Sunshine Coast, B.C. (Canva)

QUICK HITS

 

• Two B.C. Realtors were fined over $200,000 for failing to disclose key restrictions in a 2017 waterfront property sale on the Sunshine Coast.
• Acting as dual agents, they marketed the cabin as “legal non-conforming” without informing buyers of its seasonal-use limitations on Crown foreshore land.
• The B.C. Financial Services Authority found their actions misleading, ordering penalties and remedial education for violating disclosure and client care standards.

Two Realtors in B.C. are facing more than $200,000 in fines for failing to disclose information to clients related to a 2017 oceanfront property sale on the Sunshine Coast. 

According to a consent order by the B.C. Financial Services Authority (BCFSA), Joel Patrick O’Reilly and Denise Anne Brynelsen with Royal LePage Sussex in Sechelt acted as dual agents, representing both the buyers and sellers in the sale. 

Property in question

The waterfront property included an 800-square-foot cabin and a dock, both built on Crown foreshore land in Pender Harbour, B.C. Foreshore land, the area between high and low tide, is subject to strict provincial regulations. 

According to the consent order, the cabin had initially been built as a shed in the 1960s. Over time, the previous owners remodelled it into a residence, without obtaining permits. In 2010, the sellers signed a tenure agreement with the provincial government, acknowledging that the cabin was only allowed to be used as a seasonal residence. The government had also communicated that the foreshore tenure was temporary and subject to renewal or revocation.

The sellers did not share this information with the agents at the time of listing.

Professional misconduct

O’Reilly and Brynelsen eventually learned of these restrictions, not through the sellers, but through an inquiry on behalf of a prospective buyer. A foreshore tenure consultant confirmed the cabin was “not legalized” and classified as a “non-conforming use,” and “that structures on Crown foreshore are generally not approved.” 

Despite being made aware of the cabin’s non-conforming status through a government email in 2017, O’Reilly dismissed these concerns, writing in an email to the sellers he thought there was “zero chance of a government agency removing the cabin.”

The agents marketed the cabin as “legal non-conforming” without disclosing the provincial restrictions or the seasonal limitation. On MLS, the property was described as “freehold nonstrata” and highlighted the cabin as a “completely renovated beach cottage.” 

According to the consent order, the buyers, who eventually purchased the cabin for $900,000, asked about foreshore tenure and the possibility of rebuilding. The agents assured them that the tenure transfer would be straightforward and that the cabin’s legal non-conforming status allowed rebuilding within its existing footprint.

After the sale

After the sale, the provincial government refused to transfer the foreshore tenure to the new owners until the cabin was removed. The buyers filed a complaint with BCFSA in 2019, ultimately building a new home on the property in 2023.

In the consent order, O’Reilly and Brynelsen admitted to advertising the property with “false and/or misleading representations” and failing to disclose “material information” regarding the cabin’s use. They also admitted to providing inaccurate information to the buyers and neglecting to conduct necessary verifications about the property’s restrictions.

As a result, the agents were found to have violated the Real Estate Services Act’s requirements for accuracy, honesty and client care in advertising, disclosure and due diligence. 

They each agreed to pay a $100,000 penalty and $2,500 in enforcement costs to BCFSA, and are required to complete a real estate trading services remedial education course.

“The licensees’ failure to disclose information was harmful to their clients”

“It is imperative that licensees disclose all pertinent information to their clients about a property or transaction,” said Jonathan Vandall, BCFSA’s senior vice president of compliance and enforcement in a press release. 

“In this case, the licensees’ failure to disclose information was harmful to their clients. The penalties handed down are reflective of the severity of their misconduct and serve as a reminder to all real estate licensees about the importance of disclosing crucial information to clients.”