Land Owner Transparency Act

As you may be aware, the British Columbia Land Owner Transparency Act (“Act”) came into effect on November 30, 2020 and created the Land Owner Transparency Registry (the “LOTR”), a searchable database which lists individuals that ultimately control or have an ownership interest (directly or indirectly) in an organization which owns land in British Columbia (the “Interest Holders”). The Province introduced the Act to combat money-laundering in the real estate industry and to end “hidden” land ownership.

We write to advise you of the requirements under the Act so that you can determine how the Act applies to you or your organization and to offer our assistance with the necessary filings. If you or your organization do not have a registered interest in land in British Columbia you may disregard this notice.

What are the requirements under the Act?

The Act requires every registered owner of land in British Columbia that is a corporation (including a society), trustee or a partner of a partnership (collectively, a “Reporting Body”) to disclose to the Land Title and Service Authority (the “LTSA”) information about the Interest Holders through a transparency report (“transparency report”). The transparency report must be filed by November 30, 2022. The Act includes detailed legal definitions for a corporation, a partnership, and a trust for the purpose of the requirement to file a transparency report. Most, but not all corporations, partnerships and trusts are included.

A transparency report is also required if the Reporting Body is not the registered owner of land but has another specific interest in land such as a life estate or a lease for a term of more than 10 years. However, if a Reporting Body transfers its interest in the land or if the owner of the land ceases to be a Reporting Body before November 30, 2022, then there is no requirement to file a transparency report.

What does this mean for a Company or Partnership?

  • Company Owns Lands – the organization must file a transparency report
  • A Partner Owns Land on behalf of a Partnership – the partner must file a transparency report
  • Landlord Owns Land – if your organization has a lease with a term of more than 10 years then your organization must file a transparency report
  • Trustees Own Land in Favour of the Organization/Individual – the trustees must file a transparency report

What does this mean for a Society or Denomination?

  • Society Owns Land – the society must file a transparency report
  • Denomination Owns Land – the denomination must file a transparency report
  • Landlord Owns Land – if your organization has a lease with a term of more than 10 years then your organization must file a transparency report
  • Trustees Own Land in Favour of the Organization – the trustees must file a transparency report

Although a vast majority of non-profit organizations which own land are required to file a transparency report, in most cases the transparency report will not list individual Interest Holders because generally no individual controls or owns a non-profit organization. However, an analysis of the organization’s bylaws or trust document must be completed to ensure compliance with the Act.

We also note that an independent school within the meaning of the Independent School Act is excluded from the Act.

What does this mean for an Individual?

If you are an individual and the registered owner of land (which you do not hold in trust), you are likely not required to file a transparency report. An individual will only be required to file a transparency report if the registered interest in land is one of the following:

  • owned by a corporation
  • owned by a partnership, or
  • being held in a trust (this may include ownership of property on behalf of a family member for estate planning or other purposes).

Once a transparency report is filed there are also on-going disclosure requirements for specific circumstances such as changes in Interest Holders or for correcting errors or omissions.

What information is collected for a transparency report?

If a transparency report is required, certain information about the Reporting Body and Interest Holders must be collected and disclosed.
1. For corporations:

(a) The corporation’s name and registered office address and head office address;

(b) The jurisdiction in which it was incorporated;

(c) If the corporation has been continued into another jurisdiction, the jurisdiction into which the corporation was most recently continued.

2. For relevant partnerships:

(a) The partnership’s registered business name;

(b) The type of partnership

(c) The partnership’s registered address or head office address;

(d) The address of the partnership’s principal business premises;

(e) The jurisdiction in which the laws govern the partnership;

(f) If the partnership has a partnership agreement, the interpretation of the partnership agreement.

3. For individuals:

(a) The individual’s full name;

(b) Whether the individual is a Canadian citizen or a permanent resident of Canada;

(c) If the individual is not a Canadian citizen or permanent resident of Canada, every country or state in which the individual is a citizen;

(d) If the individual’s principal residence is in Canada, the city and province in which that principal residence is located;
(e) If the individual’s principal residence is outside Canada, the city and country in which that principal residence is located.

(f) Date of birth, social insurance number, tax number, location of principal residence and last known address;

(g) Date on which one became or ceased to be an Interest Holder and the nature of the individual’s interest in the Reporting Body.

Who has access to the information in a transparency report?

The LOTR will be searchable by the public and certain government authorities (including Canada Revenue Agency, FINTRAC, BC Securities Commission, BC Financial Institutions Commission, Law Society of British Columbia and law enforcement).

The government authorities will have access to the full range of information contained in the transparency report. Through the LOTR, the public will only have access to primary identification information about Reporting Bodies and Interest Holders, if applicable, that are associated with particular lands.  For individuals, this means that the information listed in 3(a) – (e) above will be available to the public, but information in 3(f) and (g) will only be available to certain government authorities.

There are some protections in the Act available for individuals who are concerned about having their information listed in the LOTR. The Act contains disclosure requirements so that an individual will be notified in advance that their information will be included in a transparency report and information about individuals will not be published in the LOTR until 90 days after the transparency report is filed. This grace period will give individuals an opportunity to apply to have their information hidden from public view if they have concerns that public disclosure of the information could create a risk for their own health or safety or the health or safety of someone in their household. The administrator of the Act will also obscure from public view any information about individuals under 19 years old or for which a determination of incapacity has been made.

What are the consequences for failing to comply with the Act?

Landowners may face steep penalties for failure to comply with the Act including a failure to file the in a truthful manner. The Act allows for both administrative penalties and fines for non-compliance.

Fines are imposed for certain violations under the Act such as the failure to file a transparency report or the filing of a transparency report with false or misleading information can be the greater of:

  • 15% of the assessed value of the relevant interest in land; or
  • $25,000 (for individuals) and $50,000 (for corporations or others)

Other offences may be subject to fines of up to $50,000 (for individuals) and $100,000 (for corporations others).

Directors, officers, managers or agents of a corporation who authorize, permit or participate in the commission of an offence by a corporation may also be liable, regardless of whether or not the corporation is prosecuted or convicted for the offence.

Conclusion

The Act is a complicated piece of legislation with multiple exemptions and exceptions and potential fines for non-compliance. The deadline to file a transparency report is November 30, 2022. De Jager Volkenant would be pleased to assist you with understanding and complying with the Act. Please contact Katrina Volkenant (katrina@dejagervolkenant.com) for more information.

This notice is intended to give general information about legal topics and is neither a complete statement of the law nor intended to constitute legal advice. This document should not be relied upon for legal advice and for specific advice about how the Act applies to you we recommend that you contact a legal professional.

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