M005 Rules, Ethics and Professional Practice

Background to RICS
1. created in 1868
  1. present structure under Agenda for Change 1998
2. Membership
  1. 111,500 members at present
    1. FRICS = 20,000
    2. MRICS = 72,000
    3. AssocRICS = 2,500
    4. Trainees = 17,000
3. How to become a FRICS
  1. evidence of 3 fellow characteristics
    1. 5yr+ at MRICS
    2. Leadership role
    3. Professional/ technical achievement
    4. academic achievement
    5. raising profile of RICS
  2. nomination from FRICS person
  3. portfolio of professional achievement to support the application is req. 2 inc your CPD
4. Governance structure
  1. TOP = Privy council (grants & award royal charter)
    1. MIDDLE = Governing Council (manage & strategy of RICS)
      1. Reg Board
      2. Audit Comittee
      3. Manage board
      4. 70 memebers of Gov Counil (66% elected & 50% is UK membership)
5. UK Structure
  1. 20 professional grps - e.g. PM, BS, Commercial Agency
  2. Each pro grp has eleccted board
  3. 4 national associations
  4. 10 regional boards
  5. Local Associations
6. High level leadership
  1. RICS President
    1. 12/13 Allan Collett FRICS
  2. President Elect
    1. Michael Newey FRICS
  3. Chief Exectutive Officer
    1. Sean Tompkinson
Role of RICS
1. the RICS is 1 of the most respected and high profile global standards & membership org 4 pro involved in land, property, construction, environmental issues'.
2. 3 main roles
  1. Maintain highest STANDARDS
  2. PROTECT consumers through REGULATION & pro standards
  3. leading SOURCE info & independent ADVICE on land property, construction and assoc environ issues
RICS Royal Charter & Bye-laws 2008
1. completed update version in 2008
2. 'a modern corporate gov model with a more business-like approach & clear accountability
3. Bye-laws
  1. rules 4 regs of firms
  2. use of designations
  3. payment of subscriptions
  4. composition of gov council
  5. all members b liable 2 disciplianary action if they bring conduct of the RICS in 2 disrepute or r found 2 b seriously pro incompetent
4. Carlsberg report 2005 & chg 2 regs 2007
  1. recommendations for chng
    1. RICS develop structure 2 separate reg functs & representational functs
    2. est. CONDUCT BOARD 2 operate disciplinary structure with equal member/ lay representative with a lay chairman
    3. REGULATE FIRMS & MEMBERS
RICS Professional & Ethical Standards 2012 = CORE VALUES
1. Act with INTEGRITY
  1. be honest & straightforward in all u do
2. Always provide a high standard of SERVICE
  1. ensure ur client or others to whom u have a professional responsibility receives the best possible advice, support/ performance of the terms of engagement you have agreed
3. INTER-SELLA/ SPACE/ TRAVEL /RESPECT/ RESPONSIBILITY
4. treat others with RESPECT
5. Take RESPONSIBILITY
  1. be accountable 4 ur actions
6. Concequences
  1. Bye-Law 5.1 all members must behave in a manner beffting the RICS
  2. RICS confidential HOTLINE 4 ethical issues
  3. serious deviation from standard = diciplinary action
Rules of Conduct 2007, amended in 2012
1. MEMBERS
  1. ELISE/ CANT / SING/ CPD/ that's SIC (ECS CPD SIC)
  2. ETHICAL BEHAVIOUR
    1. members = act with integrity/ avoid conflicts/ actions inconsistent with professional obligations
  3. COMPETENCE
    1. members = carry out work with dure care/ skill/ diligence/ regard for tech stand expected of them
  4. SERVICE
    1. members = carry out wk in a timely manner/ proper regards 4 stand service & customer care ext of them
  5. CONTINUED PROFESSIONAL DEVELOPMENT (CPD)
    1. members = plan/ undertake/ record/ evaluate CPD + provide info 2 RICS on demand
  6. SOLVENCY
    1. members = ensure finances managed in personal + professional lives
  7. INFORMATION
    1. members = submit info 2 reg board as req.
