Ethics CP

RICS Global Professional and Ethical Standards 2015

• Ethical behaviour 
• Competence
• Service
• CPD
• Solvency
• Information to the RICS
• Cooperation with the RICS

As it's regulation and forms one of the cornerstones in becoming a chartered surveyor

• Cover required once you have seized trading to protect clients against negligent claims 
• Minimum 6 years but RICS recommend 15 
• Min £1m

No, money is handled by in house accounts team

RICS Professional Statement on Clients money handling 2019

• Client accounts and cheque books needs to have the word client on 
• Needs to be separate from business accounts 
• Any interest accrued is payable to the client 
• Firms have 3 obligations: 
• - Keep client accounts 
• - Manage client accounts 
• - Report on client accounts

Clients Money Protection Scheme

• Inform RICS and complete registration form 
• Approval for CHP 
• Appoint CH officer 
• Introduce complaints log 
• Appoint AML officer 
• Appoint RICS contacts officer 
• Logo kit 
• Plan for succession 
• Staff training 
• CPD requirements 
• PII 
• How the firm will be handling clients money (set up accounts) 
• Complete RICS returns form at the end of the year

• Complaint must be in writing 
• Inform compliance officer 
• Inform CH officer 
• Issue with CHP 
• Acknowledge within 7 days, investigate within 28 
• If they're unhappy with the process, consider third party redress scheme which includes The Property Redress Scheme and RICS Dispute Resolution Service

Protect clients from negligence

£5m

Not personally however I am aware of the Bribery Act and the key principles of the Bribery Act

• Inform compliance officer 
• Inform AML officer who may raise suspicions to the NCA via a Suspicious Activity Report SAR

• Released RICS Practice Alert for when undertaking valuations
• If investigations / inspections cannot be carried out, this must be stated within the TOE and valuation report

If the valuer is unable to obtain a valuation, they must decline the instruction

Rates holidays for retail and leisure occupiers for 12 months 

• Coronavirus Act 2020 
• - Support for businesses to pay wage bills through Furlough 
• - Temp ban on evicting commercial and resi tenants who haven't paid rent for up to 3 months

RICS Bye Laws - powers granted by act of parliament

Royal Institution of Chartered Surveyors

1868

Sean Thompkins

Tim Neale

• - FRICS
• - MRICS 
• - AssocRICS
• - Student / Trainee

Need to establish 4 fellowship characteristics;

• Need to be a member for at least 5 years
• Be in a leadership role 
• Strong academic achievement 
• Raise the profile of the RICS

• - Governing council is the top level and they run the RICS and is currently made up of 33 members
•  
• - Audit committee, regulatory board and management board report through to the RICS

17  covering property, land and construction

- 4 National associations 

- 10 Regional boards 

- Local associations

• Recommended changes to the regulation of the RICS 
• To enhance fair trading through redress schemes

- Maintain the highest standard of education and training 

- Be the leading source of information on the built environment  

- Protect consumers through strict regulation

- Status: provides clients with confidence

- Recognition: promotion of your professional excellence to governments and markets 

- Market advantage: RICS status gives you competitive advantage 

- Knowledge: Knowledge sharing, CPD etc. 

- Network: access to over 130,000 members worldwide

- Create a smaller, more diverse and geographically represented GOVERNING COUNCIL 

- Governing Council is to be reduced to a minimum of 25 seats (previously 50), currently 33 

- Chair of the governing council is to hold their position for up to 6 years 

- President to focus on more ambassadorial role, promoting the RICS

PACTT 

- Proportionality: Penalty proportional to breach 

- Accountability: To all members and the public 

- Consistency: Treating all members the same 

- Targeting: Serious breaches 

- Transparency: To all members, clients and public

Recommended changes to the regulation of the RICS and allow them to self regulate (intro of rules of conduct for members and firms) 

Members regulated internally

Separate regulatory and representational functions

Regulate firms and members

RICS global professional and ethical standards 2015

STIRR

- Provide a high standard of SERVICE 

- Promote TRUST 

- Act with Integrity 

- Treat people with RESPECT

- Be RESPONSIBLE 

Flowchart to help members decide how to act in difficult situations where their professional ethics may be at stake

- Sufficient facts

- Legality

- Ethical standards

- Consultation of appropriate people

- Clear reasoning

- Impact if actions made public

- It's the new ethical framework for the global property market 

- It's promoted by the RICS

- Published by International Ethics Standards Coalition

- RICS Valuation - Global Standards

- Code for leasing business premises 2020

- RICS Global Professional and Ethical Standards 2015

- RICS Global Professional Statement on Conflicts of Interest 2017 

- RIC Property Measurement 2018

- RICS Surveying Safely, 2018

- RICS Guidance Note on Complaints Handling 2016

- RICS Guidance Note on Comparable Evidence in RE Valuation 2019

- LLP 

- Corporate bodies 

- Sole practitioners 

- Partnerships

- Prior to April 2020, it was a requirement for regulated firms to have 50% of their principles as members 

- From April 2020, firms with at least 50% of their principles being members MUST be regulated 

