Alan Hu/pacificevergreenrealty.com
The Supreme Court of British Columbia has ordered Alan Hu, a Surrey-based Realtor, to surrender his profits from the sale of a $3.35-million property after breaching his fiduciary duty to a client.
According to a court decision published on Jan. 10, Pei Hua Zhong, a Chinese immigrant of “modest means,” hired Hu to sell his South Surrey, B.C. home and purchase a new property in Surrey in 2017. Zhong signed a contract to buy a property listed for $2.1-million, conditional on securing the down payment by selling his current home.
When his home failed to sell by the subject removal deadline, Zhong decided to pursue bridge financing, planning to use the equity in his existing property to secure the down payment.
While Zhong prepared a second offer of $2.05-million, Hu referred his friend Lingxia Tao, who was vacationing with him in Las Vegas, to another real estate agent to compete for the same property. Zhong was not made aware of the referral. Tao’s offer, submitted with Hu’s assistance, included a clause allowing her to assign the contract to a third party.
In January 2018, the seller accepted Tao’s bid of nearly $2.1-million, cutting Zhong out of the deal. According to court findings, Hu later acquired the property through an assignment from Tao and in 2021, sold the property for $3.35-million— a profit of more than $1.2-million.
2038 174 St., Surrey B.C., Image source: homesbyalan.ca 2017
In her decision, Judge Amy Francis wrote that Hu “intentionally undermined Mr. Zhong’s bid to purchase the 2038 (174 Street) Property so that he could take an interest in the 2038 Property for himself,” describing his actions as a “marked departure from ordinary standards of decent behaviour,” and “deceptive and underhanded.”
Hu’s failure to act in client’s best interests
She emphasized that a Realtor’s core responsibility is to act loyally and transparently in the client’s best interests. Hu violated this duty when he shared Zhong’s bid with Tao, facilitated her competing offer and ultimately acquired the property through a contract assignment.
Justice Francis found that Tao relied on Hu for instructions and she was not held legally liable.
While litigation regarding the profit split from the sale between Hu and Tao is ongoing, the court has ordered Hu to disgorge all “ill-gotten gains” from the sale.
Insurance and regulatory implications
In February 2022, Hu submitted statements to the Real Estate Errors and Omissions Insurance Corporation, though intentional misconduct like fraud typically falls outside the scope of coverage. The B.C. Financial Services Authority, which oversees real estate agents in the province, is reviewing the judgment and considering regulatory action.
In addition to surrendering profits, Mr. Hu must also repay the $19,000 referral feed he took for the original purchase of the Surrey property.
Jordana is the editor of Real Estate Magazine. You can reach her by email.
Why is he not being stripped of his license?
As stated…
“The B.C. Financial Services Authority, which oversees real estate agents in the province, is reviewing the judgment and considering regulatory action.”
Hu should be fined minimum $100,000 by the B.C. Financial Services Authority. The Real Estate industry doesn’t need this type of person in the real estate business.
This is why we are seen as criminals by the public! Get rid of agents like this altogether, they should never have a license again if this is their method of doing business, as agents we know this is wrong just as he did when he did it. It’s not a ‘one of’ or a mistake, it’s their lack there f a moral compass. Take these licenses away for good!!
“Chinese immigrant of modest means” purchase of a $2.1 million home? Also was looking to bridge finance the deal ? The definition of modest means sure has changed.
Yes Nick , I thought the same thing as you when I read it . Given the disparity between what Mr. Hu purchased the property for and what he sold the property for I can’t help but wonder if Mr. Hu did not advise his client of the correct value of the 2038-174th Street Property as well .
Wow… “considering regulatory action”… what a great message this story conveys for any like minded individuals seeking safety from prosecution while misrepresenting the public.
Be a Realtor. If you get caught doing anything wrong, the highest court in the province will simply had out a “judgement” to repay ill gotten funds. Not fined, not stripped of licence, not barred from practice, basically just placed back to zero. No punishment, just a re-set before your next attempt.
Just waiting to hear if E&O insurance will now cover his “losses”…
What an embarrassment for the industry. So glad to be retiring from it.
“A Chinese immigrant of modest means (!!) signed a contract to buy a property listed for $ 2.1 million”.
Seriously?? Modest?
I agree with all of the above. He should lose his license. It’s a privilege to help people with the biggest purchases and sales of their lives. People who do this kind of stuff and or commit fraud should not be allowed to practice Real Estate.
How much transparency among all the realtors involved? Who was Tao’s referred realtor and his/her role in all of this if Hu advised Tao on the buyer assignment/submission Also who was the listing agent? Also what about the listing agent? Seems a $1.2 M profit quite high. And surrender profits to who…..?
Ron Farrington
Did this guy ever attend a CPE seminar on agency ??
What if anything did his Managing Broker do ?
And why did it have to go to a lawsuit in the SCBC reforestation BCFSA got wind of it ?
UH??? reforestation BCFSA got wind of it ?
The whole process is against the public interest.No consideration of Agency. Total devious intent,conflict of interest, remove his licence, no consideration for re-licencing because he commited an act against all rules, guidelines of business practice, and brought a negative impression to the real estate industry. Suggest BCFSA will get their teeth in it and he will have fines as well as coughing up the proceeds of ripping off the public?
In cases of clear cut fraud (not saying this case is such, but investigations may prove it to be), I feel criminal charges should be filed. That’s my humble opinion.