1
Q
What are the five principles of better regulation guiding RICS Rules of Conduct?
A
Proportionality Accountability Consistency Targeting Transparency
2
Q
How is the RICS governed?
A
RICS’ Governance is comprised of four teams:
- Governing council
- Presidential team
- Executive team
- Regulatory board
3
Q
What is the RICS governing council?
A
- Manages the Royal Charter Obligations, setting direction and strategy
- Establishes the Regulatory Board, Management Board and other committees
4
Q
How is the RICS Governing Council elected?
A
- Elections are held every 2 years and are open to all members of the RICS.
- All members can vote in the whole membership category
- Comprises members from world regions, specific countries, professional groups, Matrics and members as a whole
5
Q
How many RICS regional boards are there in the UK?
A
Nine regional boards:
- East Midlands
- East of England
- London
- North East
- North West
- South East
- South West
- West Midlands
- Yorkshire and the Humber
6
Q
What is the purpose of the RICS?
A
- Regulate and promote the surveying profession
- Maintain the highest educational and professional standards
- Protect clients and consumers via a strict code of ethics
- Provide impartial advice and guidance
7
Q
What professional groups are there within the RICS?
A
Three sectors contain different RICS professional groups:
• Land (e.g. environment, minerals and waste, planning and development etc.)
• Property (e.g. valuation, facilities management, residential property etc.)
• Construction (e.g. building surveying, building control, project management, quantity surveying etc.)
8
Q
What are the differences between Practice Statements, Codes of Practice, Guidance Notes and Information Papers?
A
- Practice Statements - provides members with mandatory requirements in order to comply with the RICS bye-laws and regulations in the interest of maintaining the highest professional standards
- Codes of Practice - documents approved by the RICS and endorsed by another professional body/stakeholder that provides recommended best practice to practitioners
- Guidance Notes - provides users with recommendations for accepted good practice as followed by competent and conscientious practitioners
- Information Papers - practice based information that provides users with the latest information and/or research
9
Q
As a surveyor, why should you follow the guidance produced by the RICS?
A
If an allegation of professional negligence is made against a surveyor, the court is likely to take into account compliance with relevant professional standards published by the RICS in deciding whether or not the surveyor acted with reasonable competence.
10
Q
Who regulates members of the RICS and ensures they comply with the rules?
A
- The RICS is a self-regulatory body, meaning members are not regulated by government but are internally monitored and inspected
- The Regulatory Board helps regulate the profession, deciding on policy and overseeing the implementation of regulatory matters
- The Conduct and Appeals Committee also help in regulating the profession
11
Q
What is the purpose of the Royal Charter?
A
- Changes a body from a collection of individuals into a single legal entity
- Written description of the RICS’ powers (e.g. self-regulation) and obligations (e.g. advancement of knowledge, appointment of a Governing Council etc.)
- Requires the RICS to develop the profession for the public advantage
- Allows members to use the term ‘chartered’ in their job title
12
Q
What are bye-laws?
A
A list of laws applied internally using powers granted by the Royal Charter (aka the RICS’ constitution)
13
Q
Explain the relationship between the Privy Council and the RICS.
A
Privy Council - a body set up in the early days of the monarchy to advise the king/queen on matters of state and not put before parliament
Any changes to the bye-laws have to be approved by the UK Government, through the Privy Council, even if the changes have already been approved by a majority vote of RICS members
14
Q
What are the turnover limits for professional indemnity insurance?
A
The minimum level of indemnity is based on the firm’s turnover in the previous year:
Turnover in previous year
£100,000 or less = £250,000
£100,001 to £200,000 = £500,000
£200,001 and above = £1million
15
Q
What are the legal requirements to sue for professional negligence?
A
A claimant will need to demonstrate that he or she is was owed a duty of care by the defendant professional, the professional breached the duty of care and the breach caused a loss to the claimant.
16
Q
What are the five Global Professional and Ethical standards?
A
1) Act with integrity
2) Always provide a high level of service
3) Act in a way that promotes trust in the profession
4) Treat others with respect
5) Take Responsibility
17
Q
What do you understand by the standard ‘Act with Integrity’, High level of service, etc?
A
1) Act with integrity – Being honest and straightforward
2) Always provide a high level of service – Always ensuring that your client receives the best possible advice, support or performance of the terms of engagement you have agreed.
3) Act in a way that promotes trust in the profession – Acting in a manner, both in your professional life and private life, to promote you, your firm or organisation you work for the profession in a professional and positive way.
4) Treat others with respect – Treating people with courtesy, politeness and consideration.
5) Take Responsibility – Being accountable for all your actions.
18
Q
Can you prove working examples of each Ethical Standard?
