A growing number of agents who used to work for Richmond-based New Coast Realty allege the company has not paid them commission fees for residential real estate transactions they completed months ago.
Some say they are owed tens of thousands of dollars. A few say they are owed fees for dozens of deals or hundreds of thousands of dollars. It typically takes a few days for such payments to process.
Last week, nearly 20 disgruntled former agents of New Coast interrupted an afternoon party at the company’s offices that had been organized to recruit new agents. They ambushed management, demanding answers.
On Saturday, some of them planned to protest at the Vancouver Convention Centre where New Coast was holding a black-tie, James Bond-themed, charity gala dubbed “License to Sell” for an expected 2,000 guests.
In an email, New Coast managing broker Josh Rosenberg said: “New Coast pays our agents commission promptly and on par within our industry. Any disputes with those commissions would be due to an agent leaving to work with the competition. Due to confidentiality, we cannot disclose our agents specific contracts, but I can certainly say that we pay fairly and that we are certainly not in the business of shadow flipping.”
Their protests come as an independent advisory group is investigating “shadow flipping”—the practice of selling a property several times by reassigning sales contracts for more money before the sale finally closes and the transaction is registered.
The investigation was started after the publication of a Globe and Mail article in February that cited former New Coast agents who described tactics for securing blocks of listings and assigning contracts a few times to maximize profits.
One former managing broker of the company told the Globe: “They get Chinese (clients) who are ignorant of the market to buy their highend investments.”
New Coast Realty has grown quickly since it was started in 2012 by businessman Ze Yu Wu. It has offices in Burnaby, Richmond and Vancouver, and its agents have also been active on the North Shore. The company says it has more than 400 realtors and 2,357 completed transactions in 2015.
“We don’t want to make trouble,” said Morning Yu, formerly one of New Coast’s star agents who led a team of about 10 agents when she was at the company. “We just want our money.”
Yu worked for New Coast for two years before leaving in mid-December and says she is owed fees for 37 completed deals, and 20 pre-sale ones. Some closed while she still worked for the company, others after her departure.
At New Coast’s gala in February 2015, which was held for 1,000 guests at Floata Restaurant in Chinatown, Yu was honoured as one of the company’s top performers.
“I left because it was not a good environment and I’m not comfortable at all with the way they practised business,” said Yu.
Another agent, Wendy Yang, who also led a team of agents before leaving the company in February, estimates New Coast owes her around $200,000 in commission fees.
Yu and Yang have since joined Richmond-based Metro Edge Realty. Another former New Coast agent, John Zhou, says he left the company in December and is owed around $45,000 in commission for seven deals completed since then.
“Everything was in order. They had processed everything, but all that was lacking was (New Coast owner) Mr. Wu’s signature in order to clear my cheque. I was very confused. It’s been months now,” said Chris Chen, another former agent.
He alleges he has not been paid commission for five completed deals.
New Coast has an unusual arrangement whereby agents and the company split commissions equally. In return for taking half the commission, the company provides agents with listings and its promotion services.
At most firms, agents drum up their own listings and keep most of the commission, though they might pay a brokerage some fees for certain services.
The former agents are working with a lawyer and considering legal action.
“Due to privacy and confidentiality obligations, New Coast cannot comment on the specifics of its contractual agreements with former agents,” said New Coast’s lawyer, Simon Coval, a partner at Fasken Martineau DuMoulin LLP.
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