Despite the client's offers, another buyer purchased the property with the realtor's help
The Supreme Court of British Columbia ruled that a realtor must surrender profits from a property sale after breaching fiduciary duties by disclosing confidential client information, facilitating a competing bid, and acquiring the property for personal gain.
In Zhong v. Alan Hu Personal Real Estate Corporation, 2025 BCSC 40, the court ruled that the realtor acted against the client's interests during an attempted real estate transaction. The client had hired the realtor to sell their home and assist in purchasing a new property in Surrey. Although the client made two offers on the target property, another buyer bought it with the realtor's assistance, and the realtor later arranged to have the property reassigned to themselves. Years later, the realtor sold the property, earning a profit of over $1.2 million.
The Supreme Court ruled that the realtor's actions violated core fiduciary obligations, including loyalty, transparency, and conflict avoidance. The court emphasized that the realtor undermined the client's ability to secure the property by sharing details of the client's offer and enabling a competing bid. Shortly after, the realtor personally acquired the property, which the court determined was a clear conflict of interest.
The realtor argued that the client lacked the financial means to complete the purchase, but the court rejected this, citing the client's willingness to pursue alternative financing. The court emphasized that fiduciaries must prioritize their client's interests, regardless of personal opinions about their financial position.
The court ordered the realtor to disgorge all profits from the sale of the property and return an improperly earned commission of over $19,000. It declined to award punitive damages, finding that the disgorgement remedy sufficiently addressed the misconduct.
The court dismissed a claim against the initial buyer of the property, who later reassigned it. The court determined that the buyer had committed no unlawful act and could not be held liable for conspiracy.
