PROFESSIONAL PRACTICE AND ETHICS:BRE 400

UNIVERSITY OF NAIROBI

DEPARTMENT OF REAL ESTATE AND

CONSTRUCTION MANAGEMENT

September 2016

Paul Maurice Syagga,PhD

 Course Outline
1.Definitions of important terms in ethics
i. Ethos,morality,social responsibility and ethics
ii. Business ethics
iii. Corporate social responsibility
iv. Professional ethics
v. Code of conduct
2.Classification of ethics
i. Meta ethics
ii. Normative ethics
iii. Descriptive ethics
3.Models for ethical decision-making
i. Psychological model
ii. Business model
 4. Applied ethics in Real Estate
i. Conditions of engagement for real estate professionals
(employment vs agency)
ii. Professional associations/institutions
iii. Ethics in real estate professions
iv. Codes of conduct for real estate professionals
5.Applied Ethics in the Context of Kenya Constitution 2010
i. Preamble to the Constitution
ii. Bill of Rights
iii. Human Rights and Equality
iv. Leadership and Integrity
v. Ethics and Anti-corruption
6.Professional indemnity insurance
i. Negligence or error
Bibliography
• Cranston,Ross(1995),Legal Ethics and Professional
Responsibility.
• Dzienkowski,John(2004),Professional responsibility,
standards,rules and statutes.
• Hayden,Paul(2003),Ethical lawyering: Legal and professional
responsibilities in the practice of law.
• Koehn,Daryl(1994),The ground of professional ethics.
• Lagat-Korir,Roselyne(2008),Professional self-regulation and
challenges in enforcing professional discipline: a case study of
the advocates’ disciplinary process in Kenya.
• Long,D(1995),Doing the Right Thing: A Real Estate
Practitioner’s Guide to Ethical Decision Making.Prentice-
Hall,New Jersey.
• Long,Deborah H(2008),Ethics for real estate
• Nthale C.N(2008),An evaluation of professional misconduct
and ethical malpractices in the Kenyan construction industry.
• Nzomo,N.D(2007),Professional conduct and ethics:The case
of accounting and reporting.
• Thomas,Huw(1991),Dilemmas of planning practice:
ethics,legitimacy,and the validation of knowledge
• Rossi, Alice S. (2001). Caring and Doing for Others: Social
Responsibility in the Domains of Family, Work, and
Community. Chicago, IL: University of Chicago Press
• Spector,Tom(2001),The ethical architect:the dilemma of
contemporary practice.
• Visser, Wayne, Dirk Matten, Manfred Pohl, and Nick Tolhurst
(Editors) (2007). The A to Z of Corporate Social
Responsibility. London, England; New York, NY: Wiley
• The Joint Building Council(1999),Agreement and Conditions
of Contract for Building Works.
• Republic of Kenya(2003),Public Officer Ethics
Act.Government Printer,Nairobi.
• Republic of Kenya(2010),The Anti-corruption and Ethics Act.
Government Printer,Nairobi.
• Republic of Kenya(2016),Public Procurement and Disposal
Act.Government Printer,Nairobi.
• Republic of Kenya(1987),Conditions of engagement and
scales of fees for professional services for Building and Civil
Engineering works.Ministyry of Public Works.
•
1.Definitions of important terms in ethics

i. Ethos,morality,social responsibility and ethics

ii. Business ethics
iii. Corporate social responsibility
iv. Professional ethics
v. Code of conduct
 1.1.Morality and ethics

A number of terms are often used synonymously and sometimes

erroneously in the study of ethics and social behaviour namely:
• Ethos as derived from Greek language means:
―practice,tradition,custom or habit‖. It is the inherent
obligation to comply with certain norms(e.g. Ten
commandments) or adhering to a class ethos(doctor’s code of
conduct).
• Morality describes the practiced or customary behaviour of
individuals/societies that is considered the typical way of
acting for that culture. Morality therefore is the transformation
of ethos into belief/practice, and may be enhanced by
transformation of ethos into legislation.
Moral responsibility
• Responsibility and obligation are closely related.
• In general, we have an obligation or a duty to fulfill our
responsibilities, and we are responsible for fulfilling our
obligations
• For an action to be a moral action, it must be done knowingly
and willingly.
• For instance, though I am causally responsible for things I do
in my sleep, I am not morally responsible for them.
• Actions I do in my sleep are neither moral nor immoral. When
we say that I am morally responsible for an action, then, we
mean
 that I did the action (i.e., I am the cause of the result of the
action),
 that I did the action knowingly, and
 that I did the action willingly.
• Thus causal responsibility is an ingredient in both moral and
legal responsibility
 1.2. Social responsibility and ethics

• Social responsibilty is an ethical ideology or theory that an

entity, be it an organisation or individual, has an obligation to
act to benefit society at large. This responsibility can be
passive, by avoiding engaging in socially harmful acts, or
active, by performing activities that directly advance social
goals.
• Ethics is the study or scientific reflection of morality i.e.
morality and moral phenomenon.It examines how individuals
should react and seeks to explain what they should do in
situations of uncertainty.
 Ethics consists of moral principles governing the right and
wrongs of human conduct.
 Ethics is about the principles of right and wrong accepted by
individuals or social groups.
 Ethics is a code of behaviour considered morally correct.
 Ethics is a code of moral principles that guide the actions of
people & groups.
• In specific terms, ethical behaviour is doing what is morally
right.
 1.3.Ethics and the law
Diferences between Law and Ethics
• Being ethical and being lawful are not the same.
• Ethical considerations are all about what is right and what is
wrong.
• The law is about what is lawful and what is unlawful.
• For instance,the following business activities are legal but
might pose ethical dilemmas for individuals:
 Selling goods manufactured by low wage in developing
countries.
 Engaging in the fur trade.
 Experimenting on animals
• But it should also be noted that situations will arise in which
laws might not be broken, but ethical standards will be
violated.
• Laws serve as a minimum requirement for ethics.
• In other words, obeying the law is necessary but not sufficient
in behaving ethically in the corporate world.
Ethics and religion
• Just as law is important but not the solution to ethical
behaviour, so religious ethics important to many, but not the
solution to moral pluralism because there are many religions
and their ethical codes are not all the same.
• This is clearly the case at global and national level, where a
single religion is not enforced by the state.
• This does not mean that individuals may not and many do live
their lives, on the basis of their religiously held moral beliefs.
1.4.International foundation for social responsibility
and ethics
At the international level social responsibility is guided by several instruments
principal among them being:
1.Universal Declaration of Human Rights
• Article 1: Freedom, Egalitarianism, Dignity and Brotherhood, and
• Article 2: Universality of rights
2.International Covenant on Civil and Political Rights
• Article 1 and 2: Right to freedom from discrimination ·
• Article 7: Equality before the law
• Article 17: Right to property ·
• Article 21.2: Right of equal access to public office ·
3.International Covenant on Economic, Social and Cultural Rights
• Article 23.1: Right to work ·
• Article 23.3: Right to just remuneration
• Article 25.1: Right to an adequate standard of living ·
• Article 26.1: Right to education
• Article 27.2: Right to intellectual property
 1.5.Business and ethics

