Referral Fee from other inspectors

[hknowles]

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?

[James H. Bushart]

Originally Posted by hknowles

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.

If you are being subcontracted to do the inspection for someone else, and being paid by the other inspector, then the report goes to him to do what he will. IMO

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.

[hknowles]

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

[James H. Bushart]

Originally Posted by hknowles

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.

[hknowles]

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.

[hknowles]

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?

[Christopher Currins]

Originally Posted by hknowles

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.

[James H. Bushart]

Originally Posted by hknowles

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?

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.

[Bruce M. Graham, III]

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

[Michael R. Boyett]

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.

[Joseph Hagarty, CMI]

Harun,

More information is needed.

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

[Frank M. Carrio, CMI]

Originally Posted by jbushart

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.

DITTO!

[kbowles1]

Originally Posted by mboyett

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.

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

[rwhite6]

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.

[James H. Bushart]

Originally Posted by rwhite6

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?