Ethics - Level 1 Flashcards

Question

What has now been added?

Answer 1

Rule 3 - behaviour added for firms to understand the risks and benefits of relevant technology Rule 4 - to encourage D&I

Answer 2

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

Answer 3

Members must maintain their professional competency and ensure services are delivered by competent individuals who have the necessary expertise.

Answer 4

Members and firms must provide good-quality and diligent service

Answer 5

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

Answer 6

.Member and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession

Answer 7

- Comply with CPD requirements: 20 hours, 10+ hours must be formal - Cooperate with the RICS - Promptly provide info requested by the standards and regulation board

Answer 8

- Publish a CHP which includes a ADR provider approved by the RICS, and maintain a complaints log - All work to be covered by PII - Cooperate with the RICS - Promptly provide info requested by the standards and regulation board

Answer 9

An ethical decision-making framework. Sets out questions to ask yourself when deciding how to deal with an ethical situation

Answer 10

- Is it legal? - If it was publicised on the media, would you be happy?

Answer 11

RICS confidential hotline

Answer 12

- RICS Conflicts of Interest Professional Statement 2017 – because RICS members and firms must act to identify and prevent conflicts of interest unless they have informed consent by parties involved to proceed - RICS Countering bribery, corruption, and terrorist financing Professional Statement 2019

Answer 13

Speak to client regarding concerns. Review my report and search for new evidence to support a change in value. Cannot change value unless evidence supports this. Contravenes with Rule of Conduct – should not be improperly influenced by a client or provide misleading info. Opinion needs to be honest. Contravenes with Red Book – must base value on verifiable information or reasonable assumptions

Answer 14

1. Refer to the RICS – Use of Social Media guidance for RICS members 2021 to establish whether it is inappropriate 2. If the post breaches the Rules of Conduct and undermines public confidence in the profession, report this to the RICS 3. Also report to my employer

Answer 15

* Inform RICS (Complete firm details form) * Send RICS your PII certificate * Send RICS your CHP and appoint complaints handling officer * Set up client money handling procedures * Appoint Responsible Principal to contact RICS o Register for regulation by Regulatory Board o Log CPD o Train staff o Get a logo kit from RICS o Ensure Annual Return is completed each year

Answer 16

* Register with HMRC and company’s house * Appoint Money Laundering Officer * Disability discrimination compliance (Equality Act 2010) - Bribery Act- 2010 compliance - Ensure insurance compliance for employer and public liability

Answer 17

No, it also needs to comply with the RICS regulations

Answer 18

Inform RICS Inform clients Return any client money held Inform PI insurer and get run off period Retain a copy of all files for at least 6 years  RICS recommends 15 max

Answer 19

THREE disciplinary levels 1) Action by Head of Regulation 2) Disciplinary Panel 3) Appeal panel

Answer 20

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

Answer 21

Can initiate FOUR actions after initial investigation: 1) Serve a fixed penalty notice (relates only for breaches in the supply of info to the RICS) 2) Issue a Regulatory Compliance Order (low level breach –timeframe for breach of activities) 3) CPD sanctions 4) Refer you to the Disciplinary panel

Answer 22

50% are lay members

Answer 23

FIVE OPTIONS * Issue a Compliance Order * Unlimited fine per breach (must be proportionate to offence) * Impose conditions for continued membership * Expulsion for members or remove firm * Require outcome to be published (e.g. Modus)

Answer 24

* 50% MRICS 50% laymen * Hear new evidence and adjust penalty

Answer 25

* 20 hours per annum (of which 10 must be formal) * Every 3 years to do at least an hour on ethics * Record all CPD online

Answer 26

Structured learning that has clear objectives and outcomes.

Answer 27

Self-managed learning that is relevant to your role.

Answer 28

Insurance that protects clients, surveyors and third parties against negligence claims when a duty of care is breached and claim for damages arises

Answer 29

* Protects clients from financial loss * Protects the firm from financial loss * Protects employees from having to pay damages in claim

Answer 30

* Must be an RICS approved provider * Firms must ensure adequate and appropriate level exists for each instruction considering potential liabilities that may exist * Minimum levels set by a firms annual turnover in the previous year o Under £100,000 - £250,000 o £100,001 to £200,000 - £500,000 o Over £200,001 - £1,000,000

Answer 31

If your firm’s turnover in the preceding year is: * £10m or less = 2.5% of the sum insured or £10k * Over £10m = no limit set

Answer 32

£5m aggregate Anything over that needs sign off at increasingly senior levels

Answer 33

* All work, including pro-bono. * Whenever you have a duty of care or are providing advice

Answer 34

If covered by PII and ToE have been agreed.

