A judge has ordered a B.C. Realtor to surrender the profits he made on the sale of a house that his client wanted.
Alan Hu bought the property from a close friend, then sold it for a profit of more than $1.2 million, says a Friday decision from the B.C. Supreme Court.
“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.”
Hu’s lawyer Robert Lo declined to comment.
“We are reviewing the Court’s decision and considering our options,” he wrote in an email to CBC News.
Las Vegas vacation
In 2017, Pei Hua Zhong, a Chinese immigrant of “modest means,” sought help from Hu to sell his home in South Surrey and buy another home, according to the court decision.
Zhong signed a contract with the home’s seller to buy the property for $2.1 million. He received mortgage approval from his bank to finance the purchase, but it was conditional on him having funds for a down payment of $735,000, which required him to sell his current home.
When he failed to do so by the set deadline, he decided to pursue bridge financing and use the equity in his current home for the down payment on his next property while he waited for his home to sell.
Hu sent Zhong’s second offer of $2,050,000 to the seller. At the same time, without Zhong’s knowledge, Hu referred his friend, who he was currently vacationing with in Las Vegas, to another Realtor so that she could bid on the property as well.
Hu’s friend’s offer contained a provision reserving the right of the buyer to assign the contract to a third party.
She won the bid, with a nearly $2.1-million offer.
House sold for $3.35 million
Hu got a referral fee of about $19,000 from his friend’s real estate agent.
About two weeks after her offer to buy the home was accepted, Hu’s friend assigned it to Hu, who did not disclose that to Zhong.
Hu purchased the home and sold it in 2021 for $3,350,000, for a profit of more than $1.2 million.
During the civil proceeding, Hu argued Zhong “suffered no loss” because he couldn’t afford the Surrey home, but Justice Francis was unconvinced, saying Zhong was willing to take a risk by pursuing bridge financing.
The judge did not buy Hu’s argument that he only formed the intention to buy the house about two weeks after his friend bought it. The judge found Hu had a thought-out plan much earlier to ensure that the house ultimately ended up in his hands.
She ordered him to surrender the profits he made from the sale of the house. The exact amount has yet to be determined due to outstanding litigation between Hu and his friend. Hu must also repay the referral fee.
The judge ruled Hu’s friend didn’t do anything to make herself liable to Zhong and so will not face any legal repercussions.