• Business ethics is the application of general ethical principles

to particular cases or practices in business.
• Business ethics serve as a guide for good and bad conduct in
business.
• For each business, different measures are taken in
consideration to classify a business as "socially responsible".
• Each business attempts to reach different goals.
• There are four areas that should be measured regardless of the
outcome needed: Economic function, Quality of life, Social
investment and Problem solving.
• Business uses the society for its resources and functioning
• Business therefore has an obligation to the welfare of the
society.
• While the objectives of all business is to make profits,it should
contribute to the interest of the society by ensuring fair
practices.
Corporate social responsibility
• A business affects many different people-employees,
customers,suppliers and local community.
• It also has a wider impact on the environment.
• Corporate social responsibility(CSR) cuts across almost
everything an organisation does and everyone with dealings
with the organisation.
• It means an obligation on management to make choices and
take actions that will contribute to the welfare and interests of
society as well as the organisation.
• An organisation needs to think about how employees are
treated
• It needs to think about choice of suppliers and how to deal
with them
• The local community needs to be considered in terms of the
effect the business has on them(support a local charity,sponsor
a local event,etc).
• Environmental issues are important and must be taken on
board(pollution,waste disposal,etc).
 1.6. Professions and ethics
• What is a profession? According to Australian Council of Professions: a
profession is a disciplined group of individuals who adhere to high ethical
standards and uphold themselves to , and are accepted by, the public as
possessing special knowledge and skills in a widely recognised body of
learning derived from education and training at high level, and who are
prepared to exercise this knowledge and these skills in the interest of
others. A distinguishing mark of a profession is thus the acceptance of
commitment to act ethically and in the public interest.
• Professional ethics.If ethics is a commitment to do what is right, as well
as merely what is allowable, then professional ethics refers to principles
and standards that underlie one’s responsibilities and conduct in a
particull’\
• ar field of expertise(profession).
• Code of conduct: a specific set of professional behaviours and values the
professional interpreter must know and must abide by,including
confidentiality,accuracy,privacy and integrity. They are codes of
professional responsibility or conduct as distinct from moral codes that
may apply to the culture or religion of a whole society.
 Code of conduct
• A Code of Professional Conduct provides professionals and their clients
with a statement of the standards required of professionals when engaged
to provide professional services. It reflects the principle that the public
interest is advanced if all professionals recognize that the fundamental and
overriding obligation of a profession is to serve and promote the public
interest.
• While a professional has a specific duty to the client, the Code also
recognises that there is a parallel general duty of care to the public.
• The Code is intended to inform and guide professionals as to what is
expected of them in their professional conduct and in the provision of
services to clients.
• The Code also enable clients:
(a) to understand the standards expected of professionals and the level of
accountability expected of them in the provision of services, and
(b) to understand the obligations imposed on them as clients, and
(c) to develop reasonable expectations of the services to be provided.
 1.7.Real estate and ethics

• Real estate industry encompasses many stakeholders which

include developers,design consultants,
conntractors,construction managers, real estate agents and
valuers as service providers on the one hand; and
• consumers of the services and products that include buyers and
sellers; landlords and tenants; as well as other users on the
other hand.
• Each of these groups are expected to behave in certain ways
both between themselves and third parties.
• Appropriate behaviour s might be dictated not by morally
prescribed views but by prevailing customs of the relevant
business community.
• Thus there is no single standard that may apply to all industries
at all times.
• What are real estate professions?
i. Property valuation
ii. Property management
iii. Property development
iv. Estate agency
• Each profession (like lawyers, accountants, doctors, engineers,
construction managers etc has its own ethical rules written out
in form of Codes of Conduct that set out principles about the
professional beliefs in matters of quality and procedures,
conflicts of interest, etc.
• Whether an employee or an independent consultant, the real
estate professional is responsible to the principal and the
general publicowner for proper undertaking of his/her services
which are relied on for decision-making in the real estate
industry.
• Consequently the professional undertaking must be governed
by ethical behaviour in the form of a code of conduct.
• Thus each of real estate professions above are governed by
code of conduct developed through an Act of Parliament or a
professional association.
 2.Classification of ethics

1. Meta ethics
2. Normative ethics
3. Descriptive ethics
4. Applied ethics
 2.Classification of ethics

The study of ethics is divided into a number of branches namely:

