Summary
The Land Owner Transparency Act (LOTA) aims to provide clarity as to who benefits from landholdings through the enforcement of disclosure and filings (declaration and/or report) at the Land Owner Transparency Registry (LOTR). The filing requirements can be complicated, so land owners and reporting bodies should consult with a legal professional to determine their obligations and get assistance with filing.
What Is Land Owner Transparency?
The first of its kind across Canada, the Land Owner Transparency Act (LOTA) came into effect in British Columbia on November 30th, 2020. The purpose of this provincial legislation is to “prevent tax evasion, fraud and money laundering” by putting an end to veiled or secret beneficial interests in real estate through enforcement of a legal requirement to report all indirect and beneficial interests in land. Such interests are reported and filed in a publicly searchable database called the Land Owner Transparency Registry (LOTR).
Note: the LOTR is distinct from the BC Land Title Office registry, which gives certainty to landholdings by keeping record of all legal ownership and related property charges, encumbrances and registered interests. While it is possible to register a beneficial interest (like a trust) at the LTO registry, it is not required. Ergo, the LOTR was brought into effect in order to fill this reporting hole in the BC real estate recordkeeping system.
Who Does LOTA Affect?
The LOTA affects:
- anyone buying or acquiring new interest in property;
- anyone who is a reporting body (a relevant corporation, a trustee of a relevant trust – including bare trusts – or a partner of a relevant partnership) who already owns land (even if it was purchased before the LOTA came into effect) AND
o has not already filed a transparency report for each property owned* OR
o has made a change to their interest holders (beneficial owners or corporate interest holders)
* Note: the deadline for all required retroactive filings is November 30, 2022. This must be done using the services of a legal professional (BC notary public or lawyer). The BC Government has been sending letters to those businesses that it thinks may be impacted; if you received a letter, you may be required to complete a filing with the LOTR. If you are unsure if you need to file a report, you can “take the quiz” on the LOTR website to determine if the LOTA applies to you, or contact our office for assistance.
What Is The Filing Process?
The filing process is comprised of two parts:
- Each person acquiring a new interest in real estate must file a transparency declaration. This is a yes/no statement filed to indicate if the person is a reporting body as defined by the LOTA. If the answer is “No,” only the transparency declaration is filed.
- If the answer is “Yes,” then both the transparency declaration and a further transparency report must be filed to disclose information about the reporting body and the interest holders (ie: beneficial owners and corporate interest holders, such as shareholders).
- In the case of retroactivity where a reporting body already owned property before LOTA was enforced, the reporting body must file just the transparency report, prior to Nov. 30, 2022.
Note: that either both parts or only one part of the filing process (above) may be necessary, depending on the circumstance.
For further information on key terms, bolded above, click HERE.
The disclosure of information required by LOTA must be accurate and complete to avoid material penalties. The reporting and disclosure rules are complex and require a thorough examination of all relevant intermediaries and relationships between entities. This article is meant to provide general information and is not legal advice.
If you require legal advice with respect to your reporting requirements and/or assistance with LOTR filings, contact our office at 604-576-3211.
Does your company own property in BC? Are you in a trustee holding property for the benefit of someone else? Did you receive a letter from the BC Government about a Land Owner Transparency filing requirement?
We can help! Contact us for assistance with your Land Owner Transparency Registry (LOTR) report filing and click the link in our blog for more information.
