B.C. realtor fined $45K, pay $50K in costs for rent-to-own scheme
A Lower Mainland realtor was fined $45,000, pay $50,000 in investigation costs and had his brokerage licence revoked for at least one year for a rent-to-own scheme he operated with his wife.
Kevindeep Bratch, with Bratch Realty Ltd., was found to have committed professional misconduct in a decision published by the B.C. Financial Services Authority.
Bratch was found to have targeted financially vulnerable homeowners facing foreclosure and presented them with a rent-to-own scheme.
While the practice is not illegal, Bratch and his wife, or a company controlled by his wife, would buy the homes at prices "substantially below" the assessed value, then rent the homes back above market rates.
READ MORE: B.C. realtor hit with a one year suspension and $150,000 in costs
The scheme included an option for the owners to buy back the home within a set time and a set price, but if they failed to meet that option or defaulted on their rent payments, the option would end and the home would be left for Bratch, according to the decision.
In the option agreements presented to the former homeowners, roughly 20% of their rent was a credit put toward re-purchasing the home. However, if the option was ended, they were not entitled to earn those funds back.
The decision focused on three properties, and in all three, investigators found Bratch failed to properly disclose his interest in the purchase of the homes, one of which dates back to March 2017.
"In some cases, the Owners did not receive independent legal advice or separate agency representation, and either believed that Mr. Bratch was acting on their behalf, or were at least confused as to his role in the transaction," the authority wrote.
He also failed to disclose that he and his wife were the buyers. Investigators also found administrative issues with other sales.
Bratch and/or Bratch Realty Ltd. were ordered to pay a $45,000 fine and $50,000 to cover the costs of the investigation.
READ MORE: Why not everyone will have rental rate increases limited to 1.5% next year
Bratch must also complete a real estate ethics course at his own expense.
After one year, and once those are complete, Bratch may apply to be licensed as a real estate broker again.
You can read the original decision here.
READ MORE: First month’s rent won’t even pay the taxes on this 'charming' City of Kelowna rental home
To contact a reporter for this story, email Levi Landry or call 250-819-3723 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.
We welcome your comments and opinions on our stories but play nice. We won't censor or delete comments unless they contain off-topic statements or links, unnecessary vulgarity, false facts, spam or obviously fake profiles. If you have any concerns about what you see in comments, email the editor in the link above.
