Judge orders B.C realtor to pay $1.5 M for botching sale
A B.C realtor is on the hook for $1.5 million because he sold a plot of land but neglected to tell the buyer the site might soon be in the Agricultural Land Reserve.
Calgary businessman Kevin Dunn sued realtor Todd Fyfe after the land he purchased to build a boutique ski lodge near Fernie became part of the ALR two months after the purchase.
According to a Feb. 3 B.C. Supreme Court decision, the Agricultural Land Reserve's boundary change kiboshed Dunn's plans to build a $3-million ski lodge because commercial development is largely prohibited from land classified under the zoning.
Dunn argued the realtor neglected to tell him about the impending change in land designation in 2012 or the consequences or that he could opt-out before the boundary changes had been finalized.
“Mr. Fyfe knew for a fact that there was a proposal to bring the entire property into the ALR,” the Justice said. “Yet Mr. Fyfe took no steps to alert Mr. Dunn about this risk."
Dunn argued the realtor's negligence cost him $2.6 million in delays and extra expenses.
Justice Ward Branch found the realtor liable for failing to tell Dunn about the situation with the possible boundary change and that he could have opted out.
However, the Justice ruled $2.6 million was inflated and instead ordered the realtor to pay his former client $1,536,180.
The decision says Dunn was living in the U.S. at the time and had recently sold his share of an engineering business for $12 to $14 million and wanted to move back to Canada.
The lengthy decision gives play-by-play details of conversations between Dunn and Fyfe over the land purchase.
At the time, 100 acres of the 160-acre site was part of the ALR but the province was in the process of conducting a boundary review and holding public consultations about the matter. The province had said owners wouldn't be forced into the ALR if they didn't want it to be included.
After plenty of back and forth between the two parties in November 2013, Dunn purchased the land for $775,000.
Two months later, because the Agricultural Land Commission hadn’t received any request to opt-out of the boundary change, the entire plot was lumped in.
Unaware of this, Dunn continued with his hotel project plan but in July 2014 had his building permit application to build an 8,000 square foot ski lodge refused.
After being told his permit was refused because his land was in the ALR Dunn applied as an “agri-tourism” business and made multiple other adjustments in an attempt to abide by the rules.
During the hearing, even the Agricultural Land Commission chair said it's like a "cold day in hell" before land can come out of the ALR.
Two years later having spent roughly $600,000 just in planning and design, Dunn launched legal action against the realtor.
Fyfe argued he didn’t know Dunn wanted to open a business and thought he just wanted to build a home for himself, which appears would have been allowed under the zoning.
The decision goes into lengthy detail about how much the realtor had to disclose to Dunn as well as addressing how much money Dunn lost in delays and changes in setting up his business.
The trial took nearly three weeks and included multiple expert options on everything from real estate law to a hospitality industry expert talking about how much profit Dunn’s business could have made.
Dunn did finally open his boutique hotel, the Brooks Creek Ranch, in the summer of 2018. According to its website rooms start at $900 a night.
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