Two British Columbia real estate agents have been fined more than $200,000 for professional misconduct they committed while selling a waterfront property on the Sunshine Coast in 2017.

Joel Patrick O’Reilly and Denise Anne Brynelsen acted as dual agents in the transaction, representing both the sellers and the buyers, according to a consent order from the BC Financial Services Authority, which was published online last week.

The property in question housed an 800 square foot cabin and a dock, both located on the foreshore in Pender Harbour, British Columbia. The foreshore is the space between the high and low tide watermarks in a body of water. In British Columbia, these are Crown lands.

“Not legalized”

The cabin was built “around the 1960s and was originally a shed-type structure,” according to the consent order.

“During their possession, the sellers carried out, without permits and/or approvals from the Sunshine Coast Regional District (SCRD), a major conversion of the cabin into a residence,” the order states, adding that the sellers had corresponded with the province about the property and signed an agreement in 2010 recognizing that the cabin could not be used as a permanent residence.

Although the sellers did not communicate this limitation to O’Reilly and Brynelsen, the real estate agents made inquiries with a “foreshore rental consultant” on behalf of a potential buyer and were informed that the cabin was “not legalized” and that it was “non-compliant”. to use.”

The email sent to the consultant by a provincial representative, cited in the consent order, went on to state that “generally speaking, such use on the Crown foreshore is contrary to provincial policies and would likely not be approved.”

O’Reilly shared that email with Sellers, saying he believed there was “zero chance” that a government agency would order the cabin’s removal, per the consent order.

When showing the house to prospective buyers, real estate agents told them the cabin was “not in compliance with the law.” The consent order says marketing of the property did not mention the foreshore agreement or that the cabin was only suitable for seasonal use. They also did not provide a copy of the provincial government email to buyers.

After purchasing the property for $900,000, the buyers were surprised to find that the provincial government refused to transfer the sellers’ foreshore agreement to them “until the non-conforming uses cease to exist”, according to the consent order.

The deal was ultimately transferred to the buyers in 2021, once they finished removing the cabin from the property. The consent order says the buyers built a new house on the land – away from the foreshore – in 2023, six years after their original purchase.

Professional misconduct

In the consent agreement, O’Reilly and Brynelsen each admitted to advertising the property with “false and/or misleading representations”, failing to make “independent verifications” regarding cabin use restrictions and failing to disclose “material information.” to their customers.

O’Reilly further admitted to providing buyers with “false, misleading and/or inaccurate information” in an email responding to questions they had asked about the property.

Both men admitted that these various failings constituted professional misconduct under the provincial Real Estate Services Act, specifically violating provisions prohibiting false or misleading advertising, requiring real estate agents to act honestly, with reasonable care and skill. , and that they act in the best interests of the company. customer.

They also committed misconduct by violating provisions of the law regarding the duty of real estate agents to “use reasonable efforts to discover relevant facts concerning real estate,” to “disclose all known material information relating to real estate” and to disclose any “material hidden defect” in the real estate. .

In the consent order, O’Reilly and Brynelsen agreed to pay disciplinary penalties of $100,000 each to the BCFSA, as well as an “enforcement fee” of $2,500 each.

They also agreed to take the “Remedial Real Estate Trading Services Course” at UBC’s Sauder School of Business.

“It is imperative that licensees disclose all relevant information to their customers regarding a property or transaction,” Jonathan Vandall, BCFSA senior vice president of compliance and enforcement, said in a statement from press about the consent order.

“In this case, the licensees’ failure to disclose information caused harm to their customers. The sanctions imposed reflect the seriousness of their misconduct and serve as a reminder to all real estate licensees of the importance of disclosing critical information to clients. ”