Ethics Level 1

Question 1

RICS Background & Membership

Answer 1

Foundation: RICS was founded in 1868 and has a Royal Charter, initially granted by the Privy Council in 1881.
Governance: RICS Regulations and Bye-laws establish the institution’s governance.
Membership Size: As of January 2025, membership was around 112,000 qualified members and 30,000 trainee members.
Membership Levels:
FRICS - Fellow
MRICS - Chartered Member
AssocRICS - Associate Member
RICS Student.

Becoming a Fellow (FRICS): Requires evidence of four Fellowship characteristics:
- evidence of 5 or more years at MRICS
- a leadership role
- professional/technical achievement
- academic achievement or raising the profile of the RICS

A portfolio of professional achievement is required to support the application to include CPD record.

Question 2

RICS Governance & Leadership

Answer 2

Governing Council: This is the highest governing body, with 28 seats. It ensures RICS fulfills its Royal Charter obligations.
Standards and Regulation Board: Reports to the Governing Council and manages property, land, and construction professional groups. It has an elected board responsible for professional competence and practice standards.
Leadership (as of the document’s printing):
Chief Executive Officer: Justin Young (effective January 1st, 2023).
Governing Council Chair: Nicholas Maclean FRICS (appointed on a temporary basis).
President: Nicholas Maclean FRICS (current President at the time of the review involving Justin Sullivan).
President Elect: Maureen Ehrenberg FRICS (acting).

Question 3

Role of the RICS

Answer 3

Primary Function: The Royal Institution of Chartered Surveyors promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction, and infrastructure.
Accountability: It is accountable to both its members and the public.
Three Main Roles:
To maintain the highest standards of education and training.
To protect consumers through strict regulation of professional standards.
To be the leading source of information and independent advice on land, property, construction, and associated environmental issues.

Question 4

The Bichard Review

Answer 4

Origin: An Independent Review of RICS’s governance failings was commissioned in 2021 and carried out by Lord Bichard.
Purpose: To clarify RICS’s purpose for public advantage, recommend governance structures, and propose how the incoming leadership should govern based on the institution’s future culture and strategy.
Key Recommendations: The Bichard Review reported in June 2022, making 36 recommendations across 7 key areas, including a renewed focus on the public interest and empowering members with greater support.
RICS Actions: RICS agreed to adopt all recommendations. New Governing Council elections took place in April 2023. RICS has also recruited a Diversity, Equity and Inclusion (DEI) and Sustainability Panel Chair.

Question 5

RICS Future Initiatives

Answer 5

‘Our Shaping the Future’ Initiatives: RICS undertook 12 UK roadshows in 2024 to discuss current issues with members. Key themes include addressing the skills gap, bringing RICS to the members, and maintaining high standards.
Future Foundations (Published Nov 2023):
Vision: A natural and built environment that is sustainable, resilient, and inclusive for all.
Mission: Inspire members and uphold knowledge and standards.
Strategic Goals: Lead and influence on sustainability, attract a diverse next generation, and enhance member value and engagement.
Values: Professional, Collaborative, Ambitious.

Question 6

Benefits of MRICS

Answer 6

5 Benefits of RICS Membership:
Status: Professional credentials provide client confidence.
Recognition: Promotes your professional excellence.
Market Advantage: RICS status gives a competitive advantage.
Knowledge: Access to international practice standards and guidance.
Network: Access to professionals worldwide.

Question 7

Requirements for Registration

Answer 7

Firms providing surveying services must register to ensure quality and regulation.
Firms must annually make a return to RICS confirming compliance with their obligations.
RICS rules from 2022 state that principals, sole practitioners, directors, and partners must be RICS members or have equivalent status.
Each firm must nominate a “Responsible Principal”.

Question 8

Information for RICS Registration

Answer 8

he following information is required by RICS for firm registration:
Type of business and staffing details
Name of the Responsible Principal
Statutory regulated activities (e.g., financial services)
Nature of clients
Complaints handling procedure details and records
Professional indemnity insurance details
Whether the firm holds clients’ money.

Question 9

RICS Rules of Conduct & Obligations

Answer 9

RICS Rules of Conduct (2021):
Effective from February 2, 2022, on a global basis.
Comprise a single set of 5 Rules that apply to all members and firms.
Rule 1: Members and firms must be honest, act with integrity, and comply with obligations.
Rule 2: Maintain professional competence and ensure services are provided by those with necessary expertise.
Rule 3: Provide good-quality and diligent service.
Rule 4: Treat others with respect and encourage diversity and inclusion.
Rule 5: Act in the public interest and take responsibility to prevent harm and maintain public confidence.

Mandatory Professional Obligations:
Comply with CPD requirements, cooperate with RICS, publish a compliant complaints handling procedure, and display business literature according to RICS designations.

Question 10

Ethics & Decision Making

Answer 10

RICS Ethics Decision Tree:
Provides a framework of questions to guide members facing a potentially unethical situation.
Encourages consideration of one’s actions and their consistency with the Rules of Conduct.
The ultimate test is whether members would be content to have their decisions made public.
Key Questions from the Decision Tree:
Do you have sufficient facts?
Is it legal and in line with the RICS Rules of Conduct?
Have you consulted to make an informed decision?
Have you assessed the risks and considered the options?
Would you be content for your actions to be made public?
RICS Regulation Confidential Hotline: Offers assistance to members with any ethical issue.

Question 11

Disciplinary Procedures

Answer 11

Purpose: To regulate the surveying profession to protect the public and uphold professional standards.
Three Levels of Disciplinary Action:
Action by Head of Regulation
Disciplinary Panel (drawn from the Independent Regulatory Tribunal)
Appeal Panel.
Initial Stage: A formal investigation by the Head of Regulation of the RICS. This can be initiated upon receiving a complaint or information about a member/firm.
Head of Regulation Actions (Post-Investigation):
Serve a Fixed Penalty Notice
Make a Regulatory Compliance Order
Refer the matter to a single member of the Disciplinary Panel for consideration
Refer the matter directly to a Disciplinary Panel.

Question 12

Disciplinary Actions & Appeals

Answer 12

Regulatory Compliance Orders (RCOs): Used for low-level breaches. A written document stating the breach and requiring specific actions within a set time. Failure to comply can lead to a Penalty and Disciplinary Panel.
Action by a Disciplinary Panel: For more serious breaches. The Head of Regulation can refer cases to this panel. Membership includes lay members (non-RICS members).
Possible Actions by the Panel:
Issue a Regulatory Compliance Order
Reprimand
Caution
Impose an unlimited fine
Impose conditions on future continued RICS registration
Expulsion from membership or removal of a firm
Require publication of results.
Appeal Panels: Members or firms can appeal a decision

Question 13

Use of Social Media

Answer 13

Guidance: RICS published updated “Guidance for RICS members” in September 2024 to remind members of high standards and professional conduct online.
Unacceptable Behaviour: The guidance addresses what might be considered unacceptable or inappropriate sexual behaviour and how RICS may address complaints.
RICS Investigations: RICS is likely to investigate concerns about social media posts that involve:
Dishonesty
Abusive or threatening behaviour
Bullying, victimisation, or harassment
A pattern of frequent or large-scale communication concerning a person
Ignoring prior advice or warnings about social media use
Discrimination.
Reputational Damage: If a post is felt to damage public confidence or trust in the profession, take disciplinary action to protect the public and the profession’s reputation.

Question 14

RICS Core Material

Answer 14

New Category: RICS has introduced “RICS Core Material” which replaces and re-categorises all current Professional Statements and Guidance Notes.
RICS Professional Standards: These are set requirements or expectations for RICS members. They use the word “must” and must be complied with. Recommended best practice uses “should.”
RICS Practice Information: This is information to support practice, knowledge, and performance. This can include guides, good practice, and information. They do not contain advice.
RICS Practice Alerts: Published since August 2023, these are key tools for warning or alerting the profession to emerging risks.
Examples: A Practice Alert on fire risk assessments (Feb 2024), an Alert on the Valuation Registration Scheme (July 2024), and a Practice Alert on Real Estate Auction Status (issued April 2025).

