A Metro Vancouver real estate agent has been fined for shadow-flipping a multimillion dollar home, backdating contracts and advertising properties without the owner's consent.
The Real Estate Council of British Columbia imposed penalties against Xiao Zhong (Jordan) Guo for actions he took while working under New Coast Realty and Royal Pacific Riverside Realty.
Guo was given an $8,000 fine and a 45-day suspension for shadow-flipping and other rule violations, according to a report from the board published earlier this week.
Documents suggested the realtor used his construction company to purchase a home he listed, without disclosing he was the company owner, then relisted before the sales had been finalized.
The home located on Minoru Boulevard in Richmond was purchased by Guo's company for $7.5 million, the agreed statement of facts reads. Though the completion date was June 30, 2015, Guo created a listing contract for the property on April 15, the day the seller accepted the offer and initial deposit.
On the same day, he then made and distributed brochures advertising the property for sale by assignment without the owners' consent, the report said. The listing period was April 15 to May 15, more than a month before the completion date of the original sale, and the list price was $400,000 more than Guo's accepted offer.
Council also wrote about a second home was on Marine Drive in West Vancouver, which was advertised without the seller's written consent. Council documents said he'd been contacted by a woman he believed was a shareholder of the company that had recently purchased the home, and began looking for a new buyer without confirming the woman was an authorized representative.
Tom Davidoff, from the University of British Columbia's Sauder School of Business, said shadow flipping and other issues can be expected in a red-hot real estate market.
"When prices are going bananas, when people are in a panic because they feel they need to buy a property, when they want to sell for top dollar, they're very excited but they don't know what their house is worth," he told CTV News.
"That's when unethical realtors have the opportunity to pull some kind of shenanigans like the ones we see in this case."
Guo's penalties also stem from a second file which claimed he did not disclose he was acting as a limited dual agent for a property he was renting in Burnaby.
The report said Guo represented both buyer and seller in the same transaction when he created an exclusive listing contract and contract of sale on the same day. He backdated the listing contract by three weeks, council wrote.
The buyers and sellers did not sign a "Working with a realtor" brochure or a limited dual agency agreement until after the contracts were created, though they should have been reviewed and signed as soon as Guo began representing them. He said he'd had verbal consent from his landlord to list the property, and that the owner didn't want to enter a listing contract until a buyer was in place.
Among other issues outlined in the council report, Guo prepared a second version of the contract of sale a few weeks after the initial document was signed, which did not show he'd represented both buyer and serller.
He also failed to provide his managing broker with required records for the transaction, violating two sections of the council's real estate rules.
In addition to the fines and suspension, the council ruled Guo must pay for and attend the Real Estate Trading Services Remedial Education Course hosted by the Sauder School. He will also be under enhanced supervision of a managing broker for at least a year after his suspension, which ends Nov. 4.
Because the offences occurred in 2014 and 2015, the largest fine he could have faced was $10,000. New rules that came into effect last September mean similar infractions can now result in fines of up to $250,000 for individual realtors and $500,000 for companies.