Contractor and Inspector license

[Tom Summerford, 808]

I currently have a general contractors license and I'm curious if it's wrong to combine my inspection business with the contractors business. Or should I start a new company. I'll have my state license by the end of the week, supposedly they say? PS I will abide by the 1 year code

[James L. Keilson]

Tom, no offense but did you ever read the NACHI SOP ? of your states ? or search this board? this topic gets beat to death. Now to give you the short bus answer, NO you cannot combine them. After the 12 month rule it is fair game "I Guess" I still don't think it is ethical, but thats just me.

Jim

[Russell J. Hensel]

Really? Why not? As long as he does nto do reapirs within 12 months, why not?

[Tom Summerford, 808]

There are several law suit underway with Washington State over the way they are handling this business. My lawer says I can but, I don't want to create any potential problems.

[Michael J. Meeker]

You can and I do.

[Gary Farnsworth]

Conflicts of interest abound. If you want to keep your attorney busy, then do repairs that you find, needed or not on the homes you inspect, and make plenty of money. And then you turn right around and pay your attorney when you get sued.

Like everyone said, this subject has been discussed thousands of times on this message board. I do not, and will not do repairs on any home that I inspect, now or in the future.

If so, you better have plenty of insurance. I myself, sleep well at night.

[Bob Elliott]

Sounds like a good way to earn extra money for you.
Just find tons of issues and then charge even more for fixing them.No conflict of interest there at all.(NOT)

[Michael J. Meeker]

Tom,
You will find a great many idiots around here.
Pay them no mind.
I for one am sure you are aware of the dumb a-s C.O.E. you have agreed to follow.
Good luck and let me know if I can help in any way.

[Lawrence W. Losciale]

Tom,
You can definitely combine the two services in one company, legally. I guess some of the others here can't seem to read a post to the end:

Originally Posted by tsummerford

... PS I will abide by the 1 year code...

Some things to consider though, Will your clientèle see a conflict of interest and when work is really really slow on the construction side will you be able to keep from giving in to temptation (and falling to the dark side)?

[John Shishilla]

Holding both licenses in Florida, I have no problem. Our ethics prohibit working on a home we inspect. I am busy enough as an inspector, so I have no worries.

In Florida we used to need a Qualifying Business license for a contractor's licenses. We do not need it anymore. We do not need a business entity for a home inspector license. Our Home inspector license is not for a corporation but an individual. I do business as a LLC and D/B/A. There is no problem sharing the corporation between the two professions. If you are truly concerned you should talk with an attorney and accountant in your state. They are the only people that can give you a correct answer for your situation.

[Paul Maggiore]

Tom,
It is in your best interest to seperate the companies either thru seperate corps or LLC's. We live in a litigous society. Operating both under one company may be easier and less paperwork but a successful lawsuit over an inspection is going to take your construction business as well. Significantly more liability in the home inspection industry. If you do seperate the companies give some thought to the business type you choose - corp vs LLC. There is substantial paperwork involved in properly maintaining a corporation, and if its not done by the book it is easy for a lawyer to "pierce the corporate veil". Many people who have a corp don't realize this. For this reason I chose to split into two LLC's(also for tax purposes). This was of course per the recommendation of lawyer/accountant like John said. Also worth mentioning how imperative it is to keep everything seperate -accounts,insurance, etc. Of course don't work on anything you inspect. Just my experience- good luck to you.

[Tom Summerford, 808]

I'm starting a second company because of Insurance. I'm haveing a really hard time finding anyone who will carry both. Thanks for all your help people.

[Gary Farnsworth]

And there is a reason why.

[Jeffery L. Haynes]

I have two separate companies......one for inspecting and the other for building (residential & commercial).

I have clients ask all the time if I can make repairs for which I tell them I do not do that. I will make repairs of homes other inspectors inspect but its a case by case basis.

I have built custom homes of clients I have done previous inspections............I have had clients ask me to do additions however in those cases I have turned them onto a fellow contractor I trust.

Jeff

[Mike O'Handley]

Originally Posted by tsummerford

I currently have a general contractors license and I'm curious if it's wrong to combine my inspection business with the contractors business. Or should I start a new company. I'll have my state license by the end of the week, supposedly they say? PS I will abide by the 1 year code

Tom,

As long as you abide by the 1 year prohibition there shouldn't be a problem. However, it's not just the 1-year prohibition you need to keep in mind.

WAC 308-408C-020

Ethics — Statement of purpose.


WAC 308-408C-020 Ethics;

The home inspector must: (2) 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.

That means regardless of time elapsed, that you'll need to disclose to the buyer when you've previously performed work on a home or had a relationship to anyone in the transaction - with the only exception being past agent referrals.

The home inspector must: Not for one year after completion of the inspection repair, replace, or upgrade for compensation components or systems on any building inspected - this section applies to the inspector's firm and other employees or principals of that firm or affiliated firms.

Separate company or not, this will apply to even employees of that firm. They'll need a list of everything you've ever inspected and will need to turn down any requests for work on those homes for at least a year after the inspection or your license will be in jeopardy.

I've had two separate companies for more than a decade. It's a fine line. Basically, to avoid conflict, I won't work on any home that I've ever inspected, regardless of time elapsed, and any home that I've worked on I won't inspect, ever. I will, however, inspect a home that I've previously inspected. The only requirement there is that I disclose to the client that I'd previously had a business relationship - inspector/client - with the seller. If, after being made aware of that the buyer still wants to go ahead there is no issue.

ONE TEAM - ONE FIGHT!!!

Mike O'Handley, LHI
Your Inspector LLC.
Kenmore, Washington

Editor - The Inspector's Journal
Member - Washington State Home Inspectors Advisory Licensing Board