i. Meta-ethics: the study of concepts of ethics
ii. Nomative ethics: the study of how to determine ethical
values
iii. Descriptive ethics: studies and describes the morality of a
people, their culture in a given community.
iv. Applied ethics: the study of the use of ethical values.
2.1.Meta-ethics(Analytical ethics)
• It is a branch of ethics that seeks to understand the nature of
ethical properties and evaluations(attitudes and
judgements),i.e. discussions about whether ethics is relative
and whether we always act from self-interest.
• It is closely related to normative ethics.
• First, meta-ethics studies the logic of moral reasoning.
• It asks, for instance, what the terms good and bad mean in the
moral sense and what moral responsibility, moral obligation,
and other similar phrases mean.
• The analysis of moral reasoning involves clarifying and
evaluating presuppositions and investigating the validity of
moral arguments.
• It addresses the questions such as :
a) What is goodness?
b) How can we tell what is good from what is bad?
• Meta-ethical theories in addressing questions above are
categorised into either
i)moral realism/universalism which holds that moral
propositions are not facts about any person or groups’
subjective opinion, but about objective features of the world;
or
ii) anti-realism/ethical subjectivism,which holds that
moral statements are made true or false by the attitudes
and/or conventions of people, i.e. for a thing to be morally
right is for it to be approved of by society.
Normative Ethics (moral theory)
• Normative ethics is the study of what makes actions right or
wrong.
• Norms are rules or requirements which are supposed to be
acceptable and desirable to almost every member of a given
society.
• To say that something is normative in a given society or
among a given group of people is to mean that such a thing is
practised and considered desirable by almost every member of
that society. It may, for example, be that marrying outside
one’s clan is the norm in a given society. This means that it is
considered unethical for one to choose one’s spouse within
one’s clan.
• It differs from meta-ethics because it examines standards for
the rightness and wrongness of actions(what morally ought to
be the case/belief),while meta-ethics seeks to understand the
nature of ethical properties and evaluations(i.e.the meaning of
moral language and metaphysics of moral facts).
• Nomative ethics therefore attempts to answer specific moral
questions concerning what people should do or believe.The
word ―normative‖ refers to guidelines or norms and is often
used interchangeably with the word‖prescriptive‖.
• Normative ethics theories include Kantian ethics, Virtue ethics, Utilitarian ethics.
a) Kantian ethics, based on the works of Immanuel Kant, rests on the assumption
that every person has basic right in a moral universe, so that an action is morally
right if it minimizes the aggregate violation of the rights of all stakeholders.
Kantian model is useful for managerial decision-making and readily lends itself to
internal audit review.
b) Utilitarian ethics, which advocates that an act is right if and only if it results in as
much good as any available alternative; the right or good actions are those that
produce the greatest amount of good over bad in the long-term.
c) Virtue ethics, which was advocated by Aristotle, refers to a sense of reason which
enables an individual to do the right thing.It focuses on the inherent character of
the person rather than on specific actions he/she performs.It articulates the four
virtues or good habits that should be acquired by a ethical and moral person
namely:
i. fortitude(patience),
ii. temperance(self-restraint),
iii. justice(honesty,fairness) and
iv. prudence(wisdom to make right choices).
Descriptive Ethics
• It consists of studying and describing the morality of a people,
their culture in a given community.
• It compares and contrasts different moral systems, codes,
practices, beliefs, principles, and values.
• When we observe the activities of people in a given
community, such as marriage, burial, etc.,
• We may describe those activities to a third party striving to
explain what we consider good, bad, right or wrong.
• Such a description includes not only the facts but also the way
of thinking behind them.
• This is known as descriptive ethical thinking. The outcome of
what is described is descriptive ethics.
Applied ethics
• It is a term used to describe attempts to use philosophical
methods to identify the morally correct course of action in
various fields of human life, and is supposed to involve
practitoners as much as professional philosophers.
• Examples of subfields of applied ethics include:
i. Business ethics: a study that attempts to link the business
world and the moral world by incorporating economically
relevant elements of social justice; it reflects on the
problems and behaviourial patterns inherent in business
practices.
ii. Environmental ethics: concerned with questions such as the
duties of humans towards landscapes or species.
iii. Bioethics : concerned with identifying the correct approach
to matters such as euthanasia,use of human embryos in
Example of Applied Ethics
The Public Officer Ethics Act, 2003(No. 4 of 2003):
The Code of Conduct and Ethics for Public Universities(Legal
Notice No 170)
1) Preamble
2) Integrity and impartiality.
3) Teaching and conduct of examinations.
4) Professionalism and courtesy.
5) Management of resources.
6) Gifts and donations.
7) Private interests.
8) Conduct of private affairs.
9) Contesting political office.
1)Preamble
• The Education System of the Republic of Kenya is charged
with the responsibility of nurturing the growth of the whole
person through integrated development of physical
intellectual, moral and spiritual attributes and abilities.
• This Code contains general rules of conduct and ethics to be
observed by members, officers and employees of the public
universities so as to maintain the integrity, dignity and nobility
of university education.
• Members, officers and employees should adhere to this Code
both in their public and private lives so as not to bring ridicule
and dishonour to the universities.
2)Integrity and impartiality
• An officer shall at all times uphold the dignity of the university
by conducting his official duties and his private affairs with
integrity and in a dignified, honest and impeccable manner.
• An officer shall at all times be guided by merit and sound
judgement in giving any services or granting opportunities to
persons who seek such services or opportunities from the
universities.
• An officer shall respect, promote and comply with the rule of
law.
3) Professionalism and courtesy.
• An officer shall comport himself with personal
decency and shall be well groomed.
• An officer shall not absent himself from duty
without a reasonable cause.
• An officer shall actively and personally
promote a culture in the university that aims
at providing fast, friendly, responsive and
efficient services and shall be courteous to all
persons in the provisions of such services.
4)Teaching and conduct of examinations
• An officer who is a member of the academic staff of a
university shall organize his instruction, assessment and
examination in a manner that complies with all institutional
requirements and expectations.
• An officer who is a member of the academic staff of a
university shall ensure that the examinations are delivered to
the students as scheduled and that the result thereof is
processed without undue delay.
• An officer shall exercise diligence, care and attention in the
performance of his duties, and shall seek to achieve high
standards in teaching or administrative duties.
.
• An officer shall promote the culture of research among
university students, and shall assist in the overall development
of the student as a scholar and a decent human being.
• An officer who is involved in the conduct of examinations
shall ensure that the contents of the examination papers are
kept secret and are only released to students when they are
sitting for the particular examination.
• An officer whose duties involve the grading or assessment of
examination performances shall at all times be guided by the
rule of merit in grading or assessing the examination
candidates
5)Management of resources.
• An officer shall not misuse the resources of a
public university.
• An officer shall observe the principles of the
law governing intellectual property, copyright
and other related matters in order to promote
the culture of research and to uphold the
integrity and academic freedom that members
and students of public universities enjoy.
Other examples of applied ethics include
 3.Models for ethical decision-making

i. Psychological model
ii. Business model
iii.Developing a personal code of conduct
 3.1.Psychological model
• There are two models of decision-making namely:
i. A psychological model and
ii. Business model
3.1.Psychological model
This is based on the works of Lawrence Kohlberg which
assumes:
• That people learn to reason morally and ethically in a
sequence of stages from childhood to adulthood and never
stops;cultural factors may speed the stages up,slow them
down,or even arrest them; but cultural factors do not change
their sequence.
• That it is a laboriously slow process that
accelerates when life transitions or life crises
prompt us to re-examine our perspectives;
these life challenges are opportunities for
new ethical growth.
• People show dramatic changes in their 20s
and in their early years; once a level moral of
judgement has become established that is not
reversible to a lower stage.
Stages of development in moral judgement
Development of moral judgement passes through the following
six stages;because levels are not reversible,individuals cannot
fall from a higher to a lower stage; nor can they jump from the
first stage to the third.
1. Might makes right: obedience to authority in order to avoid
punishment is the most important value(<age 9; teen agers
,adolescents and criminal offenders)
2. Look out for number one: Each person takes care of
oneself; be nice to others for them to be nice to you(teen
agers ,adolescents and criminal offenders)
3. Good girl,nice guy: Being good pleases other people;
approval is more important than specific reward( acceptance
moral principles and related rules)
4. Law and order: Being good means being a dutiful citizen and
obeying laws set by those in power ( acceptance moral
principles and related rules).
5. Social contract: the rules of society exist for the benefit of all
and are established by mutual agreement; however the
contract ceases to be binding if the rules become destructive
or if one party does not live upto the agreement(decisions
based on principle rather than conventions; only minority
adults reach this stage and only after age 20. This equally
applies to stage 6)
6. Universal ethical principles: General universal principles
determine right and wrong.These values are established by
individual reflection and may contradict the egocentric or
legal principles of earlier reasoning.
 3.2.Business model for ethical decision-making
What is an ethical dilemma?
• In real life most difficult situations are really moral
temptations,not ethical dilemmas.
• Choosing between right and wrong,is not really a dilemma
because many people recognise the difference between right
and wrong, but may not be willing to do what is right when it
costs more than what we want to pay.
• A true ethical dilemma forces to choose between two positive
value: for example,between mercy and justice or between
long-term goals and short-term goals.
• A number of ethical decision-making models could be
effective in resolving ethical models namely:
i. Testing for results and consequences.For instance,if an action
leads to the greatest possible balance of good consequences
or to the least possible balance of bad consequences,then the
action is ethical
ii. Examining rules,policies and laws. Assuming that laws are
divinely inspired,then legal actions are ethical.
iii. Filtering the dilemmas through social norms or societal
values.
iv. An individual’s personal conviction serves as the ultimate
standard for making decisions of ethical dimensions
 Business model guiding principles