Answer 35

Rent, deposits, service charge, retentions

Answer 36

RICS Client Money Handling 2019 Professional Statement

Answer 37

* How to hold client money * Providing information to clients * Receipts of client money * Payments from the account * Accounting records and controls * Compliance

Answer 38

* RICS Clients' money protection scheme * Last resort if firm is unable to pay

Answer 39

An account in the name of an RICS firm, subsidiary company or 3rd party service provider holding client money.

Answer 40

A client account where the client is not named. Must have an identifier.

Answer 41

* Client accounts kept separately and clearly identifiable * The word ‘client’ is on the bank account * Accounts must be kept in credit * 2 signatories must be agreed * Publish a written procedure for handling client money * Ensure sufficient funds are available before making payments from account * Obtain client’s permission for direct debits / standing orders

Answer 42

* Have separate bank account with client name on * Put money in there promptly * Do not use money for any other purposes * Provide access on demand to client * Ensure records are kept * 2 director signatories to approve a transfer

Answer 43

The giving, offering or receiving an advantage such as a payment, gift or service for an action which is illegal or a breach of trust.

Answer 44

Based on six principles: 1. Proportionality - proportionate to 2. Top level commitment 3. Risk assessment 4. Due diligence 5. Communication 6. Monitoring and review

Answer 45

1. Bribing 2. Receiving a bribe 3. Bribing a foreign public official 4. Failing to prevent a bribe

Answer 46

I would consider the following: - Timing of the gift - Is it reasonable and proportionate?

Answer 47

- It could be used as a bribe - It could be an attempt to improperly influence your decision

Answer 48

- Must be reasonable and proportionate - Gifts over £200 and entertainment over £1000 per head must be reported to legal and compliance

Answer 49

Politely decline.

Answer 50

- Firms are responsible for its employees - Firms need to show they took all reasonable measures to prevent it (training, identification of risks, clear policies and regular reviews)

Answer 51

Companies are responsible unless they prove adequate procedures in place to combat bribery (training, identification of risks, clear policies and regular reviews)

Answer 52

- Serious Fraud Office - Individuals: Max 10 years in prison and/or unlimited time - Companies face an unlimited fine

Answer 53

- Must comply with the Bribery Act 2010 - Facilitation payments are prohibited - Do not contribute to political parties - Do not offer employment in exchange for improper business advantage - Carefully select 3rd parties - Use good judgement when giving and receiving gifts - Encourage charity donations but seek manager approval first

Answer 54

Money Laundering, Terrorist Financing and Transfers of Funds Regulations 2017, amended 2020

Answer 55

- Amended in January 2020 - Letting Agents to register with HMRC if they let individual properties for more than 10,000 Euros PCM - CDD checks on landlord and tenant's on any new letting or reletting

Answer 56

- Wirtten ML risk assesment - Appropriate training for ML - Written AML checks - Have appropriate policies/controls in place to address ML and terrorist financing risks - Carry out CDD and EDD - Keep written records - Others: no cash over 10,000 Euros, Have a money laundering officer, AML checks before exchange of contracts

Answer 57

Converting the proceeds of criminal activity into legitimate assets

Answer 58

JLL's policy is to not accept cash under any circumstances

Answer 59

Red Flag document

Answer 60

* Parties reside in high risk countries * Large cash payments * Client lacks knowledge and has little interest in the transaction * Client is secretive or evasive about who they are * Overpaying for an asset * Urgency to complete a deal

Answer 61

* National Crime Agency * Assisting in ML: Max 14 years and/or unlimited fine * Tipping off/not reporting: Max 5 years / unlimited fine

Answer 62

* Further investigations carried out if a client or their family member is a PEP or from high risk third country * More info on background, purpose and increased monitoring

Answer 63

- Identify the client and verify their identity based on a reliable independent source (e.g. passport, driving licence) - Make reasonable endeavors to identify the beneficial owners of the client - For a company, its name, company number and address of the registered office is required - The names of the directors are required unless the company is listed on a regulated market (such as London Stock Exchange) - Obtaining info on the purpose and intended nature of the business relationship and proposed funding arrangement as appropriate

Answer 64

Politically exposed person – someone who is more at risk of bribery and corruption due to their public function

Answer 65

RICS Countering bribery, corruption, money laundering and terrorist financing (2019) professional Statement

Answer 66

* Have a written policy in place * Publish code of behaviour for staff * Encourage transparency * Set up a gifts register * Staff training * Keep up to date with legislation

Answer 67

Outlines a set of criminal offences intended to combat money laundering (AML offences)

Answer 68

* Concealing criminal property * Arrangements in relation to criminal property * Acquisition use and possession of criminal property

Answer 69

* Breach of a duty of care where a loss arises. * You have a duty to care to clients and third parties to use "reasonable care and skill"

Answer 70

* Ensure you are competent * Have signed terms of engagement in place * Make file notes * Inspections = Take photos on site * Undertake work in accordance with RICS guidance

Answer 71

Loss suffered must have been reasonably foreseeable at the time of breach by the surveyor and claimant.

