the Standards and Regulation Board which is requested
Have a complaints handling procedure
PII
Locum cover
Designation

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18
Q

Name the members professional obligations

A

CPD
Cooperate with RICS
Provide all information requested to the Standards and Regulation Board

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19
Q

What does PII stand for

A

Professional Indemnity Insurance

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20
Q

What PII cover is required for a small firm?

A

If the turnover is under £100K then a minimum of £250K of PII is required

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21
Q

What PII is required for a firm whose turnover is over £100K

A

Between £100k and £200 K - a Minimum of £500K
Over £200K - a minimum of £1mill

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22
Q

What actions can RICS take if a firm is subject to disciplinary?

A

Fixed penalty
Consent order - (written agreement between RICS and firm covering the disciplinary issue, may require member to take corrective actions, restrain from certain actions or pay cost or a fine)
Disciplinary panel - Used for more serious breaches of conduct, held in public and the Burden of proof is on RICS
can expel members or firms.

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23
Q

What is the procedure in case of a breach of a rule of conduct

A

Not every breach will give rise to proceedings.
A formal investigation by the Head of Regulation is the first step
RICS can request information and/or visit and inspect to investigate compliance
Members must co operate fully

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24
Q

How can a disciplinary procedure be triggered?

A

Complaint received by the RICS
Allegation by client or third party
Information received or established by RICS