A
- Integrity - turning down an invitation from a contractor whilst settling the final account
- High standard of service - referring clients to specialists when scope is outside competence
- Trust - rejecting the early certification of work
- Respect - working with people from different backgrounds equally
- Responsibility - questioning unsafe working on site
19
Q
What is the RICS Decision Tree?
A
Flowchart to help members decide how to act in difficult situations where their professional ethics may be at stake.
20
Q
What factors does the RICS Decision Tree consider?
A
- Sufficient facts
- Legality
- Ethical standards
- Consultation of appropriate people
- Clear reasoning
- Impact if actions made public
21
Q
What is a conflict of interest?
A
Anything that impedes or might be perceived to impede an individual’s or firm’s ability to act impartially and in the best interest of a client
22
Q
What are the five principles under the Rules of Conduct for Firms?
A
Proportionality Accountability Consistency Targeting Transparency
23
Q
As a qualified surveyor how much CPD are you required to complete each year?
A
- All members must undertake a minimum of 20 hours CPD each calendar year (January to December). Members must record their CPD activity online by 31 January.
- All members must maintain a relevant and current understanding of our professional and ethical standards during a rolling three-year period.
24
Q
What would count as formal CPD? How much do you have to do?
A
Of the 20 hours at least 10 hours must be formal CPD. Formal CPD can be any form of structured learning that has clear learning objectives and outcomes, such as a professional course, structured online training, technical authorship, learning that includes an assessment measure.
25
What would count as informal CPD?
Informal CPD is any self-managed learning that is relevant or related to your professional role. This could include activities such as private study, on-the-job training, attendance at informal seminars or events where the focus is on knowledge sharing.
26
A client calls you to confirm that they wish to make a complaint. How do you deal with the call?
If the complaint is made orally the client should be asked for a written summary and when received it should be sent to the Office Manager and provide a copy of the Complaints Handling Policy.
27
What do you understand by the term Clients Money?
Clients money is money held on behalf of a client and it does not belong to the Principals of the firm.
28
How should Clients Money be held?
Clients money should be held in a separate client account and should be clearly identifiable include in its title the word ‘client’. The account should not contain any sums other than the whole or any part of client money paid into it.
29
What word needs to be included in the account title?
The word ‘Client’ must be on the bank account title and cheque book.
30
A client asks you to pay an invoice but this will result in the client account becoming overdrawn. What do you do?
Overdrawn balances on client ledgers should be prevented by the appropriate accounting systems and controls in place and where they do occur they should be investigate and rectified immediately.
31
What instance would you need a Locum agreement in place?
A locum should be appointed if a sole practitioner. A locum is an authorised person or authorised company that can step in when needed, to ensure the smooth running of your business. There is no regulatory requirement to have a locum but if you do, you must make sure they have the right permissions to work for your business.
32
What level of PI cover does Brown and Co hold?
£20 million.
33
What level of PI would you need as a sole trader?
The minimum level of indemnity is based on the firm’s turnover in the previous year:
Turnover in previous year
£100,000 or less = £250,000
£100,001 to £200,000 = £500,000
£200,001 and above = £1million
34
What is meant by the term 'maximum level of uninsured excess'?
The part of each claim the firm must pay itself.
35
What are the levels of maximum uninsured excess?
Up to and including £500,000 indemnity = the greater of 2.5% of the sum insured or £10,000
Over £500,000 indemnity = 2.5% of the sum insured
36
Which Byelaw covers Rules of Members?
Bye-Law 5
37
Provide three examples of a member class of the RICS.
1. Chartered members – comprising fellows and professional members
2. Non-chartered members – trainee surveyor or associate and student
3. Honorary members – a person who does not practice as a Surveyor but is able to assist in promoting the objects of RICS by reason of his position and experience.
38
For the purposes of regulation by the RICS, how would you define a firm?
‘Firm’ means:
• a company, limited liability partnership or other body corporate;
• a partnership;
• the unincorporated practice of a sole practitioner;
• a practice that is equivalent to any of the above in the part of the world in which it is established;
• a Regulated Practice Division
39
When would you need run off cover?
For a minimum of 6 years
40
At what point would a firm become regulated by the RICS?
A Firm is required to register for regulation by RICS if:
• the Firm provides surveying services to the public;
• the Firm is operating in the UK
• At least 50% of the Firm’s Principals are RICS Members.
NB: a firm can still register if at least one of its partners/directors is a member of the RICS
41
What is PII and what is its purpose?
Professional Indemnity Insurance (PII):
• Protects firms against losses resulting from professional negligence, errors and/or omissions which cause financial loss to a third party
• Ensures a firm's clients do not suffer financial loss which the firm cannot meet
42
What should a PII policy contain?
