B.C. real estate agent suspended, fined nearly $100K over 'predatory' rent-to-own scheme
Regulator says Kevin Bratch, first suspended in 2017, can't reapply for licence for another year
A Lower Mainland real estate agent has been ordered to pay nearly $100,000 in fines after being found guilty of professional misconduct in relation to a rent-to-own scheme allegedly aimed at financially vulnerable homeowners.
More than three years after B.C.'s real estate council first suspended Kevindeep Singh Bratch's licence under "urgent circumstances," Bratch has also been told he'll have to wait another year before he can apply to get his licence back.
A disciplinary committee found that Bratch committed conduct unbecoming of a real estate agent after a hearing that saw testimony from a man who claimed Bratch acted like a "saviour," while negotiating a deal to purchase a $2.1 million house for less than a quarter of its worth.
"Bratch's conduct ... constitutes conduct unbecoming because it targets members of the public who are in stressful positions, have limited options and feel pressured into agreeing to any terms to keep their family homes," the council said in submissions that resulted in the penalties.
"In these circumstances, Mr. Bratch was looking to make an investment and was driven by profit. The homeowners were driven by the desire to keep their homes."
Deals 'disadvantageous' to owners
The case was one of the last handled by the real estate council before the introduction of a new regulatory authority in B.C. The B.C. Financial Services Authority (BCFSA) now oversees real estate agents, mortgage brokers, credit unions, trust and insurance companies and pension plans.
The penalties — which include a $45,000 fine and $50,000 to pay for the cost of the investigation — were announced on the new regulator's website this week.
The BCFSA will handle the file going forward.
Bratch could not be reached for comment, but a spokesperson for the regulator said he has appealed the decision to the Financial Services Tribunal.
The rulings make clear that Bratch's activities were not illegal.
The real estate council claimed they were "disadvantageous" to owners who "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."
'This is the best case scenario'
The witness who claimed Bratch came across as a "saviour" told the council that he approached Bratch after receiving unsolicited mail claiming the real estate agent was a foreclosure specialist.
At the time, the witness — whose name is redacted in the decision — was experiencing financial difficulties; his mother had passed away two years earlier and his bank had started foreclosure proceedings on his $2.1 million childhood home.
According to the decision, the two reached a deal that saw Bratch and his wife purchase the home for $500,000 and then agree to rent it back to the former owner for $4,000 a month with an option to buy back the property for $600,000 four months later.
"The language was like this is the best case scenario, this is what you have to do in order to make sure that the bank doesn't take your home," the witness told the disciplinary committee.
"I'm walking into this, like Kevin [Bratch], is in my corner, he is not somebody who, who is on the other side of the table in an agreement."
The deal ultimately ended up in court after Bratch and his wife sued the homeowner, who responded by claiming the deal was "unconscionable."
All three parties agreed to dismiss the legal action in December 2017.
'I do wear the different hats'
The real estate council's disciplinary committee considered evidence related to three rent-to-own deals involving Bratch.
In one case, Bratch evicted an elderly Maple Ridge couple on Thanksgiving 2017 after taking them to the Residential Tenancy Branch, over unpaid rent on a home they agreed to sell for $233,000 less than its assessed value to a company Bratch and his wife controlled .
The council faulted Bratch for failing to disclose the nature of his relationship with the company, and for failing to recommend that the couple get independent legal advice.
That situation led to the interest of local media. It also resulted in a lawsuit that was settled in an agreement that saw the couple buy their home back from Bratch for roughly the same price he originally paid them.
In the third case, the council says Bratch paid $154,000 less than the value of a property assessed at $869,000. He rented it back to the original owners for $4,300 a month.
"When we first signed this deal I expressed concern as to whether or not… [we] would be able to execute the re-purchase option after just one year, to which you assured me, and I quote, 'I'm not a monster, I'm here to make a return on my investment, if you can't buy it back after one year I would extent it [sic] another year,'" the original homeowner said in an email to Bratch, shared with the council.
The original owners could not buy the home back in a year and ended up renting on a month-by-month basis before moving out in December 2018.
According to the decision, Bratch now resides in the property. It was assessed at $915,000 in 2019.
Bratch represented himself at the hearing, disputing the allegations against him. He claimed he had advised the elderly couple to get a lawyer and was clear with his clients about the transactions.
According to the decision, he described himself as wearing "different hats."
"So I provide homeowners with the different options and again I do wear the different hats," Bratch is quoted as saying.
"So I would be wearing a mortgage broker's hat, a real estate agent's hat and during that time you're allowed to be ... licensed as a mortgage broker and a real estate agent at the same time."
In addition to the penalties and suspension, Bratch has been ordered to take an "Ethics in Business Practice" course offered by the Real Estate Institute.