Professional Ethics, Conduct and Regulatory Standards
Standards and obligations
Managing agents operate under layered obligations: common law and contractual duties to the client, statutory duties to leaseholders, and professional standards. The RICS Rules of Conduct (five standards: honesty, integrity and transparency; competence; good service; respect; and taking responsibility) set the ethical benchmark, supported by the RICS Service Charge Residential Management Code, and by professional body codes such as those of ARMA and IRPM.
Three ethical pressure points recur. Conflicts of interest: commissions from insurers, introducer fees, and the use of connected contractors must be disclosed and, where possible, avoided; the s.20 consultation rules on "connected persons" exist for this reason. Money: client money is trust money, held separately, protected by a Client Money Protection scheme, and never used for the agent's cash flow. Redress and insurance: membership of a government-approved redress scheme for property management work is mandatory in England, and adequate professional indemnity cover is expected.
Conduct also covers confidentiality under UK GDPR, the Bribery Act 2010, anti-money-laundering awareness, proper authorisation when signing notices or demands for a client, and honest reporting to the board when things have gone wrong.
Traps: disclosing a commission only after it is challenged; agreeing to "declare" a conflict and then continuing to act where the conflict is unmanageable; signing a s.20 notice without clear delegated authority; withholding bad news from the client board.
Rule of thumb: if you would not be comfortable explaining a payment or arrangement openly to leaseholders at a general meeting, disclose it in writing before it is made - or do not do it.