Referral Fee from other inspectors

A friend of mine, also an inspector, wants to “book” an inspection in exchange for a cut. What is reasonable? For example, I am a member of an organization which does the same thing in exchange for other benefits (they do all of the marketing and have some really fair benefits of membership). The company takes responsibility for their bookings, etc. This person wants to do the same at a similar rate, however I can’t identify anything beneficial to this arrangement - other than him receiving a large chunk of the inspection fee. I am trying to figure out what’s reasonable for booking an inspection only. Plus, I will 1099 him this amount.

Secondly, the person asked for a copy of the inspection report so he can forward it to the agent. I am accustomed to giving it to the client and letting the client forward it on. I believe this to be a condition of my E&O and Gen. Liab. insurance.

Feedback?

If you pay for the referral, the referral now belongs entirely to you. It is your client and all of your duties to your client must be observed, such as distribution of the inspection report, etc.

Yeah, but what is reasonable for a fee? Percentages are fine. Is there a scale based on services performed?

I would say $25 to $50 would be reasonable for a referral.

Thanks. That sounds good; I think that’s fair. After all, I’m doing the work, carry the business license, insurance and certifications, tools and technology.

What about giving him a copy of the report? I can send him the limited summary, but I can’t come up with a reason to justify. Aren’t there some liability or confidentiality/client relationship/ethical issues?

Get permission from YOUR client first,before sending copies to anyone else.

Send him nothing.

If he were “subcontracting” you to perform the inspection, it would be different. Since it is a referral, your ethical duties are to your client only.

Why would or does he want a copy of your work?

Are Georgia HI’s licensed? If so, check your state requirements. My state’s COE strictly prohibits accepting or paying a referral fee to another HI. I do, like many others, refer inspections that I can’t get to for whatever reason to other inspectors for no compensation and hope they remember me and return the favor some time. Invariably, they do.

Harun,

More information is needed.

Is he merely passing the work on or is he sub-contracting the Inspection to you?

DITTO!

Well heck yea we’re licensed here in GA. I got my huntin’ license, my fishin’ license, my drivers license and a few others I can’t remember off the top of my head. But I don’t know nuttin bout no Inspection license?

Actually, no, GA does not have any licensing laws. Everything is set per county as far as requirements. I agree as most of you have said, pay a $50 referral fee and tell him thank you. There should be no reason he needs the report.

Kevin

Senate Bill 334 is just beginning, (out of senate committee but yet to be put forth to the senate for debate and a vote) but it addresses formation of a HI Board and licensing Georgia HI’s There’s nothing in the law as yet (nor likely to be) regarding pay for referrals, as I can see.

The bill, as wrtten thus far, will require us to have performed a certain minimum # of inspections, pass a “recognized” national home inspector exam (the NHIE?) and have , I believe, GL insurance.

Do you plan to allow this to happen?

Mr. Bushart, why would we not WANT this to happen? I certainly feel this would be helpful to the general public overall and to our industry in general.

Kevin

Will you be a better home inspector with the state governing you than you are, today?

Me? No. Others who see this as an easy business they can just jump into and make a lot of money? Yes.

Kevin

As always…home inspection legislation that effects “others” is the objective of all who favor it. You gotta love it.:smiley: :smiley:

Who do we, as inspector recommend to our Clients to
fix an electrical problem? “Johnny Fix-it” or a licensed
and qualified Electrician?

The licence for the Electrician will keep out “Johnny Fix-it”
and only allow qualified Electricians to fix electrical problems.
Does the licensing law make all Electrician perfect? NO,
but it’s better than no licensing law at all.

If there were not so many “Johnny Fix-it” guys, that know
just enough to do great damage, then there would be no need
to protect society from them.

Some laws are created to stop harm and can also have
impure motives mingled with them at the same time. To
point out the impure motives and forget the good would
not be balanced.

I think our society needed less laws in the past because
we had a higher degree of inward moral fiber being instilled
into our children. As we loose this moral fiber, then our
society calls out for outward controls to relieve the pain
of our declining moral values.

If there were not so many “Johnny Fix-it” guys wanting to
advertise themselves as qualified to fix your electrical
problems, there would be no need to create a law to
filter them out.

I know laws will not change hearts, but some laws do
have a benefit. If not, then just tell your Clients to call
“Johnny Fix-it”.

As a Profession becomes more complex (ie… electricians,
home inspectors, etc…) the greater the harm can come
to the consumer who hires an imposter.

No, I don’t like some laws. But sometimes the other option
becomes too painful to bear. I have met many many
people who want to inspect houses, and I can see that
the consumer would be greatly harmed if we opened
the door for them to run loose.

There is complaint against every law… but there is
a benfit too. Our country is a country of law. Some
are applied for good, some of them stink. But the rule
of law is the greatest idea man has ever had for the
benefit of society. It’s a constant balance and the
debate on how to apply those laws will never end.