Focus on Ethics

The ASHI Code of Ethics Committee is charged with developing ethics education and awareness for ASHI’s membership, and answering Requests for Interpretation of its Code of Ethics.  Two Requests for Interpretation (RFIs) made and answered within the last year are published here. Once again the committee responds to RFIs dealing with ASHI’s relationship to real estate agency. Home inspector business arrangements with real estate agents may not necessarily violate the Code of Ethics, but they are fraught with ethical peril. The first marketing program technically violates the Code, but the relationship may be quite innocent. The second arrangement does not appear to violate the Code, but would be unethical if hidden referral agreements are included. In either case, the ASHI inspector should be aware of and guard against the potential for conflicts of interest.  

In each of our monthly Focus on Ethics articles, we present one or more RFIs and the responses developed by the committee since the new Code of Ethics was approved. Membership is encouraged to research past RFIs now available in searachable format on the ASHI Web site, as well as submit questions to the committee if serious questions about the intent and applicability of the Code should arise. The necessary form is available on the ASHI Web site under Downloads/ASHI Forms & Documents.

—Keith A. Oberg, Chair, 2006 ASHI Code of Ethics Committee

Request for interpretation

e060706 Hiring a Real Estate Brokerage for Marketing
If my company were to offer an annualized home inspection (inspect the home every year) to the homeowner, with the service unrelated to any and all real estate transactions, closings or estate settlements, could I pay a third party, a licensed real estate broker, etc., to market the service for my company for the marketing and administrative services performed in the placement of the annual home inspection service business?  The payment to the third party, licensed real estate broker, etc., would be a good-faith estimate of the third party’s expenses for promoting, advertising and soliciting the business.  Naturally, the agreement for payment between the inspec tion company and the third party, the real estate broker, etc., would have to be disclosed on the agreement between the homeowner and the inspection company.

Response

The Code of Ethics states that “Inspectors shall not…. compensate realty agents…. for the referral of inspections.”  You would, at least in part, be paying a real estate agency for referrals, and therefore technically be in violation of the Code. Any business relationship with a real estate broker that involves payment for referrals can clearly result in potential conflicts of interest to the detriment of the home inspector’s consumer and the integrity of the inspection report when that consumer is a prospective homebuyer. Presuming that you will also be dealing with the same  broker with regard to inspections for homebuyers, the intertwining of financial arrangements between the real estate broker and the home inspector can create at least the appearance of a conflict of interest for the inspector’s homebuyer clients.  

Request for interpretation

e060419 Weblinks

Is it ethical to share a Web site link with real estate agents, other related real estate firms, appraisers, etc.?

Response

While business relationships with real estate agents and brokers have the potential to lead to conflicts of interest, linking Web sites does not necessarily imply endorsement or represent an inspection referral. Unless the agreement to link Web sites involves an implicit or explicit agreement to refer inspection clients to the home inspector for compensation, or unless the information included on the Web sites is somehow fraudulent or misleading, there is no violation of the Code of Ethics.