1. Must be on a claims made basis
2. Must be on an each and every claim basis
3. Policy wording is written on a full civil liability basis
4. Underwritten by a listed insurer
5. Covers past and present employees
6. Run-off cover
7. Minimum level of indemnity required by the RICS
43
Explain the term 'claims made basis'.
The policy at the time the claim is made will respond, not the policy in place at the time of the negligence.
44
What does having the PII policy written on a full civil liability basis mean?
A full civil liability basis means if a claim isn't specifically excluded, it's included (as opposed to a 'negligence only' policy, where if a claim is not specifically included, it's excluded)
45
What should you do in case of a potential claim on your PII?
Must notify insurer in the event of:
1. An actual claim
2. A written or verbal threat of a claim
3. Any circumstance that the firm has reason to believe may result in a claim
4. Any complaint notified via the firm's CHP
46
How can negligence claims be avoided?
* Good communication
* Clearly understand client's objectives and confirm precise details
* Check you are competent to perform the instruction
* Undertake work in accordance with any relevant RICS guidance
* Keep up-to-date notes
* Be aware of changes in legislation
* Try and resolve any complaints as soon as possible
47
What constitutes a bribe?
“giving of financial or other advantage with the intention to induce a person to perform a function improperly”
48
Which Act covers bribery?
Bribery Act 2010
49
What actions could a firm take to reduce the risk of bribery and corruption?
* Risk Assessment
* Top down approach
* Implement procedures
* Training
* Monitor and review
* Gifts and hospitality policy
* Controls in place e.g a robust accounting system
* Policy re consultants and commission
50
What is a conflict of interest and what forms can these take?
```
A conflict of interest arises when a firm’s independence and impartiality is threatened due to the existence of a conflict between two clients.
3 types:
1) Party interest
2) Own Interest Conflict
3) Confidential Information Conflict
```
51
Conflict of duty – information barriers – explain
If both clients agree in writing, giving informed consent, a firm can act for 2 parties where a conflict of interest exists, by creating an information barrier between the 2 agents acting for the respective clients. This should be operated as follows:
• The barrier must be robust enough to offer no chance of information passing between the 2 parties
• You must take reasonable steps to operate an effective barrier
• The surveyors must be physically separated with separate support teams
• All information regarding the instruction should be securely stored
• Keep a clear audit trail of the COI process
• The firm’s compliance officer must oversee all actions.
52
What systems do Brown and Co have in place to deal with conflicts of interest?
* COI Email Check System
* Information Barriers
* Written Informed Consent
* Conflicts Compliance Managers
53
Explain who can have a COI.
* Two clients
* A client and agent
* Related firms
54
Is it just between your interests and the client’s interests?
No, a conflict can be between the interests of 2 or more different clients.
• Party conflict
• Own interest conflict
• Confidential information conflict
55
How would you deal with a potential COI?
Consider the conflict and you should only seek informed consent in order to proceed with the instruction if you are satisfied that all of the relevant clients’ interests will be served by you doing the work.
The affected party can only give informed consent if the person explaining the position to them:
a) is entirely transparent about any material factors
b) is sure that the party affected understands what they are doing and is doing it willingly.
56
What steps would you take to record the matter if the COI can be overcome?
Written informed consent from all relevant parties.
57
What would you do if a COI cannot be overcome?
Decline the instruction.
58
When should a COI email be circulated?
Prior to instructions and terms of business.
59
What would you do if you were unsure if an issue was a conflict of interest?
Consider the conflict and you should only seek informed consent in order to proceed with the instruction if you are satisfied that all of the relevant clients’ interests will be served by you doing the work.
60
What is a member class of the RICS?
MRICS, FRICS, AssocRICS
61
Under Rules for Members you are required to be competent. What do you understand by this?
Members shall carry out their professional work with due skill, care and diligence and with proper regard for the technical standards expected of them.
62
How much is the annual RICS subscription?
MRICS = £529
MRICS (newly qualified – under 2 years) = £374
Trainee = £158
63
How do the RICS define a firm?
‘Firm’ means:
• a company, limited liability partnership or other body corporate;
• a partnership;
• the unincorporated practice of a sole practitioner;
• a practice that is equivalent to any of the above in the part of the world in which it is established;
• a Regulated Practice Division.
64
If you received a complaint from a client, what action would you take?
If the complaint is made orally the client should be asked for a written summary and when received it should be sent to the Office Manager and provide a copy of the Complaints Handling Policy.
65
What constitutes a complaint?
Any expression of dissatisfaction.
