e070430 Payment after closing

Identifier: e070430

Date: 04/30/2007

Question

If an inspector does an inspection for a client, but was hired by a real estate agent and only gets paid at, or after, closing, is this a violation of the COE?  The inspector is still being paid by the buyer, but in this instance, he was paid at/after closing.  Had the house not gone to closing, it is not clear if he would have been paid.

Response

This would represent a violation of the ASHI Code of Ethics.  1.B of the Code of Ethics states that "Inspectors shall not inspect properties under contingent arrangements whereby any compensation......is dependent on......sale of a property."  Since the inspector may not get paid unless the house closes, a conflict of interest arises, to the potential detriment of the client, as the inspector may be tempted to ensure that the house "passes" the inspection in order to gain payment.

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