• In summary the guiding principles should be

basically three namely:
i)good act is one that results in the greatest happiness,
ii) good act is one guided by notions based on ―rules‖,
and
iii) there is an obligation to perform the right action,
irrespective of the consequences a good act
 3.3.Influence of economics on ethical behaviour
• Ethics can be viewed as the paradignm of just,equitable and
good behaviour in a setting of human interdependency.It is
thus easy to explain ethics in in the context of religion,family
traditions and culture.
• The need for ethics outside culture and religion can be
explained using the following simple economic hypothesis:
 That humans seek to maintain current and future expected
wealth.Circumstances that increase the difficulty of
maintaining current and expected wealth increase the
probability of individuals violating common ethical standards
• Extreme ethical violations will be observed at the margin
among those more desperate to maintain income and wealth
than those with stored wealth.
• Further violations arise due to insurance of professionals
against their own negligence though professional indemnity
insurance(PI).Negligence an error arising from faulty practice
below commonly accepted standars.
• PI is thus an insurance against a professional choosing to
dispense with excellence and skill; it is actually a commercial
tactic to avoid economic sanction associated with failure of
professional duty. Thus PI can increase incidence of unethical
behaviour among professionals.
• Professional education more than anything else, must
therefore ,strive to instill among its members the
ability to define values(individually and collectively)
and learn habits that foster integrity and moral
behaviour.
• Revered professional organisations are not ones that
flaunt rigid rules and openly sanction their members.
• Rather they are organisations consisting of members
who agree on clearly stated fundamental rules of
behaviour that have been devised for the sake of
morality,common good and organisational’s image
enhancement.
 3.4.Developing personal code of ethics
1.Recognsing the sources of our values.
• Our parents, our teachers, leaders,organised religion, and
culture all play important role in our moral development, each
in its own way contributing to our values and principles.
• Essentially there are six ethical values that govern our lives:
i. Trustworthiness: honesty, loyalty,integrity and promise-
keeping
ii. Respect: privacy,autonomy,courtesy,tolerance,and
acceptance
iii. Responsibility: accountability,self-restraint,pursuit of
excellence
iv. Fairness: openness,impartiality,equality,due
process,consistency.
v. Caring: kindness,compassion,altruism ,unselfishness
vi. Civic Virtue/citizenship: law-abiding,community
service,doing one’s share,participation in democratic process
 Principles and values

• Given one’s values, next step is to consider principles to guide

our lives, provide us with identity, and self-esteem, and power
to act. If we are true to our principles, and if they are founded
on worthwhile values, we become ethical individuals.
• Ethics is the method by which we implement our
principles.Thus ethics is a system by which we act on and act
our deepest convictions and do the right thing.
• If we integrate our values and principles in a code of conduct,
our behaviour becomes more consistent and mature, providing
guidance and inspiration for others as well. It accordingly
governs our personal and business relationships.
 Doing right or wrong

2.Doing right or wrong

i)What makes people do the right thing?
• Moral action comes from competence, will and habit.
 Moral competence is having the ability to turn moral
judgement and feeling into effective moral action
 Will is mobilizing of energy to what we think we should do
 Habit comes from the practice of being good persons so that
doing the right thing becomes an unconscious practice
ii)What stops us from doing the right thing?
• Lack of ability to know how to deal with an ethical
issue(incompetence)
• Lack of ability to resist temptation and stand up to peer
pressure(will); Little practice at being good(habit)
• Our own misplaced beliefs about ethics that prevent us from
acting
1. Conditions of engagement for consultants
in real estate practice(employment vs
agency)
2. Ethics in real estate practice
3. Professional associations/institutions
4. Codes of conduct for real estate
Terms of engagement in real estate profession
• In real estate like any other industry one could be enganged in
any of the following ways:
i. An employee
ii. An independent contractor/consultant
iii. An agent
i)Employee vs independent contractor
• Generally, an employee is someone who is hired to perform
specific duties under the direction and control of the party who
hired him or her.
• Under the terms and conditions of employment, a worker is
not normally in a position to make a profit or incur a loss.
• An employee is not perceived as operating his or her own
business, but rather as being an integral part of the payer's
business.
ii)Employee vs agent
• An agent is primarily governed by the rules on Agency under
the Civil Code while an employee is governed by the Labour
Code.
• The confusing part lies in the element of control exercised by
the principal in an agency agreement and the control that
establishes employer-employee relationship
• An employee is duty bound under labour laws to carry out
specific assignments and to be paid fair wages in relation to
the tasks.The employer controls methods of work.
• An agent enters an agreement to be paid if certain things
happen, but is not duty bound to undertake the actions to
realize the event.His way of undertaking actions is not dictated
by the principal.An agent is therefore like an independent
contractor.
iii)An independent consultant dealing in all aspects of
the profession and takes all personal liability.
Employee vs independent professional
• Generally, an employee is someone who is hired to
perform specific duties under the direction and
control of the party who hired him or her.
• Under the terms and conditions of employment, a
worker is not normally in a position to make a profit
or incur a loss.
• An employee is not perceived as operating his or her
own business, but rather as being an integral part of
the payer's business.
There are four key points that distinguish an employee from
an independent consultant namely, control, ownership of tools,
chance of profit/risk of loss, and integration.
1.Control
i. The primary issue here is who’s running the ship. Does the employer have
the right to hire or fire, determine the wage or salary to be paid, and
decide on the time, place, and manner in which the work is to be done?
Then an employer-employee relationship exists. Note that ―if the
employer does not directly control the worker's activities, but has the
right to do so, the notion of control still exists.‖
ii. On the other hand, in a business relationship, the worker decides how the
work will be performed. As a contractor, then, it’s important that you
maintain the right to decide where, when and how the work will be done.
If it comes to the test, and you can show that you were the person
responsible for planning the work to be done, choosing the hours of work,
and/or setting the standards to be met, for example, you’ll have a much
better chance of being deemed a contractor rather than an employee.
2.Ownership of tools
An obvious point, one would think; a consultant would supply
his own tools.
However, because it’s customary for employees to supply their
own tools in some trades (think of painters and garage
mechanics, for example), the cost of using the tools is a much
better indication,:when workers purchase or rent equipment or
large tools that require a major investment and costly
maintenance, it usually indicates that they are self-employed
individuals,because they may incur losses when replacing or
repairing their equipment.‖
3.Profit/Loss
• In this case, whether you’re involved in an employer-employee
relationship or a business relationship depends on your
financial involvement.
i. Do you have a chance of making a profit?
ii. Do you run the risk of incurring losses due to bad debts,
damage to equipment or materials, or delays?
iii. Do you cover the operating costs?
• If these three things are true, you’re a contractor, not an
employee.
4.Integration
• Where the worker integrates the payer's activities to his own
commercial activities, a business relationship probably
exists...
• Where the worker integrates his activities to the commercial
activities of the payer, an employer-employee relationship
probably exists.‖
• Some employers seem to view incorporation as ―proof‖ of
independent contractor status – to the point that they will only
do business with incorporated contractors. While being
incorporated could conceivably be one point of evidence
showing an arm’s length relationship between a contractor and
employer, it isn’t proof of a business relationship in itself.
The law of agency
• The general law on agency, on the other hand, expressly allows the
principal an element of control over the agent in a manner consistent with
an agency relationship.
• In this sense, these control measures cannot be read as indicative of labour
law control.
• Foremost among these are the directives that the principal may impose on
the agent to achieve the assigned tasks, to the extent that they do not
involve the means and manner of undertaking these tasks.
• The law likewise obligates the agent to render an account; in this sense, the
principal may impose on the agent specific instructions on how an account
shall be made, particularly on the matter of expenses and reimbursements.
• Control can be imposed through rules and regulations without intruding
into the labor law concept of control for purposes of employment.‖
• An agent is party that has express (oral or written) or implied
authority to act for another (the principal) so as to bring the
principal into contractual relationships with other parties. An
agent is under the control (is obligated to) the principal, and
(when acting within the scope of authority delegated by the
principal) binds the principal with his or her acts. Additional
powers are assigned to agent under the legal concept of
'apparent authority.'
• The agent, however, does not have title to the principal’s goods
in his or her possession, except where agent's lien is
applicable. In general, advertising agencies do not fall under
this definition of an agent, because they act as principals for
the services they buy on behalf of their clients. See also
general agent, special agent, and universal agent.
Duties of an agent
• Agents duties are to:
i. act on behalf of and be subject to the control of the principal,
ii. act within the scope of authority or power delegated by the
principal,
iii. discharge his or her duties with appropriate care and
diligence,
iv. avoid conflict between his or her personal interests and those
of the principal, and
v. promptly hand over to the principal all monies collected on
principal’s behalf.
vi. To use reasonable diligence and care, and
reasonable despatch.
vii. To disclose all material facts to the principal and to
refrain from divulging confidential
information to third parties.
viii. To account to the principal for property and money
of the principal which is under his control.
ix. In situations where the Regulations do not apply,
these duties (even the fiduciary ones) can be
contracted out of as between principal and agent
where both parties are businesses.
• An agent also owes duties to his principal and to third parties.
• He must use the utmost care in protecting his principal's
interests.
• He must not make any secret profits himself and any contracts
he may make must be accounted for to his principal.
• He must strictly obey the lawful instructions that his principal
may give him, and is liable to the principal for any loss to the
latter that the agent's negligence and lack of care may cause.
• He must use reasonable prudence in carrying out the affairs of
his principal that have been intrusted to him
• Generally speaking, an agent must act in person and
cannot delegate his authority to some one else. That
is, if A authorizes B to act as his agent, B cannot turn
over this agency to C, for A has a right to say whom
he wishes to act as his agent.
• An agent must also, whenever demanded, give
complete reports to his principal.
• An agent is liable to third parties if he exceeds his
authority in such a way that his principal is not
bound, and thus is liable for any fraud committed by
him while on the principal's business.
Example
• Suppose A makes a contract with B, telling B that he is acting
for X. If as as a matter of fact X does not exist,then A is liable
to B.
• If an agent makes a contract with third parties in such a way
that his principal is not bound, then the agent is liable himself.
If we,John and Mary as Directors of the Z Corporation,
promise to pay to Y Company Kshs One Million, in this case Z
Corporation is liable, for it is the corporation's promise.
• Suppose we promise to pay Y the same amount in an
agreement signed by John and Mary here the corporation
would not be liable, but two signatories would be liable
individually.
• Suppose an agent does not disclose the name of his principal.
When the third party finds out who the principal is, then he
may hold either the agent or the principal liable (but not both).
Summary of Duties of the agent in an agency relationship
• These are the duties owed by an agent to its principal. These
are of course subject to variation by agreement and, where
they apply in commercial agency:
i. To obey the lawful instructions of the principal.
ii. Not to delegate, sub-contract his authority.
iii. Only to act within the limits of his authority (actual or
ostensible).
iv. Not to make a secret profit or accept bribes.
v. Not to put himself into a situation where his interests will
conflict with those of his principal.
Duties of the principal
• Principal's duties are to:
i. compensate the agent as agreed, and
ii. indemnify the agent against claims, liabilities and
expenses incurred in discharging duties assigned by
the principal. See also master servant rule.
 4.2. Professional associations/institutions