Question 15

Terms of Engagement & Fees

Answer 15

Fee Negotiations:
Firms should avoid price fixing, collusion, and aggressive fee cutting.
Fees should be market-based and agreed upon an ad-hoc basis with clients.
Be completely transparent with clients and consumers so they understand what they are paying for, especially regarding referral fees (see Bribery Act 2010 and RICS Rules of Conduct 2021).
Terms of Engagement (ToE):
3 Key Steps:
Check professional competence.
Check for conflicts of interest or personal interest.
Confirm the ToE in writing and get written approval before starting work.
Consumer Rights Act 2015: As amended by the Consumer Contracts Regulations 2013, allows for a 14-day cooling-off period from the date of the agreement.
Declining an Instruction: It may be appropriate to decline if you don’t have sufficient facts, the client will not sign the ToE, a conflict of interest exists, or you would not be content for your actions to be public.

Question 16

Conflicts of Interest - Definitions

Answer 16

Definition: A conflict of interest arises when a member’s or firm’s independence and impartiality is threatened. Examples: personal interest, financial interest, commercial relationships.
Global Standard: The RICS Global Professional Standard: Conflicts of Interest (2017) came into effect on 1st January 2018.
Informed Consent: Proceeding despite a conflict of interest may only be sought where the RICS member is satisfied that proceeding is in the interests of all of those who are or may be affected and it is not prohibited by law.
Three Types of Conflicts:
Party Conflict: Acting for two different parties on the same instruction.
Own Interest Conflict: A conflict between the member’s/firm’s interests and their duty to a client.
Confidential Information Conflict: Relating to work between two parties that is confidential.

Question 17

Conflicts of Interest - Management

Answer 17

Three-Step Process:
STEP ONE - CONFLICT AVOIDANCE: Consider transparency and openness. Decide whether the conflict is manageable or should be avoided entirely.
STEP TWO - WRITTEN ADVICE TO BOTH PARTIES: Assuming you proceed, you must disclose the nature of the conflict in writing to Client A and Client B, setting out your proposals for how the firm will deal with it (e.g., information/ethical barrier).
STEP THREE - CONFLICT MANAGEMENT: Once you have received written consent to your declaration from both clients, you can act.
Information/Ethical Barriers:
Must be robust enough to offer a real chance of no information passing between the two parties.
Surveyors acting for each party must be physically separated (e.g., different floors or buildings).
There must be a virtual

Question 18

Conflicts of Interest - Specific Examples

Answer 18

Dual Agency: This is where an agent has a contractual agency/relationship with both the seller and the buyer. This practice must not be undertaken in any circumstances from 1st January 2018 by any RICS members.
Multiple Introductions: This occurs when an agent makes multiple introductions for a commercial real estate investment opportunity. If the appointment is on an exclusive basis, the agent can no longer advise other prospective buyers after a specific risk has been identified.
Incremental Advice: An example is when an agent acting for a seller is approached by the prospective buyer for additional advice (e.g., on planning). An information barrier must be put in place before providing any incremental advice to the prospective buyer, and consent is required.
Personal Interest/Own Interest Conflict: This involves a financial or personal interest for the member or someone with whom they have a relationship (e.g., family member, close business associate). You must not let a personal interest interfere with professional judgment. You must declare the facts promptly and in writing before accepting the instruction.

Question 19

Confidentiality

Answer 19

Confidentiality:
RICS Bye-laws state that client confidentiality must be maintained for all client affairs. This includes historical prior instruction information.
Third-party access to files requires the client’s prior approval unless you are subject to overriding legal obligations (e.g., police or HMRC).
All aid files should be held for a minimum of 6 years before disposal and should be destroyed securely.

Question 20

Complaints Handling Procedures (CHP):

Answer 20

Complaints Handling Procedures (CHP):
It is a requirement for RICS Regulated Firms to have a published complaints procedure. Details must be issued to a client at the Terms of Engagement stage.
Stage One (In-House): The firm must provide a quick, clear, and impartial process. The complaint must be made in writing, acknowledged within 7 days, and a formal written outcome of the investigation provided within 28 days.
Stage Two (ADR - Third Party Resolution): If the complainant is not satisfied with the in-house review, the firm must refer them to an independent redress scheme, such as The Property Ombudsman (TPO) or the Centre for Effective Dispute Resolution (CEDR).

Question 21

Continuing Professional Development (CPD) (requirements/informal/formal/proposed changes)

Answer 21

Four Requirements:
Members must undertake a minimum of 20 hours of CPD in a calendar year.
Of the 20 hours, at least 10 hours must be Formal CPD. The remainder can be Informal CPD.
Members must maintain a relevant and current understanding of the RICS Rules of Conduct.
All members must record their CPD activity using the RICS CPD Management System by 31st January each year.
Formal CPD: This includes forms of structured learning that have clear learning objectives, such as online training, professional courses, and seminars.
Informal CPD: This includes any self-managed learning relevant to your professional role, such as private study, on-the-job training, and informal seminars.
Proposed Changes (effective no sooner than January 2026):
Updates to encourage members to plan, undertake, and reflect on CPD that is relevant, adequate, and appropriate.
Giving members more flexibility in meeting yearly CPD requirements.
Mandatory topics to be covered every 3 years (including ethics, sustainability, and data & technology).
An improved member experience by enabling easier planning and recording of CPD activities.

Question 22

Negligence - Principles & Case Law

Answer 22

Definition: Negligence occurs when a duty of care is breached, leading to a loss, which in turn results in damages. A duty of care exists to clients and third parties, requiring the use of reasonable care and skill.
Key Case Law:
Yianni v Edvin Evans (1981): Established that a residential valuer instructed by a mortgage lender owes a duty of care to the mortgage applicant (purchaser).
Scullion v Bank of Scotland plc t/a Colleys (2010): The duty of care owed to a buy-to-let investor in relation to a valuation is not the same as that owed to a residential purchaser. The Court of Appeal held that a surveyor providing advice on value to a lender in respect of a buy-to-let purchase did not owe a duty of care to the borrower.
Burgess v Lejonvarn (2020): Established that professionals providing professional services for free still have a duty of care.
Hart v Large (2021): The Court of Appeal determined that surveyors do not just have a duty of care to value a property, but also to identify any significant risks or provide warnings, and they are not under a duty to advise on matters outside the scope of their work.
HOK v Alexander Reese Thompson (2023): Found that the purpose of a valuation is central to the extent of the valuer’s duty when considering all the circumstances. The purpose will define the extent of their duty, opinion, or advice.

Question 23

Negligence - Limitation & Avoidance

Answer 23

Limitation Act 1980:
In England and Wales, the limitation period for bringing a negligence claim is 6 years from when the service was provided.
There is also a long-stop position of 15 years if the claimant did not know a loss was suffered earlier. These years depend on the type of instruction and the type of claim.
Avoidance of Negligence:
Clearly understand the client’s objectives and confirm precise instructions in writing in the terms of engagement.
Ensure you are competent to undertake the instruction.
Undertake work in accordance with the relevant RICS advice, to include Professional Standards and Practice Information.
Make detailed file notes and take photographs to support your work.
Keep up to date with market knowledge and legislation and maintain a record of your CPD.
Keep any limitation of liability clauses on your policy in the terms of engagement.

Question 24

Professional Indemnity Insurance (PII) - Requirements

Answer 24

Mandatory Requirement: PII is mandatory for surveyors working in practice to protect clients, surveyors, and third parties against negligence claims.
RICS Requirements 2024: All members must ensure an adequate and appropriate level of insurance is in place for each instruction, considering potential liabilities. All policies must be underwritten by an RICS-approved insurer.
Minimum Indemnity Limits (based on firm’s turnover in the preceding year):
£100,000 or less: Minimum limit of £250,000.
£100,001 to £200,000: Minimum limit of £500,000.
£200,001 and more: Minimum limit of £1,000,000.

