Definition

The RICS "Conflicts of interest" global professional statement (1st edition, 2017, effective 1 January 2018) defines three categories. A party conflict arises where a member acts for two or more parties with opposing interests. An own-interest conflict arises where the member's personal or financial interests conflict with their duty to a client. A confidential information conflict arises where information obtained for one client would advantage or disadvantage another client for whom the firm also acts.

Why this matters for Ethics, Rules of Conduct & Professionalism

  • Conflicts compromise the independence clients are entitled to expect, breaching Rule 1 (Honesty and Integrity).
  • Failure to identify and disclose before accepting an instruction can result in disciplinary proceedings and civil claims.
  • The RICS professional statement is mandatory: regulated firms must have documented procedures for identifying, disclosing and managing conflicts.
  • Some conflicts cannot be managed and must lead to refusal to act or cessation of an existing instruction.

Key principles

The three categories of conflict

Party conflicts are most common: acting for both landlord and tenant in a lease renewal, or buyer and seller in a sale, creates a direct conflict. Own-interest conflicts include a personal financial stake in a transaction or an arrangement with a third party that influences advice. Confidential information conflicts arise where information from one retainer could benefit a rival client.

The prior disclosure and consent framework

The professional statement requires full disclosure to all affected parties before accepting an instruction, and written informed consent to continue. If any party withholds consent, or the conflict is so serious that independent advice cannot be guaranteed, the firm must decline or withdraw.

Identifying conflicts before accepting instructions

The duty to check arises before an instruction is accepted. Firms must maintain a conflicts-checking system against a database of current and recent clients; in larger firms, new instructions should be cleared by a compliance officer. Failing to implement an adequate system is itself a regulatory breach.

When a conflict cannot be managed

Where parties' interests are directly opposed in a live transaction or dispute, no information barrier eliminates the fundamental conflict. The firm must refuse to act or cease acting for one party. "Chinese walls" are a last resort for a narrow category of situation, not a general solution.

Relevant RICS guidance and legislation

Ethics and Rules of Conduct angle

Conflicts sit at the intersection of Rule 1 (Honesty and Integrity) and Rule 3 (Service). Rule 1 requires members to act with integrity; Rule 3 requires members to act in the client's best interests and not where a conflict prevents them from doing so. Acting in a conflict without disclosure is a fundamental breach of professional integrity.

APC-style Q&As

Q (Level 1)Name the three categories of conflict of interest identified in the RICS "Conflicts of interest" global professional statement.

Party conflict: acting for two or more parties with conflicting interests. Own-interest conflict: the member's personal or financial interests conflict with their duty to a client. Confidential information conflict: information obtained for one client would be advantageous or disadvantageous to another client for whom the firm also acts.

Q (Level 1)At what point must a surveyor check for a potential conflict of interest?

The duty arises before an instruction is accepted. Firms must operate a conflicts-checking system against a database of existing and recent clients. If a conflict is identified after acceptance, the firm must disclose and seek consent, or cease acting if the conflict cannot be managed.

Q (Level 2)Your firm acts for a commercial landlord on property management. The same landlord's tenant now asks you to advise them on a rent review for the property your firm manages. What category of conflict is this and how should you respond?

This is a party conflict: landlord and tenant have directly opposing interests in the rent review outcome. I would not accept the instruction. The firm cannot provide genuinely independent advice to the tenant while owing a continuing duty to the landlord on the same property. I would advise the tenant of the conflict, recommend independent advice, and document the decision to ensure no information about the landlord's position was disclosed.

Q (Level 2)A colleague informs you that your firm has been asked to value a development site for a lender. You are aware that another team in your firm acted for the developer who sold the site six months ago. Does this create a conflict, and what should you do?

This is a potential confidential information conflict: information from the earlier retainer could advantage or disadvantage the lender. I would report to the compliance officer immediately. The team that acted for the developer should be interviewed to establish what confidential information was obtained. If the information is material, an information barrier must be implemented and the lender fully informed. If the barrier cannot genuinely prevent use of that information, the firm should decline the instruction.

Q (Level 3)You are a senior valuer. Halfway through a valuation of a commercial property for a lender, you discover that the vendor is a company in which your managing partner holds a personal shareholding. Your firm did not identify this at the outset. What are the implications and what steps do you take?

(example) This is a serious own-interest conflict: the managing partner's shareholding in the vendor could influence the firm's valuation. I would pause immediately and report to the compliance officer and an uninvolved partner. The lender must be informed promptly; delay compounds the breach. The lender then decides whether the firm continues (with the managing partner excluded and an information barrier in place) or instructs an alternative firm. All steps must be documented, and the firm should review its conflicts-checking procedures to prevent recurrence.