May, 2010

Inspection News and Views from the American Society of Home Inspectors


Small Gifts for Agents and Booking Service

EDITED BY ASHI STAFF

The ASHI Code of Ethics Committee is charged with developing ethics education and awareness for ASHI members and answering Requests for Interpretation (RFI) of the Code of Ethics.

When serious questions arise about the intent and applicability of the revised code, members are encouraged to review previous requests and responses on the ASHI Members Only Web site under Resources. If there has not been a request for an interpretation of a similar situation, a member may submit a question using the required RFI form, which can be found under Downloads/ASHI Forms & Documents. The committee continues to provide ASHI members with responses to their requests. 


Request for Interpretation


Is it a violation of the ASHI Code of Ethics Paragraph 1.c to offer real estate agents gifts of low monetary value (less than $15 for movie tickets or car wash passes) as thanks for referrals or for the time spent at the inspection? I have included three examples for your consideration.

Example A: Provide movie tickets to real estate agents as thanks for their time at the inspection.

Example B: Provide movie tickets to real estate agents as thanks for the referral.

Example C: Offer to provide movie tickets to real estate agents for every referral.

Response

The committee finds that these offers do constitute a violation of the ASHI Code of Ethics Paragraph 1.c.

Previous rulings have found that providing meals and other small courtesies are a normal and accepted part of the business culture and do not constitute a form of compensation for future referrals.

However, in each of the examples where movie tickets are provided to the real estate agent, they are offered as direct compensation for referrals. Even though the monetary value may be low, direct inducements for inspections are not allowed by the Code of Ethics. A home inspection is a part of a client’s due diligence in purchasing real estate. Acceptance of a referral by a client is a statement of faith by the client in the source of the referral. It is important to the client that there be no doubt that a referral for home inspection services be based on the quality of services provided. Offers of direct payments of cash or other items having a cash value in exchange for the referral will undermine the trust placed in the professionals involved.

Request for Interpretation

We are a group of three inspectors and would like our independent booking service to provide information to our clients/agents on the (name of contractor) offers/plans during the process of booking an inspection for us. No monies will accrue to any inspector, but the booking service would receive a $15 servicing fee for every valid inquiry.

We are frequently asked during inspections about alarm systems and this would appear to be an associated service for the clients.

The booking service would sign the agreement with (name of contractor) and agree to act for (name of contractor) solely and not for its competitors.

In light of previous opinions, is there any cause for concern in this relationship with an affiliate? Is this an ancillary inspection service or is it recommending a sub-contractor?

Response

A previous opinion (RFIe011105) found that it was a violation of the CoE for an inspector to accept a payment or other consideration for providing client information or special access to an inspector’s client for the purpose of marketing services to the client.

This RFI presents a slightly different circumstance where the money for the client information and access would be paid by (name of contractor) to a subcontractor working for the inspectors. The committee finds that this would also be a violation of the Code of Ethics Paragraph 1.E.

The booking service has a contractual relationship with the inspectors and acts on their behalf as sales and scheduling agent. A client who calls an inspector’s phone number has no knowledge that he is dealing with anyone other than an employee of the inspector. Employees and subcontractor for an ASHI inspector must act in accordance with the CoE when acting as an authorized agent of the ASHI inspector.