  8. COORPORATION
    1. members = co-operate fully with RICS staff + person appointed by Reg Board
  9. Generally
    1. Members & Firm Rules introduced from Carlsberg report in 2007
    2. Aims of Rules
      1. shorted/ principle based/ plain language
      2. clearer arms length regulation
      3. business friendly
    3. 5 PRINCIPLES OF BETTER REGULATION (PACTT)
      1. PROPORTIONALITY
      2. ACCOUNTABILITY
      3. CONSISTENCY
      4. TARGETING
      5. TRANSPARENCY
    4. 2012 CHANGE
      1. Firms required ADR mechanism in CHP
2. FIRMS
  1. Generally
    1. 3 benefits for FIRMS
      1. CONFIDENCE
      2. PROFESSIONALISM
      3. SECURITY
    2. Regulation is the 'GOLD STANDARD' of quality for clients
    3. REGULATED FIRMS
      1. 50%+ partners/ directors RICS member.
      2. If >50% can still volunteer for RICS regulation if there are RICS members
      3. No RICS members = NON REGULATION
    4. CONTACT OFFICER
      1. individual who will be POC with RICS/ regulatory matters
    5. INFO REQ. FOR REGULATION (annually)
      1. Type of business & staffing details
      2. Statutory regulated activities such as for financial services
      3. nature of clients
      4. CHP details & records
      5. PII details
      6. whether the firm is holding clients money
    6. Help sheet for registering
    7. Firm disputes heard by Regulatory Panel
  2. CONDUCT FOR BUSINESS
    1. PROFESSIONAL BEHAVIOUR
      1. As member rule
    2. COMPETENCE
      1. As member rule
    3. SERVICE
      1. As member rule
    4. TRAINING & CONTINUED PROFESSIONAL DEVELOPMENT (CPD)
      1. Put in place procedures 2 ensure staff r properly trained & competent 2 do their work
    5. COMPLAINTS HANDLING
      1. a firm shall operate a CHP procedure/ maintain logs/inc ADR mechanism approved by the reg board.
    6. CLIENTS MONEY
      1. Firms shal preserve security of clients money entrusted to its care in the course of its business or practice
    7. PII
      1. ensure all previous/current wrk is covered by adequate and appropriate PII cover that meets standards of reg board
    8. PAPPA/CANT / SING/ CPD/ CATS/ CRY/ PERSISTENTLY
  3. FIRM ADMINISTRATION
    1. ADVERTISING
      1. promote its pro services in a truthful/responsible manner
    2. SOLVENCY
      1. ensure finances r managed
    3. ARRANGEMENTS 2 COVER THE INCAPACITY/ DEATH OF A SOLE PRACTITIONER
      1. firms with a sole principle should have arrangements in event of death incapacity/ extended absense
    4. USE OF DESIGNATIONS
      1. firms reg for registration 4 regulation must display it on its business literature
    5. INFO TO RICS
      1. as Member rule
    6. CO-OPERATION
      1. as member rule
    7. AFTER/ SOME/ ARRANGEMENTS/ UR/ INFO/ CLEARED
RICS HELPSHEETS
1. published from 2007 2 support RULES OF CONDUCT
2. Members
  1. CPD/ advice 4 sole practitioners/
3. Firms
  1. Clients money/ Training for firms/ registration 4 firms/ CHP
4. Policy
  1. PII/ Use of RICS designation/ RICS diciplinary procedures
RICS CORE MATERIAL
1. RICS GUIDANCE NOTES
  1. 50 published e.g. Asbestos and implications 2 surveyors and clients/ conflict avoidance and dispute resolution
