The Land Owner Transparency Act – What Is It And How Does It Work? - VIRANI REAL ESTATE ADVISORS - Real Estate Information

The Land Owner Transparency Act – What Is It And How Does It Work?

Laundering money through real estate has been a thorn in the side of government over the past few years, and to combat this, on November 30, 2020, it introduced the Land Owner Transparency Act (LOTA) in an attempt to make land ownership more visible and transparent in this province.

LOTA’s main aim is to:

Combat money laundering

Crack down on tax fraud

Address “hidden ownership”

Close loopholes

It applies to 3 types of reporting bodies that own any real estate in BC which are required to file a “Transparency Report”:

Any corporate entity, or

Partnership (general partnerships, limited partnerships, and limited liability partnerships) or

Trust (express or bare) that owns any real estate in BC

How does LOTA work?

Since its introduction on November 20, 2020, for any registration or change in title to a property in BC, a transparency declaration must be filed with the Land Title and Survey Authority of British Columbia (LTSA). Individuals acquiring an interest in land are responsible for completing the declaration.

The Transparency Report must be filed online and must been done by a legal professional who has access to the filing portal.

For pre-existing registered owners of land in British Columbia, disclosure must take place before November 30, 2021. It is important to note that LOTA imposes monetary penalties for failure to comply.

What is reported?

The Transparency Report contains a significant amount of information about the Reporting Body and its Interest Holders, which can be broken down into primary and secondary information. The primary information is available to the 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

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 also needs to disclose additional secondary information that is of a more sensitive nature, and which is not 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.

LOTA records are completely separate from Land Title Office (LTO) records and are handled by the administrator of LOTA and stored in a searchable registry (the Land Owner Transparency Registry or LOTR) developed by the Land Title and Survey Authority of BC.

Any corporate entity, partnership or trust that owns any real estate in BC has to file a declaration with the Land Title Office by November 30, 2021 disclosing all of the beneficial owners of the property. Fines can be levied of 15% of the assessed value of the property. If you have any questions about the filing requirements, please contact us and we will be happy to help.

Further information on the Land Owner Transparency Act (LOTA) can be found here.

Definitions:

Reporting Body means any of the following:

A corporation or limited liability company, including incorporated associations and societies

A trustee of an express trust, bare trust or similar legal relationship created in another jurisdiction; and

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.

Interest Holder means any individual who:

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.

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

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.

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