• In Kenya the activities in the real estate profession are guided

by statutory regulations through boards of registration and
professional associations.
• The statutory boards are created by acts of Parliament
notably,Valuers Registration Board under the Vluers
Act(1984)and Estate Agents Registration Board under the
Estate Agents Act(1984).
• These are similar to other legislations such as the Architects
and Quantity Surveyors Act,Cap 525 of the Laws of
Kenya,Engineers Registration Act,Cap 30 of the Laws of
Kenya,Physical Planners Registration Act,1996 etc to provide
for registration of professionals in the respective fields as
appropriate.
• While the boards regulate the practice of professionals,
respective professions have formed members clubs or
associations for their self interest.
• Examples of professional and trade associations in Kenya
include the Architectural Association of Kenya,Kenya Institute
of Quantity Surveyors,Kenya Institute of Project
Management,Kenya Association of Building and Civil
Engineering Contractors and Joint Advisory Building Council.
• In real estate the main professional body is the Institution of
Surveyors of Kenya that draws membership from
valuers,estate estate managers,land administrators and land
surveyors.
 International Associations
• At the international level there are a number of professional
bodies in real estate notably the Royal Institute of Chartered
Surveyors(RICS) ,the Commonwealth Association of
Surveying and Land Economy(CASLE),and the International
Federation of Surveyors(FIG).
• The professional and trade associations and registration
boards exist to provide services to their members including:
i. Continuous professional development programs;
ii. Industry news and issues
iii. Supporting, protecting and promoting the interests of
members
iv. Ensuring that their members behave well/ethically so as not
to be victims of misconduct .
4.3. Ethics in real estate

Problems of unethical nature in real estate industry.

