A B.C. mortgage broker was negligent when attempting to secure a mortgage for two people looking to buy a property with a mobile home on it, and that negligence resulted in the buyers having to pay an extra $5,000, B.C.'s small claims tribunal has ruled. In a decision issued Thursday, Civil Resolution Tribunal member Peter Mennie found that Gursher Bains had not met the requisite standard of care in dealing with the mortgage application submitted by Amy Sue Whittome and Lawren Neil Smith. WHAT HAPPENED The decision does not specify where in B.C. Whittome and Smith were looking to make their purchase, only that they agreed to purchase the property in January 2022 for $415,100. The pair contacted Savendra Singh to obtain a mortgage. They told the tribunal they were under the impression that Singh was their mortgage broker. In fact, Singh – who, along with Bains, did not indicate their gender to the tribunal and is referred to throughout the decision using the gender-neutral pronoun "they" – described themself as a financial consultant. Singh referred the matter to Bains, who served as Whittome and Smith's mortgage broker. "The applicants' property deal was set to close on Jan. 10, 2022," Mennie writes in the decision, summarizing what happened. "The applicants say that Savendra Singh called them a few days prior and said there was an issue with the mortgage. The applicants say Savendra Singh informed them that Gursher Bains was their mortgage broker and they should contact them. The applicants say Gursher Bains was unhelpful and told them to call the lender. The lender’s representative told the applicants that the lender does not approve mortgages for properties with mobile homes and there was nothing it could do so close to the property sale closing date." Faced with this situation, the homebuyers paid the sellers $5,000 to extend the closing date. They then secured alternative financing for their purchase without the help of either Singh or Bains, according to the decision. Whittome and Smith took Singh and Bains to the CRT, claiming that they were forced to make the $5,000 payment because of the respondents' negligence. STANDARD OF CARE BREACHED Bains told the tribunal they were not negligent, and blamed the situation on the lender, which initially approved the mortgage, only to change course later. "(Bains says) they provided all required information and documents to the lender," the decision reads. "They say that the lender approved the mortgage subject to a few conditions unrelated to whether the property had a mobile home, but the lender later realized its mistake and refused to provide a mortgage to the applicants. They say that this was the lender’s error in approving the mortgage when it was a mobile home." Mennie found this argument unpersuasive. As a mortgage broker, Bains owed a certain standard of care to the would-be mortgagees, the tribunal member noted, finding that Bains had done "obviously substandard" work on the matter. "I find it obvious that Gursher Bains, as a professional mortgage broker, should have known that there were additional considerations when securing a mortgage where the property has a mobile home," the decision reads. "I find that Gursher Bains breached their standard of care in failing to make further inquiries with the lender about how to secure a mortgage on a property with a mobile home." With regard to the claim against Singh, Mennie did not find a breach of the standard of care, noting that Singh had referred the mortgage application to Bains and was not involved in the application process. Mennie found Bains responsible for the $5,000 cost to the buyers. The tribunal member ordered Bains to pay the buyers that amount, plus $253.23 in pre-judgment interest and $175 in CRT fees, for a total award of $5,428.23. Mennie also noted that Bains is free to pursue a case against the lender on the basis of their argument that it was the lender's error, not their own, that caused the buyers' issues.
