What is LOTR? Are you affected by the November 30, 2021 filing deadline?

Recently, the Government of British Columbia introduced the Land Owner Transparency Act (“LOTA”) which seeks to create a Land Ownership Transparency Register that records information about individuals who have an indirect interest in land. As of current, LOTA requires that when an application is made to register an Interest in Land, a Transparency Declaration must be filed to the Land Title Survey Authority (“LTSA”) by the transferee(s). This transparency declaration will state whether the transferee is a Reporting Body and if so, the category of Reporting Body. 

In addition to that requirement, the LOTA also requires all Reporting Bodies who hold an Interest in Land to submit a Transparency Report listing all entities who have an Interest in Land by virtue of their relationship with the Reporting Body. This requirement applies regardless of when the property was purchased and requires the Transparency Report to be submitted before November 30, 2021. 

What is an “Interest in Land”?
Section 1 of the LOTA defines an interest in Land as any of the following:

  1. An estate in fee simple
  2. A life estate in land;
  3. A right to occupy land under a lease that has a term of more than 10 years;
  4. A right under an agreement for sale to occupy land, or require the transfer of an estate in fee simple;
  5. A prescribed estate, right or interest

What is a “Reporting Body”?
As discussed above, the LOTA requires a Transparency Report to be filed by any of the following entities defined by Section 1 of the LOTA as a “Reporting Body”:  

  1. A corporation or limited liability company, 
  2. A trustee of a trust, OR
  3. A partner of a partnership. 

The LOTA also requires that this Transparency Report be filed electronically by your Lawyer or Notary. 

Who is an “Interest Holder”?
As previously discussed, the LOTA requires the Transferee of the Interest in Land to file a Transparency Declaration which lists all Interest Holders which Section 1 of the LOTA defines as any of the following: 

A Beneficial Owner  A Corporate Interest Holder  A Partnership Interest Holder
Section 2 of the LOTA defines a Beneficial Owner as the individual who is:

  1. A beneficiary of a trust;
  2. The settlor of a trust who will hold the Interest in Land upon revoking the trust; OR
  3. An individual who is a Corporate Interest Holder in a corporation that either:
    1. Holds an Interest in Land or 
    2. Is the Settlor of a trust who will receive the Interest in Land upon revoking the trust. 
Section 3 of the LOTA defines a Corporate Interest Holder as an individual who is:

  1. An individual who owns, indirectly controls, or is a beneficiary of a trust that holds 10% of more of the corporation’s issued or voting shares; OR
  2. An individual who holds the ability to directly or indirectly elect, appoint, or remove one or more of the corporation’s directors or officers. 
Section 4 of the LOTA defines a Partnership Interest Holder as an individual who is:

  1. An individual or corporation who is a partner in a partnership; OR
  2. An individual who is a Corporate Interest Holder in a corporation that is a partner to a partnership 

 

Who are examples of owners caught under LOTA? 

  1. Mr. John Doe recently signed a contract of purchase and sale to purchase a new property in fee simple. He is therefore seeking to acquire an Interest In Land which requires him to file a transparency declaration along with his LTSA application to register this new interest.
  2. Mr. John Doe and Mrs. Jane Doe are each 50% shareholders of ABC Holding Corp. which is the owner in fee simple of a property.

    As the legal owner in fee simple of the property, ABC Holding Corp. is required to file a transparency report before November 30, 2021. ABC Holding Corp. is also a corporation and is therefore a Reporting Body.As 50% shareholders, Mr. John Doe and Mrs. Jane Doe are Corporate Interest Holders of ABC Holding Corp because they each hold greater than a 10% of the corporation’s voting shares. Therefore, they are Interest Holders of ABC Holding Corp. and must be listed as such on its transparency report.
  3. Mrs. Jane Doe is the legal title holder in fee simple of a property. She holds legal title to that property in trust for Mr. John Doe who is the beneficial owner.

    As the legal title holder in fee simple, Mrs. Jane Doe is required to file a transparency report before November 30, 2021. Furthermore, as a trustee of a trust, she is also a Reporting Body.

    As the beneficiary of the trust, Mr. John Doe is a Beneficial Owner of the trust and must therefore be listed as such in  Mrs. Jane Doe’s transparency report.
  4. Mr. John Doe is the sole shareholder of 123456 BC Ltd., which is the General Partner of a Limited Partnership. Mrs. Jane Doe is the Limited Partner of the same Limited Partnership. 123456 BC Ltd. holds the legal title holder in fee simple of a property which is held in trust for the Limited Partnership by virtue of a trust declaration.As legal owner in fee simple of the property, 123456 BC Ltd. is required to file a transparency report before November 30, 2021. Furthermore, as both a General Partner of a Limited Partnership, a corporation and a trustee of the Limited Partnership, 123456 BC Ltd., is a Reporting Body.

    As the sole shareholder of 123456 BC Ltd., Mr. John Doe is a Corporate Interest Holder and therefore must be listed as such in 123456 BC Ltd.’s transparency report. Similarly, as the Limited Partnership’s limited partner, Mrs. Jane Doe is a Partnership Interest Holder and thus must also be listed as such in 123456 BC Ltd.’s transparency report.

What happens if you violate the new LOTA requirements?
The Government of British Columbia enforces compliance of LOTA with heavy penalties that can be applied against individuals and corporations who fail to comply. Amongst these penalties under the LOTA, fines for either failing to file a transparency report, or filing a transparency report that contains false or misleading information may result in a fine that is the greater of:

  1. A $25,000 fine for an individual;
  2. A $50,000 fine for a corporation; OR
  3. A fine of 15% of the assessed value of a property, which is the subject of the transparency report. 

What should you do if you think you might be caught under LOTA? 

YOUR NEXT STEPS: 

  1. Contact Winright Law at [email protected] or at 604-559-2529 to let us know that you might be caught under LOTA. 
  2. We’ll send you an intake form afterwards, which you can fill out. 
  3. However, we’ll also need a land title document showing ownership of the land and any other document showing the Interest in Land created. If you do not have a land title document showing ownership, don’t worry – we can pull a title search showing ownership from the Land Title Office.
  4. Additionally, if you are a Reporting Body as defined above, contact us before November 30, 2021 as we would be happy to help you file your mandatory transparency report.
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