Land Owner Transparency Act

The penalties for failing to comply with the new requirements are significant. Under LOTA, failure to file or incorrectly filing a Transparency Report could result in fines up to the greater of 15% of the assessed value of the real estate property, and $25,000 for individuals and $50,000 for corporations, trusts and partnerships. Additional penalties can be imposed on parties such as directors and officers who fail to file, or incorrectly file, a Transparency Report.

For example, ABC Ltd. owns a property that has an assessed value of $1,000,000. Should ABC Ltd. fail to file the Transparency Report, it could be subject to a fine in the amount of $150,000.

Any Reporting Body that holds an Interest in Land is required to disclose certain information about its Interest Holders by filing a Transparency Report. A sample of the Transparency Report can be accessed here.

The Transparency Report will contain a significant amount of information about the Reporting Body and it’s Interest Holders, which can be broken down into primary and secondary information. The primary information will be made public and includes:

1. For individuals – their full name, citizenship and principal residence;
2. For corporations – their corporate name, registered and head office address, jurisdiction of formation and current governing jurisdiction; and
3. For partnerships – the business name, the type of partnership, the registered and head office address and its current governing jurisdiction.

In addition, the Reporting Body will also need to disclose additional secondary information that is of a more sensitive nature and which will not be available to the wider public. The secondary information includes tax and corporate registration numbers, individual’s date of birth, last known address, social insurance number and individual tax numbers.

It is important to note that, except in a few limited situations, the Transparency Report must be filed online and must been done by a legal professional who has access to the filing portal. This is not something that you can complete yourself. In order to ensure that your Transparency Report is filed by the deadline, we would urge you to take action promptly in order to avoid the last minute rush.

Owners of real estate property in British Columbia will need to be familiar with some of the key terms summarized below in order to assess whether they have obligations under LOTA and are required to file a Transparency Report by November 30, 2021.

If you need assistance in order to determine whether you are required to file a Transparency Report, the team at M&C is here to help so please contact us and one of our lawyers will be happy to assist.

Under LOTA, a Reporting Body can be one of the following:

1. A corporation or limited liability company, including incorporated associations and societies;
2. A trustee of an express trust, bare trust or similar legal relationship created in another jurisdiction; and
3. A partner of a general partnership, limited partnership, limited liability partnership, professional partnership or foreign partnership within the meaning of the Partnership Act (British Columbia) or a similar legal relationship created in another jurisdiction.

Under LOTA, a Interest in Land means:

1. Fee simple ownership;
2. A life estate;
3. A lease for a term of more than 10 years; or
4. A right to occupy or acquire fee simple ownership of land under an agreement for sale upon payments of the purchase price over a period of time.

A Reporting Body that has an Interest in Land may be required to file a Transparency Report.

Under LOTA, an Interest Holder means any individual who:

1. Is deemed to be a corporate Interest Holder under LOTA, being any individual who, either alone or jointly or in concert with one or more other individual(s):
   • Directly or indirectly, has a registered and/or beneficial interest in at least 10% of the relevant corporation’s equity or voting rights; or
   • Directly or indirectly, has the right to elect, appoint or remove the majority of the relevant corporation’s directors; or
   • Directly or indirectly, has the ability to exercise control and influence over an individual that has the right to elect, appoint or remove the majority of the relevant corporation’s directors;
2. Is deemed to be a beneficial owner under LOTA, being any individual who:
   • Directly or indirectly, has a beneficial interest in respect of an Interest in Land registered in the name of a trustee of a relevant trust; or
   • Directly or indirectly, has the power to revoke the relevant trust and receive the Interest in Land; or
3. Is deemed to be a partnership Interest Holder under LOTA, being any individual who, directly or indirectly, is a partner of a relevant partnership where at least one of the partners holds the Interest in Land as partnership property of the relevant partnership.

An Interest Holder of a Reporting Body that has an Interest in Land may be required to file a Transparency Report.

As part of the Province’s plan to increase visibility as to the ultimate ownership and control of real estate in British Columbia, the information contained in the Transparency Report will be used to update the searchable Land Owner Transparency Registry (the “Registry”). As mentioned above, the information that is disclosed will be available in varying degrees. The primary information will be available to the general public while the secondary information will only be available to select governmental authorities such as Canada Revenue Agency, the BC Securities Commission, and law enforcement.

Yes – The corporation must file separate Transparency Reports by November 30, 2021 disclosing information about all of the Interest Holders of the corporation for each and every property that the corporation owns. Click here to complete our questionnaire if this applies to you and you would like our assistance.

Yes – The corporation must file a Transparency Report by November 30, 2021 disclosing information about all of the Interest Holders of the corporation. Click here to complete our questionnaire if this applies to you and you would like our assistance.

No – You would not have to file a Transparency Report as you are not a Reporting Body.

While in some situations it will be easy to identify when a Transparency Report will need to be filed, there are going to be other situations where there are complicated ownership structures or where it is difficult to identify the beneficial owners or Interest Holders.

If you are unsure whether LOTA applies to your situation or are unsure of your filing obligations, the team at M&C is committed to guiding our clients and colleagues through these important changes. Simply start by clicking here to complete our questionnaire with the requested information. After review, one of our lawyers will reach out to you and discuss with next steps.

In the meantime, if you have any questions, please reach out to the lawyer(s) that you primarily work with at M&C, or alternatively, contact Mustafa Mohamedali on 604-639-6342 or by email at mmohamedali@murphyandcompany.com.