Property Disputes

Real Estate Agent Negligence & Fraud

A stately home in Vancouver surrounded by a wrought iron fence and greenery, representing the property dispute lawyers at Meridian Law Group who advise clients across BC on partition of property matters, boundary issues, riparian rights, real estate agent negligence and fraud, commercial lease disputes, neighbour disputes, and easements and rights of way.

Vancouver Litigation Lawyers for Real Estate Agent and Broker Misconduct

Real estate transactions often represent an individual or business’s most significant financial commitment. Buyers and sellers place substantial trust in licensed real estate agents and brokers to guide them through these transactions with professionalism, integrity, and compliance with their fiduciary duties. However, the financial and legal consequences can be severe when this trust is breached through negligence or fraud.

The real estate litigation lawyers at Meridian Law Group represent clients throughout British Columbia who have suffered losses due to the misconduct of real estate professionals. Whether the issue arises from negligent misrepresentation, dual agency conflicts, undisclosed defects, or outright fraudulent activity, the firm’s lawyers have the experience and legal acumen to pursue compensation and protect clients’ interests.

Meridian Law Group also provides legal representation to real estate professionals and brokerages accused of wrongdoing. The firm provides strategic, results-driven defence to help protect reputations, professional licenses, and business interests.

Understanding the Duties of B.C. Real Estate Professionals

Real estate professionals in British Columbia are regulated under the Real Estate Services Act and must comply with the rules set by the BC Financial Services Authority (BCFSA). These professionals are expected to act in their clients’ best interests, provide accurate information, and disclose material facts related to a transaction.

Key duties of a person providing real estate services include:

  • Exercising reasonable care and skill
  • Acting honestly and with integrity
  • Avoiding conflicts of interest
  • Providing full disclosure of material facts
  • Maintaining confidentiality

Failure to uphold these duties, whether due to oversight or deliberate misconduct, can result in legal liability for real estate professionals and potential claims against the brokerage they represent.

Real Estate Agent vs. REALTOR® vs. Broker

The terms “REALTOR®,” “real estate agent,” and “broker” are often used interchangeably in everyday conversation, but they have distinct meanings within British Columbia’s regulated real estate industry. Under the Real Estate Services Act, all three are required to be licensed to provide real estate services.

Real Estate Agent

A real estate agent is a licensee who has completed the necessary education and licensing requirements through the BCFSA and is authorized to provide trading services under the supervision of a managing broker.

Broker

A broker is a licensee who has met additional educational and experience requirements and is licensed to operate independently or manage a brokerage. In most cases, real estate agents must work under the supervision of a managing broker, who is responsible for ensuring the brokerage complies with provincial regulations, oversees agent conduct, and maintains trust accounting and record-keeping obligations.

REALTOR®

A REALTOR®, by contrast, is not a licensing category but a trademarked designation granted to real estate professionals who are members of the Canadian Real Estate Association (CREA) and a local real estate board. While all REALTORS® are licensed agents or brokers, not all licensees are REALTORS®.

Understanding these distinctions is essential when assessing legal responsibilities, professional standards, and the potential scope of liability in real estate disputes. Whether a professional is acting as a real estate agent, broker, or REALTOR® may affect their duties to clients, their obligations under industry regulations, and the remedies available in cases of alleged misconduct.

Common Forms of Real Estate Negligence and Misrepresentation

Negligence in real estate transactions frequently occurs due to a failure to perform adequate due diligence, provide precise advice, or disclose information that would reasonably impact a client’s decision to engage in a purchase or sale. Some prevalent instances of real estate negligence include:

  • Failing to investigate or disclose known defects in the property, such as water damage, mould, or foundation issues
  • Providing inaccurate or misleading information regarding zoning, land use, or strata restrictions
  • Neglecting to verify property boundaries, which may lead to costly disputes or encroachments.
  • Omitting essential market data or transaction information that could influence the sale price

In numerous situations, the effects of negligence may not be immediately discernible. Clients may only uncover issues months or years after the transaction has occurred, often during renovation projects, resale efforts, or conflicts with neighbouring properties or strata corporations.

Real Estate Agent or Broker Fraud

Fraud is a more egregious form of misconduct and may involve intentional deception by an agent, broker, or third party. Examples of fraudulent behaviour in the real estate context include:

  • Falsifying property documents, offers, or disclosures
  • Fabricating bidding wars to inflate sale prices artificially
  • Concealing financial relationships or commissions from involved parties
  • Misappropriating trust funds or deposit monies
  • Participating in mortgage fraud schemes

Victims of fraud may face substantial financial losses, damaged credit, or exposure to litigation. Swift legal action is often necessary to obtain injunctive relief and/or freeze assets, recover damages, and prevent further harm.