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25
Why are there Rules of Conduct?
To provide a framework that we can work to and so the client knows they are getting a set level of service As well as being an important tool for the Institution, the ROC are a useful professional guide for individual members
26
What is the RICS motto?
Est Modus in Rebus - There is measure in all things
27
RICS president?
Nick Maclean
28
RICS CEO
Justin Young
29
RICS President elect
Maureen Ehrenberg -- will take over in Jan 2027
30
What breach could result in expulsion from RICS
Gross, wilful or persistent failure to comply with Rules of Conduct Fraud, dishonesty, conviction of serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of clients money.
31
What would you do to start up a new RICS practice?
Register with the RICS Appoint a contact officer for all RICS communication Prepare a CHP (Complaints handling procedure) Appoint a Complaints Handling Officer Obtain PII Set up financial systems to comply with RICS regulations if handling client's money. Set up a training plan for all staff members Obtain an up-to-date logo kit from the RICS and ensure all material states "Regulated by the RICS" Make arrangements for succession/future running of the business if you are a sole practitioner. Ensure all statutory compliance is in place – Health and Safety at Work Act, etc
32
What insurance would a new RICS firm need?
Professional indemnity insurance Employer liability insurance Public liability insurance Building insurance on property if applicable
33
What is in an annual return to RICS?
Carried out online, fixed penalty if not completed. Includes: Type of business Staffing Nature of Clients Training provision Complaints handling procedure and record PII insurance details Info on client money handling if undertaken
34
What happened in the Merritt v Babb 2001 case?
A surveyor was sued for negligence. The individual surveyor was sued as the firm was no longer in existence. The claim was successful and the surveyor was personally liable for the full amount. This case highlights the need for run off cover.
35
How long should run off cover last?
6 years.
36
What should be included in a Complaints Handling Procedure?
Must have redress mechanism Details of the procedure must be given to clients in Terms of Engagement It must be clear, quick, transparent, impartial and free at the first stage The PII insurer must be informed if a complaint is received
37
What is a Conflict of Interest?
Someone in a position of trust has a competing personal or professional interest - making it difficult or appear to be difficult to fulfil their duties impartially. Surveyors have an obligation to make clients aware of any such conflicts and decline work if a conflict occurs.
38
What is the Role of RICS
The role is to set, enforce , regulate and promote global professional standards for the real estate industry.
39
Are you aware of any guidance on Bribery, money laundering and terrorist financing
Countering financial crime: bribery, corruption, money laundering, terrorist financing and sanctions violations. Effective from 17 Dec 2025 Rule 1 of rules of conduct Bribery Act 2010
40
Can you provide an Overview of the RICS professional standard Countering financial crime: bribery, corruption, money laundering, terrorist financing and sanctions violations
Aims to assist members and firms detect, prevent and respond to instances of bribery, corruption, money laundering, terrorist financing and sanctions Explains mandatory requirements and best practice to ensure firms uphold ethical behaviour, comply with legislation and maintain market integrity
41
Why do you want to become a member of RICS?
Being a member shows my employer and colleagues that I achieved a high level of professionalism and expertise in valuation. Membership as an Associate member has allowed me to experience the benefits that membership can bring in terms of access to education, networking and professional guidance.
42
Do you know the principles of better regulation
PACTT Proportionality Accountability Consistency Targeting (being focused on an issue) Transparency
43
What is a bye-law and can you give examples.
A list of laws applied internally using powers granted by the Royal Charter. examples - Members and firms professional obligations The use of the RICS designation and logo Complaints handling procedures
44
Give an example behaviour for each Rule of Conduct
1. Honesty and integrity - remaining impartial and not accepting hospitality or gifts in return for work. 2. Maintain professional competence - keeping CPD up to date and ensuring employees do the same. Decline work outside of own competence 3. Good quality and diligent service - Provide the work agreed in ToE to a high standard. 4. Treat others with respect, diversity and inclusion. Not discriminating against others 5. Public interest, prevent harm to profession and take responsibility. Keep confidence in profession. Admitting and rectifying mistakes as soon as possible.
45
What/Who is the responsible Principal
MRCIS/FRICS qualified. Holds a senior position in a RICS regulated firm and is the main point of contact with RCIS regarding regulatory compliance
46
What guidance does RICS give on social media.
Use of social media: guidance for RICS members effective 1 Sep 2024 RICS notes in this document the importance of social media networks to members and firms. It reminds members of the high standards of professional behaviour expected of RICS members and that the Rules of Conduct protect the interests of members and the profession as a whole Social media posts made by members in their personal capacity may be investigated by RICS, “particularly if extreme or highly offensive views are expressed such as may cause reputational damage to the profession”
47
Explain your understanding of the Levitt Review
Q4 2018 – RICS Management Board Meeting: Meeting notes reveal a £3 million emergency funding need over 45 days, caused by poor cash flow forecasting. Feb 2019 – Internal Treasury Audit Audit concludes there is “no assurance” over RICS’s internal financial controls. Nov 2019 – Letter to RICS President: Four Non-Executive Directors formally raise concerns about a lack of transparency and governance failings. Later in Nov 2019 – Their Dismissal: All four directors are removed from the board after raising concerns. Levitt Review Findings (Published Sept 2021): There was no criminal cover-up, but a serious internal power struggle and breakdown in governance. Leadership failed to be transparent. Recommendation: The Governing Council should have direct oversight and be regularly briefed by the Management Board, not filtered by the CEO. Staff and directors should report concerns through formal RICS channels, not to individual leaders, to ensure accountability and protection.
48
What are some principles of good governance?
transparency accountability fair and ethical appropriate systems to manage risk complies with laws and regulations leadership is competent, responsible, and responsive.
49
How do you ensure you comply with money laundering regulations?
Customer due diligence - gathering information on the company including trade license, VAT certificate as well as identification documents such as passport copy. Research the company. Identify if the client is a PEP or linked to one. Understand the source of wealth and source of funds. Monitor the business relationship more closely. Keep records.
50
How would you keep client's money securely and safely held?
