M005 Rules, Ethics and Professional Practice

M005 Rules, Ethics and Professional Practice

1. Background to RICS

   • created in 1868
     • present structure under Agenda for Change 1998
   • Membership
     • 111,500 members at present
       • FRICS = 20,000
       • MRICS = 72,000
       • AssocRICS = 2,500
       • Trainees = 17,000
   • How to become a FRICS
     • evidence of 3 fellow characteristics
       • 5yr+ at MRICS
       • Leadership role
       • Professional/ technical achievement
       • academic achievement
       • raising profile of RICS
     • nomination from FRICS person
     • portfolio of professional achievement to support the application is req. 2 inc your CPD
   • Governance structure
     • TOP = Privy council (grants & award royal charter)
       • MIDDLE = Governing Council (manage & strategy of RICS)
         • Reg Board
         • Audit Comittee
         • Manage board
         • 70 memebers of Gov Counil (66% elected & 50% is UK membership)
   • UK Structure
     • 20 professional grps - e.g. PM, BS, Commercial Agency
     • Each pro grp has eleccted board
     • 4 national associations
     • 10 regional boards
     • Local Associations
   • High level leadership
     • RICS President
       • 12/13 Allan Collett FRICS
     • President Elect
       • Michael Newey FRICS
     • Chief Exectutive Officer
       • Sean Tompkinson

2. Role of RICS

   • the RICS is 1 of the most respected and high profile global standards & membership org 4 pro involved in land, property, construction, environmental issues'.
   • 3 main roles
     • Maintain highest STANDARDS
     • PROTECT consumers through REGULATION & pro standards
     • leading SOURCE info & independent ADVICE on land property, construction and assoc environ issues

3. RICS Royal Charter & Bye-laws 2008

   • completed update version in 2008
   • 'a modern corporate gov model with a more business-like approach & clear accountability
   • Bye-laws
     • rules 4 regs of firms
     • use of designations
     • payment of subscriptions
     • composition of gov council
     • 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
   • Carlsberg report 2005 & chg 2 regs 2007
     • recommendations for chng
       • RICS develop structure 2 separate reg functs & representational functs
       • est. CONDUCT BOARD 2 operate disciplinary structure with equal member/ lay representative with a lay chairman
       • REGULATE FIRMS & MEMBERS

4. RICS Professional & Ethical Standards 2012 = CORE VALUES

   • Act with INTEGRITY
     • be honest & straightforward in all u do
   • Always provide a high standard of SERVICE
     • 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
   • INTER-SELLA/ SPACE/ TRAVEL /RESPECT/ RESPONSIBILITY
   • treat others with RESPECT
   • Take RESPONSIBILITY
     • be accountable 4 ur actions
   • Concequences
     • Bye-Law 5.1 all members must behave in a manner beffting the RICS
     • RICS confidential HOTLINE 4 ethical issues
     • serious deviation from standard = diciplinary action

5. Rules of Conduct 2007, amended in 2012

   • MEMBERS
     • ELISE/ CANT / SING/ CPD/ that's SIC (ECS CPD SIC)
     • ETHICAL BEHAVIOUR
       • members = act with integrity/ avoid conflicts/ actions inconsistent with professional obligations
     • COMPETENCE
       • members = carry out work with dure care/ skill/ diligence/ regard for tech stand expected of them
     • SERVICE
       • members = carry out wk in a timely manner/ proper regards 4 stand service & customer care ext of them
     • CONTINUED PROFESSIONAL DEVELOPMENT (CPD)
       • members = plan/ undertake/ record/ evaluate CPD + provide info 2 RICS on demand
     • SOLVENCY
       • members = ensure finances managed in personal + professional lives
     • INFORMATION
       • members = submit info 2 reg board as req.
     • COORPORATION
       • members = co-operate fully with RICS staff + person appointed by Reg Board
     • Generally
       • Members & Firm Rules introduced from Carlsberg report in 2007
       • Aims of Rules
         • shorted/ principle based/ plain language
         • clearer arms length regulation
         • business friendly
       • 5 PRINCIPLES OF BETTER REGULATION (PACTT)
         • PROPORTIONALITY
         • ACCOUNTABILITY
         • CONSISTENCY
         • TARGETING
         • TRANSPARENCY
       • 2012 CHANGE
         • Firms required ADR mechanism in CHP
   • FIRMS
     • Generally
       • 3 benefits for FIRMS
         • CONFIDENCE
         • PROFESSIONALISM
         • SECURITY
       • Regulation is the 'GOLD STANDARD' of quality for clients
       • REGULATED FIRMS
         • 50%+ partners/ directors RICS member.
         • If >50% can still volunteer for RICS regulation if there are RICS members
         • No RICS members = NON REGULATION
       • CONTACT OFFICER
         • individual who will be POC with RICS/ regulatory matters
       • INFO REQ. FOR REGULATION (annually)
         • Type of business & staffing details
         • Statutory regulated activities such as for financial services
         • nature of clients
         • CHP details & records
         • PII details
         • whether the firm is holding clients money
       • Help sheet for registering
       • Firm disputes heard by Regulatory Panel
     • CONDUCT FOR BUSINESS
       • PROFESSIONAL BEHAVIOUR
         • As member rule
       • COMPETENCE
         • As member rule
       • SERVICE
         • As member rule
       • TRAINING & CONTINUED PROFESSIONAL DEVELOPMENT (CPD)
         • Put in place procedures 2 ensure staff r properly trained & competent 2 do their work
       • COMPLAINTS HANDLING
         • a firm shall operate a CHP procedure/ maintain logs/inc ADR mechanism approved by the reg board.
       • CLIENTS MONEY
         • Firms shal preserve security of clients money entrusted to its care in the course of its business or practice
       • PII
         • ensure all previous/current wrk is covered by adequate and appropriate PII cover that meets standards of reg board
       • PAPPA/CANT / SING/ CPD/ CATS/ CRY/ PERSISTENTLY
     • FIRM ADMINISTRATION
       • ADVERTISING
         • promote its pro services in a truthful/responsible manner
       • SOLVENCY
         • ensure finances r managed
       • ARRANGEMENTS 2 COVER THE INCAPACITY/ DEATH OF A SOLE PRACTITIONER
         • firms with a sole principle should have arrangements in event of death incapacity/ extended absense
       • USE OF DESIGNATIONS
         • firms reg for registration 4 regulation must display it on its business literature
       • INFO TO RICS
         • as Member rule
       • CO-OPERATION
         • as member rule
       • AFTER/ SOME/ ARRANGEMENTS/ UR/ INFO/ CLEARED

