I am currently offering WDI and Hydro by calling around and setting up separate services each time. The contract is between my client and the WDI/Plumbing company. I would ideally like to partner with a pest control and plumbing company so I can offer these services as an up-sell. In Texas, is it legal/ethical for me to charge my clients above the Pest Control/Plumber fee for setting up these services? What is my best plan of action to offer these services through my company?
What exactly is hydro?
My opinion is that you are setting yourself up for a potential lawsuit.
I would first check with your attorney and your insurance provider. Co-mingling fees under your company’s name can become a nightmare. You need to ID the potential liability of having those services (and you are not licensed to proved them) under your company’s umbrella.
Ergo … calls to your attorney and insurance provider are essential.
I retired this past spring after 18 years of inspecting and I’ve seen many cases (lawsuits) against inspectors due to ancillary services they tried to gather under their company’s umbrella.
Thank you for your response Nolan. Other inspectors in my area are offering these services, so I’m just trying to keep up. I plan to get licensed by the State of Texas to do the WDI inspection, and we’ll see what TREC decides regarding the plumbing board and Hydrotests. Right now I feel like I am doing a ton of extra work to set up these services and not being compensated. I would like to hear how other inspectors in Texas are currently handling this.
Listen to Nolan. His advice is essential to keeping yourself out of court.
Oh, and I am with Josh. What is hydro?
I think in Canada the call Electricity Hydro but it appears you are in Texas.
Hydrostatic test is to test the plumbing drains for leaks.
Well I’m trying to figure out how to offer these services AND stay out of court.
I hope you have done your research and found out that only “licensed plumbers” can perform hydrostatic tests here in Texas.
TREC has also ruled on this from their perspective and has verbiage they have published stating same.
Also … the Governor of Texas has signed an emergency document that has preserved the State Board of Plumbing Examiners so that rule holds about licensed plumbers in Texas. They were given a two year time-frame on that until the next legislative session (in two years) where they might actually take care of business.
So … you can pursue hydrostatic testing as long as you are a licensed plumber in Texas.
Nolan - I am aware.
Just raise your own rate. Don’t get between the other service providers and your client. Doing so makes you the contractor and them the sub. You get the liability for a pittance. Do the coordination as a courtesy service and let the contractors own their own liability, while you increase your own rate for the liability that comes with the service you actually provide.
If you really want a piece of the other contractor’s action, charge them a coordination fee and let them cover it in their rates then remit the fee to you.
Thanks Chuck. Very helpful. Is there anything wrong with coordinating everything and receiving referral fees from the service providers? I believe at a minimum, I would have to disclose to my clients that I will receive a referral fee.
The Structural Pest Control Board has already specified that only a licensed WDI company/person can contract and collect payment for any pest control services of which WDI inspections are one.
Nolan already pointed out the hydrostatic testing issue. However we have not long ago also seen an Inspetor nailed for performing them.
Emmanuel I am aware. All I’m trying to do is figure out the best way to offer services to my clients, and if there is a way for me to legally, and ethically make money doing it. My competitors are doing it, I’m just not sure if they’re making money, or if they put a licensed plumber and pest controller on their payroll, or if they get referral fees, or if they are partnered with these businesses, or what. Trying to figure it out.
For WDI inspections some Inspectors have obtained their license and are listed under the pest company that trained them for the license. You would need to speak with one of those companies to determine what fee the Inspector pays the company for “Holding” their license.
As for plumbing work I seriously doubt that any Inspector has a Master Plumber on their “payroll” unless the Inspector is a Master Plumber. Most likely, if they are making money off of it, it is a kickback from the Plumber for every job they refer and complete.
Ethics are defined by each person. One person has no problem with a consumer paying more for a service so they can get their kickback from the provider. Another might consider it ethical to advise the client they are getting a kickback so the client can decide whether to use the referral or not. And then there are those that only refer good service providers and accept no kickback. You’ll have to decide which group you’re in and hopefully, to save yourself trouble down the line, you are in the latter two of the three.
Not if you stay in compliance with the Texas Occupational code as it pertains to inspectors https://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=22&pt=23&ch=535&rl=220. Specifically the Professional Conduct and Ethics section which states
(4) An inspector shall not receive a fee or other valuable consideration, directly or indirectly, for referring services that are not settlement services or other products to the inspector’s client without the client’s consent.
(5) This section does not prohibit an inspector from paying or receiving a fee or other valuable consideration, such as to or from a contractor, for services actually rendered.
You’ll have to disclose it.
For me, it’s easier and less complicated to simply charge enough in my base rate and tell clients all referrals I give are strictly merit based and I receive no compensation or other consideration…