Two weeks into the Land Owner Transparency Act: What do we know so far? What do land owners need to do?
As we have written previously, the Land Owner Transparency Act came into force on November 30, requiring all land owners to comply with transparency requirements. This means for land being purchased, a Transparency Declaration and in some cases, a Transparency Report must be filed. This article is an update on key concepts and what we have learned so far on how this will work.
In all purchases, a Transparency Declaration must be filed, stating whether the buyer is the actual owner, or is buying on behalf of someone else. If the buyer is a Reporting Body, which means a corporation, trustee, or partnership, then that buyer must also file a Transparency Report. Legal counsel for the buyer will prepare the Transparency Declaration and e-file it with the Land Title Office as part of the normal legal work. This work is quite straightforward.
If the buyer is Reporting Body, it must file a Transparency Report stating who the Interest Holders are, along with certain personal information about them. Legal counsel for the buyer will prepare and e-file the Transparency Report, which can become complex if there are multiple Interest Holders. In our practice, it is the buyer’s job to ask for and obtain information about the Interest Holders and supply it to us. If the buyer is not able to obtain this information, the Transparency Report is filed indicating the information that is missing and steps that were taken to try to obtain it. The Transparency Report would be updated at a later date with the required information. Purchases that involve partnerships, joint ventures, trusts, and multiple corporate layers of ownership are complex and can require considerable work by the legal counsel to prepare and file the Transparency Report. The Land Title Office requires a fee to file the Report and any updates. The result is that the legal costs to buyers will increase to cover additional professional time and new filing fees.
Notice to Interest Holder, and Objecting
Before the purchase completes, a Notice (the “Initial Notice”) must be sent to all Interest Holders, telling them that their personal information will be sent to the Land Ownership Transparency Registry, and informing them they will have 90 days to make an objection to the Registry if they do not want their personal information to be publicly accessible. We can supply the buyer with a form of Initial Notice, if required. In s.40 of the Act, the valid reasons for an Interest Holder objecting to the publication of his/her personal information include safety and mental or physical health. It is up to the Interest Holder to make this application directly to the administrator of the Registry. The intention is that all ownership will be public, unless the person can show that doing so would put them at risk. One can think of examples such as fear of an ex-spouse, or fear of harassment for political reasons, as being valid reasons to request the information not be published, but we have yet to see how this will be handled with real facts. In addition, a follow-up notice to Interest Holders is also required after the Transparency Declaration is filed (the “Follow Up Notice”) after the purchase completes, informing each Interest Holder of the exact information about him/her that was filed. In our practice, it is the buyer’s job to send both the Initial Notice and the Follow Up Notice to each Interest Holder.
Some Existing Owners Must File a Transparency Report in the Next 12 Months
Within the next 12 months, any existing land owner who is a Reporting Body must file a Transparency Report. In other words, no matter how many years ago the land was purchased, if it is owned by a Reporting Body then a Transparency Report must be filed by November 30, 2021, stating who the Interest Holders are. The intention is to build out the Registry with ownership information for all properties in British Columbia. We expect some kind of roll-out by the provincial government to inform land owners of this compliance requirement. It may be done by legal counsel, or it may be self-administered as is the case for the Speculation and Vacancy Tax. We suggest all existing land owners should look for updates in the next 3 to 6 months and may want to check in with their legal counsel mid-2021 if they are unsure of how to proceed.
Responsibility for Ongoing Compliance
After a Transparency Report is filed, if there is a change in the Interest Holders there is an ongoing obligation to file an additional report indicating this change. As with all legal compliance issues, it is up to the land owner to be aware of the law, to be in compliance, and to continue to be in compliance if ownership changes. As above, we do not know what kind of program the government may implement to inform land owners, and we don’t know how much owners will be able to do on their own. We recommend land owners contact their legal counsel for advice if there is a change of an Interest Holder without an actual change in title. Examples would include a change in the shareholdings of a company which is a land owner, or changes in the ownership structure of a joint venture.
Our Fine Print….
This article is a summary of a complex piece of legislation. It is meant to cover only the highlights and does not cover further policy and details that are still being worked out. For more information, our lawyers and staff are here to assist, and you can find the Registry website here: https://landtransparency.ca/
© Linley Welwood LLP. The contents of this article do not constitute legal advice. Readers should seek legal advice in relation to their own specific circumstances.