Washington State Home Inspector Licensing -- Disclosure and Conflicts of Interest

By
Home Inspector with King of the House Home Inspection, Inc
Lately, I have written about some of the changes that are occurring in this state as we prepare for home inspector licensing that will come roaring down the pike in September. From Bellingham to Spokane, inspectors and real estate professionals need to be aware of these changes.

An earlier post described the new section of a WAC that took effect at the end of January. It mandates that real estate brokers must establish a policy to assure that agents disclose to clients any "business relationships" they might have with the home inspectors they refer. The department of licensing, administering the rules, has stated in writing that a realtor, referring an inspector based on merit, is not a business relationship requiring disclosure. You can read the detailed information here.

For the record, the proposed home inspector Standards of Practice and Ethics mirror this sentiment. They say:

"The inspector shall provide full written disclosure of any business or familial relationships or other conflicts of interest between themselves and any other party to the transaction. The parties may include, but are not limited to, buyers, sellers, appraisers, real estate licensees, mortgage representatives, title companies, vendors and service contractors."

For the most part, this is self-explanatory. The home inspector licensing board discussed this language. A few explanations, based on our conversations, follow. This rule applies to situations where the inspector might have a wife, a sister, a brother, a child who is the seller, a realtor, a mortgage broker or anyone else who might be involved in the deal.

Then there is the word vendor. Some inspectors have asked what is meant by the requirement to disclose conflicts of interest that might exist with vendors. That is not complicated. Inspectors must disclose certain business situations that are not readily apparent to the client. For example, let us say the inspector or a family member has an interest in a plumbing firm and that firm's name was given to a client as the "go-to" guys to solve a plumbing issue. Or assume another scenario: Maybe an inspector is paid a "finder's fee", a kickback, for sending clients to a certain roofer, electrician, HVAC company, alarm company, etc. Any such relationships must be disclosed to the client, as specified in the SOP and ethics.

For specific information, you should contact the Department of Licensing.

To see additional information on home inspector licensing in the state, click on George's head.

Steven L. Smith

Bellingham WA Home Inspections

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Rainmaker
41,202
Michael Therriault
Michael Therriault Contracting - M.T. Contracting - Blakeslee, PA
The name to remember when you want it done right.

I suppose it can all get confusing, anything that's new tends to be that way. We just follow a few simple rules. If I inspected it I won't consider working on it. If my wife or son inspected it, I won't consider working on it. If they inspected it, they won't refer me to do any of the work. Keeps it all simple and ethical.

Feb 24, 2009 04:11 PM #1
Rainmaker
1,186,624
Steven L. Smith
King of the House Home Inspection, Inc - Bellingham, WA
Bellingham WA Home Inspector

Michael,

That makes sense.

Feb 24, 2009 04:16 PM #2
Rainer
137,570
Roy A. Peterson
Domicile Analysis of Texas - El Paso, TX
P.R.E.I.

Steven, I know you are licensed to inspect for wood destroying insects on properties for your state. Just a simple question, do you do any type of wood destroying treatments on the properties you and /or your company inspect. Just wondering.

         ~ Life is Good

Feb 24, 2009 04:45 PM #3
Ambassador
1,112,122
Charles Buell
Charles Buell Inspections Inc. - Seattle, WA
Seattle Home Inspector

Steve---I think if people stop and think for a moment----with a few exceptions perhaps----this is not rocket science.

Feb 24, 2009 04:59 PM #4
Rainmaker
1,186,624
Steven L. Smith
King of the House Home Inspection, Inc - Bellingham, WA
Bellingham WA Home Inspector

Roy,

I, personally, do not know any home inspectors who do treatments. We refer to pest control licensed firms. I do not know that it would, at this time, be illegal per the state --if the inspector had the pest applicator license -- but it would violate the standards of the home inspector organizations that we belong to.

Feb 24, 2009 05:16 PM #5
Rainer
8,671
Mike O'Handley
Your Inspector Inc. - Seattle, WA

Hi Steve,

Roy's question is a good one but this is an area where I don't think the home inspectors' board could have gone. Pest inspection is strictly regulated by the WSDA. The board can't make rules for Structural Pest Inspectors and can only make rules for home inspectors.

The board was able to come up with rules that prohibited an inspector from performing repairs on a house where he finds wood deterioration and rot, only because under the new rules the inspector can now legally write up these issues without being a pest inspector. However, it's only WSDA that can prohibit certain conduct by Structural Pest Inspectors. If WSDA chooses not to go there there isn't anything that the home inspectors board can really do about it.

I don't think it's likely that WSDA will ever prohibit inspectors from doing treatments - if they did that, how could an SPI who is not licensed as a home inspector and owns a pest management company ever expect to run a pest management business?

For the record, I do know of one or two folks who have pest management companies that were in the pest management business long before they decided to add home inspections to the services they offer. Though they can still spray insects that they discover, they weren't very happy about some of the other new rules that came out of the new home inspection licensing law.

Mike O'Handley, Editor - The Inspector's Journal (TIJ)

Feb 25, 2009 02:58 PM #6
Rainmaker
1,186,624
Steven L. Smith
King of the House Home Inspection, Inc - Bellingham, WA
Bellingham WA Home Inspector

Mike,

Good comments. You were, on the board, a real leader in the area of trying to add common sense and avoid conflicts of interest. Much of the language and intent of the law is the result of your hours of hard work, I can attest to that and my hat is off to you.

Feb 25, 2009 05:33 PM #7
Rainer
8,671
Mike O'Handley
Your Inspector Inc. - Seattle, WA

Nah,

It's a team effort and we've got a great team. It'd be a whole lot harder if we didn't.

Kudos to you too - especially for keeping me in check when I get too animated.

ONE TEAM - ONE FIGHT!!!

Mike O'Handley, Editor - The Inspector's Journal (TIJ)

Feb 26, 2009 03:53 PM #8
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Rainmaker
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Steven L. Smith

Bellingham WA Home Inspector
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