March, 2011

Inspection News and Views from the American Society of Home Inspectors


To Disclose or Not to Disclose

EDITED BY ASHI STAFF

The following interpretations of the Code of Ethics were developed by the ASHI Code of Ethics Committee in response to written Requests for Interpretation (RFIs) from the ASHI membership. 

 The committee’s responses to RFIs are intended to help clarify the Code of Ethics and its applicability to the real-world situations that home inspectors encounter in their professional practice. The RFIs should be viewed as guidance to assist members in their interpretation of the Code. These responses are not intended to supersede the Code. A response to an RFI is not necessarily a determination that an action in question is ethical or unethical, only that the committee believes that it does, or does not, violate one or more principles of the Code.

 Complaints regarding the actions of individual members for violations of the Code should be brought before the appropriate Complaints Committee. Any proposed changes to the Code must be formally brought before the membership for its input and approval per policy and procedures as accepted by the Board of Directors of ASHI. 

 ASHI members are encouraged to submit RFIs to the committee if serious questions about the intent and applicability of the Code should arise, using the required RFI form, which can be found under Resources/Interpretations in the Members Only section of www.homeinspector.org.

Do I disclose what I know from previous inspection?

Question
If I inspected a home in the past and was privy to info about a past minor fire (told to me by the previous buyer/current seller), am I obligated to or forbidden to disclose this information to the new client/buyer? Past client (current seller) did not disclose the past fire in his current disclosure statement. Current listing agent for this home was also the listing and buyer’s agent at the past transaction. This agent also knew of the past fire. If I don’t disclose what I know about the home, do I open myself up to added liability for not disclosing information that I know of the home should the buyer find in the future that I knew of the fire and I didn’t tell him, or am I still required to protect the original inspection findings only for the then client (current seller)?


Response
For information on potential liability, state laws will take precedence over ASHI Standards, and given the wide variations between individual state laws concerning these matters, ASHI recommends that members consult an attorney in their state of practice to determine the legal responsibility the inspector has to the various parties in the transaction.

With that said, the committee finds that the inspector is required to fully inform the current client of all information he has about the property that may be germane to a client’s purchase decision. An inspector assisting a purchaser in performing due diligence must disclose any information obtained about the property, regardless of the source of that information. To properly navigate this situation, the inspector should first inform the current client (purchaser) of the previous inspection for the current owner (now seller) and have the current owner (seller) sign a release, allowing the inspector to reveal any information obtained during the first inspection. After the release is signed, the inspector should then disclose all results from the first inspection.

Charging a buyer for a prelisting report and walkthrough

Question
Is it a conflict of interest for an inspector to perform a prelisting inspection for a seller and then, with the seller’s permission, provide a buyer of the property with the home inspection report and charge the buyer a fee to walk through the property and check that items noted in the report were repaired?

Response

The Code of Ethics does not prohibit an inspector from performing a prelisting inspection for the seller and then later, for a fee and with the consent of the seller, consulting with the buyer on items identified in the original report as needing repair. The Code of Ethics Item 1D states that inspectors shall not receive compensation for an inspection from more than one party unless agreed to by the client(s). The question addressed in this RFI describes full disclosure and agreement between the parties involved.