by: Nick Go
The Land Owner Transparency Act (“LOTA”) was passed to further the BC government’s goal of making ownership of real estate more transparent.
Prior to LOTA, if the owner of real estate is a company or trust then the indirect owners of the real estate, i.e. the shareholders of the company or the beneficiaries of the trust, are unknown.
LOTA attempts to solve this issue by creating a Land Owner Transparency Registry (the “Registry”), which is a database searchable by the public and contains information about the indirect owners of real estate in BC.
II. Practical Effect – When Interest in Real Estate Is Transferred
When an Interest In Real Estate is transferred, a Transparency Declaration must be filed and a Transparency Report may be required.
An Interest In Real Estate includes more than just the transfer of title or fee simple ownership to another entity – it also includes a life estate, a lease for a term of more than 10 years or a right to occupy or acquire fee simple ownership of real estate under an agreement for sale.
a. If you are an Individual
If you are an Individual Purchasing Real Estate for Yourself, all you need to do is to file a Transparency Declaration confirming that you are not a reporting body and do not need to take any further action.
b. If you are a Corporation, Trust or Partnership
In general, if you are a Reporting Body Purchasing Real Estate (a corporation, trust or partnership), you need to file a Transparency Declaration and a Transparency Report setting out the Interest Holders (shareholders or entities who have the power to elect, appoint or remove the majority of the directors of a corporation, beneficial owners and settlors of trusts, or partner of a partnership that holds an interest in real estate).
c. Contents of Transparency Report
(i)Publicly Available Information
The following contents or a Transparency Report will be made publicly available in the Registry:
If an Interest Holder is an Individual, the Transparency Report will contain their full name, citizenship status and principal residence.
If an Interest Holder is a Corporation, the Transparency Report will contain its name, registered and, if applicable, head office address, jurisdiction of incorporation and, if applicable, the jurisdiction from which the corporation was most recently continued or transferred.
If an Interest Holder is a Partnership, the Transparency Report will contain its business name, type of partnership, registered and, if applicable, head office address, address of principal business premises and jurisdiction of governance.
(ii) Information Not Available to the Public
A Transparency Report will also contain information that is only available to certain federal and provincial authorities.
For Interest Holders that are Individuals, this information includes the individual’s date of birth, last known address, social insurance number or individual tax number (if applicable) and Canadian residency status, the date the individual became or ceased to be an interest holder, a description as to how the individual is an interest holder and whether a declaration of incapacity has been made by a court or other authority in respect of the individual.
For Interest Holders that are Corporations, this information includes tax and corporate/identification registration numbers.
III. Practical Effect – Transparency Report Required for Existing Owners of Real Estate
A Corporation, Trustee of a Trust or Partner of a Partnership with an existing interest in real estate prior to November 30, 2020 has until November 30, 2021 to file a Transparency Report unless there is a transfer of the owned real estate prior to that date.
IV. Practical Effect – Ongoing Disclosure Requirements for Owners of Real Estate
If a Reporting Body becomes aware or should reasonably have become aware that a previously filed Transparency Report is no longer accurate, it must file a new Transparency Report within two months.
LOTA imposes new requirements that owners of real estate that are Corporations, Trusts or Partnerships may not be familiar with.
If you have any questions or require assistance with compliance with LOTA and the Transparency Declaration or Transparency Report, please do not hesitate to contact any real estate lawyer at Bell Alliance LLP.
This article provides general information only and does not constitute legal advice.