May, 2020

Inspection News and Views from the American Society of Home Inspectors


Are These Violations of the ASHI Code of Ethics?

JAMISON BROWN

Question:

Is it a violation of the ASHI Code of Ethics to promote your business by providing first-time buyers with the information that a local lender has agreed to reimburse consumers for their home inspection up to $250?

Response:

No, providing accurate information about potential reimbursements offered by others is not in itself a violation of the Code of Ethics.

Question:

Is it ethical to share a website link with real estate agents, other related real estate firms, appraisers and others?

Response:

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

Question:

Is it ethical for an inspection company to be listed on a real estate firm’s preferred vendor list, even if no other inspection companies are listed and to receive all of the real estate firm’s inspection referrals even if no payments are being made for the privilege?

Response:

The circumstances presented in this inquiry do not constitute a violation of the ASHI Code of Ethics. It is not unethical under the Code to be the sole inspection company referred by a real estate agency. However, it is highly unusual for a real estate agency to take on the liability associated with referring a single home inspection company to its clients, unless significant financial incentives exist to do so. Such inducements might include inspection reports that “go easy” on a house, routinely fail to disclose defects that could derail real estate sales or intentionally fail to meet the requirements of the ASHI Standard of Practice. There also may be contingent arrangements—for example, when future referrals are dependent on specific findings, or when there is some other form of hidden or indirect compensation to the agency. These inducements or arrangements would clearly violate the Code of Ethics.

In addition, an exclusive arrangement may appear to the public as a conflict of interest, and it may be a violation of law in some states. Given these circumstances, we recommend that any home inspectors who find themselves in this type of situation should exercise caution and consult with their attorney.

Know the Code: The ASHI Code of Ethics can be found at this link: www.homeinspector.org/Code-of-Ethics

Know the Standard of Practice: The ASHI Standard of Practice can be found at this link: www.homeinspector.org/Standards-of-Practice