- From April 2020, firms with 25% of their principles having member status can APPLY to be regulated

- Someone who can carry out work without supervision

- Someone who is obliged to carry out compliance and regulated activities

- Passion for property

- Knowledge 

- Status

CPS 

- Confidence 

- Professionalism 

- Security

ECS CPD SIC

- Ethical Behaviour 

- Competence 

- Service 

- CPD

- Solvency 

- Information to the RICS

- Cooperation with the RICS

• Part 1: General 
• Part 2: Personal and Professional Standards

PCS CPD CCI 

- Professional behaviour 

- Competence 

- Service 

- CPD 

- Complaints handling 

- Clients money 

- Indemnity

• - Updated rules to use of logo and designation 
• - From April 2020, if 25% of principles are members, they can apply for registration 
• - Introduction of a RESPONSIBLE PRINCIPLE who will provide oversight, accountability and engagement with RICS standards

• Part I = General 
• Part II = Conduct of business (rules) 
• Part III = Firm administration

ASADIC

- Advertising 

- Solvency 

- Arrangements for death 

- Designations 

- Information to the RICS 

- Cooperation

1. Type of business and staffing details 

2. Statutory regulated activities 

3. Nature of clients 

4. Complaints handling procedures 

5. Whether the firm will be handling clients money

6. PII  

- PII 

- CPD

- Inform RICS and complete RICS registration form 

- Appoint RICS contact officer 

- Register with RICS for regulation of the firm by the regulatory board

- Arrange PII 

- Set up procedures for handling clients money 

- Register with RICS Valuer Registration Scheme 

- Set up CHP, complaints log and complaints handling officer 

- Obtain logo kit

- Plan for succession 

- Ensure CPD is logged online 

- Set up staff training 

- Ensure completion of online RICS Annual Return every year

• Disclose business name 
• Bribery Act 2010 compliance 
• Health & Safety at Work Act 1974 compliance 
• Data Protection Act 2018 
• Inform HMRC for VAT registration 
• For agency purpose (Estate Agents Act 1979, CPR2008 and Misrep Act 1967)

• Inform RICS
• Inform clients and return money 
• Inform PII and arrange run off period of 6 years and min £1m run off cover
• Retain files for 6 years

First and foremost, it is self regulated by the RICS 

- Head of regulation will action one of 3 actions; 

1. Fixed Penalty Notice: only used for failure to provide information to the RICS 

2. CPD sanctions 

3. Regulatory Compliance Order: used for low level breaches. Member may be required to carry out further training 

• 4. Disciplinary Panel: used for more serious breaches
• - Unlimited fine
• - Suspension or even expulsion from the RICS
• - Consent order 
• - Publication in Modus magazine

It is independent from RICS and the regulatory department. It provides the profession with an effective, fair and independent judicial body

- Chair

- RICS members 

- Lay members (non RICS members)

- Price cutting

- Price fixing 

- Fee collusion

Competition and markets authority

- Market based

- Done on a ad-hoc basis

- It is a written document that must be agreed before undertaking any works

CIT 

- Competence 

- Independence 

- TOE

- Within 14 days from the date of agreement

- Not competent to carry out work 

- Conflicts of interest 

- Client won't sign TOE's 

- PII will not cover

- If they won't pass AML checks

- RICS Ethical Standards Decision Tree

3 types 

- Party conflict: relating to work on the same instruction for two difference parties 

- Own interest conflict: personal interest 

- Confidential information conflict: relating to work between two parties which is confidential

When a parties impartiality and independence is threatened due to the existence of a conflict

3 step process 

- Conflict avoidance: determine whether to carry out the instruction or not 

- Written advice to both parties: set out in writing to both parties of ALL material factors relating to the conflict. You will need to request written consent (informed consent) so that your firm can still act on the instruction 

- Conflict management: setting up the necessary barriers such as physical and electronical

Written consent given to allow party to undertake the instructions with full awareness of known conflicts

RICS Global Professional Statement on Conflicts of Interest 2017

• Understand clients aims and objectives 
• Managing parties expectations 
• Keep good records with sufficient level of detail

Hilton v Barker Booth 

Court held law firm was wrong in that it acted for both parties in a property transaction when they were aware that one of the parties was bankrupt. Law firm were convicted of dishonesty

• 1. Negotiation in house between parties 
• 2. Mediation - a third party is involved to assist 
• 3. Adjudicative process - outcome determined by third party

• To provide evidence in court 
• Duty is to the court 
• Evidence provided must be objective and their own work

Surveyor

Yes

They have full knowledge, full statement of facts, qualifications and training on the matter and that there are no conflicts of interest

- It is when you act for both the buyer and seller of an instruction

No - this was banned from 1st Jan 2018

Where an agent has competing contractual relationships with several buyers of commercial real estate investment opportunities

Surveyor must determine whether he/she wants to act on an exclusive or non exclusive basis

If exclusive, surveyor must not act for any other party 

If non exclusive, surveyor must obtain informed consent from all relevant parties

