Licences suspended, accounts frozen for realtor and 2 firms over 'potential misuse' of clients' cash

The Real Estate Council of B.C. has suspended the real estate licence of a Vancouver realtor and frozen the bank accounts of two brokerages he runs because of suspected misconduct in his bookkeeping.

The RECBC issued suspension and freezing orders for Stephen Lam, Regent Park Pinnacle Realty of Vancouver and Coral Property Management of Richmond on Feb. 6.

That comes after an investigation found "systemic books and records issues, shortages in the rental trust accounts and general trust account ledgers, and potential misuse of client trust funds" in the accounts of Regent Park Pinnacle, according to a decision from the council's discipline committee.

"Mr. Lam's history of his treatment of the pooled and trust accounts of both brokerages puts his clients in current and future financial risks that their monies will be wrongfully removed."

Lam and the two brokerages remain under investigation and allegations of misconduct have not been proven.

But the RECBC discipline committee said it was necessary to take action now because not doing so "would undermine public confidence in the real estate industry and its regulation and would bring the real estate industry into disrepute."

Lam did not know how much he owed clients

Lam owns Regent Park Pinnacle outright, is the majority owner of Coral Property Management, and is the managing broker for both firms, according to RECBC decisions. Both brokerages provide rental management services for a total of about 184 units.

The investigation began in late 2018, when RECBC auditors began looking into the books at Regent Park Pinnacle, according to the decision. They discovered overdrafts and shortages in the trust account where Lam's clients' funds were supposed to be kept separate from the brokerage's operating funds.

Lam later admitted to investigators that he had taken money out of the trust account to pay Regent Park Pinnacle's bills, and "he did not know exactly how much money he owed to his clients," the decision says.

"He acknowledged that if all of Regent Park Pinnacle's clients decided to leave the brokerage that day, the brokerage 'probably' would not have enough money to repay them, although he was not sure."

Lam also acknowledged transferring $10,500 from his personal account to the trust account to top it back up, and said he had transferred money from Coral Property Management in the past.

The RECBC says it will likely take weeks or even months to finish inspecting the records of the two brokerages

The real estate council is asking any concerned clients of the two companies to reach out by email through the addresses clientsofpinnacle@recbc.ca and clientsofcoral@recbc.ca.

According to the RECBC, there is no history of previous complaints against Lam or his two brokerages.