Question 25

PII - Excess & Run-off Cover

Answer 25

Maximum Uninsured Excess: For a limit of indemnity up to £10 million: The greater of 2.5% of the sum insured or £10,000. For a limit of indemnity over £10 million: No set limit. Run-off Cover: Adequate and appropriate run-off cover is required following the cessation of trading. For consumer claims, a minimum of £1,000,000 of aggregate cover over a period of six years is required. Firms that are unable to obtain run-off cover from their incumbent insurer can apply for coverage from the RICS Run-off Pool. RICS Professional Indemnity Insurance Requirements (July 2024): This latest edition includes changes to policy wording, with a full civil liability basis (other than for asbestos, pollution, external wall surveys, and fire risk appraisals of external walls). The assigned risk pool has been renamed the run-off pool.

Question 26

Handling Clients' Money - Principles

Answer 26

Six Main Areas of Good Practice: Holding client money Providing information to clients Receipts of client money Payments from client accounts Accounting records and controls Compliance. Key Requirements for Chartered Surveyors: Client accounts must be kept separate and clearly identifiable. The word 'client' should be on the bank account and cheque book. A client must be able to have their monies on demand. Payment of interest must be agreed upon with a client. Regular bank reconciliation must be carried out at least monthly. Expenditure records are kept with a running balance available. Money can only be withdrawn from a client account if properly required. If cash receipts are made, two signatures should be required.

Question 27

Handling Clients' Money - Compliance & Scheme

Answer 27

Discretionary Review: A RICS Discretionary Review Visit of a single named client account can be undertaken by RICS, usually on a routine 3-yearly basis by an accountant employed by RICS. RICS Client Money Protection Scheme: RICS runs a scheme for firms that receive and hold clients' money. The scheme provides a last resort protection in instances where a RICS Regulated firm is unable to repay a client's money. Firms handling client money must display their procedures documentation on their website. Guidance was published in March 2024 for RICS regulated firms to show the use of an appropriately contracted third-party transaction service provider to fulfil requirements.

Question 28

Starting a New Practice

Answer 28

RICS Compliance Steps: Inform RICS of your new practice by completing a Firm Details Form. Appoint a Responsible Principal. Register with RICS for regulation. Arrange professional indemnity insurance. Set up procedures for client money handling (including a protection scheme), and obtain RICS approval for the complaints handling procedure. Set up a complaints log. Appoint a Complaints Handling Officer or elect a surveyor in another practice if you are a sole practitioner. Use a logo licensed from RICS for all practice material. Plan for succession/future running of the business if you are a sole practitioner. Statutory Compliance: Requirement to disclose the business name. Compliance with discrimination, equality, money laundering, health and safety, data protection, and estate agents acts. Ensure compliance with employment law (e.g., National Living Wage, working hours). Ensure insurance compliance for employer and public liability.

Question 29

Closing a Practice

Answer 29

RICS Compliance Actions upon Retirement or Cessation: Inform the RICS of your retirement/closure and de-register. Ensure clients are informed at the earliest opportunity and hand over arrangements made to a new firm. Return any monies held by clients to their own accounts. Inform insurers and procure professional indemnity insurance run-off cover for a minimum of 6 years from the expiry of the policy. Maintain up-to-date contact with RICS for the duration of run-off. Retain a copy of the client files and records for a minimum of 6 years.

Question 30

What are the key requirements for Money Laundering compliance?

Answer 30

The Money Laundering Regulations 2017 apply Must conduct Customer Due Diligence (CDD) checks Verify client identity using reliable, independent sources Keep records for minimum 5 years after relationship ends Report suspicious activities to National Crime Agency Appoint Money Laundering Reporting Officer (MLRO) Staff training required on AML procedures

Question 31

What are the different levels of Customer Due Diligence?

Answer 31

1. Customer Due Diligence (CDD): Basic identity verification 2. Simplified Due Diligence (SDD): Lower risk clients, reduced checks 3. Enhanced Due Diligence (EDD): Higher risk clients, additional scrutiny required EDD required for: PEPs, correspondent banking, non-face-to-face business All levels require ongoing monitoring of business relationships

Question 32

Why do you want to become a member of RICS?

Answer 32

It would give me a sense of achievement, recognition and improve my status and also to gain access to the wider RICS community, give me a competitive advantage and will support the continuation of my learning and development through regular CPD.

Question 33

What is the role of RICS?

Answer 33

- To maintain the highest standards of education and training - To protect consumers through strict regulation of professional standards - To be the leading source of information and independent advice on land, property, construction and associated environmental issues (RICS 2015)

Question 34

What is a Royal Charter?

Answer 34

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.

Question 35

What do you understand by the term self-regulation?

Answer 35

Self-regulation at RICS (Royal Institution of Chartered Surveyors) refers to the organisation's authority and responsibility to govern its own members, set professional standards, and ensure compliance without direct government control.

Question 36

Can you tell me what you understand by the principles of better regulation?

Answer 36

In the context of RICS, the principles of better regulation refer to a framework that guides how regulation should be designed, implemented, and enforced to achieve optimal outcomes for the profession and the public. These principles are derived from broader regulatory best practices but have been specifically adapted and applied by RICS in its role as a self-regulatory body. The five key principles of better regulation in the RICS context are: 1. Proportionality – making penalty proportionate to breach 2. Accountability – to all member and the public 3. Consistency – Treating all members the same 4. Transparency – all members, clients, public 5. Targeting – serious breaches

Question 37

What is a Bye-Law?

Answer 37

The RICS bye-laws are essential governance documents that outline the rules and regulations governing the Royal Institution of Chartered Surveyors and its members. (last updated February 2020) Bye-law 1: Application & Definitions Bye-law 2: Membership & Registration Bye-law 3: Designations Bye-law 4: Contribution to Funds Bye-law 5: Conduct Bye-law 6: Governing Council, Officers and Staff Bye-law 7: Subordinate Boards, Committees and Groups Bye-law 8: Procedure for General Meetings Bye-law 9: Accounts & Audit Bye-law 10: General

Question 38

Give an example of one of the RICS Bye-Laws.

Answer 38

Bye-law 1: Application & Definitions Example: Insurance: professional indemnity insurance, and “insure” and “insured” shall be interpreted accordingly Chartered Member: a member of a class listed in Articles 5(1)-(2) of the Charter Non-chartered Member: a member listed in Article 5(3) of the Charter Bye-law 2: Membership & Registration Example: B2.2 Eligibility - B2.2.1 Chartered Member or Non-Chartered Member To be eligible for admission as a Chartered Member or a Non-Chartered Member, a person shall demonstrate the attainment of the appropriate Professional Competence Bye-law 3: Designations Example: B3.1 Use of Designations - B3.1.1 Chartered Members shall be entitled to use Designatory Initials or Designations as follows: (a) Fellow: the Designatory Initials “FRICS” and the Designation “Chartered Surveyor”; (b) Professional Member: the Designatory Initials “MRICS” and the Designation “Chartered Surveyor”. Bye-law 4: Contribution to Funds Example: B4.3 Payment A person shall be liable for the payment of his fees, subscription, levy, or other sums payable while he is or was in membership. Bye-law 5: Conduct Example: B5.3 Liability of Firms B5.3.1 Every Firm shall comply with any Regulations or Rules which may be laid down to govern the manner in which Firms carry on their business. Bye-law 6: Governing Council, Officers and Staff Example: B6.1 Governing Council B6.1.1 Composition (a) The membership of Governing Council will be comprised from those: (i) appointed as of right in accordance with Regulations; (ii) appointed by nomination in accordance with Regulations; and (iii) elected in accordance with Regulations. (b) The membership of Governing Council shall be comprised of at least: (i) 66% elected; and (ii) 66% Chartered Members Bye-law 7: Subordinate Boards, Committees and Groups Example: B7.3 Management Board B7.3.1 The Management Board shall be responsible for implementing the strategy of RICS as determined by Governing Council. Bye-law 8: Procedure for General Meetings Example: B8.3 Annual General Meeting B8.3.1 There shall be one Annual General Meeting in each Session on a date determined by Governing Council. Bye-law 9: Accounts & Audit Example: B9.1 Books of Account B9.1.1 Books of Account shall be kept showing and explaining: (a) all sums of money received and expended by RICS, together with brief details explaining the transactions where appropriate; and (b) a record of the assets and liabilities of RICS Bye-law 10: General Example: B10.3 Contracts B10.3.1 RICS shall have authority to enter into contracts or legal arrangements provided it has the necessary funds to enter into the commitments undertaken. B10.3.2 Regulations shall specify the requirements for any contract or legal instrument made by or on behalf of RICS.

