What is the Land Owner Transparency Act?
The purpose of the new Land Owner Transparency Act (the “Act”) is to provide transparency about who owns land in BC. The Act has led to the creation of the Land Owner Transparency Registry (“LOTR”), which will contain information about individuals who are deemed to have an indirect interest in land. The registry will store the information on a searchable database. Some of the more general information on the database will be available to the public, while other, more sensitive information will only be available to certain government bodies.
What does the Act do?
As of November 30, 2020, any person or entity that acquires an interest in land in BC (a “Transferee”), is now required to file a Transparency Declaration. The Act provides that an interest in land includes:
- an estate in fee simple;
- a life estate in land;
- a right to occupy land under a lease that has a term of more than 10 years;
- a right under an agreement for sale; and
- other property interests that may be outlined in the regulations of the Act.
The Transparency Declaration requires the Transferee to state whether the Transferee is a reporting body and, more specifically, what type of reporting body. Unless specifically excluded by regulation, a reporting body under the Act means any one of the following:
- Relevant Corporation: All private corporations or limited liability companies;
- Trustee of a Relevant Trust: All express trusts, including a bare trust, and any other trusts as set out in the regulations; and
- Partner of a Relevant Partnership: All partnerships.
If a transferee is a reporting body, they will be required to file a Transparency Report. The Transparency Report requires the reporting body to provide information about itself and its interest holders. Each type of reporting body has different reporting requirements regarding the information it must provide.
Who is a Reporting Body interest holder?
A corporate interest holder is an individual to which any of the following applies:
- Owns or controls 10% of the issued shares or voting rights in the Corporation;
- Has the right to appoint or remove a majority of the Corporation’s directors; or
- Has an interest in the Corporation as set out in the regulations.
A beneficial owner of a relevant trust is an individual who has any one of the following:
- A beneficial interest in land, other than an interest that is dependent on the death of another individual;
- The power to revoke the trust and receive an interest in land;
- A corporate interest holder of a corporation, as defined above; or
- An interest set out in the regulations.
A partnership interest holder is an individual to which any one of the following applies:
- Is a partner in the relevant partnership;
- Is a corporate interest holder of a corporation, as defined above; or
- Has an interest set out in the regulations.
What about pre-existing reporting bodies?
All reporting bodies with an existing interest in land must file a Transparency Declaration and a Transparency Report by November 30, 2022. This requirement does not apply to individuals who are not a reporting body.
What if I don’t file a transparency report?
The Act authorizes an enforcement officer to enforce the requirements of the Act. To do so, the enforcement officer has access to the LOTR to assess an individual’s compliance with the Act. If an individual violates the Act, the enforcement officer can impose a penalty. The amount of the penalty will depend on the violation, but the maximum penalty is greater than $25,000 for individuals,$50,000 for a reporting body, or 5% of the assessed value of the property.
How to get more information?
For more information, please contact any member of our Real Estate Team.
