Request for Interpretation

Ethics for Home Inspectors

by Jamison Brown August 1, 2020

In this column, ASHI’s Ethics Committee addresses dilemmas faced by home inspectors.

Know the Code:

View the ASHI Code of Ethics

Know the Standard of Practice:

View the ASHI Standard of Practice ASHI Standard of
Practice

Question:

To participate in Contractor A’s $15 “processing fee,” a home inspector must provide what I believe to be confidential client information to Contractor A. Is it a violation of the ASHI Code of Ethics to provide this information to Contractor A, and is it also a violation to accept the $15 processing fee from Contractor A? Can a complaint be filed against an ASHI member for participating in Contractor A’s processing fee plan?

Response:

Accepting payment or other consideration from a party (in this case, Contractor A) in return for client information or special access to an inspector’s client for the purpose of marketing services to the client, such as being present during a home inspection for which a member is responsible, violates ASHI Code of Ethics Items 1B, 1E and 2C (see below).

1. Inspectors shall avoid conflicts of interest or activities that compromise, or appear to compromise, professional independence, objectivity, or inspection integrity.


B. Inspectors shall not inspect properties under contingent arrangements whereby any compensation or future referrals are dependent on reported findings or on the sale of a property.


E. Inspectors shall not accept compensation, directly or indirectly, for recommending contractors, services, or products to inspection clients or other parties having an interest in inspected properties.

2. Inspectors shall act in good faith toward each client and other interested parties.


C. Inspectors shall not disclose inspection results or client information without client approval.

Question:

Is it an ethical violation to be tied to a brokerage by a marketing agreement, and get 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 Item 1.C of the Code of Ethics (see below), 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.

1. Inspectors shall avoid conflicts of interest or activities that compromise, or appear to compromise, professional independence, objectivity, or inspection integrity.


C. Inspectors shall not directly or indirectly compensate realty agents, or other parties having a financial interest in closing or settlement of real estate transactions, for the referral of inspections or for inclusion on a list of recommended inspectors, preferred providers, or similar arrangements.

Question:

In light of Item 1 of the Code of Ethics, “Inspectors shall avoid … activities that … appear to compromise professional independence,” is it acceptable to work in my local area to encourage other inspectors not to use pricing as a competitive tool, but to rely on their professionalism to sell their services? I would not try to set prices, but I would try to influence others in the profession through educational efforts such as our chapter magazine.

Response:

The provision of the Code addressing professional independence (Item 1) does not really apply to your question. In the context of the Code, professional independence means freedom from the improper influence of the inspector, caused by potential conflicts of interest that could result in a lack of objectivity or inspection integrity.

Item 3 of the ASHI Code of Ethics states, “Inspectors shall avoid activities that may harm the public, discredit themselves, or reduce public confidence in the profession.” There are many dos and don’ts regarding when and how competitors can generally discuss pricing of services. These guidelines are beyond the purview of the Code of Ethics Committee. An improper discussion can result in substantial penalties. Therefore, unless legal advice is obtained, such discussions are discouraged, despite the best of intentions.


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