Question 39

Explain to me the new RICS Rules of Conduct - what do they replace?

Answer 39

The new Rules launched on 11 October 2021 with an effective date of 2 February 2022, and replace the following: - Rules of Conduct for Members. - Rules of Conduct for Firms. - Global Professional and Ethical Standards.

Question 40

When do they take effect?

Answer 40

2 February 2022

Question 41

Who do they relate to? (Rules of Conduct)

Answer 41

Members and regulated firms. A set of 5 rules with example behaviours for each rule plus a list of 3 professional obligations for members and 7 professional obligations for firms, which can be found in Appendix A.

Question 42

What are the ethical principles that the Rules of Conduct are based on?

Answer 42

- Honesty, - integrity, - competence, - service, - respect, and - responsibility.

Question 43

What are the 5 Rules?

Answer 43

- Rule 1: Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS. - Rule 2: Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise. - Rule 3: Members and firms must provide a good quality and diligent service - Rule 4: Members and firms must treat others with respect and encourage diversity and inclusion. - Rule 5: Members 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.

Question 44

Give an example behaviour for each.

Answer 44

- Rule 1: Members and Firms do not allow themselves to be influenced improperly by others (as a result for example by giving or receiving work referrals, gifts, hospitality or payments) or by their own self-interest. - Rule 2: Members and firms only undertake work that they have the skills, knowledge and resources to carry out completely. - Rule 3: Members and firms agree with clients the scope of the service to be provided and its limitations and timescales for the work. - Rule 4: Members and firms do not bully, victimise or harass anyone. - Rule 5: Members and firms respond to complaints made against them promptly, openly and professionally.

Question 45

What are the core professional obligations of firms and members to RICS?

Answer 45

Members: - Members must comply with the CPD requirements set by RICS - Members must cooperate with RICS - Members must promptly provide all information reasonability requested by the standards and regulation board, or those exercising delegated authority on its behalf. Firms - Firms must publish a complaints-handling procedure which included an alternative dispute resolution provide approved by RICS and maintain an complaints log - Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS - Firms with a sole principle must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work. - Firms must cooperate with RICS - Firms must provide all information reasonably requested by the standards and regulation board, or those exercising delegated authority on its behalf. - Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS. - Firms must report to RICS any matter that they are required to report under the Rules of Registration of Firms.

Question 46

What disciplinary procedures can the RICS impose?

Answer 46

Three levels of disciplinary action: - Action by Head of Regulation - Disciplinary Panel (drawn from the independent Regulatory Tribunal) - Appeal Panel Initial investigation stage - Formal investigation by Head of Regulation of the RICS, who will initiate one of the 4 actions if required: 1. Serve a fixed penalty notice (procedure used for breaches of the Rules relating only to the supply of information to the RICS by firms and members. These may consist of a fine and/or a caution) 2. Make a Regulatory Compliance Order (for low level breaches of the Rules, minor or easily corrected. A written document stating terms to make or desist from taking and agreement to pay a fine. May cover issues such as non-compliance like failure to undertake appropriate CPD. Failure to undertake appropriate CPD may result in sanctions such as a Fixed Penalty & Disciplinary Panel resulting in expulsion). 3. Refer the matter to a single member of the Regulatory Tribunal for consideration 4. Refer the matter directly to a Disciplinary Panel (for more serious breaches. Membership of a disciplinary panel included lay members. The penalties available to a Regulatory Tribunal Disciplinary Panel include:  Issue a Regulatory Compliance Order  Reprimand  Caution – a warning against repeating the activity or conduct  Fine – imposed an unlimited amount of fine per breach but it much be proportionate to the offence  Expulsion from membership or remove a firm  Require publication of the result of the hearing in the RICS Modus magazine, on the RICS website and in the local newspaper where the firm or members is based.) Appeal panel – appeal panels can consider an member’s or firm’s appeal against review of a decision relating to the above levels of disciplinary procedure. They will review previously submitted and new evidence. They can allow the appeal or vary the penalty previously imposed. Membership of the Panel includes lay members.

Question 47

In what circumstances can these be imposed? (Types of disciplinary action)

Answer 47

Action by Head of Regulation * Breaches of RICS Rules of Conduct * Non-compliance with RICS regulatory requirements * Following complaints from clients, other professionals, or members of the public * Issues identified through RICS regulatory reviews or monitoring Fixed Penalty Notice * Specifically for breaches relating to the supply of information to RICS by firms and members * Failure to provide required regulatory information by deadlines * Providing incomplete or inaccurate information to RICS * Non-compliance with information requests Regulatory Compliance Order * For low-level breaches of the Rules that are minor or easily corrected * Failure to undertake appropriate CPD * Minor administrative non-compliance * Issues that can be resolved through specific remedial actions * Cases where formal disciplinary proceedings would be disproportionate Referral to Single Member of Regulatory Tribunal * Cases requiring independent review but not warranting a full panel * Matters of moderate seriousness * Cases where a preliminary assessment is needed * Situations requiring expedited decision-making Referral to Disciplinary Panel * More serious breaches of professional standards * Repeated minor breaches showing a pattern of misconduct * Breaches involving integrity, ethics, or client funds * Conduct bringing the profession into disrepute * Cases with potential significant harm to clients or the public * Criminal convictions relevant to professional standing * Serious incompetence or negligence * Significant conflicts of interest * Non-compliance with previous regulatory orders Appeal Panel * When a member or firm wishes to challenge a disciplinary decision * When new evidence becomes available after a disciplinary decision * When procedural irregularities are alleged in the original proceedings * When a member or firm believes sanctions imposed were disproportionate * When there are grounds to believe the original decision was incorrect

Question 48

When did RICS last update their disciplinary panel rules?

Answer 48

On 2 March 2020, the Conduct and Appeal Committee was renamed the Regulatory Tribunal, and the 'Disciplinary, Registration and Appeal Panel Rules' changed to the 'Regulatory Tribunal Rules'. Therefore, concerns raised, or information received, from that date are considered under the new rules (and older complaints under the older rules). ‘Monitoring and Investigation Rules Version 5 with effect from 2nd February 2022’

Question 49

What are the different levels of action within these procedures?

Answer 49

- Action by Head of Regulation - Disciplinary Panel (drawn from the independent Regulatory Tribunal) - Appeal Panel

Question 50

What do you understand by the term professional practice?

Answer 50

Professional practice in the context of RICS encompasses the comprehensive framework within which chartered surveyors conduct their business activities and provide services to clients. It extends beyond technical competence to include ethical standards, business conduct, and professional responsibility.

Question 51

What money laundering regulations or legislation are you aware of?

Answer 51

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017, as amended. (amended annually since 2021, latest amendment was in 2024). Sanctions and Anti-Money Laundering Act 2018 Proceeds of Crime Act 2002 Economic Crime (Transparency & Enforcement) Act 2022

Question 52

What is a red flag of money laundering?

Answer 52

- Inability or unwillingness of parties to provide identity documents - Changes to parties involved in transactions - Unusual transaction features such as unexpected urgency required by parties, potential loss-making or an unusual transaction for a client - Payment of fees, purchase or rental monies in unusual currencies.

Question 53

What Bribery Legislation are you aware of?

Answer 53

Bribery Act 2010

Question 54

What is a bribe?

Answer 54

A bribe can be the giving, offering, promising or receiving of an advantage such as payment, gift or a service for an action which is illegal or a breach of trust

Question 55

What are the penalties for accepting a bribe?

