B.C’s Land Owner Transparency Act
The Land Owner Transparency Act (LOTA) creates a publicly accessible registry, the Land Owner Transparency Registry (LOTR), allowing for the disclosure of indirect interest in land. Both the LOTA and LOTR are the first of their kind and are the product of an effort to reverse the growing issue of hidden ownership and money laundering through real estate in British Columbia. The new requirements created by the LOTA became effective November 30, 2020.
The LOTA creates an obligation for reporting bodies to disclose information on the beneficial ownership of land interests through disclosure reports. The reporting bodies include:
· relevant corporations
· trustees of relevant trusts
· partners of relevant partnerships
For each of these reporting bodies, a transferee will be required to file a transparency declaration and a transparency report any time there is an application for registration or change of an interest in land. There is also an obligation on reporting bodies to address any inaccuracies in the information registered in the LOTR or when the reporting body ceases to be a reporting body. The transparency declaration acknowledges who the reporting body is, whereas the transparency report will provide more extensive information on the interest holders in the land.
So, what information does the transparency report need to include?
The LOTA is seeking information on the individual interest holders. For corporations, these will be individuals who directly or indirectly control either 10% or more of the shares of the relevant corporation or of the voting rights at general meetings, or have the ability to appoint or remove the majority of directors of the corporation. For partnerships, it will be the individual who has an interest as a partner and for trusts, it will be the beneficial owner of the trust.
For each corporate reporting body, the transparency report must include:
· the corporate name;
· the registered address and head office address;
· jurisdiction of incorporation or continuation; and
· incorporation number and business number
For each partnership, the transparency report must include:
· the partnership’s business name;
· the type of partnership;
· the registered address and address of the business premises;
· the jurisdiction of organization; and
· if applicable, an identification number or business number.
For each trust, the transparency report must include information regarding the trustee and settlor which corresponds with the information required for individual interest holders.
Each individual interest holder of the relevant reporting body must disclose:
· the individual’s full name, date of birth, social insurance number, tax number, location of principal residence and address;
· the date on which the individual became an interest holder (or ceased to be an interest holder);
· the nature of the individual’s interest in the reporting body; and
· whether or not the individual is Canadian citizen or permanent resident of Canada.
The LOTA is backed by some hefty penalties for those reporting bodies who fail to comply with its requirements. Individuals can be fined up to $50,000 for non-compliance and corporations up to $100,000. While completing a transparency report can be time consuming, it is best to start compiling the information required so as to avoid attracting any penalties. Connect with Kickstart Law if you have any questions or concerns about what these new requirements may mean for you and your business.