A recent judgment of the BC Supreme Court reiterated the fiduciary duties of REALTORS® to their client(s) and the potential consequences when those fiduciary duties are breached.
In Rahil v. Chand, 2025 BCSC 106, (released on January 24, 2025) Justice Marzari stated that the fiduciary duties owed by a real estate agent to their client are:
- To act, loyally and transparently, in the best interests of the client;
- To act in accordance with the instructions given and within the authority granted by the client;
- To maintain the confidentiality of information respecting the client;
- To assiduously avoid a conflict of interest and to promptly disclose any that arise in the course of the fiduciary relationship; and
- To make full and fair disclosure of all material circumstances and of everything the agent knows about the subject matter, including all facts within the agent’s knowledge which might affect the value of the property or the client’s decision.
Facts of the Case
The Rahils sued Chand for the return of monies they advanced to him to invest in properties for which Chand was a REALTOR®. However, Chand used those funds to purchase his own property in Aldergrove.
Chand was the Rahils’ neighbour. The Rahils did not speak English as a first language. Chand advised them to invest money in a property he had listed in Surrey. The Rahils agreed and provided Chand with a $15,000 bank draft made out to him personally. This money came from their kids’ education fund. Chand advised the Rahils that they could trust him. Chand had them sign a Contract of Purchase and Sale that indicated that the Rahils were the buyers and that they paid a $15,000 deposit. A month later, Chand advised that there was an offer on the Surrey property and the Rahils made a $20,000 profit on the sale. There was no evidence that the Rahils’ $15,000 was ever invested in the Surrey property. Rather, the money was deposited into Chand’s personal account.
When the Rahils asked Chand to return their $15,000 investment along with the $20,000 [alleged] profit, Chand suggested they use the $35,000 plus an additional $200,000 to invest in a Kelowna pre-sale property. Chand reassured the Rahils that “I just started my business, I am not going to cheat you.”
The Rahils gave Chand the $200,000, primarily by drawing on their line of credit. Chand had them sign various documents. Chand assured them that this was a one-month investment.
Chand in fact, used the $200,000 one week later to complete the purchase of the Aldergrove property in his own name. The Rahils did not find out about this until seven months later. Chand advised the Rahils that he had a “surprise” for them. They expected to get their money back. Rather, Chand showed them photos of the Aldergrove property, which he said he bought for them. The Rahils were shocked as they couldn’t afford to sustain their line of credit payments. They demanded the return of their money but never received it.
Outcome
The Court found that Chand, [at the relevant time, a FVREB Member with Century 21 Coastal Realty, but is no longer licensed] owed certain fiduciary duties to his client and that he breached his fiduciary duties “in a myriad of ways.” Chand was found to have breached an agreement with his clients, and through his actions, unjustly enriched himself, to the detriment of the clients.
Chand was ordered to pay $257,000 ($215,000 plus interest) in damages to his clients. He was further ordered to pay an additional $25,000 to the clients in punitive damages, as his “misconduct in this case is particularly repugnant.”
This is an important reminder that it is a privilege to hold a real estate licence. With that privilege, comes the related responsibility to uphold the fiduciary duty to clients. Failure to do so could result in regulatory consequences (loss of licence, penalties) and/or, as in this case, civil liability.
The full judgment can be found here.
Source: Professional Standards