When an agent is acting for the seller of an instruction, but is approached by the buyer to provide a valuation for the instruction 

Surveyor must obtain consent from client to provide advice

- Aims to reduce bribery in the UK and overseas 

- Came into force on 1st July 2011

- Bribing 

- Receiving a bribe 

- Failing to prevent a bribe 

- Bribing a foreign public official

Giving, receiving, or offering an advantage such as payment, a gift or service for an action which is illegal

• Proportionality 
• Top level commitment
• Risk assessment
• Due diligence 
• Communication 
• Monitoring and review

Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019

Sets out the mandatory requirements and guidelines for regulated firms and members to combat the above

Part I - Mandatory Requirements in relation to all four parts 

Part II - Guidance (good practice) 

Part III - Supplementary Guidance (on some of the concepts in Part I & II)

Obtain London Stock Exchange listing

• Company number, name and registered address
• Any stakeholders with more than 25% share in the business

• Copy of valid passport / driving licence 
• Proof of address including utility bill, council tax etc. no older than 3 months

Government ownership

MAKE SURE YOU HAVE A CLEAR ANSWER 

Examples: We have a AML officer who carries out the necessary due diligence procedures for specific clients. These include customer due diligence, enhance due diligence and simplified due diligence

- Bribery Act 2010

- Proportionality (are the tickets proportional to work undertaken) 

- Gift register

- ABSOLUTELY NOT.

- Serious Fraud Office

- 10 years imprisonment and / or unlimited fine

Money Laundering, Terrorist Financing and Transfer of Funds Regs 2017 (amended 2020)

Seeks to prevent ML and enhance due diligence checks

When the proceeds of crime are used legitimately, such as when purchasing a property with funds generated from dealing drugs

• From 10th Jan 2020 all letting agents are to carry out CDD if they let a property for more than 10k euros a month 
• CDD to be undertaken with any such tenancy

• Register with HMRC
• Limit of acceptance of cash of more than 10k euros 
• Keep good record keeping
• Staff training
• Appoint AML officer

- Customer Due Diligence 

- Enhanced Due Diligence 

- Simplified Due Diligence

- Max 14 years imprisonment and / or unlimited fine for assisting with ML 

- Max 5 years imprisonment and / or unlimited fine for tipping someone off who may be under investigation

National Crime Agency

- It is a criminal offence if a party fails to report suspicious activity 

- Allows enforcement authorities to recover criminal money and other assets which are deemed to be from the proceeds of crime

FAT

- Tipping off someone who is under suspicion 

- Assisting a criminal 

- Failing to report

- 20 hours 

- At least 10 hours must be formal CPD

Formal - Structured training that has clear objectives and outcomes 

Informal - Self managed learning and training

Online: RICS CPD Management System

• Sender should be notified of the error immediately 
• Dispose of it immediately 
• Make note with the firms compliance officer

RICS Professional statement on clients money handling 2019

• Holding clients money 
• Providing information to clients 
• Receipt of clients money 
• Payment from client accounts 
• Accounting records and controls 
• Compliance

• Obligation to keep client accounts 
• Obligation to report 
• Obligation to keep accurate records

Clients money protection scheme

• - Keep client accounts separate and identifiable
• - Client account and cheque book needs the word 'client' on
• - If client wants money returned, must do so immediately with interest accrued

RICS Guidance Note on Complaints Handling 2016

- Firms complaints handling procedure must be approved by the RICS 

- Complaints log must be set up 

- Complaints Handling Officer must be appointed

Stage One - In house 

Stage Two - ADR (Third Party resolution)

• RICS Dispute Resolution Service 
• The Property Redress Scheme

Out of court therefore;

• - Quicker 
• - Cheaper 
• - Informal 
• - Confidential 
• - Decision making done by a surveyor rather than a judge

• Mediation
• Arbitration 
• Expert

• Someone who facilitates discussions between two parties to come to a resolution without going to court 
• Use of a neutral mediator who assist both parties but doesn't bind them to a decision 
• No decision making in the process, purely advice

- Complaint must be in writing 

- Must appoint CH officer immediately 

- Must acknowledge complaint within 7 days but investigate within 28 

- Must provide complainant with CHP

- ADR (Alternative Dispute Resolution) 

- Third party gets involved to resolve the issue 

- Examples include The Property Redress Scheme & RICS Dispute Resolution Service

• HMRC 
• Police

- Duty of care exists to clients and third parties 

- When breached this could lead to a loss which could result in damages

+/- 5% for residential properties 

+/- 10% for commercial properties 

+/- 15% for specialist properties

- Understand clients aims and objectives 

- Ensure you are competent 

- Undertake work in accordance with the relevant professional statements and guidance notes

RICS Professional Indemnity Insurance requirement 2019

- Yes 

- Based on Turnover: 

0 - £100k = £250k min

£100,001 - £200k = £500k min

£200,001 and above = £1m min

£5m

- Inform RICS 

- Inform clients and arrange for handover 

- Return clients money with any interest paid 

- Arrange PII run off cover (6 years min, £1m min claim)

- Retain files for a minimum of 6 years