2. RICS CODES OF PRACTICE
  1. Code of Measuring Practice 6h Ed.
Disciplinary Procedures
1. Self regulation by RICS
2. changes in 2007 following setting up reg board
3. 3 levels of procedure
  1. 1. Action by HEAD OF REGULATION
  2. 2. DISCIPLINARY PANEL
  3. 3. APPEAL PANEL
4. PROCESS
  1. INITIAL INVESTIGATION
    1. 1st step - formal investigation by Head of Regulation
    2. 2nd Head of regulation can trigger 1 of 3 actions
      1. 1. serve a FIXED PENALTY
        Breaches to rules regarding INFORMATION 2 RICS
        FIXED PENALTY - depending on delay lenght/ member or firm
        delay up to 28 days: Member = £150; Firm = £300
      2. 2. Make a CONSENT ORDER
        low level breaches e.g. members accounts reg that can b corrected
        writtendoc - states terms which member/firm must TAKE or DISSIST action in a TIME PERIOD
        RICS may ask member/firm 2 undertake some training
        member ca be refferred to a disciplinary panel if breach of order
      3. 3. refer matter to DISCIPLINARY PANEL 4 consideration under DISCIPLINE RULES
        more serious breaches
        Panel sit in public. considered all factors when making a decision
        50% membership of panel are lay members (non RICS)
5. Penalties available
  1. Issue CONSENT ORDER
  2. Impose an UNLIMITED AMOUNT / BREACH (appropriate to offense)
  3. Impose conditions upon future continued RICS regulation
  4. TEMP SUSPENSION
  5. EXPULSION
  6. Require COSTS/EXPENSES 2 b paid
  7. Require PUBLICATION of results of hearing in RICS MAGS/WEBSITE & LOCAL NEWSPAPERS
6. Appeals
  1. Appeal Panel considered in relation to the 3 levels of discipline
    1. fixed penalties/ disciplinary panels/ registration panels
  2. Appeal board considers new & old evidence - can allow appeals and vary the penalty prev upheld
  3. 50% are lay members
FEE NEGOTIATIONS
1. RICS guidance note on professional ethics - firms should avoid PRICE FIXING. AGGRESSIVE FEE CUTTING/ COLLUSION with competitors
2. no FIXED scale charges 4 surveyors but MARKET BASED & agreed on ad-hoc with client
3. can enter further fee negotiation with client after you have submitted your initial fee proposal.
GIFTS/ BRIBES/ INDCUEMENTS
1. Hospitality to genuinely promote & improve a firms image = acceptable
2. accepting/offering GIFTS/ HOSPITALITY/ PAYMENT/ BRIBE/ INDUCEMENT = ILLEGAL
3. DON'T be in a position where it compromises the standards expected of the RICS
4. BRIBERY ACT 2010
  1. 1ST July 2011 - corporate criminal offense of failing to prevent bribery
  2. Enter text here
CPD
1. Requirement
  1. July 2009 - members shall undertake CPD
  2. 20hrs+
2. Planning
  1. identify future learning objectives
  2. Plan/ carry out/ record annual programme of learning
  3. 2013 CHANGE - record details on RICS website
3. Quantity & Quality
  1. outcome is more important than no. of hrs
4. Content
  1. Formal/ training/ personal & informal further edu/ charity work
5. Records
  1. records of CPD kept
    1. each CPD - subject/ method of learning/ no. hrs/ objective/ outcome
  2. each CPD is a min of 1/2 hr
  3. on request provide evidence to RICS
6. Changes 2013
  1. every 3yrs - needs an ETHICAL CPD
  2. 10 hrs Formal out of 20hrs
Starting a new practice
1. RICS Compliance
  1. Inform RICS of new practice by completing FIRM DETAILS FORM
  2. Appoint CONTACT OFFICER for all RICS correspondance
  3. Register with RICS for REGULATION OF FIRMS by REG BOARD
  4. Arrange PII
  5. Procedure for MEMBER ACCOUNTS REG'S for handling CLIENTS MONEY
  6. Set up staff TRAINING PLAN
  7. RICS approval 4 CHP
  8. Set up COMPLAINTS LOG
  9. Appoint CHP officer (elect a surveyor in another practice if sole practice)
  10. Obtain a LOGO KIT from RICS for use in producing business stationary
  11. make arrangements 4 succession/future running of business if sole practitioner
2. Statutory Compliance
  1. Disclose Business name
    1. BUSINESS NAMES ACT 1985 & COMPANIES ACT 1985
  2. DDA complaince
    1. DISABILITY DISCRIMINATION ACT 2005/ EQUALITY ACT 2010
  3. Finance services compliance
    1. FINANCIAL SERVICES & MARKETING ACT 2000
  4. BRIBERY ACT 2010
  5. Appoint Money Laundering Reporting Officer
