March, 2019
Feature
Inspection News and Views from the American Society of Home Inspectors



Are These Violations of the ASHI Code of Ethics?

JAMISON BROWN

Question: Can an inspector conduet a prize drawing for real estate agents who refer business?
After each paid home inspection (by the buyer or client), we would like to give a free car wash ticket (approximately a $10 value) to the client’s real estate agent, regardless of how the client chose to select our inspection business. This ticket would be given as a thank-you to the real estate agent for their time spent waiting during the home inspection. Would giving a gift like this to real estate agents be a violation of any ASHI Standard?

Interpretation by the ASHI Code of Ethics Committee:
No, this is not a violation of the ASHI Standard of Practice because the ASHI Standard does not address this issue. However, if by “any ASHI Standard” you intended to refer to the ASHI Code of Ethics, then yes, such a gift would certainly be considered by many to be a potential violation.

Members should check the applicable laws in their states regarding gratuities and referral fees passing from inspectors to real estate agents. A gift that does not clearly fit into the normal category of “promotional items” such as calendars, pens or coffee cups with a business logo could be viewed as an improper payment.

The Code states: “Inspectors shall comply with this Code, shall avoid association with any enterprise whose practices violate this Code, and shall strive to uphold, maintain, and improve the integrity, reputation, and practice of the home inspection profession” (https://www.homeinspector.org/Code-of-Ethics). It is the committee’s recommendation that inspectors avoid providing potentially questionable gifts to real estate agents.

Question: Can an inspector offer an incentive or a “finder’s fee” to individuals who are not real estate agents?
In other words, do incentives for inspection referrals (such as a finder’s fee) to friends, friends of friends and past clients (not real estate agents or brokers) violate the ASHI Code of Ethics?

Interpretation by the ASHI Code of Ethics Committee: 
Home inspectors need to be cautious about offering or providing referral incentives because this activity may violate the ASHI Code of Ethics (Section 1B or 1C) if the incentive is detrimental to clients. 

A modest incentive for an inspection referral (including a finder’s fee) to a third party may not be in conflict with the ASHI Code of Ethics if the recipient has no occupation that may involve conflicting interests with the home inspector’s clients, has no interest in the property being inspected and has no interest in the outcome of the inspection. 

Incidentally, any referral incentive must comply with state and federal laws applicable in the jurisdiction where the inspection occurs, and any applicable provisions of the federal Real Estate Settlement Procedures Act (RESPA). Inspectors should periodically consult their attorney regarding legal issues.

Question: Can I sponsor a table at a real estate office awards program?
I would like to sponsor a table ($300) at a breakfast awards program at a real estate office. There will be additional sponsors other than home inspectors who will have tables. Does this table violate the ASHI Code of Ethics, Section 1C? Does buying a table at a breakfast awards program for a real estate office differ from buying a table at a home show or street fair?

Interpretation by the ASHI Code of Ethics Committee:
This is not a violation of the ASHI Code of Ethics if the ASHI associate member’s purchase of the $300 table is not exclusive. Is the program open to all home inspectors in the service area? If other inspectors have the opportunity, but choose not to participate, that is their marketing decision; however, if the associate member has been assured unexclusive, and if this or exclusive right to market also comes with an assurance that his position on any in-house referral list will be placed above other qualified inspectors, then it is a violation of Code of Ethics, Section 1C.

Jamison Brown is the owner of Home Inspections by Jamison & Company, Poquoson, VA. Before becoming an ASHI member in 1988, Jamison was a project manager, and supervised the construction and remodeling of more than 10,000 housing units for the U.S. Department of Defense (DoD) and the U.S. Department of Housing and Urban Development (HUD). Jamison is a former member of the Carpenters and Joiners of America, and a former licensed plumber in the state of Virginia. He is a member of the International Code Council, International Association of Electrical Inspectors (IAEI) and a certified member of the American Society of Home Inspectors (ASHI). He has been a member of ASHI’s Technical and Membership Committees, and was chair of the CEPP Committee. Currently, he chairs the ASHI Code of Ethics Committee. Jamison has personally inspected more than 18,000 residential and commercial properties. Contact him at jamison.brown@gmail.com.