Real Estate: Beneficial Ownership Disclosure is Around the Corner

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Effective November 30, 2020, all acquisitions of land in BC will be subject to the new disclosure rules under the Land Owner Transparency Act (the “Act”). Existing landowners will have until November 30, 2021 to become compliant.

The Act is a far-reaching piece of legislation that all owners of BC real estate need to understand. It is one of the government’s response to address hidden ownership of real estate in the province.

Introduction

The Act will require the disclosure of individuals who hold, directly or indirectly, beneficial interests in land in BC, including through corporate and partnership structures. The Act will also create a publicly searchable registry of such individuals, referred to as the Land Owner Transparency Registry (“Registry”). All categories of land are affected, including residential and non-residential, with limited exceptions.

Who is impacted?

The Act will impact everyone who holds or acquires an interest in land in BC directly or indirectly, including shareholders of corporations and partners of partnerships. Interests in land subject to the Act include fee simple lands, leased lands for a term of more than 10 years, other less commonly encountered interests in land (such as life estates), and any other estates, rights or interests added by regulation.

Reporting Body

The Act introduces the concept of a “reporting body”. As the name suggests, a reporting body that holds or acquires an interest in land subject to the Act will be required to disclose the individuals holding direct or indirect beneficial ownership interests in that land through the reporting body. There are three categories of reporting bodies: a) corporations, b) trustee of a relevant trust, c) partner of a relevant partnership.

Contents of Transparency Reports

A transparency report must include certain information about the reporting body itself, as well as for each individual interest holder. It must also include information about the land, the individual certifying the report, and additional information set out in the Act. The Act requires disclosure of specific primary identification information (which will be publicly accessible) and other additional information (which will only be accessible by selected entities, generally governmental authorities). The information that will have to be disclosed in transparency reports includes the following:

Primary Identification Information

  • Individuals – Full name; citizenship or permanent residency status and location of principal residence;

  • Corporations – Name; registered office address, jurisdiction of incorporation; and

  • Partnerships – Registered business name, if any, type of partnership, registered address.

Registry

The Registry will be administered by the Land Title and Survey Authority pursuant to which information filed in transparency declarations and transparency reports will be accessible by the general public and governmental authorities. The Registry is not expected to be accessible or searchable until at least April 30, 2021, being the date on which the applicable provisions in the Act and the regulations dealing with the Registry come into force.

Public information will be limited to primary identification information on reporting bodies and interest holders, as well as any other information set out in the regulations. However, primary identification information in respect of an interest holder or settlor will not be publicly accessible until at least 90 days after the transparency report has been accepted for filing. This means that anyone searching the Registry will not be able to rely on the information being current. The purpose of this delay is to allow individuals an opportunity to apply to omit certain information from the public record (for example, if the health or safety of an individual is at risk). Further, information about individuals under 19 years of age and those determined to be incapable of managing their financial affairs will be omitted from the publicly accessible information.

Information in the Registry will be searchable in a manner similar to what currently exists for land title information, including searches by parcel identifier to determine the interest holders for a parcel, and searches by name to identify the interests in land in which the named individual is an interest holder.

Enforcement

Failure to submit a transparency declaration — and, if required, a transparency report — will result in the land title office refusing to register the interest in land.

Certain contraventions of the Act are subject to administrative penalties up to the greater of $25,000 for individuals or $50,000 for non-individuals, and five per cent of the assessed value of the property.

Our team has extensive experience assisting clients with real estate matters in BC, let us know if you have any questions at info@bhlegal.ca.