August, 2003
Feature
Inspection News and Views from the American Society of Home Inspectors



Proposed Draft Foreword to the Code of Ethics for the Home Inspection Profession

EDITED BY ASHI STAFF

The purpose of the American Society of Home Inspectors® (ASHI®) is to promote exemplary practice in property inspection services. The membership of ASHI is committed to the Code of Ethics for the Home Inspection Profession, which sets forth the ethical standards for home inspection providers. This Foreword and the Commentaries1  are intended to aid understanding of this Code by providing context, explanations, illustrative settings, or historical background; they do not limit meaning or scope of the Code.

Ethical Standards Are Vital to the Home Inspection Profession

During the 1970s, the demand for professional home inspections grew as a result of home buyers’ desire for unbiased expertise and judgment, independent from the intense, high-stakes sales motivations and emotional pressures surrounding the purchase of homes. To preserve inspection integrity and independence from sales motives, the founders of ASHI adopted a strong Code of Ethics2  upon the establishment of ASHI in 1976. Over the years the ASHI Code of Ethics has become the most widely used ethical standard for the home inspection profession and has been adopted by many states as the official ethical code for home inspectors.

Developments Leading to a New Code of Ethics

By the end of the 1990s, increasing ethical challenges arose from the spread of the internet and complex marketing arrangements. To help its members resolve questions on these and other important issues, ASHI began issuing interpretations. In September of 1999, the ASHI Standards Committee issued its first response to a request for interpretation of the Code of Ethics. By 2003, twenty-nine ethics interpretations were issued to answer questions submitted by members with ethical concerns they felt were not clearly addressed in the 1976 Code of Ethics.

In 2002 several ethics scandals, costing the public billions in losses, emerged among large, publicly owned companies. These scandals involved conflicts of interest3  and severely damaged the reputation of CPAs, financial advisors, investment firms, stock markets, and businesses in general. The public’s concern about ethical issues made this an appropriate time to address several questionable practices by home inspectors that had crept into usage. On June 1, 2002, the ASHI Standards Committee, in consultation with a business ethicist, updated an October 3, 2000, proposal that had been written by an ad hoc ASHI Ethics Task Force. In the fall of 2002 the ASHI Board of Directors formed a new Code of Ethics Committee whose primary task was to focus on interpreting the Code of Ethics and to propose to the membership a revised code, resulting in this Code which was approved to be effective on ______.

Although this Code is more specific than the original code regarding the prohibition of certain conflict-of-interest arrangements,4  all prohibitions of the original 1976 ASHI Code of Ethics5  and its 29 ethics interpretations remain valid under this Code, except for the added prohibitions against disclosing a client’s personal information without the client’s approval, being paid to hand out warranty company brochures, and hidden finders fees to friends, etc. (contrary to 1976 Code of Ethics which allowed such practices per interpretations e010731, e020305, and e020419).

Distribution and Use of the Code of Ethics for the Home Inspection Profession

The Code of Ethics may be freely distributed as long as ASHI copyright notice is included. It is desirable that this Code be widely known, particularly by clients, as this Code is intended to guide home inspectors’ conduct, to educate the public about consumers’ interests and privacy, and to serve as an ethical standard for home inspectors. ASHI urges governments that regulate home inspectors to adopt this Code to ensure high ethical standards for the benefit of the general public and especially for consumers of home inspection services. ASHI would appreciate appropriate acknowledgement by authorities adopting this Code or its provisions.



1 The Code of Ethics for the Home Inspection Profession may be published with or without this Foreword or the Commentaries. Regardless of form, neither this Foreword nor the Commentaries limit the meaning or scope of any provision of the Code. The Code of Ethics for the Home Inspection Profession is approved by two-thirds of voting ASHI Members. This Foreword and the Commentaries are modified from time to time by the ASHI Code of Ethics Committee as new situations arise.

2 Much of the original 1976 ASHI Code of Ethics was inspired by the 1958–1964 Code of Ethics of the National Society of Professional Engineers.

3 “A conflict of interest is ‘a situation in which a person has a business, financial, or personal interest sufficient to influence the objective exercise of his/her official duties.’ An “apparent conflict of interest” is one that a reasonable person would think is likely to compromise a professional’s judgment. A “potential conflict of interest” is a situation that may develop into an actual conflict of interest.” – Michael McDonald [with editing]; an inspector cannot simultaneously provide services to two parties who have conflicting interests such that if both are pursued there might result an unjustified effect on another individual. (Ethical Theory and Business, Tom L. Beauchamp & Norman E. Bowie, Ed. Prentice Hall, 1979, p. 295.)

4 Even if were fully disclosed, some conflicts of interest are too unethical to tolerate or too conflicting for an inspector to eliminate their influence. And, due to the pressures on clients when scheduling home inspections, disclosures cannot normally be timely, cannot be sufficiently detailed, cannot sufficiently explain consequences, and cannot be sufficiently understood (particularly by first-time homebuyers) to be an effective remedy. However, inspectors must guard against the influence of potential conflicts of interest that are not prohibited by this Code.

5 ASHI Code of Ethics, Adopted 1976
Honesty, justice, and courtesy form a moral philosophy that, associated with mutual interest among people, constitutes the foundation of ethics. The members should recognize such a standard, not in passive observance, but as a set of dynamic principles guiding their conduct. It is their duty to practice the profession according to this code of ethics.

As the keystone of professional conduct is integrity, the Members will discharge their duties with fidelity to the public, their clients, and with fairness and impartiality to all. They should uphold the honor and dignity of their profession and avoid association with any enterprise of questionable character, or apparent conflict of interest.
  1. The Member will express an opinion only when it is based on practical experience and honest conviction.
  2. The Member will always act in good faith toward each client.
  3. The Member will not disclose any information concerning the results of the inspection without the approval of the clients or their representatives.
  4. The Member will not accept compensation, financial or otherwise, from more than one interested party for the same service without the consent of all interested parties.
  5. The Member will neither accept nor offer commissions or allowances, directly or indirectly, from other parties dealing with their client in connection with work for which the member is responsible.
  6. The Member will promptly disclose to his or her client any interest in a business which may affect the client. The Member will not allow an interest in any business to affect the quality or the results of their inspection work which they may be called upon to perform. The inspection work may not be used as a vehicle by the inspector to deliberately obtain work in another field.
  7. An inspector shall make every effort to uphold, maintain, and improve the professional integrity, reputation, and practice of the home inspection profession. He or she will report all relevant information, including violations of this Code by other members, to the Association for possible remedial action.