LAND OWNER TRANSPARENCY ACT – A New Beneficial Ownership Registry
Published by Bruce DaviesIn September 2018, B.C.’s Minister of Finance appointed the Expert Panel on Money Laundering to review money laundering in B.C.’s real estate market. Billions of dollars were laundered through B.C.’s real estate market in 2018. This was achieved, in part, by a landowner’s ability to hide their indirect (or beneficial) ownership in land through corporations, trusts, and partnerships, as only direct or legal ownership was recorded.
In their final report, the Expert Panel’s first recommendation was to implement a Land Owner Transparency Registry (the “Registry”) that requires the disclosure of the ultimate ownership of land by individuals in B.C. To read the Expert Panel’s final report, Combatting Money Laundering in BC Real Estate, click here.
The provincial government implemented the Expert Panel’s recommendations by passing the Land Owner Transparency Act (Bill 23-2019) (“LOTA”) on May 16, 2019. The LOTA took effect on November 30, 2020.
PURPOSE OF LOTA
The purpose of LOTA is to combat money-laundering and tax evasion in British Columbia’s real estate industry by eliminating the “hidden” ownership of land.
This is achieved through LOTA’s new filing requirements that reveal the ultimate ownership of land by individuals who may own land indirectly through corporations, partnerships, or trusts.
NEW FILING REQUIREMENTS
Beginning November 30, 2020, any time an application is made to the B.C. Land Title Survey Authority (LTSA) to register an “interest in land” (a term that LOTA defines to include fee simple ownership, a life estate, and a lease for more than 10 years), a new transparency declaration must also be filed with the LOTA administrator by the party receiving an interest in land. If the party receiving an interest in land is a corporation, trust, or partnership (defined in LOTA as a “Reporting Body”), an additional transparency report must also be filed. This report reveals the individual “interest holders” within that Reporting Body.
The combined effect of the transparency declaration and report reveals the individuals who ultimately own the land.
These LOTA requirements not only apply to a change of interest in land beginning November 30, 2020, but also apply retroactively to all Reporting Bodies with an existing interest in land. The LOTA requires these Reporting Bodies to file an initial transparency report by November 30, 2021.
DOES LOTA APPLY TO ME?
“I am an individual buying land in B.C.”
Yes. You must file a transparency declaration with the LOTA administrator when making the application to the LTSA to transfer ownership of the subject land.
“I have a corporation entering into a lease of land in B.C. for a term of 10+ years”
Yes. Your corporation must file a transparency declaration and a transparency report with the LOTA administrator after entering into the lease agreement.
“My family holding has owned one or more parcels of land for a number of years”
Yes. Your family holding company is a “reporting body”. It must file a transparency report for all properties it owns on or before November 30, 2021.
“I am an individual who received land in B.C. as part of an inheritance”
Yes. You must file a transparency declaration with the LOTA administrator when making the application to the LTSA to transfer ownership of the subject land.
WHEN TO CONSULT A LEGAL PROFESSIONAL
There are obvious circumstances where these new LOTA filing requirements apply, such as the purchase of land in B.C. However, there are less obvious circumstances where the LOTA applies, such as an executor administering an estate involving a life estate for beneficiary under a will.
If you are unsure whether the LOTA applies to your situation or are unsure of your filing obligations, you will need to consult a legal profession. Our team of real estate lawyers are happy to you navigate these new requirements.