Referral Pressure on a Foundation Finding
A real estate agent who has referred 11 inspections to you in the past year calls before you write the report on a 1920s semi-detached home. You found a horizontal foundation crack 4 mm wide with efflorescence and a 20 mm inward offset on the north wall, plus a bathroom renovation with no subfloor repair around the toilet flange. The agent says the buyers are “nervous” and asks you to describe the crack as “typical settlement, monitor” and to leave out the toilet flange because “the buyers will fix it anyway.” She adds that if the deal closes she has three more listings next month. Your contract says the report is for the client only. The buyers are first-time purchasers and have not seen the report yet. You are a registered inspector bound by a code of ethics.
1. Identify the ethical issues and explain how the Code of Ethics applies.
Read the worked answer
The main issues are conflict of interest, objectivity, confidentiality, and inducement. The agent is not my client; the buyers are. My duty is to report what I observed, not what makes a transaction close. The Code of Ethics requires me to avoid conflicts of interest, not accept benefits that could influence my judgement, and to be objective and truthful. The offer of “three more listings” is an inducement, even if no money changes hands. The request to call a 4 mm crack with a 20 mm offset “typical settlement, monitor” would understate a possible structural issue. The request to omit the toilet flange is a request to conceal a moisture/repair issue. I should not agree. I can maintain a professional relationship with the agent, but referral volume cannot affect report content. If I have a business relationship with the agent (e.g., marketing agreement), it should be disclosed to the client. I should document the call.
2. Write the report language you would use for the foundation crack and the toilet flange, and explain why.
Read the worked answer
Report wording:
- North foundation wall: “Horizontal crack approximately 4 mm wide with efflorescence and approximately 20 mm inward displacement at the crack. This is a structural-movement concern, not a cosmetic item. Recommend evaluation by a licensed structural engineer before removal of conditions; monitoring alone is not appropriate until the cause and stability are assessed.”
- Main bathroom: “Subfloor around the toilet flange is soft/discolored and appears moisture-damaged. Recommend a licensed plumber and flooring contractor evaluate and repair the flange/subfloor; failure to repair can lead to rot and mould.”
Why: I report measurements, location, and visible evidence, then recommend the appropriate specialist. I avoid a diagnosis (“settlement”) and avoid minimizing words like “typical.” I do not say “fix it anyway” because the buyer needs to know the cost and safety implications. This is clear, objective, and within my scope.
3. How do you handle the agent’s request in communication with the agent and with your clients?
Read the worked answer
I would respond to the agent once, calmly: “I appreciate the relationship, but I can’t alter findings to help a deal close. My report has to reflect what I saw. If repairs are made, I can re-inspect and update the report for the buyer.” I would not debate the crack or the flange; I would not promise anything about future referrals. I would document date/time, who called, and what was requested. I would not disclose the agent’s private call to the buyers unless it affects their interests; but if the agent is pressuring me to conceal a material defect, the buyers’ interests are affected. I could tell the buyers that the agent contacted me about the report, without repeating confidential details, so they understand the context. I would also review my contract for a clause about third-party communications. If the agent’s conduct continues, I would seek advice from my association and possibly report the conduct under the code’s complaint process.