where is the ethical line between contractor and inspector

(Gregory Giguere) #1

I am coming out of the contracting world, currently working on getting my license in NH. I do all phases of construction from excavation to roofs to custom cabinetry, I understand that contracting a defect is unethical. But where is the line drawn in terms of bidding on a project. Should I only think about superficial projects (bath or kitchen remodels with no defects present) updating flooring because of aesthetic displeasure? Or completely separate inspection and contracting jobs.

I’m really looking to see what other guys have done starting in inspections. I have little capital to work with, so I was thinking about complimentary construction work I can do until I can establish myself as an inspector, without affecting my future reputation as an inspector.

(Jeffrey R. Jonas) #2
(Stephen W. Stanczyk, WA License #221) #3

Simple. If you inspect a house, you or any company you have a financial interest in cannot work on the home for 1 year. Period. Very simple. Many licensed states have this rule.

(J Dupont) #4

As both a builder and an inspector, I use a class code on my contacts.
A client can be either a construction client or an inspection client.
They can never be both, you are either one or the other.
After a year, an inspection client becomes classed as an “expired” inspection client and becomes eligible for construction activities.
It keeps it easy for marketing purposes.

(Larry W. Morrison, CMI) #5

Several years back I was also an insulation contractor and had to distance myself and take a financial hit because I chose to not do work on or bid homes I inspected. (In my state it would not be illegal, but ethically it would not be correct under my own standards as well as interNACHI’s C of E)…

Ultimately you will probably find setting the standard now will help you be known as an inspector that is ethical and honest.

On a Related Note: I also find it a conflict of interest as well as Wrong for a State to require an inspection on your Automobile by the same outfit that is going to “Repair the Problems” THEY found"…(This is actually the reason most states have dropped annual inspections as a requirement for registration. (Utah just dropped starting Jan. 1 2018… It Harms the consumer more than helps.

(Douglas Cossar, CMI. NHI) #6

It becomes easier to understand the reason for the ethics prohibition if you think about it this way.

Do you do the inspection for the purpose of pitching repair work? If so… that is the violation.

Cheers

(Jeff Belrose, CMI) #7

I am in a position like this. We are a top vendor for mold remediation and cleaning. But I cannot touch anything I inspect for 12 months. We bid on projects otherwise, seamlessly. But if I have been there for an inspection prior to 12 months being up, its a no go.

What you can do, is market to other inspectors. Specially, if you can find one that installs radon systems or does some other niche type service or even another that also does contracting. I share work with another inspector that does this. He sends me inspections and mold remediation jobs and I send him all the radon mitigation needs I find on inspections.

Many of my competitors send me mold work from their inspections. You can also market to realtors heavily as it is hard to find service providers. You will get a lot of work outside of inspections.

Your competitors become some of your best marketing. I send nearly 50 radon jobs per year to the inspector that does radon mitigation installs. It works really well and makes up for the lost revenue of not being able to bid projects that I find because he feeds me as well.

(Joseph Burkeson, CMI) #8

Here’s the secret, once you experience the wealth effect associated with being a home inspector your contractor goals will be eclipsed by the need to find the time to spend the money. :wink:

(Rick Elliott) #9

Another thing to consider is when a client asks you “would you buy this house?” I have a standard response and it comes up surprisingly often. Your client is looking for a professional opinion not based upon your needs, but theirs. You wanna carry on with contracting then look for another avenue for clients… and have a good reference or two you are prepared to pass along. it’s a conflict of interest to report (document) a potential problem and then offer to fixer up!
That is of course, unless your a termite inspector…

(Michael A. Senty) #10

This is a tough one for me too. I’m coming from construction in a remote region of the country with not enough inspections to be full time. I have to stay in construction, which is fine. Inspecting is an interesting and part time business. Always will be.

I engaged in correspondence with Nick Gromicko about this, and he explained that it’s not so cut and dry as some have explained here. Having two companies, one for inspection and one for construction, separates the line somewhat.

My approach is to never mention or promote my construction company when I’m wearing my inspection hat. Because of the small community, I do get asked about construction during inspections. Some inspection clients come with knowledge of my construction businesses. My construction experience is a significant asset to my qualifications as an inspector.

My policy is to not do work on the existing buildings I inspected for a year, per ethics standards. In the 12 months from the inspection date, I will not do work on concerns that are mentioned in my report.