    1. MONEY LAUNDERING REGULATION 2007
  6. H&S compliance
    1. H&S AT WORK ACT 1974
  7. Fire safety compliance
    1. REGULATORY REFORM (FIRE SAFETY) ORDER 2005
  8. Asbestos register
    1. CONTROL OF ASBESTOS REGULATION 2012
  9. Register for data protection
    1. DATA PROTECTION ACT 1998
  10. Inform HMRC for VAT & TAX registaion
    1. VAT threshold is £77k/annual turnover
3. Closing down a practice
  1. retirement/cease trade
    1. inform RICS
    2. Ensure clients r informed + handover arrangement made
    3. return monies held by clients to their own accounts
    4. inform insurers & procure PII run off cover for a min of 6yrs & £250k
Handling Clients Money
1. 2 help sheets
2. 3 main areas of good practice
  1. obligation 2 client
  2. obligation 2 keep accurate records
  3. reporting obligations
3. keep client accounts separately & clearly identifiable
4. name account after client
5. clients money AVAILABLE ON DEMAND
6. agree payment of interest
7. Account must always b in credit
8. Monies paid within 3 working days of reciept
9. signatories agreed + 2 signatures
10. Annual Audit by RICS accountant
11. RICS MONEY PROTECTION SCHEME 4 claims up 2 £50k from clients
12. RICS REG REVIEW visits of inspection can b undertaken by RICS 3yrly
PII
1. mandatory 4 surveyor in practice
2. protect surveyors/client/3rd parties from negligence claims when DofC if breached
3. Help Sheet 2011
4. 3 min levels on turnover
  1. £100k/less = £250k cover
  2. £101k to £200k = £500k cover
  3. £201k+ = £1m cover
5. new firm = cover on est. turnover
6. certificate sent 2 RICS annually
7. Min 6yr runoff cover of £250k for past & present employees required but RICS recommends up 2 15yrs
8. PII cover needed 4 'pro bono'/ friends
9. RICS assigned risk pool 4 members who cannot arrange cover
10. RICS low earners scheme to ritired/p. time employees
11. early notification 2 firm insurers when potential claims arise
12. RICS runs a MEMBERS SUPPORT SERVICE (MSS) for members facing claims for wrks carried out by an emp who has gone in 2 administration. offers help & advice
BRIBERY ACT 2010
1. 1st July 2011
2. aim = reduce bribery in UK business + abroad + strenghten extg bribery laws
3. Bribe = GIVE/TAKE/PROMISE/RECEIVE OF ADVANTAGE E.G. PAYMENT/GIFT/SERVICE 4 AN ACTION WHICH IS ILLEGAL/BREACH OF TRUST
4. COMPANIES = responsible 4 employees unless they can show that they had adequate procedures/policies
5. lavish entertainment can be seen as bribery. illegal to give hospitality in hope of winning business
6. Gov guidance 2011 - offering client reasonable & proportionate hospitality = okay e.g. ticket to events/meals but have 2 b RECORDED IN GIFT REGISTER
7. BRIBERY ACT 2010 - criteria 2 prove that they have taken steps 2 prevent bribery = IDEN RISK/ TRAINING/POLICIES/ REVIEWS
8. Policed by serious fraud squad
9. penalties = 10yrs prison/unlimited fines
CHP
1. Generally
  1. Mandatory for all terms of engagement
  2. Help sheet 2012
  3. practicies written procedures APPROVED BY RICS
  4. notify PII insurers if complaint made/lead 2 claim
  5. CHP details given 2 client at same time as terms of business
  6. complaints log maintatined
  7. include ADR procedure for CHP
2. Procedure
  1. STAGE ONE
    1. Details of CHP issued when firm receives a complaint
    2. free of charge 2 complainant + include 3rd party redress
    3. details of nom. person 2 investigate complaint (CHP officer)
    4. complaint must be in writing
    5. procedures and timescales r 2 b followed 4 investigation of the complaint should b recorded
    6. complaint ack. in 7 days + investigated within 28days
  2. STAGE TWO
    1. if complaainant not happy - 2nd stage of CHP involves using REDRESS scheme firm chosen 2 use.
    2. name of relevant redress mech must b provided 2 the complainant
  3. OTHER INFO
    1. RICS ONLY get involved if member FAILS 2 RESPOND/ prevents party gaining access 2 redress mech.
    2. SOLE Practitioner has 2 NOMINATE a CHP Officer from another firm
    3. Approved redress mech = OMBUDSMAN SERVICES: PROPERTY & RICS DISPUTE RESOLUTION SERVICE

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