Answer 55

The Bribery Act is policed by the Serious Fraud Office. If this Act is breaches, there is a maximum penalty of 10 years imprisonment and/or an unlimited fine for individuals; companies face an unlimited fine.

Question 56

What are the penalties for being involved in money laundering?

Answer 56

- Failure to comply with Regulations - Maximum 14 years prison sentence and/or unlimited fine for assisting with money laundering - Maximum 5 years prison sentence and/or unlimited fine for tipping off a person by informing them that they are under suspicion for money laundering or for failing to report suspicion.

Question 57

What constitutes an offence under the Bribery Act 2010?

Answer 57

The four offences are: - Bribing - Receiving a bribe - Bribing a foreign public official; and - Failing to prevent bribery

Question 58

What constitutes an offence under the current money laundering regulations?

Answer 58

- Concealing criminal property: if a person conceals, disguises, converts or transfers criminal property - Arrangements: if a person enters into or becomes concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person. - Acquisition use and possession: if a person acquires, uses or has possession of criminal property.

Question 59

How long should you keep anti money laundering records for?

Answer 59

A firm must maintain records for a minimum of 5 years and to report to Companies House any discrepancies between the information the firms hold on their customers compared with the information held in the Companies House Register.

Question 60

What is Professional Indemnity Insurance (PII)?

Answer 60

It is to protect clients, surveyors and third parties against negligence claims when there is a duty of care breached and a claim for damages arises.

Question 61

What is a PII aggregation clause?

Answer 61

A PII (Professional Indemnity Insurance) aggregation clause dictates how multiple claims arising from the same or related events are grouped together under a single policy limit. Essentially, it determines whether several claims will be treated as one larger claim, impacting the deductible (excess) and the overall amount the insurer will pay.

Question 62

What does ‘claims made’ mean in terms of PII?

Answer 62

According to the ‘Professional indemnity insurance requirements’ Regulation document effective 1st July 2024, "PII policies work on a 'claims made' basis. This means that the policy covers claims that are first made against the insured during the period of insurance regardless of when the negligent act occurred. If the retroactive date of the policy is stated as ‘none’ then the policy is fully retroactive and all former work carried out by the firm will be covered.”.

Question 63

Is a PII excess usually paid for per claim?

Answer 63

"The uninsured excess must be provided on an each and every claim basis" with the exception of Financial Services Claims where "the excess can be provided on an each and every claimant basis."

Question 64

In a negligence claim, what would help to show that you acted with consideration and due process?

Answer 64

- Maintain thorough records - Took reasonable steps to mitigate risks - Seek expert advice where required - Acted promptly and competently

Question 65

Can good record keeping help to provide a defence in a PII claim?

Answer 65

Yes, good record keeping can help to demonstrate that the professional followed appropriate procedures, made reasonable decisions, and kept appropriate records of their actions. This helps the professional defend themselves against any allegations of negligence.

Question 66

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?

Answer 66

Notify the PII provider to ensure that the additional services are covered under the policy. The PII provider may charge an additional premium for the extended coverage.

Question 67

What is run off cover?

Answer 67

Run-off cover is insurance maintained after a firm ceases trading to protect against claims arising from work done while the firm was active. The Regulation document states it's required "to ensure that firms, members and their clients are not exposed to financial detriment in the period following a firm ceasing to trade."

Question 68

What RICS requirements are there relating to run off cover?

Answer 68

The requirements include: * For consumer claims: Minimum limit of £1,000,000 for six years from policy expiry at cessation * For non-consumer claims: "Adequate and appropriate run-off cover" for minimum six years * Run-off can be arranged annually but must maintain minimum coverage requirements * Firms unable to obtain run-off from incumbent insurers can apply to the Run-off Pool

Question 69

What changes did RICS recently make to the Minimum Approved PII Wording?

Answer 69

RICS recently made several changes to their Minimum Approved PII Wording, which take effect on July 1, 2025. The changes were approved by the RICS Standards and Regulation Board following a public consultation from February to April 2025. Key changes include: * maintaining the existing "any one claim" coverage approach; * introducing a new two-stage process for policy cancellation by insurers; * formalizing provisions for policy cancellation by regulated firms; * extending the notification period for policy cancellation from 5 working days to 30 calendar days; * clarifying that six years of consumer run-off cover applies when premium payment has been made; * and updating fire safety wording to specify coverage relates to negligent acts, errors, or omissions. These changes aim to strengthen client protections and provide greater clarity for regulated firms and insurers.

Question 70

Would a dictated report avoid the need to have any written site notes?

Answer 70

Dictation can be a useful tool for capturing initial observations, it should be used in conjunction with well-structured, written site notes to comply with RICS guidelines and ensure a thorough and defensible inspection process.

Question 71

Explain PII requirements relating to fire safety cover and cyber cover.

Answer 71

Fire Safety Cover Basic buildings (up to 4 storeys): * Full coverage for all fire safety claims Taller buildings (5+ storeys): * Limited coverage - only covers negligent mistakes related to cladding, balconies, and wall systems * Only applies to work done after July 1, 2024 EWS1 Forms & Fire Risk Assessments: * Covers professional mistakes when completing these forms * Only for work done after July 1, 2024 Important limits: * The maximum payout for fire safety claims is capped at your policy's main limit * This limit covers all fire safety claims combined (not per claim) * Legal defense costs are included within this limit, not in addition Cyber Cover What's NOT covered: * Hacking or malicious attacks on computer systems * Your own computer system failures * Virus or malware transmission * Internet or cloud service outages * Data protection law violations * Costs to recover lost or damaged digital data The policy defines specific terms like "Computer System" and "Cyber Act" to clearly establish what is and isn't covered.

Question 72

How long can a PII claim arise after the work is undertaken?

Answer 72

‘RICS Practice Information: Risk, liability and insurance UK (1st edition, April 2021)’ A professional indemnity insurance (PII) claim can arise up to 15 years after the work is undertaken, according to RICS guidance. This "long stop" date is relevant for both contract and tort claims, particularly when hidden damage is involved. RICS recommends that members retain records for 15 years to ensure they can respond to potential claims

Question 73

What is the Assigned Risks Pool (ARP)?

Answer 73

The Assigned Risks Pool (ARP) is essentially a safety net insurance scheme established by the Royal Institution of Chartered Surveyors (RICS) for members who cannot obtain Professional Indemnity Insurance (PII) through the standard commercial market. * Last resort coverage: It provides temporary professional indemnity insurance when firms have made genuine efforts to secure coverage in the commercial market but have been unsuccessful. * Limited duration: Coverage is typically granted for 12 months, during which time firms must continue seeking standard commercial insurance. * Coverage limits: The ARP usually provides more limited coverage than standard PII policies, with higher premiums and excess amounts. * Eligibility requirements: To qualify, firms must demonstrate they've approached multiple insurers and been declined, or received quotes with unacceptable terms or premiums. * Application process: Firms must submit detailed application forms and supporting documentation to demonstrate their eligibility and risk profile. * Risk management: Firms in the ARP may be subject to additional risk management requirements and monitoring.

Question 74

Who might need to access the ARP?

Answer 74

Surveying firms and professionals typically need to access the ARP in these situations: Firms facing insurance market difficulties * Previously claimed firms: Those with recent significant claims history that make them unattractive to standard insurers * Firms in high-risk service areas: Those working in sectors facing industry-wide claims issues (like fire safety assessments, cladding inspections, or valuations of certain property types) * New practices: Startups without established track records that insurers find difficult to assess * Firms affected by insurer withdrawal: When insurers exit specific market segments, leaving firms without renewal options Specific circumstances * Firms with coverage gaps: Those who discover they have insufficient retroactive coverage for past work * Practices undergoing significant changes: Those experiencing mergers, acquisitions, or substantial changes in service offerings * Firms with regulatory issues: Those who have had compliance problems that concern standard insurers * Sole practitioners: Particularly those nearing retirement who may struggle to find affordable coverage The ARP serves as a vital safety net allowing these professionals to continue practicing while they work to address the underlying issues making them difficult to insure in the standard market.

Question 75

What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?