Answer 72

Member’s firm unless LLP or LLC.

Answer 73

A contractual agreement that a client can only claim damages up to the amount agreed.

Answer 74

* Breach of the rules of conduct – dishonest about fees * Failing to comply with professional obligations e.g. failing to carry out required hours of CPD

Answer 75

Limitation Act 1980 - period for bringing a claim against a member for breach is 6 years from the date the service was provided with a long stop date of 15 years.

Answer 76

* Should avoid price fixing * Should avoid undercutting other firms * Fees should be market based * Fees can be negotiated

Answer 77

* Bichard reported in June 2022 * RICS commissioned a review into the purpose of the RICS * 7 recommendations were made and all were adopted: o Increased focus on D&I o Independent review of RICS governance every 5 years o New simplified, clear, accountable governance structure o Greater leadership on sustainability and climate change o RICS President (Clement Lau) to also chair governing council

Answer 78

* Not competent * Client won’t do AML checks * Client won’t sign ToE * Conflicts of Interest * Client is on UK Sanctions list * Can’t agree PII liability cap * The advice if for a friend/pro bono basis and PII won’t cover personal work

Answer 79

* Check personal competence * No conflicts of interest or personal interest * Confirm ToE in writing with written approval before work is started on the instruction

Answer 80

Conflict checks - Prevents JLL being sued, not receiving fees and having to re-do work. KYC checks – considers the potential risks to JLL in engaging with a client. AML checks – ID & POA

Answer 81

* Credit checks / review of the client’s financial accounts (companies house) * Understand who owns or controls the client (leadership and ownership) * Be clear why the client has chosen JLL * Review if the client is represented by other well-know / reputable advisors * Online search for negative press

Answer 82

Defines the scope of work that has been agreed, outlines the fees and avoids negligence claims.

Answer 83

Written confirmation of the conditions that have been agreed with the client.

Answer 84

* Proposed fee basis * Payment of expenses and how it is calculated * Copy of the complaint’s procedure is available on request

Answer 85

* Client’s obligations * Firm’s obligations * Confidentiality * Termination * Liability * Data protection

Answer 86

* When a member or firm’s impartiality and independence is threatened * Due to conflict between two competing interests

Answer 87

RICS Conflicts of Interest (2017) professional statement

Answer 88

Using my firm’s internal database. Without this I would: * Email colleagues detailing the parties and property * Check files for previous or current involvement with parties * Keep a register where employees could declare personal interests and check this

Answer 89

* Own Interest conflict * Party Conflict * Confidential Information conflict

Answer 90

* Acting for competing bidders * Acting for a lender and advising borrower * Acting for seller and buyer in same transaction * Promoting business or services owned by family member

Answer 91

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

Answer 92

* Establish the facts, can you proceed? If not then, conflict avoidance * Inform both parties o Disclose nature of the conflict o Parties to make own decision o Request written informed consent * Conflict management  put the measures in place

Answer 93

* Must take reasonable steps to put robust measures in place to stop information passing between the two parties: o Different surveyors, physically separated with different support teams – ideally different offices, buildings or floors o Different files with no access, all securely kept o Clear audit trail and overseen by firms’ compliance officer

Answer 94

PS2 – reiterates the guidance note provides examples in a valuation context.

Answer 95

Outlines the scope of work, PII and fees agreed with the client. It is RICS and JLL policy that a valid contract is in place before providing advice

Answer 96

Terms of Agency must be confirmed in writing

Answer 97

Customer Due Diligence – done on all clients buying, selling, letting or renting properties * Copy of valid ID (passport, driving license) * Copy of POA (bank statement, council tax bill etc) Note to self – AML and KYC checks are completed on both parties. In a leasing transaction, where the monthly rent exceeds £8,250 the same rule applies (Dual AML).

Answer 98

Report it to the legal and compliance team who will inform the national crime agency.

Answer 99

* Review companies house Request the following: * Company name * Registered number and office * Business address * Names of all directors/shareholders

Answer 100

14-day period to cancel a contract - Consumer Rights Act 2015

Answer 101

* Client confidentiality must be maintained at all times * Only share client info if statutory duty e.g. police/HMRC * Old files should be held for a minimum 6 years before secure disposal

Answer 102

* Notify the sender. * Delete the email.

