Ethics Level 1

Question 1

Can you explain the general overview of the New Rules of Conduct (February 2022)?

Answer 1

The Rules of Conduct consist of 5 rules which are based on the ethical principles of honesty, integrity, competence, service, respect and responsibility.

The document consists of the 5 rules for members and firms, providing example behaviours for each rule.

The document ends with Appendix A: Professional Obligations to the RICS.

Question 2

There are 5 New Rules of Conduct, can you pick one and explain what it is?

Answer 2

Rule 4: Members must treat others with respect and encourage diversity and inclusion.

This rule is all about respecting one anothers rights, treating eachother fairly, not discriminating on any improper grounds, not bullying, harrassing or victmising, not taking unfair advantage or exploiting, working cooperatively and encouraging inclusive cultures in workplaces for all.

Question 3

Give an example of one Rule that you comply with every day?

Answer 3

Rule 3 - I provide a good-quality and diligent service through ensuring my work goes through quality assurance processes

Question 4

What is included in Appendix A in the New Rules of Conduct?

Answer 4

Professional Obligations to the RICS - it sets out the core professional obligations for members and firms.

Question 5

What do you need to do if you set up a practice?

Answer 5

• ensure the relevant insurances are in place
• set up the necessary procedures such as informing the RICS & register for regulation and preparing a complaints handle procedure
• completing the RICS Annual Returns

Question 6

What are the CPD requirements for a chartered surveyor? What about ethics?

Answer 6

They are required to undertake 20 hours CPD a calendar year, with at least 10 hours formal
They are required to undertake CPD relating to RICS Global & Ethical Standards once every 3 years

Question 7

Why would you require PII if you were to set up in private practice?

Answer 7

• to ensure that if a firm faces a claim, it is protected from financial loss that it cannot meet from its own resources
• protect the insured firm against the consequences of its liability to pay damages to third parties through breaches of its professional duty that it commits through its professional activities and
• ensure the firms clients do not suffer financial loss which the firm cannot meet

Question 8

How would you assess the level of PII you would need when setting up in private practice?

Answer 8

As it’s a new firm, I would assess based on estimated turnover for the upcoming year

Question 9

Would the PII indemnity levels increase as your business expanded?

Answer 9

If turnover expanded into the next bracket as outlined in the RICS UK professional indemnity insurance requirements

Question 10

When would you arrange run off cover and why and how long is it held for?

Answer 10

RICS Firms are required to ensure run off cover is in place under their PII to cover historic liabilities of a business after it ceases to trade. It relates to any claims made under the policy for work carried out before trading stopped.

For consumer claims, it must be maintained for a minimum of 6 years from the expiry date of the policy in force at the time of cessation

For non-consumer claims, it must be maintained for a minimum of 6 years from cessation of practice

Question 11

How would you protect your client’s interest if you decided to give up practice?

Answer 11

By ensuring run-off cover is in place

Question 12

How would you determine the time period that runoff cover would need to be provided?

Answer 12

In accordance with the RICS Professional Indemnity Insurance Requirements

Question 13

How would you advise your client to give assurance as to how you were going to hold their money, so that it would securely be kept and accounted for?

Answer 13

• confirmation that client money will be held in a client money account including bank account details
• that the RICS-regulated firm has exclusive control over the client money and whether the account is in the name of the regulated firm
• a wholly owned subsidiary or an appropriately contracted third-party transaction service provider
• give advice to clients who pay fees in advance for surveying services (but not property agent services in England) that this money is not covered by the Client Money Protection scheme
• disclosure of all commissions earned by the firm while managing their property
• how unidentified funds are dealt with
• a copy of the firm’s written procedures for handling client money

Question 13

With regards to client’s money, how should you name the bank account you are required to set up for this purpose?

Answer 13

all client money accounts include the word ‘client’ (written in full) and the name of the firm in the title of the account, and that discrete client money accounts include an identifier (e.g. the client or property name) in the title of the account to easily distinguish it from other accounts of the RICS-regulated firm

Question 14

Why do we ring-fence client’s money placed in our trust?

Answer 14

So if the firm becomes insolvent, the money cannot be touched

Question 15

What would be your approach if the client wished to pay you in advance for your services?

Answer 15

• set up a separate client account and ensure this is properly named and clearly identifiable
• provide the client with a statement of account
• inform and agree draw downs
• prior to drawing monies, send a statement of how much is to be withdrawn and what services or associated fees are made up of and send updated statements of the account
• once complete, show a final statement, ensure everything is complete and transparent

Question 16

What would happen if your employer’s rules conflicted with RICS rules? Which takes precedence?

Answer 16

The RICS Rules of Conduct always take precedence.

Question 17

If a conflict of interest arose within your business, what advice would you give to colleagues or clients on how to deal with it?

Answer 17

In accordance with RICS requirements, I would advise disclosing the conflict in writing to the client, detailing the nature of the conflict. I would advise that they do not continue to represent unless:
- they feel they can 100% act impartially
- the client finds it acceptable and gives informed consent

Question 18

If you carried out work for a client and he decided to pay you in cash, what advice would you give to them and would you readily accept it?

