Land Owner Transparency Act (LOTA) – Deadline for Pre-Existing Owners to File Transparency Reports Extended By One Year
The B.C. Government has extended by one year the deadline for pre-existing owners of a registered interest in land that are reporting bodies to file a transparency report with the Land Owner Transparency Registry (the “Registry”). Prior to the extension, affected pre-existing land owners were obligated to file a transparency report by November 30, 2021. The deadline has now been extended to November 30, 2022. The news release from the B.C. Government may be found here.
The Land Owner Transparency Act (“LOTA”) is intended to establish a registry of beneficial ownership of real property in British Columbia. Information is collected by requiring “reporting bodies” (generally private corporations, trustees and partners of partnerships) to file a transparency report disclosing significant personal information about “interest holders” and potentially certain other individuals. The collected information may be inspected for law enforcement, taxation and regulatory purposes, and much will be published on a publicly-searchable database.
Since November 30, 2020, reporting bodies have been required to file a transparency report together with their application to register an interest in land. Reporting bodies that held an interest in land prior to November 30, 2020 — referred to as “pre-existing owners” — had until November 30, 2021 to file a transparency report with respect to their registered land interest.
On October 25, 2021, the Canadian Bar Association (British Columbia Branch) (“CBABC”) wrote to the B.C. Minister of Finance seeking an extension to the filing deadline for pre-existing owners. In support of its extension request, the CBABC cited limited efforts by the B.C. Government to adequately inform property owners of their obligations under LOTA, a lack of meaningful guidance to legal professionals regarding the interpretation and application of LOTA, and the ongoing COVID-19 pandemic. The extension provided by the B.C. Government appears to be a response to this request.
The B.C. Government has stated that the extension will allow the Province to provide greater support through direct outreach and education and give reporting bodies additional time to work with their legal professionals to determine their reporting obligations. The B.C. Government also re-emphasized the Registry’s stated objective of ending hidden ownership and battling money laundering.
The technical provisions of LOTA and the regulations made thereunder concerning, among other things, the identification of interest holders are complex and often lack clarity. As noted by the CBABC in its letter, “after nearly a year of LOTA being enacted, there remains little, if any, consensus among legal professionals regarding the correct interpretation of a number of LOTA provisions.” The B.C. Government did not suggest that it would revisit these technical provisions during the extension period. As such, reporting bodies that own land in British Columbia are advised to obtain legal advice concerning their reporting obligations.
For further information, including potential concerns with the legislation and associated compliance burdens, please see our earlier blog post Tax Evasion, Money Laundering, BC Real Estate and the Proposed Land Owner Transparency Act.