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B.C. real estate agent suspended, fined nearly $100K over 'predatory' rent-to-own scheme – CBC.ca

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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.

B.C. Realtor Kevin Bratch has been fined and suspended in relation to a rent-to-own scheme that was called ‘predatory’ by the B.C. Real Estate Council. (Bratch Realty)

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.

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Saint John saw record real estate prices. So why did assessments barely budge, mayor asks – CBC.ca

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Thousands of Saint John properties that escaped assessment increases this year, including dozens that sold for record prices, are slowing growth in the city’s tax base for 2022 compared to other cities.

That’s at odds with predictions from Service New Brunswick officials earlier this year, and Mayor Donna Reardon wants to know why assessments in other communities appear to follow different rules.

“That to me is a question I’d like to get answered,” Reardon said.

“I have to say I don’t understand it.”

Real estate sales in Saint John set records in both volume and price over the past year.

But although Service New Brunswick officials told the city in February that it would “reap some of that reward” with growth in its 2022 tax base, the results announced earlier this month were underwhelming.  

Saint John Mayor Donna Reardon has been a critic of property assessments in Saint John for several years. She’s concerned Service New Brunswick operates differently in other cities than it does in Saint John. (Hadeel Ibrahim/CBC)

City’s tax base ranks 43rd among N.B. municipalities

Based on property assessments completed this year by Service New Brunswick, Saint John’s tax base is expanding by 6.24 per cent for 2022 according to figures released  earlier this month by the province

That’s more growth than in recent years, but still well below the provincial average of eight per cent.

Part of the sluggishness is because 5,332 residential, commercial and industrial properties in the city, one in every five, escaped any assessment increase at all from Service New Brunswick.   

That helped to drag growth in the city’s tax base down to 43rd place among all New Brunswick municipalities.   

Moncton had only 888 properties awarded no assessment increase for 2022 and Fredericton just 680.

Most perplexing for Saint John are dozens of properties given no change in their taxable values, even after being sold to buyers for double their assessment and more.

On Saint John’s upscale Anchorage Avenue, five waterview lots sold earlier this year at prices between $151,000 and $230,000. 

Houses on Saint John’s upscale Anchorage Avenue sell for up to $1 million. The street had five lots sell this year at prices an average of 144 per cent above their assessed values, but none received an assessment increase. (Robert Jones/CBC News)

The sales were an average of 144 per cent above the properties’ 2021 assessed values, but the high prices triggered no changes in their assessments or in assessments of other lots in the neighbourhood.   

As a result, the sales added nothing to Saint John’s critical tax base growth for 2022. One of the Anchorage lots purchased in May for $169,000 has since been relisted by its new owner at $209,900. However, for taxation purposes, Service New Brunswick continues to assess it at $75,200.

That appears to contradict Service New Brunswick’s claims that its annual assessments approximate what a property will reasonably sell for if it were put on the market.  

According to the agency, a collection of actual sale prices in a neighbourhood are considered the most reliable guide to what assessments should be in an area.

“Your property’s real property assessment value reflects its market value,” the agency explains on its website. 

“Our assessors aren’t actually determining market value,” it notes. “They are simply reflecting the values that have been established by buyers and sellers in local real estate markets across the province.”

That is what happened in Moncton in a development going up around the Mountain Woods golf course.

This year, eight lots in the development sold to buyers for an average price of just over $102,000 each — 98 per cent above their assessed values.  

Based on those sales, Service New Brunswick raised assessments on all eight lots and six others nearby by an identical 98 per cent.  The change accurately reflected sale prices in the development and the rising assessments added $621,400 to Moncton’s 2022 tax base.

Assessments on 14 undeveloped lots on and around St. Andrews Drive in Moncton went up 98 per cent after a number sold at those higher prices. (Pierre Fournier/CBC News)

It’s a sharp contrast to what Service New Brunswick did on Anchorage Avenue and in a second Saint John neighbourhood along the Bay of Fundy.

On a stretch of Saint John’s Sea Street, perched above Bayshore Beach with panoramic ocean views, 18 building lots sold to buyers this year for a combined $892,750.  

It was, on average, more than double their assessed value.

However, 13 of the lots have been awarded zero per cent assessment increases for 2022, as have seven existing homes that sit among them on the same street.

Service N.B. ‘can’t discuss the details’

Oceanview properties in Saint John have been among the highest in demand over the past year, selling for $100,000 or more above their assessed values in several cases.   