Dual Agency and Conflict of Interest Risks

Dual agency occurs when one agent represents both the buyer and seller in a transaction. This practice was largely banned in British Columbia in 2018 due to the inherent conflict of interest. However, conflicts can still arise when agents attempt to benefit themselves or their brokerage at the client’s expense.

Examples of problematic conduct include:

  • Failing to fully disclose multiple representation scenarios
  • Encouraging clients to accept unfavourable terms to expedite a commission
  • Prioritizing the interests of repeat clients or investors over those of a new buyer
  • Steering clients toward properties with personal or business connections

When agents prioritize their own financial interests over those of their clients, they breach their fiduciary duties and may be subject to liability and regulatory sanctions.

Legal Remedies for Victims of Agent or Broker Misconduct

Victims of real estate agent or broker negligence or fraud may have several legal avenues for recourse, depending on the nature and severity of the misconduct.

Civil Claims for Damages

Clients can pursue a civil claim (lawsuit) for compensation against the individual agent, their brokerage, or both. These lawsuits may be based on causes of action such as negligence, misrepresentation, breach of fiduciary duty, or fraud.

In certain circumstances, compensation may be sought from the BCFSA’s Special Compensation Fund, particularly in cases of fraud or misappropriation.

Claims Against Errors and Omissions Insurance

Most real estate professionals in B.C. are covered by mandatory errors and omissions (E&O) insurance through the Real Estate Errors and Omissions Insurance Corporation, established under the Real Estate Services Act. In cases involving negligence, clients may be eligible to claim compensation under this policy.

Rescission or Cancellation of Contract

In certain instances, particularly where fraud or misrepresentation induced a transaction, the court may allow the victim to rescind the real estate transaction entirely and be restored to their pre-contractual position.

Establishing a Real Estate Professional’s Liability

To succeed in a claim against a real estate agent, REALTOR®, or broker, the plaintiff must prove:

  • The agent owed them a duty of care or a fiduciary duty;
  • That duty was breached by negligent or dishonest conduct;
  • The breach caused financial harm (e.g., overpayment, repair costs, loss of opportunity); and
  • The damages can be quantified and attributed to the misconduct.

In fraud cases, the burden of proof is higher, and plaintiffs must show that the misrepresentation was intentional and made with the intent to deceive.

Time Limits for Bringing a Claim Against a Realtor or Broker

Most civil claims in British Columbia are governed by the Limitation Act, which generally imposes a two-year limitation period from the date the claimant knew, or reasonably should have known, that a legal claim existed. In real estate cases, this can be challenging, especially if defects or fraud are discovered long after the closing date.

It is essential to seek legal advice promptly once any issues are identified. A delay may prevent you from pursuing compensation, even if the underlying misconduct was serious and well-documented.

Preventative Measures and Due Diligence for Buyers and Sellers

While not all real estate issues are preventable, buyers and sellers can take steps to protect themselves from negligent or fraudulent conduct. These include:

  • Carefully reviewing disclosure documents and strata minutes
  • Obtaining independent inspections and appraisals
  • Consulting a lawyer before signing purchase agreements
  • Asking direct questions about known defects, renovations, or title issues
  • Keeping written records of communications with agents and brokers

Legal guidance during a transaction can help identify red flags and clarify your rights and obligations.

Defending Against Real Estate Litigation

Meridian Law Group also represents real estate professionals and brokerages accused of misconduct. These cases often involve:

  • Defending against allegations of professional negligence
  • Responding to BCFSA complaints and investigations
  • Addressing civil claims from buyers or sellers
  • Advising on insurance coverage under E&O policies

Real estate professionals facing litigation or regulatory proceedings must act quickly and carefully. Admissions, emails, and incomplete documentation can all play a critical role in shaping the outcome of a claim.

Meridian Law Group: Trusted Advocacy in Real Estate Agent Professional Negligence and Fraud Cases in B.C.

Meridian Law Group‘s real estate litigation lawyers have extensive experience handling disputes involving agents, brokers, buyers, sellers, and developers. The firm works closely with experts such as real estate appraisers, inspectors, and forensic accountants to build a strong, evidence-based case tailored to each client’s needs.

For over 30 years, the dedicated litigators at Meridian Law Group have built a strong reputation for delivering outstanding results and consistently surpassing client expectations. From its office in downtown Vancouver, the firm provides exceptional legal service to clients throughout British Columbia, across Canada, and worldwide. To book a consultation, please call (604) 687-2277 or contact the firm online.