CEO 81-10 -- February 26, 1981

CONFLICT OF INTEREST

CITY CODE INSPECTOR ACTING AS REAL ESTATE BROKER

To: (Name withheld at the person's request.)

SUMMARY:

Section 112.313(7)(a), F. S., prohibits a public employee from having a contractual relationship with a business entity which is subject to the regulation of his public agency and further prohibits him from having any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of those duties. This provision would be violated were a municipal code inspector, who is a licensed real estate broker, to make real estate transactions or permit real estate salespersons registered under his broker's license to make real estate transactions within the jurisdiction of the city. When the real estate transactions concern property located outside the city, there would be no violation so long as the code inspector does not contract as a real estate broker with a business entity, such as a developer or building contractor, who is regulated by the code inspector's department because of other work being done within the city.

QUESTION 1:

Would a prohibited conflict of interest exist were a code inspector employed by a city building and inspections department, who is also a licensed real estate broker, to make real estate transactions or to permit real estate salespersons registered under his broker's license to make real estate transactions within the jurisdiction of the city?

This question is answered in the affirmative.

In your letter of inquiry you advise that .... is employed by the City of Plant City Building and Inspections Department as a Code Inspector. You also advise that the duties of a Code Inspector involve the inspection and approval of building improvements to properties within the City, including structural, electrical, mechanical, plumbing, and related building construction which is regulated by locally-adopted codes and ordinances. An inspector is required to make evaluations of improved and unimproved properties for compliance with codes and ordinances regulating minimum housing standards, weed control, and litter. In addition, you advise that the inspector has some enforcement authority to effect compliance with codes and regulations and possesses a degree of discretion in determining whether compliance has been achieved.

The Code of Ethics for Public Officers and Employees provides in relevant part:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. -- No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he is an officer or employee . . . ; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), F. S.]

The first part of this provision prohibits a public employee from having a contractual relationship with a business entity which is subject to the regulation of his public agency. Under this provision, the subject Code Inspector would be prohibited from contracting as a real estate broker with businesses being regulated by the City Building and Inspections Department. Such businesses would include all business entities within the City whose work or property is subject to inspection by the Code Inspector or by others in the Department.

In a telephone conversation with our staff, the City Manager advised that the Building and Inspections Department is authorized to inspect all property within the City, both improved or unimproved, for compliance with various City Codes. Therefore, the subject Code Inspector would be prohibited from contracting as a real estate broker with businesses which own property within the City. In addition, he would be prohibited from contracting as a real estate broker with business entities, such as developers or building contractors, whose work is subject to inspection by the Department. Thus, even if he were to contract as a broker to sell property lying outside the City, if the property owner is regulated by the Department because of other work being done within the City, he would be prohibited from doing so.

The second part of Section 112.313(7)(a) prohibits a public employee from having any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. This provision, unlike the first part of this Section, is not limited in its scope to contractual relationships only with business entities; rather, its scope covers contractual relationships with both business entities and individual persons. Because property within the City which is owned by individual persons also is subject to the regulation of the Department through code inspections, we find that a contractual relationship between such a person and the subject Code Inspector as a real estate broker would impede the full and faithful discharge of his public duty to inspect in an independent and impartial manner the property owned by the individual. Were this situation to occur regularly as an ongoing part of the subject Code Inspector's business as a real estate broker, a continuing or frequently recurring conflict of interest also would be created.

We recognize that a Code Inspector exercises great authority in real estate development. The use of land within the City and the manner and mode of improvements to real property are regulated in detail by various City Codes, codes which are to be enforced by the subject Code Inspector. In enforcing these codes, a code inspector has substantial responsibilities which must be exercised impartially and without regard for his private interests. We are especially sensitive to the possibility that an inspector may be tempted by his private interests to misuse his position not only through the discretion afforded him within the codes but also in the timing of his inspections. This degree of control over real estate and the various persons whose economic interests are tied into real estate only serves to emphasize the conflict of interests that exist where a code inspector also is a real estate broker.

For these reasons, we are of the opinion that the full and faithful discharge of the subject Code Inspector's public duties would be impeded were he to profit through the sale or listing of any real property within the City. In either case, the subject Code Inspector would stand to gain privately from the services he has rendered to one who owns property regulated by his Department and who would bear the consequences of any code inspection by him.

Accordingly, we find that a prohibited conflict of interest would be created were the subject Code Inspector to make real estate transactions or to permit real estate salespersons registered under his broker's license to make real estate transactions within the jurisdiction of the City.

QUESTION 2:

Would a prohibited conflict of interest exist were a code inspector employed by a city building and inspections department, who is also a licensed real estate broker, to make real estate transactions or to permit a real estate salesperson registered under his broker's license to make real estate transactions concerning property located outside the city?

In our response to your first question we advised that Section 112.313(7)(a), F. S., would prohibit the subject Code Inspector from contracting as a broker with a business entity, such as a developer or building contractor, with respect to real property outside of the City if the business entity is regulated by the Department because of other work being done within the City. Accordingly, subject to this restriction, we answer your second question in the negative.