They’re not in the real estate business, but some immigrant settlement companies are receiving fees from home sales.
The case of Richmond realtor Di (Tony) Xu illustrates how.
Xu has been paying commissions to immigrant settlement companies for client referrals.
Xu, a realtor since 2007, has made at least three successful property deals because these referrals.
But Xu did not tell his clients that they were referred to him by immigrant settlement agencies.
The Sutton Group Seafair Realty made the admission in a consent order he prepared for the Real Estate Council of B.C. (RECBC).
Xu faced a disciplinary review by the council because of a complaint that realtors that providing services to some immigrant settlement companies.
However, it was not for paying commissions that Xu was found liable for wrongdoing.
Xu was deemed to have committed professional misconduct because he did not tell his managing broker that he was getting referrals from and giving out fees to immigrant settlement agencies.
According to the consent order prepared by Xu, he provided RECBC copies of purchase and sale contracts for property transactions at Arlington Street, Rosamond Avenue, and Regent Street that “arose out of the referrals”.
Xu told the council: “I do business practice purely on an individual basis, so I did not inform my managing broker for each case.”
Xu also stated that while he disclosed to his clients the fees he earned, he “did not disclose the amount of commission that he would be paying for the referral or the identity of the referral source to his clients”.
Xu did not think that the sources of the referrals had to be disclosed to his clients.
“However, when he spoke to his managing broker, he was informed that was not the case,” according to the consent order. “He stated that he will make sure that he does not make this mistake again.”
According to a summary of Xu’s case posted online by RECBC on Wednesday (November 14), a discipline committee ordered Xu suspended for 30 days.
Xu also has to pay a penalty of $1,500, and complete at his own expense a real estate services course.
The consent order did not identify the immigrant settlement companies that received commissions from Xu.More