Keep client money separate from the firm’s own money Maintain accurate records of all client money received, held, and distributed, (e.g, client’s name, the amount of money received, and the purpose) Provide regular reports to clients on the status of their funds (details of all transactions and the balance of the client account.) Implement security measures and ensure that all staff involved in handling client money are trained.
51
What might client money include?
Rent Service charges Interest credited to a client account Client money due to be paid to contractors
52
How would you register your firm with RICS for regulation?
RICS Rules for the Registration of Firms (effective 02 February 2021) * Contact the RICS * Fill out the registration form. * Appoint a responsible principal. * Appoint a complaints handling officer. Publish a complaints handling policy. Keep a complaints log. * Appoint a money laundering officer. * Register with RICS Valuer Registration Scheme. * Obtain PII, send details to the RICS. * Comply with accounts regulations. * Staff training plan. * Log CPD. * Include Logo ‘Regulated by RICS’ * Sole principal arrangement (i.e, death, incapacity & complaints)
53
What are conflict of interest types?
Party Conflict (you owe separate duties to two or more clients whose interests are directly opposed) Own Interest Conflict (personal, financial, or business interest interferes with your duty to the client.) Confidential Information Conflict (holding confidential information for one client that would be material and relevant to another, but you are bound to keep it confidential)
54
What is an information barrier?
Chinese Wall The physical and/or electronic separation of individuals (or groups of individuals) within the same firm that prevents confidential information passing between them.
55
What are the steps of the ethics decision tree?
Do you have sufficient facts Is it legal Does it comply with the rules of conduct? Have you consulted the appropriate people? Do you have clear reasoning? Would you be content for your actions to be made public?
56
How many RICS members are there
142,000 professionals and candidates
57
What would you do if you received a notice of a PII claim from a client or their solicitor
I would contact my insurers and instruct my own legal representative
58
If you were providing services outside of your usual scope to a client, what might you need to do in relation to your PII cover?
For a consumer (any natural person acting for purposes outside their trade, business or profession) claims, the requirement is for a limit of £1,000,000 in all for a period of six years from the expiry date of the policy in force at the time of cessation. RICS’ minimum policy wording will automatically provide this coverage.
59
How much run off cover should a firm have?
6 years is mandatory but the RICS recommends 15 years.
60
What is informed consent?
Informed consent is an agreement between client and surveyor to take on a instruction despite a conflict of interest existing. It can only be sought where the RICS member or firm is satisfied that the COI is in the interests of all those affected and not prohibted by law.
61
What must a firm do to prevent Bribery
Not offer or accept anything that could constitute a bribe. have a written policy in place to ensure compliance with anti Bribery legislation and ensure these are followed. Report any activity which breaches anti Bribery legislation Act with due diligence to perform periodic written evaluations of the risks that face the firm. ie. Risk assessments. Retain information on how the professional standard has been complied with (Bribery register) Publish a code of behaviour to staff Can require mandatory training for staff
62
What are the four main offences under the Bribery Act 2010
Bribing Accepting a bribe Bribing a foreign public official Corporate offence of failing to prevent a bribe
63
Principles of the Bribery Act
proportionate procedures, top-level commitment, risk assessment, due diligence, communication/training, and monitoring/review
64
Legislation on Money Laundering
Money Laundering, Terrorist Financing and Transfer of Funds Regs 2017 and Proceeds of Crime Act 2002.
65
You have set up a new business and I am coming to you today as a new client – what information would you need from me?
Know your client Name Address ID What do you want
66
I have flagged on the system as a PEP – what is this?
Politically exposed person
67
What is a red flag in regards to money laundering?
The client (evasive?) The parties (high risk country, connected?) The source of funds (large cash payments, unexplained payments?) The transaction (loss-making, no purpose?) The instructions (willingness to pay higher fees, outside firm’s expertise?)
68
What is clients money
Can include holding deposits, rents, service charges and monies due to be paid to other contactors/suppliers, arbitration fees, auction sale proceeds.
69
What best practice should you follow if handling client’s money?
Hold client’s money in a separate account - Make sure the monies are clearly identifiable - Nominate authorised employees to deal with the money - Ensure money is available to clients on demand - Ensure there are adequate It systems in place to handle client’s money and corresponding data and are held securely. - Pay the annual fee to the RICS which is between £64.50 to £14,500 for holding client money
70
What bribery legislation are you aware of?
Bribery Act 2010
71
Penalties for breaching bribery act
Fines can be unlimited and up to 10 years imprisonment
72
What is PII for?
The aim of PI Insurance is to ensure that if a firm faces a claim it is protected from financial loss and ensures that a firm does not face a financial loss which it cannot pay which in turn protects it’s clients.
73
What must PII cover. Who provides it.
"Each and Every" claim basis Fully retroactive (all former work carried out by the firm should be covered) Underwritten by a listed insurer. (Listed by RICs) Run-off-cover (after a firm ceases trading, minimum of 6 years but the RICs recommends15 years) Cover for past and present employees
74
What is the Valuer Registration scheme?
The scheme is an independent monitoring system which reinforces professional standards. It is mandatory for anyone carrying out Red Book Valuations. The registration fee starts at £120 per annum for the first valuer and runs on a sliding scale to £10 per annum for the 250th valuer. Must have taken the RICs valuation pathway or converted.
75
Mandatory requirement regarding Conflicts of Interest
Do not act where conflict or significant risk of conflict exists without prior informed consent Identify, manage and record all conflicts Maintain confidentiality Firms must have effective systems and controls
76
What would you do if a conflict of interest arises mid‑instruction?
I would pause work on the affected element, assess the conflict, seek Informed Consent if appropriate, or withdraw if consent cannot be obtained or proceeding would compromise integrity.”
77
What is informed consent
“Consent given willingly by an affected party who fully understands the conflict, the risks, the material facts, and how it will be managed. It must be obtained before proceeding and recorded.
78
How do you identify a conflict of interest
I carry out a documented conflict check at instruction stage, considering Party, Own Interest and Confidential Information conflicts as defined in the RICS Conflicts of Interest Professional Standard. I also reassess throughout the instruction because conflicts can arise later.
79
How are Bye Laws approved
Two step process RICS members vote Approved by privy council
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