• Ethics may be simply defined to mean proper or appropriate
behaviour.For this reason,most professional trade associations
have developed a set of expected behaviours defined over a
range of interactions and encoded these in in set of standards
known as professional codes of conduct or business ethics.
• Appropriate behaviour s might be dictated not by morally
prescribed views but by prevailing customs of the relevant
business community.Thus there is no single standard that may
apply to all industries at all times.
• Real estate industry encompasses many stakeholders which
include design consultants, developers, estate agents and
valuers as service providers ; and
• Consumers of the services and products that include buyers
and sellers; lardlords and tenants; as well as other users.
Ethics and property development
• It is argued that real estate professionals have a moral
obligation to protect land and resources for the benefit of
countless future generations.
• This is often achieved through
i. Individual professional group’s code of conduct
ii. Development control regulations
• However, evidence exist to suggest, that where major private
developers are concerned, regulatory systems provide
merely a negotiating framework in order to fulfil (short term
political needs for development such as jobs,crime,etc)rather
than long term planning for sustainability:
• If the function and discipline of planning and
development control is failing due to wide
manipulation, then the hope for real estate
development industry lies with professional
bodies concerned with regulation and
conduct of members behaviour in particular,
 to ensure that their members did not
transgress the principles of equity and
sutainability
 to invest wealth not just for present society,
but for coming generations over the very long
term
Unethical acts by buyers and sellers in real estate market.
• There are also a number of ethical violations by buyers and sellers in real
estate market that make it difficult for real estate agents to act
professionally namely:
 A buyer using vaguely written purchase contract contingencies as an
excuse for not moving forward on an offer
 A buyer overepresenting his/her ability to pay so as to induce sale
 A buyer intentionally stalling a pending deal in order to compromise the
situation for the other party and force a renegotiation
 A seller providing misleading information about market
rents,values,expenses,material facts and other problems
 A seller manipulating by deception the negotiation process so as to place
the buyer in a weakened negotiating position
• The test of violation is to ask whether the other party has been placed in a
disadvantaged position due to circumstances caused by the other
party?Would you consider it unfair/unethical if subject behaviour were
done to you?
Estate agency
• Estate Agents Act,Cap 533 Laws of Kenya defines the practice
of estate agency to include any of the following acts in
connection with immovable property:
i. Bringing together or taking steps to bring together,a
prospective vendor,lessor or lender and a prospective
purchaser,lessee or borrower,or
ii. Negotiating the terms of sale,mortgage,charge or letting as
an intermediary between or on behalf of either principals
• When a principal(property owner),for instance, instructs or
gives a manadate to an agent to undertake specific agency
functions, an estate agency agreement or contract is
created.
• Estate agency agreement,unless otherwise stated, is governed
by the common law of agency, which is then customised in
• In estate agency;
i. Agent means real estate licensee acting in an agency
relationship/carrying out estate agency functions
ii. Customer means a party to a real estate transaction who
receives information,services,or benefits but has no
contractual relationship with the agent
iii. Client means persons/entities with whom an agent has
agency relationship, or legally recognized non-agency
relationship
iv. Prospect means a purchaser,seller,tenant or landlord who is
not subject to representation relationship with the agent
Duties and responsibilities of an estate agent
1.Authority of an estate agent to act:
i. Estate agent cannot bind the principal to a contract:his/her
negotiations with prospective is ‖subject to contract‖.
ii. estate agent under law of misrepresentation must ―describe
trully‖ the property he/she is mandated to sell/let
iii. Estate agent cannot delegate the mandate without authority
of the principal
2.Duties of an agent
i. Estate agent is not under contract of employment ; therefore
not bound to act
ii. Estate agent must comply with lawful instructions of the
principal: e.g. no sign posts of ―for sale‖
iii. Estate agent owes duty of care of care and skill to the client
iv. Estate agent owes duty of loyalty/trust to the client
3.Rights of an estate agent:
• An estate agent is entitled to remuneration if he/she is an
―effective cause‖ of transaction which takes place.
• An estate agent is assumed to cover all costs in the
commission, unless expressly provided for in terms of
appointment, to enable him/her claim indemnity if carrying out
principal’s instructions results in legal liability or abortive
work.
Estate Agency violations and acts of dishonesty
• In representing buyers and sellers and in dealing with
purchase and sale contracts there are several common
complaints against agents which are contrary to general
principles of agency, and become professional misconduct.
i. Acts of dishonesty:
 An agent claiming to be the procuring cause of a sale when
in fact s/he was incidental to the transaction
 Exaggerating the market value of the property to a potential
seller so as to obtain the mandate, then thereafter working on
the seller to reduce the asking price
 Keeping an expired listing contract in the multiple listing
services so as to attract new potential buyers
 Collecting commission from both buyer/tenant and
seller/landlord
ii. Acts of fudiciary violations:
 Revealing confidential information from with respect to the
lowest or highest acceptable price in the process of single-
agency negotiations
 Avoiding messages(phones,faxes,e-mails) from other agents
with with prospects for a listing in order to try and complete
a current transaction with an internal prospect that would
mean a higher net commission
 Showing the buyer only the firm’s listings while more
appropriate listings are available from other firms in order to
try and keep more commission fee revenue within the firm or
directed towards friends
Ethics and property defects
• Real estate industry experts report that nondisclosure of
property defects is the most likely event to trigger litigation
against real estate practitioners.It is a requirement in countries
like the USA that real estate salespeople disclose property
defects,such as leaky roofs and environmental hazards to
prospective buyers regardless of agency relationships.
• Estate agents as professionals cannot merely pass along
information given by their principals without verifying,it.
Estate agents must be knowledgeable about the property they
are marketing. Should the seller and/or evidence indicate that
some property defects exist,the agent has an obligation to
insist upon an expert inspection.
• Environmental issues and concern about social
responsiveness promise to make the future an
era of litigation on failure to disclose physical
defects in property.
• ‖As is‖ contract closes, and caveat
emptor(buyer beware) used to protect agents
may be no longer viable response as
owners,lending institutions and real estate
agents are increasingly held by courts to be
financially responsible to a buyer for any
damages caused to a property by an
environmental contaminant.
Valuation practice
• Good professional practice requires that the valuer describe
in sufficient detail, in each case, the nature and meaning of
the specific value that he is determining.
• The procedure and method for determining the particular
value in question is a matter for the valuer himself to
determine-he cannot be held responsible for the result unless
he has a free hand in selecting the process by which that
result is to be obtained.
• The valuation of a property is a procedure based on an
analysis of all the characteristics of all the property which
contribute to or detract from its value; good valuation
practice requires that the valuer’s inspection, investigation,
and study be thorough enough to cover all of the pertinent
characteristics.
• It is proper for the valuer to rely upon and use material
obtained from other sources(architect, engineers, lawyers,
accountants, government officials, government agencies,
etc)provided
i. he states in his report that he has done so,
ii. he stands ready to make his sources and/or the material itself
available for any required verification, and
iii. he does not pass to others the responsibility for matters that
are, or should be, within the scope of his own professional
knowledge.
Valuer’s primary duty and responsibility are:
i. To determine and describe the apposite kind of Value or
Estimated Cost Because there are several kinds of value and
several kinds of cost estimates, each of which has a
legitimate place as the end point of some class of valuation
engagement, it is the valuer’s obligation to ascertain which
one of these is pertinent to the particular undertaking.
ii. To determine the appropriate and applicable numerical
results with as high a degree of accuracy as the particular
objectives of the valuation necessitate.
Unethical and unprofessional valuation practice
• Conflict of interest
 It is unethical and unprofessional for a valuer to accept an
assignment to value a property in which he has an interest or a
contemplated future interest.
 Interests which a valuer may have in a property which is to be
valued, include ownership of the subject property; acting, or
having some expectation of acting, as agent in the purchase,
sale, or financing of the subject property; and managing, or
have some expectation of managing, the subject property.
• Responsibility for signature
It is unethical (a) to misrepresent who made a valuation by
appending the signature of any person who neither did the
work himself nor had the work done under his supervision, (b)
in the case of a joint report to omit any signatures or any
• Advertising and Solicitation
 It is not unethical to advertise the availability of valuation
services. It is unethical to use any inaccurate, misleading, false
or deceptive claim, promise or representation in connection
with any advertisement
 It would be unethical to do the following:
(a) Misrepresent one’s background, education, training
or expertise;
(b) Misrepresent services available or a valuer’s prior or
current service to any client, or identify any client
without the express written permission of such client
to be identified in advertising
iii. To avoid giving false figure. The numerical result of a
valuation could be false for one of two reasons: it could be
false because it is a grossly inaccurate estimate of the
apposite kind of value or cost estimate, or it could be false,
even though numerically accurate, because it is an estimate
of an inapposite kind of value of cost estimate.
iv. To attain competency and to practice ethically. In order to
meet his obligations, the valuer must be competent in his
field. This competency he attains by education, training,
study, practice, and experience. He must also recognize,
understand, and abide by those ethical principles that are
interwoven with and are an essential part of truly
professional practice.
Valuer’s obligation to his client
• Confidentiality: The fact that a valuer has been employed to
make a valuation is a confidential matter.
• It is thus improper for the valuer to disclose the fact of his
engagement, unless the client approves of the disclosure or
clearly has no interest in keeping the fact of the engagement
confidential, or unless the appraiser is required by due
process of law to disclose the fact of his engagement.
• It is not proper for a valuer to accept an engagement to
make a valuation of property of a type he is not qualified to
value or in a field outside his Institute membership
classification, unless (a) he fully acquaints the client with the
limitations of his qualifications or (b) he associates himself
with another valuer or valuers who possess the required
qualifications.
• When two or more potential clients seek a valuer’s services
with respect to the same property or with respect to the same
legal action, the valuer may not properly serve more than
one, except with the consent of all parties.
• When a valuer is engaged by one of the parties in a
controversy, it is unethical for the valuer to suppress any
fact, data, or opinions which are adverse to the case his client
is trying to establish; or to over-emphasize any facts, data, or
opinions which are favorable to his client’s case; or in any
other particulars to become an advocate. It is the valuer’s
obligation to present the data, analysis, and value without
bias, regardless of the effect of such unbiased presentation
on his client’s case.
Valuer’s obligation/ responsibility to third parties
• Under certain specific circumstances a valuation report may
be given by a client to a third party for their use.
• If the purpose of the valuation includes a specific use by a
third party, the third party has a right to rely on the validity
and objectivity of the valuer’s findings as regards the
specific stated purpose and intended use for which the
appraisal was originally made.
• Members of the association recognize their responsibility to
those parties, other than the client, who may be specifically
entitled to make use of their reports.
Valuer’s obligation to other valuers
• It is unethical for a valuer to injure, or attempt to injure by
false or malicious statements or by innuendo the professional
reputation or prospects of any valuer.
• A member having knowledge of an act by another member
which, in his opinion, is in violation of the ethical principles
incorporated in the Code of Ethics of the Association, has the
obligation to report the matter in accordance with the
procedure specified in the Constitution and Bylaws of the
Association.
 4.4.Code of conduct for real estate professionals