Answer 18

Well, firstly my firm operates as a cashless business, which is also set out and agreed prior any commencement of work for a client. So I would have to decline.

In addition, this would raise concerns in relation to the source of the money, and whether I could ascertain this was legitimate money.

Question 19

What do you know about the UK Bribery Act 2010?

Answer 19

It covers criminal law relating to bribery, containing 4 main offences:
- general offence of bribing
- general offence of being bribed
- offence of bribing a foreign public official
- corporate offence of failing to prevent bribery by persons associated with relevant commercial organisations

It applies to all UK companies and associated persons

Question 20

Can you explain the process for safeguarding clients’ interests in the event of death or prolonger illness of a sole trader Chartered Surveyor?

Answer 20

Through employing a Locum

Question 21

When does a firm have to register with the RICS?

Answer 21

If:
a) the firm provides surveying services to the public
b) the firm is operating in the United Kingdom
c) at least 50% of the Firm’s Principal’s are RICS Members

Question 22

What is a Locum employed for?

Answer 22

Locums are employed for firms which are sole practitioners or have a sole directors

The Locum is another professional who is appointed to stand in for the surveyor if they are unable to work

Question 23

If you received a complaint about the service you had provided, how would you deal with it and what are the timescales for responding?

Answer 23

In accordance with my companies complaints handling procedure, which is in line with the RICS Complaints Handling.

The complaint must be investigated within 28 days.

Question 24

Discuss a relevant third-party redress mechanism and their role?

Answer 24

So, as an example, The Centre for Dispute Resolution is named as the alternative dispute resolution for my firm. They provide an impartial dispute resolution service in the event that a firm and client cannot reach a solution to a complaint raised. An example of the mechanism they utilise is mediation. As the mediator, they will not having decision making power but will assist parties in identifying their problems, guiding them in resolving.

Question 25

If a friend asked you for an opinion on a project they were considering carrying out, what advice would you give them?

Answer 25

Firstly, my firm's professional indemnity insurance does not cover me for private advice; so I would have to decline. In addition, I would also need to consider the potential conflict of interest surrounding working with a friend. I would suggets the friend contacts the firm I work for, in business hours, to discuss a potential commission.

Question 26

If you & a colleague were invited to a Consultants Christmas Party, what advice would you give to your colleague, what are the guidelines for dealing with an offer of a gift or hospitality and when may acceptance be appropriate?

Answer 26

I would advise my colleague that we would need to assess our relationship with consultant and the nature of the Christmas Party and whether this proporitionate with the working relationship that exists. By way of example, if the Christmas Party was at a small pub or venue local to their offices, this may be proportionate, whereas if this was at a lavish hotel with an overnight stay included, this will likely not be proportionate. In addition, I would advise we assess the intention of the consultant, are other companies that we work with invited and do we have influence over their workload. I would also cross check this against my firms Anti-Briberty Policy, and recorded on our gifts and hospitality register.

Question 27

What would you advice if a client approached you and asked if you would work for them directly instead of your employer to reduce their cost?

Answer 27

I would decline and I would advise the client that through providing private advice I would not be covered by my firms professional indemnity insurance.

Question 28

How would you describe 'conduct befitting' a Chartered Surveyor?

Answer 28

Conduct Befitting a chartered surveyor is the expected behaviour of an RICS member who upholds the highest standards of professionalism, integrity and competence in their work. It's not only about complying with the RICS ROC, but also about demonstrating the values and principles of RICS in every situation.

Question 29

What Laws and regulations govern the formation and workings of RICS?

Answer 29

The Royal Charter, Bye-Laws, Regulations, RICS Regulatory Framework and Standing Orders

Question 30

What do you know of the Money Laundering Regulations 2017?

Answer 30

It sets out the additional obligations of private sector firms working in areas of higher money laundering risk. They aim to stop criminals using professional services to launder money by requiring professionals to take a risk-based approach.

Question 31

What is a money laundering red flag? Can you give an example?

Answer 31

Money Laundering Red Flags are scenarios or occurences set out by the RICS which may indicate a reason to suspect money laundering. An example could be: - if a client is secretive or evasive about who they are, the beneficial owner, the source of funds, the reason for the transaction or what the bigger picture is - if the transaction has unusual features such as no obvious commercial purpose to the transaction

Question 32

What current challenges is Covid and/or Brexit and/or conflict in Russia / Ukraine bringing to Conduct & Ethics?

Answer 32

Supply chain disruptions leading to difficult decisions about labour, fair pricing and environmental sustainability.

Question 33

How does ethics and conduct affect the environment we live and work in?

Answer 33

Ethics and conduct play a crucial role in shaping the environment we live and work in by fostering ethical principles such as honesty, integrity, competence, service, respect and responsibility. In the workplace, promoting these principles helps build a positive culture, reduce conflicts and enhances productivity. In addition, it also ensure compliance with laws, regulations and ethical practice which safeguards public interest and protects individuals rights.

Question 34

What are the 6 principles of prevention under the Bribery Act 2010?

Answer 34

1. Proportionate procedures 2. Top level commitment 3. Risk assessments 4. Due diligence 5. Communication 6. Monitoring & review