What is the Land Owner Transparency Act and how does it affect land owners?
The Land Owner Transparency Act (“LOTA”) comes into force November 30, 2020 and will create new disclosure requirements for land owners. The information will be used to create the Land Owner Transparency Registry that will contain information about the beneficial owners of all lands in BC. By “beneficial owner”, we mean the “real” or “true” owner of the property even if another party is the registered owner. In this article we will refer to the beneficial owner as the “true” owner.
Learn more about the Land Owner Transparency Act.
The basics are:
- Beginning November 30, 2020, any buyer of land will have to disclose who are the true owners, and any company, trust or partnership will have to disclose its true owners or beneficiaries.
- By November 30, 2021, any existing owner of land who is a reporting body will have to file a disclosure of its true ownership.
If I am buying land, how does it affect me?
Starting November 30, 2020, any buyer of land in BC will have to file with Land Title Office a Transparency Declaration, which declares whether the buyer is the true owner and if not who the true owner is. If the buyer is a reporting body, which means a corporation, trustee, or partnership, then that buyer must also file a Transparency Report which declares the true ownership of that entity.
For example, ABC Company is owned by Fred and Wilma. If ABC Company is buying land it would have to file a Transparency Declaration stating that ABC Company is the true owner (or if ABC Company is buying as a trustee for the true owner, then that true owner would need to be declared), and it would also file a Transparency Report stating the owners of ABC Company are Fred and Wilma, along with some personal information on them such as residential address, social insurance number, date of birth, etc.
If Fred and Wilma were buying land in their personal names, and will be the true owners, they would file only the Transparency Declaration, stating that they are the true owners.
What questions should you ask before hiring a real restate lawyer?
If I already own land, how does it affect me?
Any existing owner who is a reporting body (a corporation, trustee or partnership) will have one year, until November 30, 2021, to file an initial transparency report stating who are the beneficial owners.
Following the above example, if ABC Company already owns land, it would file an initial Transparency Report stating ABC Company is the true owner, and the owners of ABC Company are Fred and Wilma. If Fred and Wilma personally already own land in BC, and are the true owners of that land, then they would file that they are the true owners (not holding title for someone else). However, please note that there remains at present many questions about how the government will inform owners of their duty to report, and how the reporting process will work.
Read the latest information about the Land Owner Transparency Act.
If a reporting body has a change of ownership, does this have to be reported?
Yes, if there is a change to the beneficial owners of a company, trust or partnership, then this change of ownership must be reported to the Registry.
Again, following the above example, if Fred and Wilma sold their ABC Company shares to Barney and Betty, then this change of ownership would have to disclosed to the Registry.
Is this different from the Transparency Registry required of companies?
Yes, while the transparency goal is the same, the LOTA is a completely different transparency requirement. Companies in BC had until September 30, 2020 to create a transparency registry, stating who are the true owners of the shares of the company. The LOTA is different, as it applies to the ownership of land, and begins November 30, 2020, with a compliance deadline for existing land owners of November 30, 2021.
Are there penalties for non-compliance?
Yes, and they can be significant. Failing to file a transparency report or providing false information can result in fines up to $50,000 for a corporation or $25,000 for an individual, or 15% of the assessed value of the related property, whichever is greater.
Will the public have access to this information?
Yes, the information given to the Registry will be available within 90 days to the public to search. Certain critical information such as social insurance numbers and tax numbers will not be available to the public, but basic ownership information will be.
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 visit the Registry’s website: 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 circu