6. RICS HELPSHEETS

   • published from 2007 2 support RULES OF CONDUCT
   • Members
     • CPD/ advice 4 sole practitioners/
   • Firms
     • Clients money/ Training for firms/ registration 4 firms/ CHP
   • Policy
     • PII/ Use of RICS designation/ RICS diciplinary procedures

7. RICS CORE MATERIAL

   • RICS GUIDANCE NOTES
     • 50 published e.g. Asbestos and implications 2 surveyors and clients/ conflict avoidance and dispute resolution
   • RICS CODES OF PRACTICE
     • Code of Measuring Practice 6h Ed.

8. Disciplinary Procedures

   • Self regulation by RICS
   • changes in 2007 following setting up reg board
   • 3 levels of procedure
     • 1. Action by HEAD OF REGULATION
     • 2. DISCIPLINARY PANEL
     • 3. APPEAL PANEL
   • PROCESS
     • INITIAL INVESTIGATION
       • 1st step - formal investigation by Head of Regulation
       • 2nd Head of regulation can trigger 1 of 3 actions
         • 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. 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. 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)
   • Penalties available
     • Issue CONSENT ORDER
     • Impose an UNLIMITED AMOUNT / BREACH (appropriate to offense)
     • Impose conditions upon future continued RICS regulation
     • TEMP SUSPENSION
     • EXPULSION
     • Require COSTS/EXPENSES 2 b paid
     • Require PUBLICATION of results of hearing in RICS MAGS/WEBSITE & LOCAL NEWSPAPERS
   • Appeals
     • Appeal Panel considered in relation to the 3 levels of discipline
       • fixed penalties/ disciplinary panels/ registration panels
     • Appeal board considers new & old evidence - can allow appeals and vary the penalty prev upheld
     • 50% are lay members

9. FEE NEGOTIATIONS

   • RICS guidance note on professional ethics - firms should avoid PRICE FIXING. AGGRESSIVE FEE CUTTING/ COLLUSION with competitors
   • no FIXED scale charges 4 surveyors but MARKET BASED & agreed on ad-hoc with client
   • can enter further fee negotiation with client after you have submitted your initial fee proposal.

10. GIFTS/ BRIBES/ INDCUEMENTS

    • Hospitality to genuinely promote & improve a firms image = acceptable
    • accepting/offering GIFTS/ HOSPITALITY/ PAYMENT/ BRIBE/ INDUCEMENT = ILLEGAL
    • DON'T be in a position where it compromises the standards expected of the RICS
    • BRIBERY ACT 2010
      • 1ST July 2011 - corporate criminal offense of failing to prevent bribery
      • Enter text here

11. CPD

    • Requirement
      • July 2009 - members shall undertake CPD
      • 20hrs+
    • Planning
      • identify future learning objectives
      • Plan/ carry out/ record annual programme of learning
      • 2013 CHANGE - record details on RICS website
    • Quantity & Quality
      • outcome is more important than no. of hrs
    • Content
      • Formal/ training/ personal & informal further edu/ charity work
    • Records
      • records of CPD kept
        • each CPD - subject/ method of learning/ no. hrs/ objective/ outcome
      • each CPD is a min of 1/2 hr
      • on request provide evidence to RICS
    • Changes 2013
      • every 3yrs - needs an ETHICAL CPD
      • 10 hrs Formal out of 20hrs