Answer 75

Terms and conditions – There are at least three key terms that should be considered from a risk perspective in the context of every instruction that a surveyor undertakes: - the scope of the work. - the basis on which the fee will be calculated and. - the liability cap

Question 76

What is an annual return?

Answer 76

The Annual Return in the context of RICS refers to a mandatory regulatory submission that RICS-regulated firms must complete each year. It's a formal declaration and data collection mechanism that serves several important regulatory purposes, key elements include: Regulatory Compliance Declaration, Firm Information, Financial Information, Risk Management and Professional Development - It provides RICS with data to monitor compliance across the profession - It helps identify firms that may require additional regulatory attention - It reinforces firms' accountability for maintaining professional standards - It allows RICS to collect industry data to inform regulatory strategy

Question 77

Tell me what you understand about Complaints Handling Procedures (CHP).

Answer 77

A firm’s internal procedure for handling complaints: - A requirement to RICS Regulated Firm - Terms of Engagement must include reference to the CHP with a named conflicts handling officer - PII insurer must be notified if there is a complaint in case of negligence claim - Details should be issued to client along with the Terms of Business - A complaints log must be kept, showing details, progress and outcome - Firms must include an RICS approved Alternative Dispute Resolution (ADR) mechanism in their CHP.

Question 78

When and how can the RICS be involved in a complaint about a firm or member?

Answer 78

The RICS will only become involved if a member fails to respond to the complainant or prevents the party gaining access to an independent redress mechanism.

Question 79

What is double dipping (dual agency)?

Answer 79

Where an agent has a contractual agency relationship with both the seller and buyer at the same time.

Question 80

Why is double dipping (dual agency) an unacceptable practice?

Answer 80

When a single agent represents both the buyer and seller in the same transaction, they cannot fully advocate for the best interests of both parties simultaneously. ‘This practice must not be undertaken in any circumstances from 1st January 2018 by any RICS Member’

Question 81

How would you close down a regulated firm?

Answer 81

The following actions are required by the RICS: - Inform the RICS of your retirement/closure and deregister - Ensure clients are informed at the earliest opportunity and hand over arrangements made to a new firm - Return any monies held by clients to their own accounts - Inform insurers and procure professional indemnity insurance run-off cover for a minimum of 6 years from the expiry of the policy in force at the time of cessation in accordance with RICS requirements - Retain a copy of the client files and records for a minim of 6 years.

Question 82

What can you tell me about RICS guidance relating to bribery, corruption or money laundering?

Answer 82

Global RICS Professional Standard: Countering financial crime: bribery, corruption, money laundering, terrorist financing and sanctions violations, 2nd edition September 2025 - Effective from 17 December 2025 To ensure the updated standard supports members and firms effectively, RICS held a public consultation online from the 25th February to the 22nd April 2025 The 1st edition of the standard was issued in 2019 and referred to as Countering bribery, corruption, money laundering and terrorist financing. This standard has now been revised and updated to address the evolving landscape of financial crimes, including emerging issues driven by the rise of new technologies such as artificial intelligence (AI) and the increasing use of digital currency. It also incorporates the latest developments in global trade, including the growing utilisation of natural resources such as gold and timber for trade-based money laundering. These resources are often used in illegal activities like deforestation or unregulated mining to generate illicit funds. These funds are subsequently laundered through legitimate markets via online platforms. Bribery and Corruption Corruption involves public officials and private bribe payers, but often also requires access to the financial system, the use of anonymous shell companies and professional facilitators to help launder the proceeds. Far from being a victimless crime, corruption also deprives state institutions of sorely needed resources. Bribery and corruption mitigation controls will typically involve monitoring the activities of your own organisation. Money laundering and terrorist financing Money laundering is how criminals change money and other assets into clean money or assets that have no obvious link to their criminal origins. The purchase of property has the potential to be used by organised criminals to launder money due to the amount of money which can be "cleaned" in a single transaction. Global guidance Risk-based Approach Guidance for the Real Estate Sector The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. This guidance provides real estate professionals with the requisite tools and examples to support the implementation of FATF standards to implement a risk-based approach to anti-money laundering and countering the financing of terrorism. RICS guidance - Know the red flags The Red Flag Indicators document outlines the five main categories of red flags that property professionals need to be aware of. These are: * the client * the parties * the source of funds * the transaction * the instructions When you have assessed the money laundering risks to your business, we recommend that you consider three lines of defence, which are: your front line staff; your policies, systems (e.g. e-verification of passports) and controls; and senior management and internal specialists and audit functions.

Question 83

What are the current RICS rules for registration of firms?

Answer 83

- If 50% of Principles of a UK fir, which provides surveying services are RICS members then it has to be regulated, and if at least 25% then it can apply to be regulated. - Principles are sole practitioners, directors, partners or board members (or anyone of equivalent status to such positions), or someone who is able to act autonomously/without supervision of a firm. - Each firm must nominate a ‘Responsible Principle’ who is obliged to ensure all reasonable steps are taken and systems are in place to ensure compliance with Regulatory and RICS requirements, including to report to RICS where required. - Disputes concerning the registration of a firm will be heard by the RICS Standards and Regulation Board. - Complete an annual return on the RICS professional portal - Full details can be found on RICS website - There are strict rules on the use of the RICS logo and new rules came into effect in April 2020, including a restriction to the use of the designation ‘Chartered Surveyors’ by firms to the trading name only. Only RICS members and registered firms can use the logo.

Question 84

Who is a ‘qualified member’ of RICS?

Answer 84

* MRICS (Member of RICS) - Professional members who have completed the required education, training, and assessment * FRICS (Fellow of RICS) - Senior professionals who have been recognised for their significant contribution to the profession

Question 85

If passed today and wanted to start your own firm, what would you do?

Answer 85

I would follow both the RICS compliance requirement and Statutory compliance requirements: RICS compliance * Inform RICS of your new practice by completing a Firm Details Form * Appoint a Responsible Principal for all RICS communication (previously known as the Contact Officer) * Register with RICS for regulation of the firm * Arrange professional indemnity Insurance and send details to RICS * Set up procedures for the requirements for client money handling, including a protection scheme * Register for the RICS Valuer Registration Scheme (VRS) if undertaking Red Book valuation work * Obtain RICS approval for the complaints handling procedure * Set up a complaints log * Appoint a Complaints Handling Officer (or elect a surveyor in another practice if a sole practitioner) * Use a logo kit from the RICS for all practice material to comply with the designation 'Regulated by RICS' * Plan for succession/future running of the business if a sole practitioner * Ensure CPD logged online on the RICS CPD Management System and set up a staff training plan * Ensure completion of an online RICS Annual Return at the end of each year Statutory compliance * Requirement to disclose business name * Disability discrimination compliance (Equality Act 2010) * Financial services compliance (Financial Services and Markets Act 2000, Financial Services Act 2012 et al.) * Bribery Act 2010 compliance * Appoint a Money Laundering Reporting Officer (Money Laundering Regulations 2017, as amended) * Health and Safety compliance (Health & Safety Act 1974, as amended) * Asbestos register (Control of Asbestos Regulations, 2012) * Fire Safety compliance (Fire Safety Act 2021 et al.) * Register for data protection (UK General Data Protection Regulation and Data Protection Act 2018) * Estate agency compliance (Estate Agents Act 1979, Misrepresentation Act 1967 et al.) * Inform HMRC for VAT and Tax registration (VAT registration threshold is currently £90,000 p.a. turnover) * Ensure compliance with current employment law, i.e. National Living Wage, working hours, stakeholder pensions, gender pay gap reporting etc. * Ensure insurance compliance for employer and public liability

Question 86

What CPD requirements must you comply with PQ?

Answer 86

* Minimum of 20 hours a year, at least 50% of which must be formal CPD * Must maintain a relevant and current understanding of the RICS Rules of Conduct during a rolling 3-year period. * Must be recorded using the RICS CPD Management System available online on the RICS website by 31st January each year.

Question 87

What is Formal CPD?

Answer 87

* Includes all forms of structured learning that has clear learning objectives and outcomes * Examples include structured online training, professional courses/seminars and self-managed learning that can be assessed by an expert third party.

