Issue 46 June 6, 2001 

Ethics in Home Inspection

Part of dealing with others in the real estate profession should be coming to an understanding of the professional standards under which we operate. North Carolina licensed home inspectors operate under state legislation part of which includes a Standards of Practice and Code of Ethics. I will deal with the first later; today we will address the NC and ASHI Codes of Ethics. 

This article will address some questions you may have such as:

1. To whom should the Home Inspector be partial?
2. What governs the Home Inspectors use of his opinion about issues?
3. To whom is the Home Inspector responsible?
4. To whom is the Home Inspector allowed to disclose information relative to his findings?
5. Can and/or should a Home Inspector refuse to disclose information regarding his findings to the seller, seller or buyer's agent, lending institution, insurance agent, buyers or sellers relatives, repair contractors, pest control inspectors, etcetera, etcetera, etcetera (remember "The King and I"?). 
6. Can a third party purchase the home inspection report from the inspector?
7. Can a Home Inspector pay a commission or finders fee to a Realtor or give gifts in return for business?
8. Is a Home Inspector allowed to express his opinion as to the value of the home he is inspecting?
9. Can the Home Inspector involve himself in other business transactions relative to the home he is inspecting?
10. Can the Home Inspector claim in advertising or otherwise to have experience, education or affiliations, which are not based in fact?
11. After completing the inspection is it acceptable for the inspector to offer a proposal to perform the repair work?

The word ethical is defined as "Being in accordance with the accepted principles of right and wrong that govern the conduct of a profession." Part of the legislation, which governs the home inspection profession in North Carolina, is a Code of Ethics. This North Carolina "Code of Ethics" was adapted from the American Society of Home Inspector's (ASHI) Code of Ethics with North Carolina amendments. 

Code of Ethics for North Carolina Licensed Home Inspectors

(a) Licensees shall discharge their duties with fidelity to the public, their clients, and with fairness and impartiality to all.
(b) Opinions expressed by licensees shall only be based on their education, experience, and honest convictions.
(c) A licensee shall not disclose any information about the results of an inspection without the approval of the client for whom the inspection was performed, or the client's designated representative.
(d) No licensee shall accept compensation or any other consideration from more than one interested party for the same service without the consent of all interested parties.
(e) No licensee shall accept or offer commissions or allowances, directly or indirectly, from other parties dealing with the client in connection with work for which the licensee is responsible. 
(f) No licensee shall express, within the context of an inspection, an appraisal or opinion of the market value of the inspected property. 
(g) Before the execution of a contract to perform a home inspection, a licensee shall disclose to the client any interest in a business that may affect the client. No licensee shall allow his or her interest in any business to affect the quality or results of the inspection work that the licensee may be called upon to perform.
(h) Licensee shall not engage in false or misleading advertising or otherwise misrepresent any matters to the public. 

The ASHI code from which the NC code was derived is a little tougher in some areas than the NC code. Those of us who are ASHI Inspectors must abide by it as well as the less strict NC code. 

Code of Ethics of The American Society of Home Inspectors

Honesty, justice, and courtesy form a moral philosophy which, 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 not 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 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 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 industry. He will report all such relative information, including violations of this Code by other members, to the Association for possible remedial action.

End of Code

The greatest difference between the two codes is that the ASHI code says "The inspection work may not be used as a vehicle by the inspector to deliberately obtain work in another field." Put more simply an ASHI inspector cannot do the repair work, be affiliated with a company which does or receive compensation or finders fees for such work. There are many, including me, who would be pleased for this to be added to the NC Code. Our efforts at such, so far, have been in vane. I take this a step further and will not give out names or make recommendation of companies or individuals who do repair work. 

Hopefully this has been enlightening and helps you have a better understanding of why we home inspectors do things the way we do and to be able to recognize a home inspector who is not following the rules. 

Thought for the week

"It don't take a genius to spot a goat in a flock of sheep." 
The Wisdom of Will Rogers