Written by: Vicki Xu (Articled Student)
The Land Owner Transparency Act, SBC 2019, c 23 (“LOTA”) and its accompanying regulations came into force on November 30, 2020. This new legislation will have extensive impact on holders of beneficial interest in real property, especially those who had set up elaborate arrangements for the purpose of tax evasion.
Below is a non-exhaustive list of holders of beneficial interest in real property who are affected by the coming into force of LOTA. If your circumstances fit one of the descriptions below, we strongly advise that you contact a lawyer to discuss your compliance with the disclosure procedures of LOTA.
- If you are completing a purchase of real property on or after November 30, 2020.
Section 10 of LOTA requires each transferee of interest in land to file a Transparency Declaration upon the registration of that interest at the Land Title Office. This Transparency Declaration requires the transferee to declare whether they are a Reporting Body within the definition under Part 1 of LOTA. Transferees who are reporting bodies must also file a Transparency Report pursuant to the requirements of LOTA.
- If you own beneficial interest in land but is not registered as the legal title owner.
Section 15 of LOTA requires any Reporting Body who is a registered owner of an interest in land immediately before the coming into force of this section to file a Transparency Report disclosing the information of any indirect or beneficial interest holders of that land by November 30, 2021. Under this requirement, land interest holders who were previously able to conceal their indirect or beneficial ownership through bare trusts, holding corporations or other arrangements are now legally compelled to disclose their interest as well as extensive information about themselves. Information which must be disclosed within a transparency report include, among others, the interest holder’s social insurance number, tax residency and the date on which the interest was acquired.
- If you prefer the information regarding your interest to remain private.
Certain information within filed Transparency Reports will be housed in a publicly accessible database. Any member of the public may access this information by conducting a search on the Land Owner Transparency Registry. This information can be searched either by an individual’s name or by the property’s Parcel Identifier (PID). Applications may be made under section 40 of LOTA for some or all of the filed information to be omitted from public access.
In order to ensure compliance with the disclosure requirements, Part 6 of LOTA sets forth the penalties associated with failing to do so. Entities that fail to file a Transparency Report, or provide false or misleading information in a Transparency Declaration or Report may be liable to a fine of not more than the greater of:
- $50,000 for a corporation, or $25,000 for an individual; OR
- 15% of the assessed value of the property to which the transparency declaration or transparency report relates.
The land title office may also refuse to register an interest in land pursuant to section 11 of LOTA if the transferee fails to submit a transparency declaration.
Henderson & Lee’s lawyers will be happy to assist you with your disclosure obligations and property purchase. Please do not hesitate to contact our firm at 604-558-2258 for a free initial consultation.