Question 88

What form of ADR following a complaint?

Answer 88

The appropriate body depends on the subject matter of the complaint and your status as a consumer or business: * The Property Ombudsman (‘TPO’) Scheme - Residential Estate Agency (sales, purchases, lettings) and Residential Property Management * The Centre for Dispute Resolution (‘CEDR’) - All other disputes (other than Residential Estate Agency and Residential Property Management) * Financial Ombudsman Service (FOS) – Corporate Finance * RICS - All other disputes (other than Residential Estate Agency and Residential Property Management) & Professional Ethics & Conduct, Conflict of Interest, Practice Management

Question 89

What are the two stages (CHP) and what does the RICS offer?

Answer 89

- Internal review then external review by 3rd party – RICS offers third party reviews for all disputes (other than Residential Estate Agency and Residential Property Management) & Professional Ethics & Conduct, Conflict of Interest, Practice Management.

Question 90

How does JLL promote diversity and inclusion

Answer 90

- Regular training - Ensures a non-discriminative employment process

Question 91

What is an inclusive environment

Question 92

What would you see on a balance sheet

Question 93

What would you see on an EPC?

Answer 93

- EPC rating - Assessment date and Expiry date - Property address and floor area - Name of assessor

Question 94

Is an EPC worth having?

Answer 94

Yes it is a legal requirement under the Minimum Energy Efficiency Standards 2015 to have a minimum EPC of an E to let a commercial property.

Question 95

What would you do if a friend of a friend asked for a loan sec val

Answer 95

I would refer to the RICS Decision Tree to help me decide whether or not to accept the instruction. I would consider this to be a conflict of interest and contrary to Rule 1 of the Rules of Conduct. Therefore, I would decline the instruction and recommend a registered valuer to undertake the instruction or advise them of the RICS Find a Surveyor function.

Question 96

What would you do if a client was unhappy with loan security val

Answer 96

I would try to understand why the client is unhappy with the valuation, I would offer to review the valuation again and request a competent valuer in my team to review the valuation. If I am confident that the valuation is correct I would confirm to my client that the valuation is reflective of evidence and market and that I am unable to amend the value. I would advise my client to request another valuation with a different firm if they remain unsatisfied.

Question 97

Have you ever found it hard to respect somebody at work so far?

Answer 97

No, I always ensure I treat others with respect in line with Rule 4 of the Rules of Conduct.

Question 98

How would you deal if in negotiations and someone being very rude to you

Answer 98

Remain calm and seek advice from my line manager.

Question 99

What is Negligence?

Answer 99

Negligence is the failure to behave with the level of care that a reasonable person would have exercised under the same circumstances. Either a person's actions or omissions of actions can be found negligent.

Question 100

How is negligence quantified? (Clarification: How are damages claims quantified?)

Question 101

Why would a client choose a regulated firm rather than a firm that isn’t regulated?

Answer 101

Regulated firms are required to adhere to the RICS Standards and are subject to external review which ensures that they provide a high-quality service.

Question 102

What is CPD for?

Answer 102

Continuing Professional Development ensures that members remain up to date on the latest standards and market changes.

Question 103

If a client offered you a day out to Silverstone following a £15k fee instruction would you accept?

Answer 103

I would consider whether the invitation was proportionate to the instruction and appropriate in the circumstances. I would consider that this may be construed as a bribe due to the timing of the offer so I would decline and raise this with senior management for advice on how best to decline or respond.

Question 104

What about a lunch?

Answer 104

This would usually be acceptable depending on the cost of the lunch and the surrounding circumstances. Provided it is a general lunch, I would likely seek approval from my line manager before attending but I would not be required to disclose a lunch under JLL’s gift policy.

Question 105

What is JLL’s gift policy?

Answer 105

The gift must be considered in terms of it value, purpose, source and timing. Value - Gifts and entertainment must be reasonable, of nominal value, proportionate, and consistent with good business practices. - Gifts or entertainment of higher value may be viewed as an attempt to influence behaviour. If a more substantial gift is accepted, for example a case of wine, it must be accepted on behalf of and shared among the team. If it cannot, the gift should be politely declined. - Gifts of cash or cash equivalents (i.e. gift voucher, gift cards, or a store credit) should not be given or received unless if there is a cultural tradition where they are commonly given (i.e. red envelopes). Purpose - Why is the gift or entertainment being given or received? If the gift is being given with the intention of gaining some form of commercial advantage or influencing a decision maker, then it is likely to be unacceptable. - There must be a clear and legitimate business purpose for the gift or entertainment to be acceptable. For example, it is not uncommon for parties in an existing commercial relationship to jointly attend events to strengthen their commercial relationship. Source - Not all recipients of gifts or entertainment are equal. A gift or entertainment to government officials, irrespective of the value or intention, may result in criminal action being taken against JLL or our employees. Under no circumstances should an employee give or offer to give gifts or entertainment to a government official without first consulting Legal & Compliance. Timing - Don’t give or accept gifts that could be perceived as bribes, favouritism, or a way to influence a business decision, especially immediately before a contract is due to be awarded or if there is a relevant tender or bid process that might cause a conflict

Question 106

What are the 6 principles of the Bribery Act?

Answer 106

1. Proportionality 2. Top level commitment 3. Risk assessment 4. Due diligence 5. Communication 6. Monitoring and review

Question 107

What is required when setting up a new RICS firm?

Answer 107

RICS Compliance and Statutory compliance. At least 25% of the firms principals must be RICS qualified for the firm to apply to be regulated. If 50%, they have to.

Question 108

Difference between Professional Standards and Statements?

Answer 108

Statements refer to the old document structure, which are currently being replaced by Standards under the new structure. RICS is in the process of reviewing its standards portfolio because the Standards and Regulation Board wants to ensure that RICS standards and advice documents are up-to-date and easy to use. We have simplified our document structure so that all documents fit into two categories: - Professional standards: These are the documents which set requirements for competent and ethical practice e.g. our existing professional statements and guidance - Practice information: These documents provide advice or practice support to RICS members and firms.

Question 109

What is a phoenix firm?

Answer 109

When a regulated firm closes there is a requirement on the principals of the firm to inform RICS of the closure and provide information to demonstrate that the firm has closed in an orderly way. Particularly high risks arise from firms which close in a disorderly way and then rapidly re-establish themselves as a new trading entity. We use the term “phoenix firms” to describe these companies

Question 110

When must a firm register for regulation?

Answer 110

When at least 50% of its Principles are RICS members and at 25% it can apply to be regulated

Question 111

What are the registration eligibility criteria?

Answer 111

- Offer professional services in surveying disciplines to professional, corporate, institutional and other clients who rely on such services. - Have at least 25% of principals (a senior manager, partner or owner), who are qualified RICS professionals (MRICS, FRICS, AssocRICS). - Agree to observe and comply with RICS Rules of Conduct for Firms, including working to RICS standards.

Question 112

Who is a Responsible Principal?

Answer 112

Sole practitioners, directors, partners or board members (or anyone with equivalent status) or someone who is able to act autonomously or without supervision in a firm. A ‘Responsible principle’ is obliged to ensure all reasonable steps are taken and systems are in place to ensure compliance with regulatory and RICS requirements, including to report to RICS as required.

Question 113

What are the rules around use of the RICS logo and ‘Regulated by RICS’ designation?

Answer 113

Only RICS members and registered firms may use the logo.

Question 114

Tell me about the restrictions to the use of the designation ‘Chartered Surveyors’ by firms

Answer 114

New rules came into effect on April 2020, including a restriction to use the designation of ‘chartered surveyors’ by firms to the trading name only.

Question 115

What must be included in ToE relating to firm regulation?

Answer 115

Refer to RICS Framework: terms of engagement (2025) if for a valuation – released with Red Book - Identity of the client - Identity of the person who has overall responsibility for the case - Conflict of interest - Description of the assignment and its end purpose - Relevant legislation, standards and regulation to be adhered to - Scope of inspections, data collection, enquiries and any limitations to due diligence - Assumptions - Information supplied - Limitations in liability to the client and third parties - Description of the deliverable - The basis of the fee - Follow-up work - Complaints- handling procedure

Question 116

What is a locum and who might need one?

