Question: Is assuming a real estate agent’s liability as it pertains to a home inspection a prohibited compensation? For example, in order for any agent of a specific real estate company to refer business to an inspector, the real estate company requires the inspector to sign a “Marketing Agreement” that has certain indemnification requirements. Would signing an agreement like this be a violation of the ASHI Code of Ethics?
Response: The inspector referral agreement that was provided with this request for interpretation (RFI) appears to be an indemnification by the inspector for the inspector’s liability to the client for negligent inspecting. Therefore, the specific question is moot, due to a mischaracterization of the agreement.
This does not mean that the accompanying agreement is or is not in compliance with the ASHI Code of Ethics. Conflicts of interest arise naturally with real estate companies because they represent the homeseller and a home buyer. The indemnification both mitigates the conflicting interests and expands the client’s opportunity for redress in the event of negligent inspecting or reporting.
The agreement between the real estate company and the inspector is a quid pro quo that benefits only the real estate company. Participating in such an agreement does not comply with the first item of the ASHI Code of Ethics (“Inspectors shall avoid conflicts of interest…”) and also is contrary to the second item of the Code (“Inspectors shall act in good faith toward each client…”) because clients would assume referrals are based on competence, not on a hidden protection for the real estate company.
Question: Is it a violation of the ASHI Code of Ethics for a home inspector to pay for advertising on a commercial moving truck when the owner of the vehicle is a real estate agent and is advertising his own business along with other businesses? The agreement to advertise would be with the owner of the truck, as an individual, not as a representative of the real estate company.
Response: The ASHI Code of Ethics allows advertising. However, any advertisement, regardless of who owns or controls the advertising media, would be a violation if it is deceptive or if it involves referrals or endorsements by an entity that has conflicting interests with a home inspectors’ clients, such as a real estate agent.
In addition, any advertisement, regardless of who owns or controls the advertising media, would be a violation of the ASHI Code of Ethics if it involves payment for an approved or preferred listing or if it involves any quid pro quo between the home inspector and an entity that has conflicting interests with a home inspectors’ clients, such as a real estate agent.
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 email@example.com.