Service New Brunswick says it cannot reveal why it concluded Oceanside properties on Sea Street warranted no increases in their values, even those that sold for higher than their assessed price.
   
“We cannot discuss the details of individual properties,” Jennifer Vienneau, Service New Brunswick’s director of communications, said in an email.

“It is not uncommon for external factors to affect the market value.  On an annual basis, property assessors analyze these factors to make adjustments to assessment values that are in line with market activities.”

Reardon thinks Service New Brunswick is not following the same assessment rules in Saint John as it does in Moncton, and that difference is restricting growth in her city’s tax base.

“If I say a lot’s worth $150,000 to me and there’s been a few of them that have sold for that, that’s the price. That’s what they’re worth,” she said.

“We’re trying to work with Service New Brunswick. I think it needs to be more transparent, more clear to people. We need to understand how they come up with the calculations.”

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Windsor-Essex real estate market slows down — so sellers pulling out all the stops – CBC.ca

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Windsor’s sizzling real estate market is seeing a slight slowdown — and it means sellers have to up their game to draw people in. 

Prices are still high in Windsor-Essex but realtors say more listings over the last several months are leading to fewer offers on individual homes, putting buyers in a better position with more options and less competition.

“When buyers have more choice, sellers have to do a little bit more to stand out from the crowd,” explained Danial Malik, a broker at ReMax Preferred.

“They have to do more in terms of professional photography, videography, staging. They want to make sure there’s as many eyes as possible on their property, so it gets sold for top dollar.”

The average price of a Windsor-Essex home in September was $552,186, according to data from the Windsor-Essex County Association of Realtors. That’s 27.4 per cent more than September of last year. 

Listings have also doubled from what we saw at the beginning of the year (1,035 listings in September compared to 475 in January).

One home stager says business has doubled

“Things have picked up quite a bit,” said Julie Kapitan, owner of Lemon Tree Living, a home staging company in Windsor-Essex.

Julie Kapitan, owner of Lemon Tree Living, says demand for her home staging services has doubled since June. (Katerina Georgieva/CBC)

At the start of the year, there was a “buying frenzy,” and homes were selling quickly with or without staging, she said.

“But something shifted I think in May and June and the calls started to come in,” Kapitan said. 

Her business has doubled since then. 

She said it helps people imagine living in the space.

‘Property has to stand out’

Aditya Soma with the WinCity Real Estate Team says staging is “crucial” for any sale.

Realtor Aditya Soma says home staging is crucial. (Katerina Georgieva/CBC)

“There is more inventory,” he said.

“That means your realtor and your stager, you know, have to do a fantastic job by pricing it right, by presenting it well to attract as many buyers as possible.”

Soma added that some sellers list their homes and try to sell without a stager, and later realize they need to “revamp” their approach in order to get the offer they’re hoping for. 

Malik explained that he’s also seeing more cancellations of listings in recent months. That’s because, given the trend of the last year or so, expectations are very high for sellers. 

“They’re trying different realtors or they’re trying different strategies to get that dollar amount, whereas the property … may not be worth what they’re asking for,” Malik said.

WATCH | Broker Danial Malik on what the current market means for buyers:

Broker Danial Malik on today’s market

3 days ago

Broker Danial Malik explains what the current real estate market climate means for buyers. 0:59

Hence, there’s a stronger lean toward marketing tools like home staging — though it can be a pricey option, depending on what you need. 

Kapitan explained that staging could start at $1,000 if accessories are the only items required by the seller. However, if furniture is required, home staging could cost $5,000 or more depending on the size of the home. 

She also works with house flippers in the community to help them get the best possible price.

Flippers turn to stagers

Jami Jacklyn, a partner at M & J Doors Ltd., a St. Thomas company that flips houses, recently acquired a Windsor home that cost them close to $200,000, they invested between $30,000-$50,000 into renovations. After listing the home for $199,000 and using Kapitan’s home staging service, it recently sold for more than $100,000 over asking. 

“Previous, in my real estate career, I didn’t think it was important, to be honest. I’ve sold houses before,” Jacklyn said. 

“Now that we’re doing this in more volume, I have a massive respect for stagers and it has helped my business tremendously.”

Jami Jacklyn flips houses with her company, M & J Doors. The home behind her, a recent project, sold for more than $100,000 over asking. (Katerina Georgieva/CBC)

Jacklyn explained that her company tries to choose “eyesores” in the community to flip in order to improve the neighbourhood, while still being able to sell the renovated property to first-time home buyers, even though the work on the home drives that price up. 

