The ASHI Code of Ethics Committee is charged with developing ethics education and awareness for ASHI’s membership, and answering Requests for Interpretation (RFI) of our Code of Ethics.
The two RFIs presented this month are from earlier this year. Both deal with the fine line between paying for referrals and simply promoting one’s business to real estate agents. While paying for referrals, in whatever form, is clearly a violation of ethics, promoting one’s business to real estate agents by paying for advertising or participating in marketing agreements merely places the inspector in a potentially compromising relationship. The devil will be in the details.
Each month, in Focus on Ethics, we present one or more RFIs and the responses developed by the committee since the new Code of Ethics was approved. The membership is encouraged to submit RFIs to the committee if serious questions about the intent and applicability of the Code should arise. The necessary form is available at the ASHI Web site under Downloads/ASHI Forms & Documents.
—Keith A. Oberg, Chair, 2006 ASHI Code of Ethics CommitteeRequest for interpretation
e060217 Vacation Contest Promotion
Is it ethical for an inspector to offer a promotional free vacation contest if a participant must use the inspector’s company to obtain “tickets” to register for the drawing?Response
If the promotional contest is offered to real estate agents contingent upon providing client referrals to the inspector, it would be considered a form of compensation for such referrals, in violation of 1.C of the Code of Ethics. Paying a real estate broker for referrals, in whatever form, including a vacation contest, could bring into question the integrity of the inspection itself in the eyes of the consumer. Secondly, home inspection clients should be able to have confidence that the referral of a home inspector by their real estate broker is based on an assessment of the inspector’s competence and professionalism, rather than on the potential receipt of a financial incentive by the referring party.Request for interpretation
e060221-1 Implied Loyalty in Marketing Agreement
Is it an ethical violation to be tied to a brokerage by a marketing agreement, and getting substantial, if not exclusive, access to the inspection business from that brokerage due to implied loyalties or other inescapable bias, even if there is no preferred vendor list or similar written arrangement?Response
Advertising or marketing with real estate brokers is a clear violation of 1.C of the Code of Ethics, if such marketing includes an explicit or tacit agreement to refer real estate clients to the inspector by printed list of preferred inspectors, or by any other means.
In comparison, advertising or marketing with real estate brokers that does not include a written or quid pro quo agreement for referrals does not violate any specific provisions of the Code. Nonetheless, such joint marketing ventures may appear to compromise professional independence, objectivity, or inspection integrity, and should be undertaken with caution. Home inspection clients should be able to have confidence that their inspector is not being influenced by the interests of the real estate agency for the transaction.