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Former New Coast Realty agents Wendy Yang, second right, stands with other former employees after being asked to leave New Coast's realty office on March 9, 2016. (Ben Nelms/The Globe and Mail)
Former New Coast Realty agents Wendy Yang, second right, stands with other former employees after being asked to leave New Coast's realty office on March 9, 2016. (Ben Nelms/The Globe and Mail)

B.C. realty withholding commissions from luxury home sales, agents say Add to ...

Several Vancouver-area real estate agents are claiming New Coast Realty refuses to pay hundreds of thousands of dollars in commissions they earned selling multimillion-dollar homes.

Eleven agents recently left the fast-growing Richmond-based company – which has more than 400 agents and has recently opened several new offices – all to join the same competing firm.

The agents say they quit because they were expected to put company profits above all else and didn’t get much support in return. They said as soon as they told New Coast they were leaving, the paycheques stopped.

“I am very angry,” said former New Coast agent John Zhou, who claims he is owed $45,000. “We want respect. We want to be treated fairly.”

New Coast was highlighted in a recent investigation by The Globe and Mail as a company that encourages agents to personally invest in real estate. The brokerage firm said it also allows them to assign contracts, a practice known as “shadow flipping,” in which sold properties are flipped to new buyers for a higher price before a deal closes, which brings extra commissions.

The brokerage has an unusual business model, where it keeps half of all commissions earned, which the complaining agents do not dispute. The disgruntled former agents say they simply want their half, which in most cases amounts to tens of thousands of dollars.

“I worked there four months and I completed five deals and I have never been paid a single cent for the work I did,” said real estate agent Zheng Yu Chen, who asked to be identified by his Chinese name. “The owner was not signing off on cheques.”

New Coast didn’t answer The Globe and Mail’s request for an interview. It responded to the agent’s complaints through its lawyer, Simon Coval.

“New Coast denies owing any outstanding amounts to its former agents,” Mr. Coval said in an e-mail. “The types of allegations you describe would be determined based on the written agreements between the parties. Due to privacy and confidentiality obligations, however, New Coast cannot comment on the specifics of its contractual arrangements with former agents.”

In Vancouver’s hot real estate market, sales commissions can pile up quickly. Morning Yu, formerly one of New Coast’s top-performing agents, said she has not been paid her half of commisions on 37 completed deals and 20 pre-sale contracts. She left late last year and estimates she is owed $300,000.

“I also paid almost $8,000 for a staging of a property out of my own pocket,” Ms. Yu said. “Realtors do all the work and New Coast just takes their money.”

The agents have hired lawyer Wayne Ryan, who said he is preparing to file a lawsuit on their behalf. Mr. Ryan said he also called the Real Estate Council of B.C. – responsible for regulating agents and brokerages – but it told him it won’t do anything about this.

“They indicated they are busy with many things so they can’t deal with everything – and this matter involving real estate agents and a real estate company is not under their jurisdiction,” Mr. Ryan said.

“Based on what was conveyed to us by Mr. Ryan, this appears to be a contractual issue between the licensees and the brokerage, and would be a matter for the civil courts,” Real Estate Council spokewoman Marilee Peters said in an e-mail response.

“The Council is reviewing the issue regardless to ensure that there is no risk of public harm, and meet our mandate of protecting the public interest in real estate transactions.”

Mr. Ryan says he believes that doesn’t go far enough.

“That industry is under scrutiny by the public and the government and they should come to the table and deal with all issues related to real estate.”

The agents involved said the owner of New Coast Realty, Ze Yu Wu, required them to sign a contract when they were hired, written in Chinese. Each contract has a set term – nine years for example – that agents must work for the company to fulfill the terms. They all said they weren’t allowed to have a copy of what they signed.

The Globe and Mail obtained one of those contracts. The translation reveals a clause that says any agent who goes to another firm will lose all outstanding commissions.

The contract reads: “Important item. If Party B [the realtor] terminates the cooperation agreement and joins another real estate agency, all the commissions from all the property sales by Party B belongs to Party A [New Coast]. Party B cannot communicate with property owners by any means. All the profits generated from property sales have nothing to do with Party B.”

Several of the former New Coast agents told The Globe and Mail they have been in Canada for many years and don’t really understand written Chinese. They said they signed because they wanted a job.

“I don’t believe the Chinese contract is enforceable,” Mr. Ryan said. “It seems to me what Mr Wu has done is basically give a notice to all of his realtors that you can’t leave. Obviously, the person doing all the work here is the realtor, who is entitled to payment.”

Former New Coast agent Paul Zhang, who is not part of the group, filed a suit in B.C. Supreme Court last year, also alleging unpaid commissions and lack of support from New Coast. The company responded by claiming Mr. Zhang failed to live up to the terms of its contract so they let him go.

New Coast is hosting a gala Saturday night in Vancouver and several of the disgruntled agents say they plan to protest at the venue.


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