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Land Owner Transparency Act (LOTA) Information

Land Owner Transparency Act (LOTA) Information

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  • Information

    BCFSA’s information is clear, concise, easy-to-read explanations of the requirements for real estate professionals under the Real Estate Services Act (“RESA”), Real Estate Services Regulation (“Regulation”), Real Estate Services Rules (“Rules”), and other applicable legislation.

    This information is intended for use by real estate professionals, to support their understanding of the standards they must meet in the delivery of real estate services.

The Land Owner Transparency Act (“LOTA”) was introduced in B.C. to address part of government’s concern with money laundering in the province. The legislation is intended to enhance visibility of the ownership of land in B.C. and to:

  • Address “hidden ownership”;
  • Crack down on tax fraud;
  • Close loopholes; and
  • Combat money laundering.

LOTA requires individuals and entities who are “reporting bodies” to disclose information about themselves and about “interest holders” who directly or indirectly hold an “interest in land”.

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 British Columbia.

LOTA itself does not refer to a “registry” (“LOTR”) but for ease of reference the information about “interest holders” is referred to as being in the LOTR. However, unlike the Land Title registry, LOTR does not confirm the title or ownership of estates and interests. It is merely a repository of records.

Some of the information required by LOTA is made available through a public search, while some of the information is available only to certain authorities and officials. The information contained in LOTR is vetted the transferee of the interest in land, to the best of the transferee’s knowledge. If it is later determined that the information contained in LOTR is incorrect or misleading, reporting bodies have the option to file a new transparency report to correct or complete the information. If they choose not to do so, reporting bodies or the individual responsible may be subject to penalties, fines and possible offence provisions.

Interests That Require Disclosure

Under LOTA, an interest in land that require disclosure are:

  • Estate in fee simple;
  • Life estate in land;
  • A right to occupy land under a lease that has a term of more than 10 years;
  • A right under an agreement for sale to
    • Occupy land, or
    • Require the transfer of an estate in fee simple.

Some lands are exempt such as reserves and treaty lands of Treaty First Nations (see s. 6 of LOTA for full list).

Transparency Declarations

A transparency declaration must be filed with the administrator of LOTA any time an application is made at the LTO to register or transfer an interest in land. The transparency declaration is submitted to the registrar of the LTO together with the required LTO application. An application to register an interest in land at the LTO will not be accepted without a transparency declaration or an exclusionary reason chosen. The transparency declaration must declare whether the transferee is a reporting body. If not, nothing further needs to be filed with the administrator. If the transferee is a reporting body, then the transparency declaration must declare if the reporting body is a relevant corporation, a partner of a relevant partnership or a trustee of a relevant trust.

Who is Required to File a Transparency Report (reporting bodies)

LOTA describes three types of reporting bodies that are required to file a transparency report. These reporting bodies are:

  • Relevant corporation: These are corporations, except those set out in Schedule 1 of LOTA.
  • A partner of a relevant partnership: These include general partnerships, limited partnerships and limited liability partnerships, as set out in section 9 of LOTA.

A trustee of a relevant trust: These are trusts such as express trust and bare trusts, except those set out in Schedule 2 of LOTA.

Transparency Reports

Transferees that are reporting bodies must further disclose certain information about themselves and about the indirect owners of the interest in land. These indirect owners are called “interest holders” or “beneficial owners” depending on their nature. The main purpose of LOTA is to force reporting bodies to disclose the true or beneficial owners of any interest in land. There are three categories of interest holders under LOTA: corporate interest holders, partnership interest holders, and beneficial owners.

A corporate interest holder is an individual who has:

  1. Registered or beneficial ownership of, or indirect control over, at least 10% of the shares or voting rights in a relevant corporation;
  2. The right or indirect control of the right to elect, appoint or remove a majority of the directors of the corporation; or
  3. The ability to exercise direct and significant influence over an individual who has any such rights.

There are also provisions for joint ownership, associates and in the Land Owner Transparency Regulation, provisions for indirect control. The important point for real estate professionals to note is that the threshold, generally speaking, of 10% ownership is much less than the 25% threshold under the Proceeds of Crime Money Laundering and Terrorist Financing Act (“PCMLTFA”).

A partnership interest holder is an individual who is:

    1. A partner in the relevant partnership, regardless of the percentage of units or proportion of other entitlements held by the partner for the partnership; or
    2. A corporate interest holder (e.g. an individual holding 10% of the shares) in a relevant corporation, if that corporation is a partner in the relevant partnership.

