A judge has ordered a B.C. Realtor to surrender his portion of a more than $1.2-million profit from the sale of a South 性视界传媒 home that his client wanted.
Real estate agent Alan Hu bought the 174 Street property in 2018 for $2,098,000, and sold it in September of 2021 for $3,350,000, noted a B.C. Supreme Court decision dated Jan. 10.
When Hu bought the house in 2018, he was representing client Pei Hua Zhong, who was looking to purchase the 174 Street property and to sell his current property. Zhong made two failed offers for the 174 Street house; the first was accepted, but not completed, because Zhong hadn't yet sold his home, which he needed to do in order to secure financing. Zhong then sought bridge financing, and made a second offer on the property in January of 2018.
That offer was rejected because a different buyer 鈥� a friend of Hu's whom he was vacationing with in Las Vegas at the time with his wife 鈥� had also made an offer. The friend, Lingxia Tao, made a nearly $2.1-million offer, compared to Zhong's offer of $2,050,000. According to the decision, Hu sent both offers within minutes of each other on Jan. 2, 2018.
In addition, on Jan. 1, 2018, unbeknownst to Zhong, Hu referred Tao to Iris Liu, another Realtor, so that Tao could bid on the 174 Street property, the decision noted. Ultimately, Tao's offer, which included a provision reserving the right of the buyer to assign the contract to a third party, won the bid.
"Hu's conduct was deceptive and underhanded," Justice Amy Francis wrote in her decision. "He led Mr. Zhong, with whom he was in a fiduciary relationship, to believe that he was working to help Mr. Zhong purchase the (174 Street) property, while at the same time working on an agreement to purchase the property with Ms. Tao and successfully outbidding Mr. Zhong. His conduct represents a marked departure from ordinary standards of behaviour and is deserving of denunciation."
Hu also received a referral fee of $19,245.25 from Liu for referring Tao to her for the purchase of the 174 Street property.
Approximately two weeks after Tao's offer to buy the house was accepted, Tao assigned it to Hu, who did not disclose that detail to Zhong.
Hu and his wife closed on the purchase of the property on March 16, 2018, and they became the legal title holders. Also in March 2018, Hu, Tao and their spouses signed an investor agreement that stipulated their equal ownership interest in the property and other properties.
"The investor agreement is the subject of separate litigation between Mr. Hu and Ms. Tao," Francis noted in her decision.
In July of 2020, Zhong was driving past the 174 Street home and saw Hu in front of it, the decision said. In September 2021, with the assistance of a lawyer, he pulled a copy of the title to the property, which indicated Hu had purchased it in March 2018. As a result, Zhong filed the notice of civil claim in this action in January of 2022.
Francis ordered Hu to disgorge all profits he received from the sale of the property, but the total remains unspecified because of the ongoing litigation between the couples over the investor agreement.
If the proceeds of the sale were split 50-50 between couples, the amount Hu would need to pay would be $626,000, plus the $19,245.25 commission he improperly took for referring Tao to Liu, who represented her in the transaction.
The judge did not make any orders against Tao. She noted Tao was never in a fiduciary relationship with Zhong and had not committed any unlawful acts.
"I accept that Mr. Hu told Ms. Tao about Mr. Zhong鈥檚 failed first contract and invited Ms. Tao to invest in the (174 Street) property with him. He intentionally undermined Mr. Zhong鈥檚 bid to purchase the property so that he could take an interest in the property for himself," states the decision.
