A $25,000 regulatory penalty became $15,000 because the licensee had committed the conduct before he was formally found liable for an earlier contravention. That wasn't a finding that his work was satisfactory. In Chang (Re), 2025 BCSRE 41, British Columbia's real estate regulator found four failures in a property manager's duties to a landlord and tenant. It confirmed three $5,000 penalties while cancelling the $10,000 penalty that treated an earlier rent increase mistake as a subsequent offence.
How a tenancy dispute became a professional conduct case
Ernest Chang managed a Richmond rental property under a 2018 service agreement. A second tenant moved out in September 2019, but Chang didn't tell the owner until October 2023. He also tried to increase rent in March 2022 and June 2023 without using the mandatory Residential Tenancy Branch notice. The tenant later obtained a ruling that the increases hadn't taken effect, which also undermined the owner's ability to charge that increased amount in later years.
In September 2023, the owner wanted to recover the property for family use. Chang delivered a notice to end the tenancy, then assumed his separate property management agreement would end on November 30, 2023. The tenant disputed the eviction and continued to send rental payments and documents to Chang. Neither the owner nor the tenant received clear written instructions from him about when management would end or where the tenant should direct rent. Confusion persisted through January 2024, contributing to proceedings over rent and attempted eviction.
BC Financial Services Authority issued a $25,000 administrative penalty notice in November 2024, alleging breaches of sections 30(a), 30(f) and 34 of the Real Estate Services Rules. Chang sought reconsideration under section 57(4) of the Real Estate Services Act. Hearing Officer Gareth Reeves examined the documents and submissions on the balance of probabilities.
A tenancy notice didn't terminate a management contract
Chang argued that the notice ending the tenancy, the owner's instructions, or unpaid management fees automatically ended the separate management agreement. The officer rejected that interpretation after examining clauses 7, 8 and 14. A provision allowing immediate termination when a triggering event occurs still required someone to exercise the right to terminate. Without a written notice, the parties wouldn't necessarily know which relationship had ended or when. The officer relied on the contractual principles governing implied terms, including MJB Enterprises, and found written notice necessary to make these provisions workable.
The distinction is important. A tenant can resist or overturn a notice to end a tenancy, and a manager may still have responsibilities to the owner and tenant while that dispute unfolds. The officer found that Chang hadn't ended the management agreement by the process it required. He should have informed the owner in writing and given the tenant clear written directions about contacting the owner. His informal understanding of the transition didn't meet the reasonable care and skill requirement in section 34. The officer also found that withholding information about the departure of a co-tenant for four years breached the section 30(f) duty to disclose material information.
As for rent increases, the failure to use the prescribed form meant the purported increases didn't legally work. The officer found that this fell short of the section 30(a) obligation to act in the client's best interests. Even a tenant's acknowledgement of an informal notice couldn't substitute for statutory compliance. The decision describes real potential financial harm to the landlord but doesn't determine the merits of any separate civil claim between the parties.
Why the $10,000 penalty had to go
The prescribed Category C scale allowed $5,000 for a first contravention and $10,000 for a subsequent one. The regulator had issued a separate penalty over different conduct in May 2024, and a reconsideration decision confirmed it on November 5, 2024. Yet the defective rent increase notices in this case were sent in 2022 and 2023, before that prior finding of liability.
The officer applied the principle commonly called Lord Coke's Rule. Unless the legislative scheme says otherwise, a harsher penalty for a subsequent contravention ordinarily requires the person to have already been found liable and sanctioned before committing the later conduct. The BC rules lacked the alternative definitions that had produced a different result in Skybar. The older events could establish a breach of section 30(a), but they couldn't carry the $10,000 subsequent contravention tariff. Section 57(4) allowed the officer to confirm or cancel the penalty, not rewrite it at a $5,000 first contravention rate.
He cancelled that $10,000 administrative penalty and declined to refer the issue to a discipline hearing. The three remaining penalties were each confirmed at $5,000. They addressed failing to tell the owner a co-tenant had moved out and the two communication failures concerning termination of property management. The confirmed total of $15,000 became payable to BCFSA. The cancellation wasn't a reversal of the underlying rent increase finding.
What this means for regulated businesses
The reasons are a reminder that compliance duties don't disappear merely because a service provider believes a commercial relationship has ended. Where different contracts and statutory relationships overlap, the manager should be clear about which one is being terminated, who must be told and how the transition will work. In this case, a tenancy eviction notice couldn't do the job of written notice ending the owner's property management agreement.
The penalty analysis matters well beyond real estate. Repeated poor conduct doesn't automatically qualify for every statutory repeat-offender enhancement. The sequence of misconduct, a finding of liability and subsequent conduct can be decisive, but the statutory wording comes first. This was an administrative reconsideration under British Columbia's particular rules, not an appellate determination of a universal penalty standard.
The official decision was released with redactions. Binder has preserved the public case identity and omitted the tenant's and owner's identifying information. The account above is based on the complete 24-page BCFSA reasons, paragraphs 1 to 179, issued March 10, 2025. Read the full decision.