A beneficial owner is an individual who has any of the following rights in a LOTA interest for land registered in the name of a trustee of a relevant trust:

  1. A beneficial interest in a LOTA interest no matter how small,but not an interest contingent on the death of another individual; or
  2. The power to revoke the relevant trust and receive the LOTA interest.

There are deeming provisions for partnership relations with other relevant partnerships.

Section 35 of LOTA provides for searches by members of the public. A real estate professional falls within this category. A real estate professional may search publicly accessible information by either:

  1. Searching for the name of a person to ascertain the parcel identifier(s) for the parcel(s) of land in relation to which the person is, identified as a reporting body, interest holder or settlor, or
  2. Searching for the parcel identifier for a parcel of land to ascertain the person(s) who are, identified as reporting bodies, interest holders or settlors in relation to the parcel of land.

LOTA provides that the administrator must make the following information contained in transparency records available through searches conducted pursuant to section 35:

  1. Primary identification information in respect of reporting bodies that are identified as registered owners of LOTA interests; and
  2. Primary identification information in respect of
    1. Individuals who are identified as interest holders in relation to
      1. The reporting bodies referred to in paragraph (a) above, or
      2. The LOTA interests in respect of which the reporting bodies referred to in paragraph
        1. Above are identified as registered owners, and
    2. In the case of reporting bodies referred to in paragraph (a) above that are trustees of relevant trusts, persons who are identified as settlors of the relevant trusts; and
      1. Parcel identifiers for parcels of land in relation to which persons are identified as reporting bodies, interest holders or settlors.

Primary identification information and parcel identifiers for parcels of land in relation to which the individual is identified as an interest holder or settlor will not be made publicly accessible until at least 90 days after the applicable transparency report is accepted for filing. Therefore, real estate professionals should note that LOTR information may not be complete. Given that the information in LOTR may not be complete, real estate professionals should address this in a discussion with their clients. Reasons for the information not being current on LOTR include:

  • Pre-existing owners must file a Transparency Report by November 30, 2021;
  • Failure to file historical data by the deadline;
  • A90-day delay from land transfer until the information becomes available for search by the public;
  • Permitted omission of data for reasons of personal security; and
  • Inaccurate or incomplete information provided by a transferee to the conveyancing lawyer.

Corporate Primary Identification Information

In a transparency report, “primary identification information” for a corporation consists of:

  1. The corporation’s name and registered office address;
  2. If the corporation has a head office, the corporation’s head office address;
  3. The jurisdiction in which the corporation was incorporated, organized or formed;
  4. If the corporation has been continued or transferred into another jurisdiction, the jurisdiction into which the corporation was most recently continued or transferred.

Partnership Primary Identification Information

In a transparency report, “primary identification information” for a partnership consists of:

  1. The partnership’s registered business name, if any;
  2. The type of partnership referred to in the definition of “relevant partnership”;
  3. The partnership’s registered address or head office address, as applicable;
  4. The address of the partnership’s principal business premises; and
  5. The jurisdiction the laws of which govern the partnership, or if the partnership has a partnership agreement, the interpretation of the partnership agreement.

Individual Primary Identification Information

In a transparency report, “primary identification information” for an individual consists of:

  1. The individual’s full name;
  2. Whether or not the individual is a Canadian citizen or permanent resident of Canada;
  3. If the individual is not a Canadian citizen or permanent resident of Canada, every country or state of which the individual is a citizen;
  4. If the individual’s principal residence is in Canada, the city and province in which that principal residence is located;
    1. If the individual’s principal residence is outside Canada the city and country in which that principal residence is located.

The primary identification information as set out above will be available through the search by a real estate professional. Full transparency records contain additional information about reporting bodies, interest holders and settlors which will not be available to real estate professionals.

LOTA provides for the updating of transparency reports if the previous report does not disclose the current interest holders or a determination of incapacity has been made in respect of an interest holder. A reporting body may also file a new transparency report to correct or complete information in a previously filed transparency report. Transparency reports for owners of pre-existing registered LOTA interests (i.e. Interests registered before LOTA came into effect) will have to be filed by November 30, 2021.

An application may be made to the administrator to request that some or all of the individual’s primary identification information be omitted from or obscured in publicly accessible information if the individual believes that making that information publicly accessible could reasonably be expected to threaten the safety or mental or physical health of the individual or a member of the individual’s household. For this reason, real estate professionals should note that LOTR information may not always be complete.