Code of ethics and standard practice for valuers/appraisers

• Valuation has been defined as the act or process of estimating
value.Usually it is a written statement setting forth an opinion
of the value of an adequately described property as of a
specified date,supported by the presentation and analysis of
relevant data.
• Valuation also include
i. The forecasting of the monetary earning power of certain
classes of property
ii. The estimation of the cost of producing or replacing physical
property.
• Given the specialized knowledge and abilities required of a
valuer which are not possessed by a lay person,a fudiciary
relationship exists between the valuer and those who rely
Examples of codes of conduct for valuers
• Examine the codes of conduct of the following professional
valuation institutions/associations:
i. International Valuation Standards Committee Code of
Conduct(ISVC,6th Edition,2003)
ii. The Principles of Appraisal Practice and Code of Ethics of
the American Society of Appraisers.
iii. The Rules of Conduct of the Royal Institution of Chartered
Surveyors
iv. The Principles of Valuation Practice and Code of Ethics of
the Institute of Appraisers and Cost Engineers of Nigeria.
v. The Valuers(Professional
Misconduct)(Procedure)Rules,1987.Legal Notice No 32 of
the Valuers Act,Cap 532 of the Laws of Kenya.
• The above professional institutions/associations of valuers
have developed a set of authoritative principles and code
of ethics, broad enough to cover all classes of property as well
as the complexities of the various valuation procedures for the
professional valuer.
• The codes of ethics invariably cover the following aspects:
i. Valuer’s primary duty and responsibility
ii. Valuer’s obligation to his client
iii. Valuer’s obligation to third parties
iv. Valuer’s obligation to other valuers
v. Valuation methods and practices
vi. Unethical and unprofessional valuation practice
Codes of conduct for estate agents
• While Code of Ethics establishes obligations that may be
higher than those mandated by law, in any instance where the
Code of Ethics and the law conflict, the obligations of the law
must take precedence.
• Estate agency has developed from a business occupation into a
profession that connotes competency, fairness and high
integrity resulting from adherence to a loafty ideal of moral
conduct in business relations.
• In accepting this standard estate agents carry out their
activities whether conducted personally, through associates or
others, or via technological means in accordance with rules of
professional conduct set by national associations.
• The following core criteria summarize what specific
conditions a code of conduct must fulfill if it is to control
market performance effectively:
i. Validity for the entire industry/profession: removes ethical
ambiguity for an entire industry.
ii. Support by an institution: enhances permanence and
invariability of standards
iii. Equipment with a control and sanctioning structure:self
regulation
iv. Direct competitive advantage for members through an
improved market position and high standards of
qualification: safeguarding self interest
v. Indirect advantage through increased market attractiveness:
understanding and recognition.
Examples of code of conduct for estate agency
• The following are some of the institutions/associations that
have developed codes of conduct for real estate agency
practice:
i. Brokers Association in Germany(Ring Deutcher
Makler,1986),published the rules and regulations that apply
to brokers and property managers active in the German
market
ii. The Chartered Surveyors’ Rule Book(Royal Institution of
Chartered Surveyors,1993)
iii. Code of ethics and standards of practice of the National
Association of Realtors(NAR,2009)
iv. Estate Agents (Disciplinary Proceedings)(Procedure Rules)
1987(Estate Agents Act,Cap533,Laws of Kenya).
 5.Applied Ethics in the Context of Kenya
Constituition 2010
5.1. Preamble to the Constitution
• Kenya Constitution 2010 ushered in the Kenyan society
specific values as contained in the preamble.Among other
things We the people of Kenya,
i. Are proud of our ethnic,cultural and religious diversity,and
determined to live in peace and unity as one indivisible
sovereign state.
ii. Are committed to nurturing and protecting the well-being of
the individual,the family,communities and the nation
iii. Recognize the aspirations of all Kenyans for a government
based on the essential values of human
rights,equality,freedom,democracy,social justice and the rule
of law.
5.2.Chapter Four on Bill of Rights
• The Bill of Rights is an integral part of Kenya’s democratic
state and is the framework for social,economic and cultural
policies.The values that underlie the Bill of Rights are based
on human dignity,equality,equity and freedom.
• The Bill of Rights applies to all law and binds all State organs
and all persons
• The State shall enact and implement legislation to fulfil its
international obligations in respect of human rights and
fundamental freedoms.
• The rights and fundamental freedoms are provided for in Part
2(articles 26-56) of Chapter Four4 of the Constitution.
• 5.3.Kenya Human Rights and Equality Commission
• Article 59 of the Constitution establishes Kenya National Human Rights
and Equality Commission whose functions among other things include:
• To promote human rights and develop a culture of human rights in Kenya
• To act as the principal state organ in ensuring compliance with obligations
under treaties and conventions relating to human rights
• To investigate complaints of abuse of power,unfair treatment,manifest
injustice or unlawful,oppressive,unfair or unresponsive official conduct
• To report on complaints investigated and take remedial action
• An Act of Parliament,The Kenya National Human Rights Commission
Act, 2011 has been enacted to operationalise the Kenya National Human
Rights Commission pursuant to Article 59 of the Constitution; to provide
for the functions and powers, qualification of, and appointment procedure
for members of the Commission and for connected purposes.
5.4.Chapter 6 on Leadership and Integrity
This chapter provides for the following among other things
• Responsibilities of leadership which include
i. responsibility to serve the people rather than the power to
rule them;
ii. objectivity and impartiality in decision making,and ensuring
that decisions are not influenced by
nepotism,favouritism,other improper motives or corrupt
practices
iii. discipline and commitment in the service to the people.
• Legislation to establish Ethics and Anti-Corruption
Commission(Ethics and Anti-Corruption Act,2011)
• Legislation to provide for Leadership and
Integrity(Leadership and Integririty Act,2012)
5.5.Ethics and Anti-Corruption Act 2011.
• An Act of Parliament to establish the Ethics and Anti-
Corruption Commission pursuant to Article 79 of the
Constitution, to provide for the functions and powers of the
Commission, to provide for the qualifications and procedures
for the appointment of the chairperson and members of the
Commission, and for connected purposes
General Principles
• In fulfilling its mandate, the Commission shall, in addition to
the values and principles under Article10 of the Constitution,
observe the following principles"
• (a) accommodate the diversity of Kenyan people;
• (b) impartiality and gender equity; and
• (c) the rules of natural justice
Functions
• develop and promote standards and best practices in integrity and anti-
corruption;
• develop a code of ethics;
• work with other State and public offices in the development and promotion
of standards and best practices in integrity and anti-corruption;
• receive complaints on the breach of the code of ethics by public officers;
• investigate and recommend to the Director of Public Prosecutions the
prosecution of any acts of corruption or violation of codes of ethics or other
matter prescribed under this Act or any other law enacted pursuant to
Chapter Six of the Constitution:
• recommend appropriate action to be taken against State officers or public
officers alleged to have engaged in unethical conduct;
• oversee the enforcement of codes of ethics prescribed for public officers;
• advise, on its own initiative, any person on any matter within its functions;
• raise public awareness on ethical issues and educate the public on the
dangers of corruption and enlist and foster public support in combating
corruption but with due regard to the requirements of the Anti-Corruption
and Economic Crimes Act, 2003 as to confidentiality;
• subject to Article 31 of the Constitution, monitor the practices and
procedures of public bodies to detect corrupt practices and to secure the
revision of methods of work or procedures that may be conducive to
corrupt practices; and
• institute and conduct proceedings in court for purposes of the recovery or
protection of public property, or for the freeze or confiscation of proceeds
of corruption or related to corruption, or the payment of compensation, or
other punitive and disciplinary measures.
Powers of the Commission.
• (1) The Commission shall have all powers generally necessary
for the execution of its functions under the Constitution, this
Act, and any other written law.
• (2) Without prejudice to the generality of subsection (1),
the Commission shall have
the power to"
(a) educate and create awareness on any matter within the
Commission’s mandate;
(b) undertake preventive measures against unethical and corrupt
practices;
(c) conduct investigations on its own initiative or on a complaint
made by any person, and
(d) conduct mediation, conciliation and negotiation.
5.6.Leadership and Integrity Act 2012
• An Act of Parliament to give effect to, and establish
procedures and mechanisms for the effective administration of,
Chapter Six of the Constitution; and for connected purposes.
• Part 11— General Leadership And Integrity Code
• The Act set out leadership and integrity code for public
officers which among other things include the following:
1.In carrying out the duties of his or her the office, a State officer
shall not violate the rights and fundamental freedoms of any
person.
2.A State office is a position of public trust and the authority and
responsibility vested in a State officer shall be exercised by the
State officer in the best interest of the people of Kenya.
3.Subject to the Constitution and the law, a State officer shall take
personal responsibility for the foreseeable consequences of his
or her actions or omissions in the discharge of his or her
duties.
4. A State officer shall, to the best of his or her ability-
• carry out his or her duties efficiently and honestly;
• carry out his or her duties in a transparent and accountable
manner;
• keep accurate records and documentation;
• report truthfully on all matters;
• provide accurate and truthful information to the public
5.A State officer shall—
• carry out his or her duties in a way that maintains public
confidence in the integrity of his or her office;
• treat members of the public and other public officers with
courtesy and respect and in a non-discriminatory manner;
• to the extent appropriate to the office, maintain high standards
of performance and level of professionalism in the
organisation; and
• if he or she is a member of a professional body, observe and
subscribe to the ethical and professional requirements of that
body in so far as the requirement are not in contravention of
the Constitution or this Act.
6.A State officer shall not use his or her office to unlawfully or
wrongfully enrich himself or herself or any other person.
7.An elected State officer shall meet and maintain the moral and
ethical requirements of Article 99(1)(b) and 193(1)(b) of the
Constitution. For purposes of this section, actions that
contravene moral and ethical requirements include, but are not
limited to dishonesty in the conduct of public affairs, abuse of
office, misuse of office, misrepresentation of information to
the public, wrongful conduct in furtherance of personal
benefit, misuse of public resources, abuse of office,
discriminatory conduct, falsification of records or matrimonial
offences;
8.A State officer shall at all times exercise his or her duties with
impartiality and objectivity in accordance with Articles 10, 27,
73(2)(b) and 232 of the Constitution and shall not practise
favouritism, nepotism, tribalism, cronyism, religious bias or
engage in corrupt or unethical practices.
Part 111—Specific Leadership and Integrity Codes
1) Each public entity shall establish a specific Leadership and
Integrity Code.
2) The specific Leadership and Integrity Code established by a
public entity shall include all the requirements in the general
Leadership and Integrity Code under Part II and may set out
how any requirements of the specific or general Code may be
satisfied.
3) Until the public entity has established a specific Leadership
and Integrity Code under this section, the general Code under
Part II shall apply as though it were the specific Leadership
and Integrity Code established by the public entity.
•
 6.Professional Ethics and Indemnity