Answer 103

RICS Complaints Handling 2016 Guidance Note

Answer 104

* Firms must have written CHP approved by the RICS (must include an ADR mechanism) * Provide CHP to client with Terms of Business * Maintain a complaints log * Notify PII as soon as possible if complaint could lead to a claim

Answer 105

* STAGE ONE = Internal o When complaint received issue CHP o Complaint must be made in writing o Complaint must be acknowledged within 7 days, investigated within 28 days * STAGE TWO = ADR o If client is not happy with review, refer to independent redress scheme Appendix A of the Rules of Conduct states that firms must have a CHP that should: - Be fit for purpose - Made available to all staff - Readily be shared with clients - Regularly reviewed at senior level - Be agreed with insurance providers (PII) - Provide details of access to independent redress schemes

Answer 106

1. Refer to my firm’s CHP 2. Starting point – establish the root cause of the issue. Need to understand the complaint. Listen / read it carefully. Respond within the timeframe set out in the CHP. 3. All complaints should be recorded immediately 4. Apologise to the client for needing to complain. 5. Clearly set out next steps and a timeframe 6. Establish one point of reference / nominated contact for the complainant 7. Where a duty of care has been established, supply the complainant with a copy of your firm’s CHP 8. Evaluate whether to inform your PII 9. When the complaint is understood, you should decide on a course of action to reach a good outcome 10. The response letter should refer to the availability of ADR 11. It is good practice to maintain an audit trail, follow up in writing and keep copies 12. Following the complaint, it is good practice to review the CHP and reflect of the situation to see if lessons can be learned. Do you need more CPD on the issue? Etc

Answer 107

1. Complaint is raised with the deal director in the first instance. If the client is not satisfied, then a formal complaint in writing should be made to the engagement director. 2. The engagement director will attempt to provide a reasoned response within 15 days. 3. If the client is dissatisfied, the client may raise the complaint with the legal and compliance team. 4. It will be allocated to a member of the L&C team to investigate and you will receive a response within 8 weeks from original complaint. The response will provide details for: redress offered, appeal process and external review. 5. If the client remains dissatisfied, they can refer to an external body for adjudication.

Answer 108

- Plan for Succession - someone takes over your work if you're a sole practitioner and you die.

Answer 109

- Get client's aims and objectives - Good record keeping - Manage client expectations

Answer 110

- When you act on behalf of both the buyer and the seller

Answer 111

Ethics decision tree

Answer 112

- 20 hours - 10 formal - Must be logged on RICS CPD Management System - must have understanding of current Rules of Conduct

Answer 113

- Complains handling procedure and how many complaints received and how they were resolved - PII cover - Type of business - Nature of clients - Whether the firm is handling clients money

Answer 114

- Not competent - Client not signed TOE - Not enough PII cover -

Answer 115

Moral compass

Answer 116

- Depends on timing - if it's at the start of an instruction/tendering process - Depends on proportionality of the gift

Answer 117

Professional indemnity insurance

Answer 118

The nature and extent of the insurance must be adequate and appropriate having particular regard to: * an ‘each and every’ claim basis or aggregate plus unlimited round the clock reinstatement basis * RICS’ minimum policy wording or more comprehensive wording. As a minimum, you should ensure that your policy wording is written on a full civil liability basis and * the minimum level of indemnity based on the firm’s turnover in the previous year (or estimated for a new firm)

Answer 119

Merrett v Babb

Answer 120

Firms that are unable to obtain run-off from their incumbent insurer or on the open market will be able to apply for coverage from RICS' Run-off Pool.

Answer 121

Money laundering is the illegal process of making large amounts of money generated by criminal activity appear to have come from a legitimate source.

Answer 122

In a professional context, I would rely on established due diligence procedures such as background checks and compliance with anti-money laundering regulations, to identify potential risks. As I continue to adhere to the RICS codes of conduct, I would report to any appropriate channels within the RICS, while allowing authorities to handle such investigations.

Answer 123

I would explain to the client that I cannot proceed with any action that breaches RICS standards, as I am bound by the RICS Code of Conduct. If necessary, I would withdraw from the project to maintain professional integrity.

Answer 124

I would raise my concerns directly with the colleague in a professional manner, and if the issue persisted, I would report the behavior to a senior manager or follow the company’s whistleblowing policy. report to the RICS - breaking codes of conduct

Answer 125

I would refuse, as doing so would breach RICS ethical guidelines. I would maintain my professional independence and ensure that all valuations are accurate and objective.

Answer 126

I would politely decline any gifts that could create a conflict of interest or be perceived as compromising my impartiality, in line with RICS ethical standards.

Answer 127

I would disclose the conflict to both parties and seek their consent to proceed. If this isn’t possible, I would withdraw from one or both engagements to maintain impartiality.

Answer 128

I would immediately report the issue to the relevant authorities and follow the necessary anti-money laundering procedures, as required by law and RICS regulations.

Answer 129

I would communicate the risks of rushing and explain that delivering work to the required professional standard is a priority, ensuring that the client understands the importance of quality over speed.

Ethics - Level 1 Flashcards

(155 cards)