A $1.2m profit sparks legal backlash over ethics in real estate
The BC Supreme Court judge has ruled against a real estate agent who bought a property his client was pursuing, later selling it for a $1.2 million profit. Alan Hu, the agent in question, has been ordered to forfeit his profits after being found guilty.
“Hu’s conduct was deceptive and underhanded,” wrote Justice Amy Francis. “His conduct represents a marked departure from ordinary standards of behaviour and is deserving of denunciation.”
According to a report from CBC News, the case centres around Hu’s actions in 2017 while representing Pei Hua Zhong, a South Surrey resident and Chinese immigrant. Zhong had enlisted Hu’s help to sell his home and purchase another for $2.1 million. Despite mortgage approval, Zhong’s plans were delayed due to a missed down payment deadline, prompting him to seek bridge financing.
A vacation turns controversial
While vacationing in Las Vegas, Hu reportedly referred his friend to another real estate agent, facilitating a competing bid on the property Zhong intended to buy. His friend’s offer, nearly identical to Zhong’s, included a clause allowing the contract to be reassigned to a third party. After the bid succeeded, Hu’s friend transferred the property to him.
Hu purchased the house and sold it in 2021 for $3.35 million. During litigation, Hu argued that Zhong “suffered no loss” because he was unlikely to afford the home. Justice Francis disagreed, citing Zhong’s efforts to secure alternative financing.
Legal and regulatory fallout
The judge rejected Hu’s claim that he decided to buy the property only after his friend’s purchase. Instead, she found evidence of premeditated planning to acquire the house for personal gain.
Hu must repay the referral fee of $19,000 earned through the transaction and surrender the profits from the home’s sale. The exact repayment figure remains unresolved due to ongoing litigation between Hu and his friend.
Zhong’s lawyer, Eoin Logan, said he is eager to see what action, if any, the BC Financial Services Authority (BCFSA) will take against Hu. The BCFSA, which regulates the province’s real estate agents, confirmed it is reviewing the ruling to determine appropriate regulatory steps.
Justice Francis ruled that Hu’s friend, who initially bought the house, did not act improperly and would not face legal consequences.
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