The Land Owner Transparency Act, SBC 2019, c. 23 ("LOTA") is designed to create a publicly accessible beneficial land ownership registry in British Columbia. On November 30, 2020, most of the provisions of LOTA will come into force, pursuant to Order in Council 549/2020 of September 20, 2020.
The newly released Land Owner Transparency Regulation (the "Regulation"), will also come into effect on November 30, 2020. This article provides a general overview of the requirements imposed by LOTA and the Regulation.
Pursuant to LOTA, beginning on November 30, 2020, any transferee applying to register an interest in land with the Land Title and Service Authority (the "LTSA") must file a Transparency Declaration. For the purposes of LOTA, an interest in land means an estate in fee simple, a life estate, a lease of more than 10 years, certain rights under an agreement of sale, and any estate, right or interest prescribed by the Regulation. A Transparency Declaration sets out whether the transferee registering an interest in land is a Reporting Body (as defined below) and, if so, what kind of Reporting Body.
LOTA requires relevant corporations, trustees of relevant trusts, and partners of relevant partnerships (each a "Reporting Body" and collectively "Reporting Bodies") taking or holding legal title to land to identify and disclose individuals who have a beneficial interest in the land under a trust arrangement, an interest in the corporation that owns the land, or an interest in the land through a partnership ("Interest Holders"). The Regulation provides guidance as to who qualifies as an Interest Holder, particularly with respect to what it means to have an interest in a corporation. Disclosure must take place by way of a Transparency Report. The purpose of the disclosure and reporting requirements is to look beyond intermediaries and identify the individuals who ultimately own and control the land.
Where a Reporting Body takes legal title to a new parcel of land they must, on application to register their interest, file a Transparency Declaration specifying that the land is to be registered in the name of a Reporting Body. The Reporting Body must then file a Disclosure Report by which it discloses all Interest Holders including, if relevant, settlors of a trust.
If immediately before the coming into force of LOTA, a Reporting Body is the registered owner of an interest in land, the Reporting Body must file a Disclosure Report before November 30, 2021, the date that is one year after LOTA comes into force. If a Reporting Body is the pre-existing registered owner of an interest in land immediately before the coming into force of LOTA, but transfers that interest to another person or ceases to be a Reporting Body before November 30, 2021, the Reporting Body is exempt from the requirement to file a Disclosure Report with respect to that interest in land.
If there is a change in beneficial ownership after a Disclosure Report is filed, or if there has been a determination of incapacity with respect to one or more Interest Holders, the Reporting Body must file a new Disclosure Report within two months of becoming aware of the change or determination, unless the Reporting Body is no longer the registered owner of the land.
Additional Requirement Relating to Disclosure
LOTA requires Reporting Bodies to take reasonable steps to obtain the information required for the Disclosure Report and to confirm the accuracy of that information. Section 21(4) of LOTA sets out the process that Reporting Bodies should follow if they are unable to obtain all of the required information.
The Reporting Body must also make reasonable efforts to give written notice to each Interest Holder informing them of the purposes for which their information is being sought, their right under section 40 of LOTA to request that certain information be obscured or omitted from public access, and the time frame for making such a request. If the Reporting Body is the trustee of a relevant trust, they must also make reasonable efforts to give notice to each settlor identified in the Disclosure Report.
Public Availability of Information
The provisions of LOTA dealing with searching and inspecting the Land Owner's Transparency Registry (the "Registry") will not come into force until April 30, 2021. When those provisions do come into force, some of the information provided in the Transparency Declarations and Disclosure Reports will become publicly accessible through Registry searches. In particular, a search of a parcel identifier will allow the public to identify beneficial and corporate Interest Holders in land and their related identification information. The public may also search the name of an individual to identify the interests that they hold in land.
Failure to comply with the requirements of LOTA will result in the LTSA refusing to register the interest in land and may result in fines. However, there are several exemptions and exceptions to the requirements of LOTA, set out in detail in LOTA and the Regulation.
EKB's Commercial Real Estate team would be pleased to assist you with understanding the implications of the coming into force of this new legislation. To find out more about how LOTA and the Regulation will affect you, please contact David Allman.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.