535.220: Professional Conduct and Ethics

(a) The responsibility of those persons who engage in the business of performing independent inspections of improvements in real estate transactions imposes integrity beyond that of a person involved in ordinary commerce. Each inspector must maintain a high standard of professionalism, independence, objectivity and fairness while performing inspections in a real estate transaction. Each inspector license holder must also uphold, maintain, and improve the integrity, reputation, and practice of the home inspection profession.

(b) The relationship between an inspector and a client should at a minimum meet the following guidelines.

(1) In accepting employment as an inspector, the inspector should protect and promote the interest of the client to the best of the inspector’s ability and knowledge, recognizing that the client has placed trust and confidence in the inspector.

(2) In the interest of the client and the inspector’s profession, the inspector should endeavor always to maintain and increase the inspector’s level of knowledge regarding new developments in the field of inspection.

(3) The inspector should conduct the inspector’s business in a manner that will assure the client of the inspector’s independence from outside influence and interests that might compromise the inspector’s ability to render a fair and impartial opinion regarding any inspection performed.

(c) The relationship between an inspector and the public should at a minimum meet the following guidelines.

(1) The inspector should deal with the general public at all times and in all manners in a method that is conducive to the promotion of professionalism, independence and fairness to the inspector’s, the inspector’s business and the inspection industry.

(2) The inspector should attempt to assist the general public in recognizing and understanding the need for inspections, whether the inspector is selected to perform such inspection or not.

(3) The inspector accepts the duty of protecting the public against fraud, misrepresentation or unethical practices in the field of real estate inspections.

(d) The relationship of the inspector with another inspector should at a minimum meet the following guidelines.

(1) The inspector should bind himself to the duty of maintaining fairness and integrity in all dealings with other inspectors and other persons performing real estate inspections.

(2) The inspector should cooperate with other inspectors to ensure the continued promotion of the high standards of the real estate inspection profession and pledges himself to the continued pursuit of increasing competence, fairness, education and knowledge necessary to achieve the confidence of the public.

(3) If an inspector has knowledge of a possible violation of the rules of the Commission or Chapter 1102, the inspector should report the possible violation to the Commission.

(e) An inspector shall comply with the following requirements.

(1) An inspector shall not inspect a property when any compensation or future referrals depend on reported findings or on the closing or settlement of a property.

(2) In this section, “settlement service” means a service provided in connection with a prospective or actual settlement, and “settlement service provider” includes, but is not limited to, any one or more of the following:

(A) federally related mortgage loan originator;

(B) mortgage broker;

(C) a lender or other person who provides any service related to the origination, processing or funding of a real estate loan;

(D) a title service provider;

(E) an attorney;

(F) a person who prepares documents, including notarization, delivery, and recordation;

(G) a person who provides credit report services;

(H) an appraiser;

(I) an inspector;

(J) a settlement agent;

(K) a person who provides mortgage insurance services;

(L) a person who provides services involving hazard, flood, or other casualty insurance, homeowner’s warranties, or residential service contract;

(M) a real estate agent or broker; and

(N) a person who provides any other services for which a settlement service provider requires a borrower or seller to pay.

(3) An inspector shall not pay or receive a fee or other valuable consideration to or from any other settlement service provider for, but not limited to, the following:

(A) the referral of inspections;

(B) inclusion on a list of inspectors, preferred providers, or similar arrangements; or

(C) inclusion on lists of inspectors contingent on other financial agreements.

(4) An inspector shall not receive a fee or other valuable consideration, directly or indirectly, for referring services that are not settlement services or other products to the inspector’s client without the client’s consent.

(5) This section does not prohibit an inspector from paying or receiving a fee or other valuable consideration, such as to or from a contractor, for services actually rendered.

(6) An inspector shall not accept employment to repair, replace, maintain or upgrade systems or components of property covered by the Standards of Practice under this subchapter on which the inspector has performed an inspection under a real estate contract, lease, or exchange of real property within 12 months of the date of the inspection.

(7) Inspectors shall not disclose inspection results or client information without prior approval from the client. Inspectors, at their discretion, may disclose observed immediate safety hazards to occupants exposed to such hazards when feasible.

(8) This subsection does not prohibit:

(A) normal promotional or educational activity that is not conditioned on the referral of business and that does not involve the defraying of expenses that otherwise would be incurred; or

(B) a payment at market rates to any person for goods actually furnished or for services actually performed.

(f) The inspector should make a reasonable attempt to cooperate with other professionals and related tradespersons at all times and in all manners in a method that is conducive to the promotion of professionalism, independence and fairness to the inspector, the inspector’s business, and the inspection industry.

(g) Each active licensed inspector shall provide the consumer notice adopted under §531.18 of this title in the manner described by that section.

The provisions of this §535.220 adopted to be effective March 6, 1992, 17 TexReg 1542;

amended to be effective August 31, 2004, 29 TexReg 8297;

amended to be effective August 28, 2006, 31 TexReg 6736;

amended to be effective January 1, 2015, 39 TexReg 9669;

amended to be effective January 1, 2016, 40 TexReg 8249;

amended to be effective March 5, 2019, 44 TexReg 1126;

amended to be effective September 2, 2019, 44 TexReg 4740