i. What is professional ethics?

ii. What is professional negligence/error?
iii.What is professional indemnity?
iv.What is professional indemnity
insurance(PI)?
6.1.What is professional ethics?
 6.2..What is professional negligence

• Negligence is distinct from error because the former

is that error arising from faulty practice below the
commonly accepted standards i.e. it like the
practitioner chooses to dispense with care skill or
abdicates duty.
• If however, an error is such a mistake that no
reasonable practitioner would be able to avoid, or a
mistake that occurred even though the practitioner
took reasonable measures to avoid it,the client would
have no claim, and there would be no need for
insurance indemnity.
6.2. Professional indemnity
• Subject to any requirements of the law a practising
professional in Kenya should:
• (a) maintain a policy of professional indemnity insurance
during each financial year appropriate for the services being
provided by the professional, and
• (b) provide each client of the professional with information
relating to the insurance maintained by the professional for the
services to be provided to the client.
• Many professional associations and registration boards now
require practitioners to insure themselves against the
negligence by taking a professional indemnity insurance(PI).
• Before 1970s, PI was widely abhored by most
professions as an indication of a professional
abdication of duty, but today it is widely
embraced as a professional necessity
• Professional indemnity insurance, while a
noble innovation,may lead some practitioners
to discount on quality of work,knowing that
where poor quality is detected, the penalties
can be passed on to the insurer.
 6.2.Professional insurance

• Professional indemnity insurance, is a liability cover that

provides protection for negligent advice or a service
provided , and is designed to safeguard one against claims
made by clients for any resulting financial loss or damage to
their reputation. The most common professional liability law
suits arise from:
i. Negligence, omission or error
ii. Unintentional breach of intellectual property rights
(copyright, trademarks, broadcasting rights, passing off
etc).
iii. Loss of clients' original documents or data (these could be
damaged, lost in the post or even stolen while in your
care)
iv. Unintentional slander or libel
v. Unintentional misuse or breach of confidential information
 6.3.Who requires professional indemnity
insurance(PI)?

• Professional indemnity insurance is required to

fend of spurious claims and in defending
allegations
• Professional indemnity insurance protect s you
against damages you become liable for mistakes
such as errors of judgement, basic
administration errors, mislay or damage clients'
documents etc. resulting loss of business and
damage to reputation.
• Individuals and companies which provide professional advice
or consultancy services need indemnity cover,for example:
Accountants ,Architects ,Computer Consultants ,Engineers
,Independent Financial Advisors ,Insurance Consultants ,IT
Professionals ,Medical Professionals, Doctors & Nurses
,Management Consultants ,Optometrists,Surveyors.
• Generally, the riskier the nature of a profession, the higher will
be the premium.
• The cost of the premium will depend on the: i)type of the
business ,ii)turnover ,iii)number of employees and iv) level of
risk
• END OF SEESSION

• THANK YOU