Business Practices
Business Practices
The Business domain tests the legal and ethical side of inspection: contracts, standards, reports, insurance, records, and client communication. The exam expects you to know that an inspection is a limited visual service, not a warranty or code compliance review, and that the written agreement and report define your exposure.
Core rules and concepts
- Pre-inspection agreement: obtain a signed written agreement before the inspection. It should identify the scope, standards of practice, exclusions, fee, limitations, and dispute-resolution terms. A verbal agreement or a signature collected after the inspection weakens your position.
- Scope and standards: follow the applicable standards of practice. You report observable conditions and recommend further evaluation; you do not certify code compliance, predict life expectancy, or guarantee future performance.
- Ethics and conflicts: do not accept undisclosed referral fees. Do not inspect for a fee and then repair the same property within the prohibited period set by your state or standards. Disclose any relationship that could affect judgment.
- Insurance and records: maintain general liability and errors-and-omissions coverage as required. Keep signed agreements, reports, photos, and correspondence for the period required by state law or your insurer.
- Report writing: use plain language, describe the condition and location, state the implication, and recommend the next step. Avoid “pass/fail” language and unsupported cost estimates.
Worked example
An agent asks you to remove a finding that a guardrail is loose because it may delay the closing. The guardrail is a safety hazard. You may clarify the wording, but you may not delete a true finding to accommodate a third party. Record the request and your response in the file, keep the finding in the report, and recommend repair by a qualified contractor. The client’s interests and the accuracy of the report control.
Traps that cost marks
Inspecting before the agreement is signed; using “passed” or “failed”; giving a repair estimate without a basis; accepting a referral fee; promising to “cover” an item; and failing to document a conversation that changed the report.