But with or without a stager, Kapitan suggests depersonalizing your home by removing family photos, de-clutter, avoid patterns, use white linens and white towels, and clean so that your home is spotless.

Meanwhile, even though the lull in the market puts buyers in a better position, it’s still a seller’s market. 

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Hamilton mixed-use dev. gets height-limit exemption – Real Estate News EXchange

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IMAGE: A rendering of the proposed high-rise multiresidential development at 75 James St. S. in downtown Hamilton. (Courtesy Fengate Asset Management)

A rendering of the proposed high-rise multiresidential development at 75 James St. S. in downtown Hamilton. (Courtesy Fengate Asset Management)

Ground has broken on the latest project in downtown Hamilton, a mixed-use development at 75 James St. S. which will tower more than 30 storeys and include over 500 residential units.

The Labourers’ International Union of North America’s LiUNA Pension Fund of Central and Eastern Canada (LPFCEC) holds 100 per cent interest in the development. Fengate Asset Management is the investment manager, developer and asset manager, while The Hi-Rise Group is the development manager and SG Constructors is the builder.

The Downtown Hamilton Secondary Plan states buildings shall not exceed the height of the Niagara Escarpment, which works out to about 30 storeys, but the partners applied for and received permission from the city to exceed the height restriction with the James Street building.

“Working collaboratively with city staff and local stakeholders, the building height was determined with consideration for relevant planning policies, precedent projects and addressing local housing needs,” Fengate managing director and group head of real estate Jaime McKenna said in an email exchange with RENX.

An application filed with the city called for a tower of up to 34 storeys.

Plans for the James St. S. property

The James Street site was formerly a bank and was acquired for an undisclosed price in 2018. It was assembled in 2020 with another site at 44 Hughson St. S. – which is the current home of the LiUNA Local 837 and LiUNA Central and Eastern Canada regional offices.

It’s still to be determined if the residential component of the development will be a purpose-built rental apartment or condominium. It will include office and commercial space and a heritage component.

“Due diligence is underway to determine the best model to meet residential needs in downtown Hamilton,” McKenna wrote.

The development will help address significantly increased residential needs in Hamilton from people of all ages and occupations, including students, millennials priced out of the Toronto market and retirees.

The residential units will range in size from studios to three bedrooms. Building amenities will include fitness facilities, party rooms, relaxation lounges, private rooftop green space and underground parking.

LiUNA and the development

“LiUNA is incredibly proud to be addressing the increasingly critical residential needs in Hamilton,” Joseph Mancinelli, LPFCEC chair, LiUNA International vice-president and regional manager for Central and Eastern Canada, said in an email interview with RENX.

“I myself, a Hamiltonian, have a personal passion for the future of our city, addressing current infrastructure needs that will continue to foster economic development, job opportunities and growth.”

Mancinelli said the location is transit-oriented and pedestrian-friendly, offering easy access to necessities, work, school and entertainment.

“Our LiUNA HQ of the Central and Eastern Region as well as the LiUNA Local 837 office at 44 Hughson will be seamlessly integrated into the development and expanded with new office space, keeping the artistic and historic façade of the front of the building, honouring the foundation and history of those before us,” said Mancinelli.

“Further, a number of live/work units will be provided, catering to local small business needs.”

A 2025 completion is being targeted for the development.

The development partners

LiUNA has half-a-million members across North America, including more than 140,000 in Canada, who predominantly work in construction.

The LPFCEC was established in 1972 and is one of the fastest growing multi-employer pension funds across Canada. Its diverse investment portfolio has more than $10 billion in assets.

Fengate Asset Management is an alternative investment manager focused on infrastructure, private equity and real estate strategies. It has a total asset value of more than $20 billion and offices in Toronto, Oakville and Houston.

Fengate Real Estate is involved with more than 75 properties and investments. The completed value of its portfolio is more than $9 billion and it has more than $4 billion in value under development.

The Hi-Rise Group is a fully integrated development and construction company that was founded in 1979. It initially functioned as a merchant builder that sold most of the projects it developed and built, but it now holds a number of properties across Ontario.

SG Constructors was founded by Matt Stainton and its management team has accumulated more than a century of experience working on construction projects.

The two-tower King William Residence in Hamilton and the revitalization of Yonge Eglinton Centre, Yonge Sheppard Centre, 66 Wellington St. W., 111 Richmond Street West and 180 Wellington in Toronto are among its projects.

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