This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

CONFLICTS OF INTEREST -- Building Inspector (engaged in private business of performing home inspections)

GENERAL MUNICIPAL LAW, §§801, 805-a(1)(b), (c): Although a building inspector engaged in the private business of performing home inspections for prospective purchasers of homes does not have a prohibited interest in a contract with the municipality for which he or she serves, the conduct of the private business could violate General Municipal Law, §805-a, the municipality's code of ethics, or the standards of conduct to which the courts hold public officials.

We are in receipt of your letter concerning the propriety of a town building inspector also engaging in the business of providing home inspection reports to prospective purchasers of homes within the town.

Article 18 of the General Municipal Law (§800 et seq.) contains the provisions of law which relate to conflicts of interest of municipal officers and employees. Pursuant to General Municipal Law, §800(3), a municipal officer or employee has an interest in any contract with his or her municipality if he or she receives a direct or indirect pecuniary or material benefit as a result of that contract. That interest is prohibited if the officer or employee, individually or as a member of a board, has the power or duty to: (a) negotiate, prepare, authorize or approve the contract or approve payments thereunder; (b) audit bills or claims under the contract; or (c) appoint an officer or employee who has any such powers or duties (General Municipal Law, §801), and none of the exceptions contained in Article 18 are applicable (see General Municipal Law, §802).

Any contract willfully entered into in which there is a prohibited interest is null, void and unenforceable (General Municipal Law, §804) and any officer or employee who willfully and knowingly violates the provisions of article 18 may be guilty of a misdemeanor (General Municipal Law, §805). We also note that, if an officer or employee has an interest in a contract that is not prohibited under the provisions of article 18, General Municipal Law, §803 nonetheless generally requires that the interest be disclosed in writing and included in the official record of the governing board's proceedings. Disclosure is not required under section 803 in the case of an interest in a contract which is not prohibited under subdivision two of section 802 (General Municipal Law, §803[2]).

The term "contract" for purposes of Article 18 is defined to mean any claim, account or demand against or agreement with a municipality (General Municipal Law, §800[2]). Since it appears that the home inspections in this instance would be performed pursuant to contracts between the building inspector in his private capacity and prospective home owners, and it appears that the town would not be a party to those contracts, there appears to be no "contract" with the town for purposes of Article 18. Therefore, the building inspector would not have prohibited interest in a "contract" under section 801.

We note, however, that in addition to the prohibition against certain interests in contracts, Article 18 also prohibits certain other actions of municipal officers and employees. Paragraph (c) of subdivision (1) of section 805-a provides that no municipal officer or employee shall:

receive, or enter into any agreement, express or implied, for compensation for services to be rendered in relation to any matter before any municipal agency of which he is an officer, member or employee or of any municipal agency over which he has jurisdiction or to which he has the power to appoint any member, officer or employee ...

Also, paragraph (b) of subdivision (1) of section 805-a prohibits a municipal officer or employee from disclosing confidential information acquired by him or her in the course of his or her official duties or using such information to further his or her personal interests. Since we do not know the full scope of the building inspector's powers and duties in this town (see generally, Town Law, §138), we cannot determine whether engaging in private home inspections would violate section 805-a.

Even if it is determined that there is no prohibited conflict of interest or violation of section 805-a in this case, the town's codes of ethics should be examined to determine whether it contains any pertinent provisions. In this regard, we note that codes of ethics must include provisions relative to private employment in conflict with official duties (General Municipal Law, §806[1]). Also, we note that the courts of this State have held public officials to a high standard of conduct and, on occasion, have negated certain actions which, although not violating the literal provisions of Article 18 of the General Municipal Law, violate the spirit and intent of the statute, are inconsistent with public policy, or suggest self-interest, partiality or economic impropriety (see e.g. Zagoreos v Conklin, 109 AD2d 281, 491 NYS2d 358; Matter of Tuxedo Conservation and Taxpayers Ass'n v Town Board of the Town of Tuxedo, 69 AD2d 320, 418 NYS2d 638; Conrad v Hinman, 122 Misc 2d 531, 471 NYS2d 521). Thus, even if the private employment is found not to violate the letter of Article 18 of the General Municipal Law or the town's code of ethics, it is possible that, upon judicial review, it could be determined that engaging in this private business impairs the building inspector's judgment or discretion in performing his official duties in connection with properties which he has privately inspected, or otherwise conflicts with his official duties.

April 18, 1989
John C. Jilnicki, Esq., Deputy Town Attorney
Town of East Hampton