New hearing scheduled for B.C. developer after his release from U.S. prison

The Murrayville House condo development is seen in Langley, B.C. on Aug. 3, 2018.

A real estate developer who recently finished a U.S. prison sentence will soon face a hearing in B.C., and two individuals who worked with him on an ill-fated Langley condo project have been ordered to pay more than $100,000 in penalties between them.

The enforcement actions announced this week by the B.C. Financial Services Authority trace back to the Murrayville House condo development, a 92-unit project on 221A Street near 52 Avenue in Langley Township, which was placed in receivership in 2017.

The court-appointed receiver determined that the developer – a numbered company whose sole director was Mark John Chandler – had entered into 151 pre-sale contracts for 91 units in the building, with some units sold two or three times and one unit sold on four occasions, according to court documents from 2018.

The BCFSA alleges that Chandler “undertook marketing activities to re-sell units within the Murrayville House development that had already been purchased by other buyers,” the authority said in a news release this week.

The BCFSA’s predecessor, the Real Estate Council of B.C., issued a cease marketing order against Chandler in 2017 and a hearing on the allegations was scheduled for 2019.

“BCFSA could not conduct the scheduled hearing however, because Chandler was extradited and imprisoned in the United States, where he served a sentence for unrelated charges,” the release reads.

Those charges, according to extradition decisions issued by B.C. courts in 2019, were for fraud related to a purported condo development in Los Angeles.

Chandler has since been released from prison and deported to Canada, according to the BCFSA, which said it has served him a new notice of hearing related to the Murrayville House project.

The new hearing is scheduled to begin on Sept. 15 of this year.

• Read more: Police investigating pre-sale development; condo buyers out hundreds of thousands

Unlicensed real estate services

While Chandler awaits a BCFSA hearing on his alleged misconduct, two people who helped market and sell units in the Murrayville House project have agreed to consent orders with the regulator.

Vasant Pragjibhai Patel and Chattar Singh Flora have each agreed to pay administrative penalties for providing unlicensed real estate services related to the Langley development, the BCFSA announced this week.

Patel will pay a $10,000 penalty, plus another $10,000 in investigation costs, and a numbered company he owns will pay a further $20,000 penalty. Those amounts represent the maximum penalties allowed under the rules that were in place at the time, according to the BCFSA.

Flora, meanwhile, has agreed to pay a $70,000 administrative penalty.

The consent orders for both Flora and Patel describe the same units being sold to multiple buyers, with the “first purchaser” paying a 15-per-cent deposit to be held in trust by the developer’s lawyer.

The “second purchasers” were offered the units at a discounted price of roughly 75 per cent of the amount the first purchaser had agreed to pay, according to the consent orders.

These buyers paid their discounted purchase prices directly to the developer and signed contracts indicating that they “would not be required to pay any additional monies for the units and would receive either: (1) the unit they purchased; or (2) 100 per cent of the total net sale proceeds from the sale of the unit,” the Patel order reads.

According to the documents, Patel worked for Chandler as an accountant and purchased a unit as a second purchaser, along with two friends. He also informed Flora – with whom he was friends – of the opportunity to buy units in the building for discounted prices.

The consent orders indicate that the two worked together, along with others, to find people who were interested in purchasing units and provide them with sales agreements, collecting deposits and commissions for doing so.

Patel received payment for his role in facilitating the sale of 16 units, while Flora received payment for seven transactions.

In the consent orders, each man acknowledged that he provided real estate services without being licensed to do so under the provincial Real Estate Services Act.

Two other people – both licensed real estate agents – have been found liable for misconduct related to the Murrayville House project, but have not yet been sanctioned, the BCFSA said. It did not name those individuals.