(This article was updated Jan 12, 2021)
LOTA introduces mandatory reporting of indirect ownership of land in British Columbia. Subject to limited exceptions, LOTA requires every registered owner of land in British Columbia that is a corporation, trustee or a partner of a partnership to disclose to the Land Title and Service Authority (the “LTSA”) information about individuals who have an indirect interest in the land.
For those registering a new interest in land on or after November 30, 2020, the requirement to disclose arises at the time of registration. For pre-existing registered owners of land in British Columbia, disclosure must take place before November 30, 2021. LOTA imposes monetary penalties for failure to comply. The requirements of LOTA are set out in more detail below.
As of November 30, 2020, any transferee applying to register an interest in land with the LTSA must file a Transparency Declaration. The 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.
Meaning of “Interest in Land”
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.
Reporting Bodies and Interest Holders
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 an interest in land must identify and disclose individuals who have:
- an interest in the corporation that owns the land;
- a beneficial interest in the land under a trust arrangement; 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. The purpose of the disclosure and reporting requirements is to look beyond intermediaries and identify the individuals who ultimately own and control the land.
A Reporting Body acquiring legal title to an interest in land 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 Transparency Report by which it discloses all Interest Holders including, if relevant, settlors of a trust.
Reporting Bodies which were pre-existing owners of an interest in land at the time LOTA came into force must file a Transparency Report by November 30, 2021. Certain other situations trigger the requirement to file a Transparency Report or other documents under LOTA.
The table below summarizes the LOTA filing requirements:
|Registration of an interest in land
|a. All transferees
b. Reporting Bodies
|a. Transparency Declaration
b. Transparency Declaration and Transparency Report
|Upon application to register the interest in land
|Pre-Existing Owner of an interest in land
|By November 30, 2021
|Change in Interest Holders
|Updated Transparency Report
|Within 2 months of becoming aware of the change
|Registered Owner Becomes a Reporting Body
|Within 2 months of becoming a Reporting Body
|Registered Owner ceases to be a Reporting Body
|Registered Owners that were formerly Reporting Bodies
|Notice to Administrator
|Within 2 months of ceasing to be a Reporting Body
|Pre-Existing Owner ceases to be a Reporting Body or transfers title
|Exempt from requirement to file Transparency Report
|Must cease to be a Reporting Body or transfer title before November 30, 2021 to be exempt
|Need to complete or correct information in Transparency Report
|Updated Transparency Report
Additional Requirements Relating to Disclosure
Reporting Bodies must take reasonable steps to obtain the information required for the Transparency 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 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 Transparency 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, certain information provided in the Transparency Declarations and Transparency Reports will become publicly accessible through Registry searches. In particular, a search by 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 acquisition of an interest in land and may result in fines. However, there are certain 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 and complying with LOTA. To find out more about how LOTA and the Regulation will impact you, please contact David Allman.