A Surrey, B.C.-based property developer and its director have been ordered to pay nearly $100,000 by the province’s real estate regulator for causing “consumer harm.”
The B.C. Financial Services Authority (BCFSA) said Halcyon Point Development and its director Dale Tortorelli are both liable for failing to provide purchasers with a disclosure statement and for putting purchasers’ funds into Tortorelli’s business accounts.
They’ve been ordered to pay a total of just over $79,000 in enforcement expenses and a $20,000 administrative penalty, according to the decision made public this week.
“Consumer harm was a key factor in determining disciplinary measures,” BCFSA said in a statement.
The purchasers’ plans to own a chunk of a property marketed by the developer “were thrown into disarray because Halcyon and Tortorelli did not provide them with a disclosure statement as required,” according to the BCFSA.
CBC News contacted Tortorelli by phone, by social media and through his lawyer but has yet to hear back.
Property in Arrow Lakes area
In 2016, Halcyon and Tortorelli marketed a development property in the Arrow Lakes area, a picturesque region in B.C.’s Kootenays made up of two lakes that are widened parts of the Columbia River.
They were looking for purchasers to acquire a 1.3-acre portion of the property and build a house on it, according to the BCFSA.
The buyers and Tortorelli had “differing views” about the nature of the intended transaction, including how purchasers could sell the land, the decision said.
The buyers planned to first place a trailer on their portion of property, with a plan to later build a house in another area of it.
But the BCFSA found Halcyon and Tortorelli did not prepare or file a disclosure statement that would have explained that the buyers couldn’t have full use and control of the land.
$80K deposit put in personal account
The BCFSA also found Tortorelli put $80,000 of the purchasers’ deposit funds into “various” bank accounts of his, instead of putting it into the trust account of a brokerage, lawyer, notary public or trustee.
It meant the buyers could not get a refund because the money wasn’t properly deposited, according to the BCFSA.
The buyers ended up taking Halcyon to B.C. Supreme Court to get their money. Court documents obtained by CBC News show Halcyon was ordered to pay the buyers a total of $265,000 and that they no longer have any claims to the property.
Tortorelli argued he should not be held personally liable because he was acting as an agent for Halcyon, but the BCFSA said there’s nothing in the Real Estate Development Marketing Act that says an administrative order can’t be handed to both a developer and director.
“I consider it to be necessary to signal to the industry that the failure to place purchaser deposits in a trust account … will be met with a penalty of significance,” wrote BCFSA chief hearing officer Andrew Pendray in the decision.
