A former real estate agent on Vancouver Island has been ordered to pay a significant fine after failing to disclose that a property she was selling was a designated archaeological site. The B.C. Financial Services Authority (BCFSA) issued a penalty of $66,500 to Judy Bood for her role in a 2018 transaction that resulted in a substantial financial loss for the buyer.
The case highlights the legal and ethical obligations of real estate professionals to disclose all material facts about a property, even when instructed otherwise by a client. According to regulatory documents, the failure to disclose the property's protected status prevented the new owner from developing the land as planned.
Key Takeaways
- A former Vancouver Island real estate agent, Judy Bood, was fined $66,500 by B.C.'s financial services regulator.
- The fine was for failing to disclose that a property sold in 2018 for $300,000 was a protected archaeological site.
- The buyer could not develop the land and later sold it at a loss of approximately $110,000.
- The regulator deemed the non-disclosure as "significant misconduct," emphasizing the need to maintain public trust in the industry.
Details of the Transaction
The property in question, located on the coast of Vancouver Island, was sold in 2018 for $300,000. Under British Columbia's Heritage Conservation Act, properties designated as archaeological sites are protected. Any significant alterations, including construction or land clearing, require special permits from the provincial Archaeology Branch.
An agreed statement of facts presented to the regulator revealed that Bood was explicitly instructed by the seller not to disclose the property's protected status to potential buyers. The buyer only became aware of the restrictions after the purchase was complete, when they began clearing trees and brush from the land.
Financial Impact
The buyer, unable to proceed with their development plans due to the archaeological designation, ultimately sold the property for $200,000. The regulator noted this resulted in a loss of approximately $110,000 when accounting for associated costs. This financial harm was cited as an aggravating factor in the disciplinary decision.
In its decision, the BCFSA hearing officer stated that the buyer's loss was a direct consequence of the failure to disclose critical information during the sale process. This underscored the severity of the professional misconduct.
The Agent's Responsibility
During the investigation, it was revealed that Bood had previously listed the property. In earlier interactions with prospective buyers, she had verbally disclosed the existence of the archaeological site. However, the seller consistently argued that disclosure was unnecessary.
Documents describe the seller as "very argumentative and difficult." For the final transaction, the seller convinced Bood that the buyer was a "sophisticated party and developer" who was familiar with local regulations and did not need to be explicitly informed. Bood told the regulator she found this argument reasonable at the time.
"The only reasonable conclusion, in my view, is that there was a concern on the part of both Ms. Bood and her client that the disclosure may cause a problem with respect to the offer on the [property], and that as a result a decision was made not to disclose," the hearing officer wrote in the decision.
The regulator firmly rejected the notion that the buyer's perceived sophistication absolved the agent of her duty. The responsibility to disclose a latent material defect, such as a development restriction, remains with the licensee regardless of the buyer's background.
Regulatory Findings and Mitigating Factors
In her defense, Bood, who has since retired from the real estate industry, presented what she described as significant mitigating factors. She informed the regulator that she was experiencing serious health problems during the period of the sale, which eventually contributed to her decision to retire.
"Ms. Bood indicated that she was not attempting to trivialize her error in this case, but that it was a mistake that she had made during a difficult time in her life, and one that there was no risk of her ever making again," the decision summary reads.
However, the hearing officer found that her health condition did not impair her ability to fulfill her professional duties. The decision noted that despite her health issues, she had successfully disclosed the site's status to other potential buyers in the past.
Maintaining Public Confidence
The regulator's decision emphasized the broader importance of upholding professional standards to maintain public trust. "Licensees are expected to follow and uphold the law, and the public needs to know that when they do not, the superintendent will ensure that they are held to account," the decision stated. The finding of "significant misconduct" was central to the final penalty.
The case serves as a stark reminder for real estate professionals about their non-negotiable duty of disclosure. An agent's primary obligation is to act honestly and with reasonable care and skill, which includes revealing all known material facts about a property to potential buyers, even when facing pressure from a client.
Broader Context of Heritage Protection
This incident also brings attention to B.C.'s Heritage Conservation Act, the legislation designed to protect sites of historical and cultural importance. The act has been a subject of recent discussion within the provincial government.
Just this week, Forests Minister Ravi Parmar announced that the province would be postponing a planned reform of the act. The delay is intended to allow for more extensive consultation with First Nations, industry stakeholders, and municipalities to ensure any changes are comprehensive and well-supported.
For property owners and buyers, this case highlights the critical need for due diligence. Verifying a property's status and any potential development restrictions is a crucial step before finalizing a purchase, particularly for land in areas with known historical or archaeological significance.