Answer 116

A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work, e.g. in the event of an accident/illness, unforeseen circumstances, prolonged absence (e.g. holiday or a sabbatical) or death.

Question 117

How could a sole trader set up their CHP using a locum?

Answer 117

In the usual course of business, a locum may be appointed by a sole practitioner as their complaints handling officer to ensure that their Complaints Handling Procedure can be run fairly and impartially.

Question 118

What RICS guidance relates to handling client money?

Answer 118

Client money handling, 1st edition, October 2019

Question 119

When was this last updated? (Client money handling, 2019)

Answer 119

Client Money Handling document was reissued in October 2022 as a professional standard and was revised to reflect the new RICS Rules of Conduct, which came into effect on 2 February 2022.

Question 120

What do the RICS Rules of Conduct say about client money?

Answer 120

Under Rule 1 example behaviours the Rules of conduct state that Firms keep client money safe and have appropriate accounting controls, it also states that Members do not misuse client money and comply with controls needed to keep it safe

Question 121

Explain your understanding of the RICS Scheme Rules relating to client money protection

Answer 121

RICS operates a Client Money Protection Scheme (CMPS) in the UK. This scheme provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client's money, up to the limits and exceptions set out in the scheme rules

Question 122

What are the main schemes available to firms?

Answer 122

RICS' CMP scheme is split into two parts: - general client money protection, covering money held by firms undertaking any surveying activities (Client Money Protection for Surveying Services); and - residential agency activity in England protection, covering areas under the Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 (Client Money Protection for Residential Agents).

Question 123

When were these last updated? (Client money protection scheme)

Answer 123

25 June 2020

Question 124

What is the current compensation limit?

Answer 124

£50,000

Question 125

What does the annual regulatory review fee relate to?

Answer 125

All regulated firms who hold clients' money pay a regulatory review fee on an annual basis. The income generated from these fees covers the operational costs of the client money regulatory review visit programme. The fee is set based on the number of directors/principals in each firm, which includes both RICS members and non-member individuals. Following completion of your Annual Return an invoice is issued for this fee which covers the preceding 12 months. The invoice also includes a levy that is collected for the clients' money protection scheme

Question 126

What might client money include?

Answer 126

Client money is defined as any cash, cheque, draft or electronic transfer which a ‘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’. Examples of client money include: - Payment on account of general costs - Rent - Service charges - Interest credited to a client account - Arbitration fees - Client money held but due to be paid to contractors

Question 127

How does this differ to office money?

Answer 127

This is different to office money, which includes: - Interest on general client accounts which the client agrees will not accrue to them - Fees - Disbursements - Money paid in advance in respect of an agreed fee for surveying services, but not property agent work in England

Question 128

Gifts & Bribery (Bribery Act 2010) Purpose, definition, 6 principles, 4 offences, penalty

Answer 128

Purpose: The Bribery Act 2010 aims to reduce bribery in business in the UK and abroad. Definition of Bribe: The giving, offering, promising, or receiving of an advantage (such as a payment or service) for an action which is a breach of trust. Six Principles (to prevent bribery): Proportionality Top-level commitment Risk assessment Due diligence Communication Monitoring and review Four Offences: Bribing Receiving a bribe Bribing a foreign public official Failing to prevent bribery Hospitality: Hospitality or other low-value benefits that are proportionate and a key part of doing business are acceptable. Lavish or disproportionate hospitality is not. Penalties: The Act is policed by the Serious Fraud Office. There is a maximum penalty of 10 years imprisonment for individuals, and companies face an unlimited fine. A defence exists if you can show that adequate procedures were in place to prevent bribery.

Question 129

Money Laundering Regulations 2017

Answer 129

Definition: Money laundering is when proceeds of criminal activities are disguised or converted and then realised as legitimate funds. Regulations: The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 cover estate agency work and relevant financial business inside and outside the UK. They have been amended annually since 2021, with the latest amendments in 2024. Key Provisions: A requirement to have a written money laundering and terrorist financing risk assessment. Implement systems and controls to address these risks. Adopt appropriate internal controls. Provide staff training. Comply with new customer, enhanced, and simplified due diligence requirements. Ensure appropriate record keeping for politically exposed persons (PEPs). High-Risk Factors: Additional high-risk factors exist when assessing the need for enhanced due diligence, such as when contracts are exchanged on a property without prior viewing.

Question 130

Money Laundering - Estate & Letting Agents' Obligations

Answer 130

Letting Agents (from May 2024): Property managers in England and Wales will fall under the Financial Sanctions Regulations (FSR). The government is implementing new procedures for letting agents to cover rental agreements. As a result, letting agents will be required to implement new procedures to verify tenants and landlords and ensure they are not engaged in unlawful activities. The previous rental threshold of €10,000/month has been abolished. HMRC Registration: Individuals and businesses approved to trade need to remain registered with HMRC. Due Diligence Checks: Due diligence checks on tenants, guarantors, and landlords will have to be undertaken on new sales and any tenancy agreements. If red flags occur (e.g., involving high-risk countries), enhanced checks must be undertaken. Firm Policies: Firms must have policies to identify and scrutinise transactions which are complex, unusually large, contain unusual patterns, or are without apparent economic or legal purpose.

Question 131

Levels of Due Diligence

Answer 131

1. Customer Due Diligence (CDD): Identify and verify the client's identity based on a reliable, independent source (e.g., passport, driving licence). For a company, make reasonable endeavours to identify beneficial owners, company name, number, and address of the registered office. 2. Enhanced Due Diligence (EDD): Required for any transaction or business relationship involving a person established in a 'high risk third country' or a politically exposed person (PEP). A PEP is a person who has been entrusted with a prominent public function and presents a higher risk for potential involvement in bribery and corruption. Other Key Requirements: There is a limit of 10,000 Euros for the use of cash. The ongoing business relationship with clients must be monitored. A senior member of staff must take responsibility for all compliance. A nominated person (Money Laundering Reporting Officer, MLRO) must be appointed to report any suspicions via a Suspicious Activity Report (SAR) to the National Crime Agency (NCA).

Question 132

Money Laundering - Penalties & Checks (CDD requirements)

Answer 132

Penalties: Failure to comply / "Tipping Off": Maximum 5 years prison sentence and/or unlimited fine. Assisting with money laundering: Maximum 14 years prison sentence and/or unlimited fine. Failing to report suspicion: Maximum 5 years prison sentence and/or unlimited fine. Summary of Evidence of Constitution Required for CDD: Public limited company: London Stock Exchange listing. Publicly accountable body: Government ownership/control. Private limited company: Certificate of Incorporation; full name, registered number, business address, names of all directors and shareholders with 25% or more holding. Private individual: Copy of a valid passport or driving licence with photo; copy of a bank statement or recent utility bill (not more than 3 months old) to show evidence of address.

Question 133

AML - Red Flags

Answer 133

Red Flags (Potential Money Laundering): Inability or unwillingness of parties to provide identity documents. Changes to parties involved in transactions. Unexpected urgency required by parties. Unusual transaction features, such as a potential loss-making transaction. Payment of fees, purchase, or rental monies in unusual currencies.

Question 134

What Is Fraud?

Answer 134

"Fraud" is defined as any intentional or deliberate act to deprive another of property or money by deception, or other unfair means. In essence, fraud occurs when the perpetrator gains something of value by deliberately deceiving the victim. The three main types of fraud are: Consumer fraud (victimizing individuals): This includes credit card fraud, identity theft, and investment fraud such as Ponzi schemes. Internal fraud (also called "occupational" fraud): This is committed against the company by its own employee, officer, or director. For example, embezzlement, skimming, forging documents, misappropriation of funds, or manipulating expenses. External fraud: This is committed by outside parties. For example, billing fraud, claims fraud, insurance fraud, tax evasion, check fraud, underwriting fraud, and healthcare or welfare fraud.