Update: The deadline has been extended. See below for the updated details.
Red tape is never fun to deal with. And this particular piece is no fun at all, but it does play an important role in Canadian efforts against illegal funds and money laundering.
The details around who the ‘warm body’ is when it comes to ownership of assets, and specifically real estate, was one of the most important measures identified in a 2018 report on Combatting Money Laundering in BC Real Estate. This led to the 2019 passing of the Land Owner Transparency Act (LOTA) in BC, a first-of-its-kind in Canada, and the creation of an accessible registry of beneficial interests in land in BC – The Land Owner Transparency Registry.
The Land Owner Transparency Registry is a registry about individuals who are deemed to have an indirect interest in land, as defined in Section 1 of LOTA (e.g. through corporations, trusts, and partnerships). This is a publicly accessible registry, which can be searched for a small fee.
If you own property in the name of a company, trust, or partnership, and the property was purchased prior to December 1, 2020, you are required by law to file a Land Owner Transparency Report by November 30, 2021.
This is a one time filing requirement, until the real estate changes hands, at which time a new filing will be done as part of the transactional paperwork. But failure to file or inaccurate filings come with some heavy penalties; for individuals the maximum penalty is the greater of $25,000 or 5% of the assessed value of the property. For corporations and other entities, the maximum penalty is $50,000 or 5% of the assessed value of the property.
Although it is possible to do it yourself, we’d recommend reaching out to your real estate lawyer or notary to complete. This summary gives a small part of the information; there’s more for business owners to understand. After making a few calls to local law firms, affected clients could expect to pay a filing fee in the neighbourhood of $475+GST with the whole process taking 1-3 weeks to complete. Understandably, the more complex cases will require more time to review the details and a potentially higher cost.
In short, get that filing done soon. If you have any questions, don’t hesitate to reach out to us for more information.
On November 2, 2021, the B.C. Government-issued an information bulletin regarding the approaching November 30, 2021 deadline extending it to November 30, 2022. The Bulletin states: “The B.C. government will be extending the deadline for pre-existing owners to file with the Land Owner Transparency Registry, giving reporting bodies with an interest in land more time to file a transparency report without incurring penalties.”
As a result, there is no longer any obligation for Reporting Bodies who are also pre-existing owners to file a Transparency Report by November 30, 2021. That deadline to file the necessary reports has been extended to November 30, 2022.