However, I’m open to discussing the project if an inspection client contacts me after the closing for an added building, an addition to the existing structure, or possibly a remodel. More often than not, by the time the project is contracted, it’s been a year since the inspection date.

The attitude, when wearing an inspection hat, is to be disciplined to not think of the inspection client as a potential construction client. If they ask about another contractor, recommend they contact that person. Hopefully you have enough construction work that you don’t NEED the work that can come about from a newly purchased home.

(Michael A. Senty) #11

This is a tough one for me too. I’m coming from construction in a remote region of the country with not enough inspections to be full time. I have to stay in construction, which is fine. Inspecting is an interesting and part time business. Always will be.

I engaged in correspondence with Nick Gromicko about this, and he explained that it’s not so cut and dry as some have explained here. Having two companies, one for inspection and one for construction, separates the line somewhat.

My approach is to never mention or promote my construction company when I’m wearing my inspection hat. Because of the small community, I do get asked about construction during inspections. Some inspection clients come with knowledge of my construction businesses. My construction experience is a significant asset to my qualifications as an inspector.

My policy is to not do work on the existing buildings I inspected for a year, per ethics standards. In the 12 months from the inspection date, I will not do work on concerns that are mentioned in my report.

However, I’m open to discussing the project if an inspection client contacts me after the closing for an added building, an addition to the existing structure, or possibly a remodel. More often than not, by the time the project is contracted, it’s been a year since the inspection date.

The attitude, when wearing an inspection hat, is to be disciplined to not think of the inspection client as a potential construction client. If they ask about another contractor, recommend they contact that person. Hopefully you have enough construction work that you don’t NEED the work that can come about from a newly purchased home.

(Larry Kage, CMI) #12

Is the above bolded/underlined how you understand the below part of the Code of Ethics?

InterNACHI Code of Ethics - InterNACHI

  1. The InterNACHI® member shall not perform or offer to perform, for an additional fee, any repairs or associated services to the structure for which the member or member’s company has prepared a home inspection report for a period of 12 months. This provision shall not include services to components and/or systems that are not included in the InterNACHI® Standards of Practice.

With all due respect, it is different to me.

(Steve Nadeau) #13

I think that “repairs or associated services” has quite a bit of wiggle room. If you inspect a home that is missing insulation as it’s only defect, ethically you can’t sell your client insulation. I see no conflict if that client asks you to remodel their kitchen. That is not a “repair or associated service” of anything to do with a discovered defect during the coarse of your inspection.

(Stephen W. Stanczyk, WA License #221) #14

Wrong. If you inspected the house, you cannot work on the house for 1 year unless it is an item that is not included in the Standards of Practice. So you could perform pest control or radon mitigation since those are not in the SOP. But the structure, electrical, plumbing, floors, walls, ceilings, windows and doors are all in the SOP so no, a kitchen remodel would not be allowed. The only wiggle room is to not be a member of InterNACHI. So you do have a choice.

(Larry Kage, CMI) #15

From the InterNACHI Standards of Practice.

(Stephen W. Stanczyk, WA License #221) #16

Well first, it is from the Code of Ethics, not the Standards of Practice.

And the sentence you left out at the end is also important.

This provision shall not include services to components and/or systems that are not included in the InterNACHI® Standards of Practice.

(Larry Kage, CMI) #17

Thanks for the correction…I knew that…doing too many things at once. :oops:

(Stephen W. Stanczyk, WA License #221) #18

And don’t forget old age too… :wink:

(Larry Kage, CMI) #19

Yeah, that and radiation…:shock:

(Stephen H. Payson) #20
  1. The InterNACHI® member shall not perform or offer to perform, for an additional fee, any repairs or associated services to the structure for which the member or member’s company has prepared a home inspection report for a period of 12 months. This provision shall not include services to components and/or systems that are not included in the InterNACHI® Standards of Practice.

The NJ Standards of Practice (which we are bound by) implies that it’s forever.

**13:40-15.19 PROHIBITED PRACTICES
**
a) It is a prohibited practice for a home inspector to do any of the following:

       1) Perform or offer to perform, for an additional fee, any repairs to a structure on which the licensee or the licensee's company, has prepared a home inspection report.

Period!