British Columbia

B.C. couple 'defeated' after 6-year battle to recover cash from discredited former realtor

Ron and Shelley Gordon turned to the courts and the real estate council in their quest to get their money back from former realtor Katharine Virtanen. All that they have to show for that is a pile of legal bills and an effectively useless court order.

Ron and Shelley Gordon turned to the courts and the real estate council after dealing with Katharine Virtanen

Former real estate agent Katharine Virtanen has been found to have misappropriated clients' money. (CBC)

Former realtor Katharine Virtanen was ordered to pay Ron and Shelley Gordon more than $37,000. A warrant was issued for her arrest. A judge ruled she couldn't escape this debt through bankruptcy.

And yet, more than six years after the Gordons first agreed to loan cash to Virtanen for a real estate deal, they are no closer to getting their money back.

Most frustrating of all for the Gordons is the response from the Real Estate Council of B.C. (RECBC), which maintains a pool of money meant to compensate victims of misappropriation by real estate professionals.

Earlier this fall, the real estate council agreed to reimburse another couple after Virtanen embezzled $30,000 in deposits.

But the Gordons' application for relief through the same program was rejected.

That decision left Ron Gordon feeling disillusioned about the people who are meant to shield consumers from the actions of unscrupulous real estate professionals.

"They like to tell you that they're protecting the public, but that's the farthest thing from their minds. They protect themselves at all costs," Gordon said.

That's not how the council's CEO Erin Seeley sees things.

"I know our team, we come every day to work to protect the public," she said.

She said the council has made a lot of progress in the years since 2016, when the province ended self-regulation of the real estate industry in response to a series of scandals.

"But we're always looking for ways to improve, and so this experience with the Gordons is helpful for us to take forward," Seeley said.

Virtanen surrendered her real estate licence in 2014 after seven years in the business, but the real estate council says it cannot confirm or deny whether that happened in response to complaints about her work.

She could not be reached for comment on this story. She did not return calls to a cellphone number included in her old listings, and an email address in her name has been deactivated.

Lost in the paperwork

The Gordons tried two different avenues in their quest to get their money back from Virtanen — the courts and the real estate council. All that they have to show for that is a pile of legal bills and an effectively useless court order.

They filed an application with RECBC in 2017 for relief through the Real Estate Special Compensation Fund, hiring a lawyer to help them navigate a confusing process.

"They sort of lose you in the paperwork," Ron Gordon said.

According to the Gordons' application, they met Virtanen in 2013 when they were selling their home in Surrey and buying a new one. She performed those services without any issues and then befriended them, the Gordons say.

In early 2014, Virtanen approached them about a client who was trying to buy a home but was short on the deposit, according to the Gordons' application. Virtanen allegedly told them the client had money in an investment that would mature after the deadline.

Ron and Shelley Gordon have given up hope of getting their money back from Katharine Virtanen. (Ron Gordon)

The Gordons say they eventually agreed to cover most of the shortfall, writing Virtanen a bank draft for $12,500 and then another to her brokerage for $10,000 on the understanding it would be paid back within three days of closing.

"I never would have thought she would have absconded with the money," Shelley Gordon said.

But when they tried contacting her after the deal was done, they say she always had an excuse why she couldn't talk or meet up with them.

The Gordons' application for compensation was rejected in June 2018.

A letter from the RECBC's lawyer, Patrick Poyner, to the Gordons states that their claim doesn't meet the definition of a "compensable loss" under the Real Estate Services Act.

Poyner wrote that while the Gordons say the $12,500 they gave directly to Virtanen was to be used for a real estate deal, "there is no evidence to support that other than your clients' assertion."

As for the second bank draft for $10,000 made out to Virtanen's brokerage, Poyner wrote that there was no evidence that it was misappropriated since it appears the money did in fact go toward the clients' purchase — even though the Gordons were never repaid as promised.

When he received the news, Ron Gordon said, "I was defeated."

'What's the point?'

By then, the Gordons had already given up on the courts, even though they had technically won their case.

They filed a claim against Virtanen in provincial court in 2015, asking for their money back. She never filed a response to that claim, and a judge wrote a default order requiring her to pay back the principal plus more than $14,500 in interest and expenses.

When she failed to show up for a hearing on repaying the Gordons, a warrant was issued for her arrest on July 26, 2016.

That warrant was cancelled less than a month later because Virtanen had declared bankruptcy.

Virtanen was eventually told she couldn't escape her debts because of her "unjustifiable extravagance in living, by gambling or by culpable neglect," according to a 2017 order from B.C. Supreme Court.

A judge at Surrey provincial court, pictured, ordered Virtanen to repay the Gordons, but that hasn't happened. (Cliff MacArthur/provincialcourt.bc.ca)

But a year had passed by then, and if the Gordons wanted to see their money, they'd have to ask the court for another payment hearing. Then they'd have to track down Virtanen so they could serve her with a summons.

Having already spent a few thousand dollars on their legal battle, the Gordons decided throwing more money at the problem wasn't worth it.

"What's the point?" Ron Gordon asked.

They've pretty much given up any hope of ever getting their money back. But they would like to see changes at the real estate council to make it easier for laypeople to navigate the claim process, with deadlines and other requirements clearly laid out.

"They need to be more approachable," Shelley Gordon said.

Seeley, the CEO of RECBC, said she recommends people consult a lawyer before filing a claim, but the council does provide information to the public about the process through FAQs on its website, information packages and professional standards advisors.

"But again, I'm very sorry that the individuals in this case didn't feel like they had the support they needed," she said.

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