66
What does the RICS recommend firms include in a CHP?
* Ensure the CHP has at least two stages – 1. Consideration of the complaint by a senior member of the firm or the firm's designated complaints handler 2. If the complaint cannot be resolved, referral to an independent third party with authority to award redress
* Timescales for responding – Acknowledgement of the complaint within 7 days and a full response within 28 days
* Ensure complaints are recorded in a complaints log
67
Do the RICS need to get involved in complaints?
The RICS will only become involved if the firm fails to respond to a complaint or prevents the client from gaining access to an independent redress mechanism
68
Where would you obtain PI cover?
The RICS publishes annually a list of insurers who are listed to underwrite professional indemnity insurance policies of RICS member firms.
69
What is a client account? When would you use it?
Clients money should be held in a separate client account and should be clearly identifiable include in its title the word ‘client’. The account should not contain any sums other than the whole or any part of client money paid into it.
70
What is an Assigned Risks Pool for PI?
* The Assigned Risk Pool (ARP) panel is a facility for trading members/firms who find themselves unable to obtain insurance in the open market of RICS-listed insurers. Applications to the ARP need to meet eligibility and application criteria before the panel can make a decision to provide cover within the ARP.
* The ARP is underwritten by all RICS Listed Insurers collectively and the aim of the ARP is to make a Regulated Firm an insurable risk again in the normal market.
* Firms can remain in the ARP for a maximum of 3 years, where they will be audited and guided in how to amend their business procedures/practices ready to obtain market PII again
71
What is formal CPD? Provide an example.
Formal CPD can be any form of structured learning that has clear learning objectives and outcomes, such as a professional course, structured online training, technical authorship, learning that includes an assessment measure.
72
Name three offences under the Bribery Act 2010.
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent a bribe
73
Does a COI prevent you from acting?
Consider the conflict and you should only seek informed consent in order to proceed with the instruction if you are satisfied that all of the relevant clients’ interests will be served by you doing the work.
74
What is the president of the RICS?
Chris Brooke. The Presidential Team is elected by Governing Council. The team provides strategic leadership and oversight to the highest priority issues facing the organisation. It plays a significant role in supporting the profession to meet the vision set out by Governing Council.
75
What do your terms of engagement cover?
* Conflicts of interest
* Duty of care
* Money laundering
* Client’s money
* Payment terms
* Abortive fees
* Data Protection
* Liability
* Professional indemnity insurance
* Complaints handling
76
What is the maximum amount of cash that can be accepted at the office under Money Laundering Regulations?
10,000 euros – Brown & Co limit is £7,500
77
If you were to set up your own firm what things would you have to consider/put in place?
RICS Compliance:
• Inform the RICS by completing the RICS Firms Details form
• Register with the RICS for regulation
• Arrange PII cover
• Obtain RICS approval for Complaints Handling Procedure
• Set up a complaints log
• Appoint a complaints handling procedure
• Ensure compliance with RICS regulation designation
• Set up staff training and CPD
Statutory Compliance:
• Disclose business name
• Discrimination compliance with the Equality Act 2010
• Comply with the Bribery Act 2010
• Appoint an AML officer for Money Laundering Regulations 2017
• Health and Safety compliance with the Health and Safety at Work Act 1974
• Fire Safety
• Estate agency compliance – Estate Agents Act 1979, Consumer and Business Protection Regulations and Misrepresentation Act 1967
• HMRC Tax and VAT registration
• Employment Law
• Insurance
78
What would you have to register for regulation?
An application to register for regulation by RICS must:
• provide information to RICS in such form as prescribed by the Regulatory
• Board;
• agree that RICS may share relevant information about the Firm with government or other regulatory bodies as appropriate; and
• agree that if RICS declines to register the Firm RICS may publish its decision.
The prescribed frim details form includes:
• Firm details
• RICS Designations
• Details of additional offices
• Principal details (partners and directors)
• Employee details – All RICS member employees
• Valuer Registration Scheme – Details of which RICS members are to be sponsored for the Valuers Registration Scheme
• Contact Officers
79
When can you use the RICS designation?
* A firm is entitled to use the ‘Chartered Surveyors’ designation if at least 50% of its principals (e.g. partners/directors) are RICS members.
* “Regulated by RICS” Strapline should appear on the letterhead of all regulated firms where there is at least 1 RICS Member Principal (FRICS, MRICS or AssocRICS). In addition, it is recommended that all advertising and other public-facing communication material carry the designation where possible
80
For how long do you need run off cover?
6 years
81
How often do you need to cover Ethics in your CPD once qualified?
All members must maintain a relevant and current understanding of our professional and ethical standards during a rolling three-year period.
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