BCFSA Issues $200K in Penalties to Real Estate Licensees for Failing to Disclose Information to Clients

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Joel Patrick O’Reilly and Denise Anne Brynelsen committed professional misconduct when they acted as limited dual agents in the purchase and sale of a waterfront property and failed to disclose information regarding the property to their clients. Despite knowing the property contained a non-conforming cabin on foreshore tenure not permitted by the Crown as a permanent residence, they failed to disclose this to buyers and misleadingly advertised the property as being suitable for more than seasonal use.

BC Financial Services Authority (“BCFSA”) has issued a Consent Order that requires Joel Patrick O’Reilly and Denise Anne Brynelsen to each pay penalties of $100,000 for serious professional misconduct under the Real Estate Services Act (“RESA”).

Both trading representatives with RLPS Limited Partnership dba Royal Lepage Sussex in Sechelt were found to have committed professional misconduct in relation to a real estate transaction involving a waterfront property in Pender Harbour, B.C.

O’Reilly and Brynelsen are subject to the following disciplinary measures:

Payment of a $100,000 penalty each;
Payment of $2,500 in enforcement expenses each; and
Enrollment in and completion of the Real Estate Trading Services Remedial Education Course.

Through its investigation, BCFSA determined that O’Reilly and Brynelsen:

Understood the property contained a cabin on foreshore tenure that was not permitted by the Crown as a permanent residence;
Advertised the property with false and/or misleading representations by failing to represent the cabin was for seasonal use only, contrary to sections 33, 34 and 41 of the Real Estate Services Rules;
Understood that their buyer clients were seeking a permanent residence, failed to conduct independent verifications on restrictions on the use of the cabin and assignment of the foreshore tenure, contrary to sections 30(a), 30(h) and 34 of the Real Estate Services Rules; and
Failed to disclose to their buyer clients all material information about the property, namely that the cabin was not permitted by the Crown to be used as a permanent residence and that the foreshore tenure was subject to a 5-year lease which had expired, contrary to sections 30(f) and 59(2) of the Rules

“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, Compliance and Enforcement. “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.”