12. Starting a new practice

    • RICS Compliance
      • Inform RICS of new practice by completing FIRM DETAILS FORM
      • Appoint CONTACT OFFICER for all RICS correspondance
      • Register with RICS for REGULATION OF FIRMS by REG BOARD
      • Arrange PII
      • Procedure for MEMBER ACCOUNTS REG'S for handling CLIENTS MONEY
      • Set up staff TRAINING PLAN
      • RICS approval 4 CHP
      • Set up COMPLAINTS LOG
      • Appoint CHP officer (elect a surveyor in another practice if sole practice)
      • Obtain a LOGO KIT from RICS for use in producing business stationary
      • make arrangements 4 succession/future running of business if sole practitioner
    • Statutory Compliance
      • Disclose Business name
        • BUSINESS NAMES ACT 1985 & COMPANIES ACT 1985
      • DDA complaince
        • DISABILITY DISCRIMINATION ACT 2005/ EQUALITY ACT 2010
      • Finance services compliance
        • FINANCIAL SERVICES & MARKETING ACT 2000
      • BRIBERY ACT 2010
      • Appoint Money Laundering Reporting Officer
        • MONEY LAUNDERING REGULATION 2007
      • H&S compliance
        • H&S AT WORK ACT 1974
      • Fire safety compliance
        • REGULATORY REFORM (FIRE SAFETY) ORDER 2005
      • Asbestos register
        • CONTROL OF ASBESTOS REGULATION 2012
      • Register for data protection
        • DATA PROTECTION ACT 1998
      • Inform HMRC for VAT & TAX registaion
        • VAT threshold is £77k/annual turnover
    • Closing down a practice
      • retirement/cease trade
        • inform RICS
        • Ensure clients r informed + handover arrangement made
        • return monies held by clients to their own accounts
        • inform insurers & procure PII run off cover for a min of 6yrs & £250k

13. Handling Clients Money

    • 2 help sheets
    • 3 main areas of good practice
      • obligation 2 client
      • obligation 2 keep accurate records
      • reporting obligations
    • keep client accounts separately & clearly identifiable
    • name account after client
    • clients money AVAILABLE ON DEMAND
    • agree payment of interest
    • Account must always b in credit
    • Monies paid within 3 working days of reciept
    • signatories agreed + 2 signatures
    • Annual Audit by RICS accountant
    • RICS MONEY PROTECTION SCHEME 4 claims up 2 £50k from clients
    • RICS REG REVIEW visits of inspection can b undertaken by RICS 3yrly

14. PII

    • mandatory 4 surveyor in practice
    • protect surveyors/client/3rd parties from negligence claims when DofC if breached
    • Help Sheet 2011
    • 3 min levels on turnover
      • £100k/less = £250k cover
      • £101k to £200k = £500k cover
      • £201k+ = £1m cover
    • new firm = cover on est. turnover
    • certificate sent 2 RICS annually
    • Min 6yr runoff cover of £250k for past & present employees required but RICS recommends up 2 15yrs
    • PII cover needed 4 'pro bono'/ friends
    • RICS assigned risk pool 4 members who cannot arrange cover
    • RICS low earners scheme to ritired/p. time employees
    • early notification 2 firm insurers when potential claims arise
    • 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

15. BRIBERY ACT 2010

    • 1st July 2011
    • aim = reduce bribery in UK business + abroad + strenghten extg bribery laws
    • Bribe = GIVE/TAKE/PROMISE/RECEIVE OF ADVANTAGE E.G. PAYMENT/GIFT/SERVICE 4 AN ACTION WHICH IS ILLEGAL/BREACH OF TRUST
    • COMPANIES = responsible 4 employees unless they can show that they had adequate procedures/policies
    • lavish entertainment can be seen as bribery. illegal to give hospitality in hope of winning business
    • Gov guidance 2011 - offering client reasonable & proportionate hospitality = okay e.g. ticket to events/meals but have 2 b RECORDED IN GIFT REGISTER
    • BRIBERY ACT 2010 - criteria 2 prove that they have taken steps 2 prevent bribery = IDEN RISK/ TRAINING/POLICIES/ REVIEWS
    • Policed by serious fraud squad
    • penalties = 10yrs prison/unlimited fines

16. CHP

    • Generally
      • Mandatory for all terms of engagement
      • Help sheet 2012
      • practicies written procedures APPROVED BY RICS
      • notify PII insurers if complaint made/lead 2 claim
      • CHP details given 2 client at same time as terms of business
      • complaints log maintatined
      • include ADR procedure for CHP
    • Procedure
      • STAGE ONE
        • Details of CHP issued when firm receives a complaint
        • free of charge 2 complainant + include 3rd party redress
        • details of nom. person 2 investigate complaint (CHP officer)
        • complaint must be in writing
        • procedures and timescales r 2 b followed 4 investigation of the complaint should b recorded
        • complaint ack. in 7 days + investigated within 28days
      • STAGE TWO
        • if complaainant not happy - 2nd stage of CHP involves using REDRESS scheme firm chosen 2 use.
        • name of relevant redress mech must b provided 2 the complainant
      • OTHER INFO
        • RICS ONLY get involved if member FAILS 2 RESPOND/ prevents party gaining access 2 redress mech.
        • SOLE Practitioner has 2 NOMINATE a CHP Officer from another firm
        • Approved redress mech = OMBUDSMAN SERVICES: PROPERTY & RICS DISPUTE RESOLUTION SERVICE