B.C. property manager fined $27K amid probe of alleged short-term rental fraud

Condo and office towers are seen in downtown Vancouver, on Tuesday, April 25, 2023. (Darryl Dyck / The Canadian Press)

B.C.’s real estate regulator has upheld a $27,000 administrative penalty against a property manager it has accused of tenanting multiple Vancouver properties “under false pretences” and subleasing them as short-term rentals without their owners’ consent.

The underlying allegations against Matthew Kuras have not been proven. The penalty imposed by the B.C. Financial Services Authority stems from Kuras “refusing to provide, concealing, or withholding information and documents” from investigators.

The BCFSA first issued a notice of administrative penalty to Kuras on June 3 of this year. The $27,000 total represented an initial $1,000 penalty, plus 26 days’ worth of daily $1,000 penalties for continued failure to produce documents the regulator had demanded.

Kuras contested the penalty, and BCFSA hearing officer Gareth Reeves issued his decision on Kuras’ reconsideration request in October. The reconsideration decision was published online earlier this month.

Reeves’ decision notes that his role does not allow him to vary the administrative penalty, only cancel or confirm it. After considering the documents the BCFSA requested and Kuras’ arguments for why he had either already provided them or should not be required to do so, the hearing officer opted to confirm the penalty.

“Mr. Kuras continued to refuse to provide the required responses until at least June 3, 2025,” the decision reads. “The requests appear to be presently outstanding.”

Short-term rental scams

CTV News has reported on several illegal short-term rental operations involving downtown Vancouver condos so far this year. While each case is different, the fraud’s typical pattern is as follows.

A tenant signs a long-term lease on an apartment, often one that has been offered fully furnished. Rather than moving in, however, the “tenant” lists the unit on Airbnb or a similar short-term rental platform without the knowledge or consent of the property’s owner.

In some of the cases CTV News has reported on, the fake tenant has had several similar listings, suggesting the scam is being run on multiple units at once, in violation of provincial regulations that limit short-term rentals to a person’s primary residence and one secondary suite on the same lot.

• Read more: ‘A strange person opened the door’: How a Vancouver condo owner discovered his long-term tenant listed the unit on Airbnb
• Short-term rental scam in downtown Vancouver happening on another well-known booking platform
• One-on-one with B.C.’s housing minister on CTV News investigation into short-term rental scam
• Vancouver Airbnb host’s legal, paid registration number fraudulently used in multiple listings

The BCFSA noted in its letter to Kuras informing him of its investigation that it does not enforce provincial short-term rental rules. Rather, the regulator investigates allegations of conduct unbecoming of a licensee, which can include “conduct that is contrary to the best interests of the public, undermines public confidence in the real estate industry, or brings the real estate industry into disrepute.”

The investigation letter, which is partially reproduced in the reconsideration decision, goes on to list five allegations of conduct unbecoming that the regulator is investigating. They are:

• Tenanting five properties in Vancouver “under false pretences” and renting them out as short-term rentals without their owners’ knowledge or authorization
• “Advertising real estate without the owner’s knowledge and authorization”
• “Falsifying contractual documents”
• “Exposing owners to fines” during tenancies Kuras managed
• And “making any false or misleading statement” in a document related to a licensing renewal application

Again, these allegations have not been proven. The administrative penalty against Kuras stemmed from his response to the BCFSA’s request for documents it deemed related to the investigation.

Tax documents relevant

The BCFSA made 13 requests for documents in its correspondence with Kuras, but only 10 of them were under consideration in Reeves’ decision.

Two of these pertained to banking records and were “overbroad,” according to the hearing officer. Another two—a request for proof of payment related to a Residential Tenancy Branch order and a request for a “Docusign Certificate of Completion” for a residential tenancy agreement Kuras signed—were deemed to have been satisfied or impossible to satisfy because the documents requested were not in Kuras’ possession.

The remaining six requests from the BCFSA were for “a list of any additional properties” Kuras had leased and subleased since Jan. 1, 2021, contact details for each person he subleased to, sublease agreements for each party, copies of all payments received from the subleasees, and Kuras’ T1 tax forms and notices of assessment for tax years 2021 through 2024.

Kuras’ initial response to the enumerated requests is partially reproduced in Reeves’ decision. In response to the request for his tax information, it reads:

“It is not clear to me why I ought to provide you with my tax returns for four years. Please tell me why these are relevant to your inquiries.”

In his submissions to the hearing officer, Kuras argued that most of the information the BCFSA requested from him was not relevant to the stated purpose of its investigation, but Reeves disagreed.

While Kuras argued that the investigation was limited to the five properties specified in the regulator’s initial letter—and therefore requests for information about other properties were irrelevant—Reeves interpreted the BCFSA’s letter differently, noting that the letter said the allegations “include” the properties specified, without limiting them to only those properties.

Reading the request this way, questions about other properties Kuras had leased and subleased were clearly relevant to the investigation, and he clearly refused to answer them, according to Reeves’ decision.

The hearing officer reached a similar conclusion on the relevance of the tax documents.

“Mr. Kuras stated in his interview that he received payment from the subtenants for those of the properties he subleased and he also stated that he did not receive a profit from those subleases and was not involved in any short-term rentals of the properties through short-term rental providers, like Airbnb,” the decision reads.

“What Mr. Kuras claimed on his tax filings is clearly relevant to whether he in fact obtained a profit from subleasing the properties or from short-term rentals of the properties. If he did claim income from those sources on his returns, that would tend to indicate that he, contrary to his statements, received some profit. If he did not claim income, that might confirm his statements. In either case, that information is reasonably required by the superintendent to test the truth of Mr. Kuras’ use of the properties.”

Accordingly, the hearing officer concluded that Kuras had failed to comply with six of the 10 requests in question, and the administrative penalty should be upheld.

“In my view, a suspension would have been within the scope of an appropriate order in this case,” Reeves’ decision concludes.

“Such an order would incentivize compliance in a way that a lump sum monetary sanction might not. That said, I do not think this is a case where a monetary sanction is inappropriate, and the combination of a monetary order to address the past misconduct, written reasons, and the prospect of further enforcement will be sufficient to achieve compliance in this case.”