Land Owner Transparency Act: The Basics

In November 2020, BC’s new Land Owner Transparency Act (LOTA) came into force. The Act creates new disclosure obligations for owners of real estate in the province. It has a very broad scope and could impact many people. Keep reading for more information on the Act, and what it means for you as a home owner or real estate investor.

What is the purpose of the act?

The Government of BC has created the LOTA with the stated purpose of preventing tax evasion, money laundering, and real estate fraud. This comes amidst an ongoing housing crisis and the publishing of several studies and news articles which suggest that BC’s real estate market is particularly vulnerable to financial crime. The Act requires applications to the BC Land Title office to register interests in land. This requirements includes the submission of a transparency report.

This report discloses whether the Act considers a transferee (the person receiving the land title through the transfer) a “reporting body”. A ‘reporting body’ includes any person or entity holding the land title under a corporation, trust, or through a partnership. This is to prevent individuals from deliberately obscuring their identity purchasing and holding land in order to commit financial crime.

If the Act considers the transferee a reporting body, they must complete an additional transparency report. This report discloses information on all relevant interest holders. For example, if your children each own shares in your business through which you own property, you must disclose their details when registering your interest in the land.

How am I Affected?

This will impact many people’s estate plans, as it’s common to hold assets such as real estate in a trust for beneficiaries. The Act requires the disclosure of these beneficiaries as indirect owners. For example, if you create a trust account to hold real estate, you are transferring the interest in land away from yourself and in to the trust. The land register will reflect this transfer, and the Act identifies the trust as a reporting body. In completing the transfer application, you must file a transparency disclosure with details on the beneficiaries of the trust.

This may sound complicated, but it should not discourage you from considering using trust instruments in your estate planning. There can be many benefits to your estate and beneficiaries by using trusts to distribute your assets. For more on this, read our article on inter vivos gifts.

What do reporting bodies have to do?

If this change might impact your real estate holdings or estate plans, you should consider seeking legal advice. Simply, when you transfer the land title of your property, either through sale or as part of your estate planning, or for some other personal reason, it is likely that you will have to fill out new forms for the land register as a result of the act. The information you share in the disclosure will depend on the type of transferee- the person or entity receiving the land title. Let’s look at some examples. If the transferee is…

• A trust: Information on both the trustee, the settlor, and any beneficiaries is required.
• A corporation: The name of the company, the address(es) it’s registered to, its corporation number and business number is required.
• Individuals: Name, birth date, social insurance number, home address and even information on their relationship to the reporting body will be necessary.

As you can see, the information required by the Land Owner Transparency Act is not intrusive and does not pose any new challenges to people buying/selling property in British Columbia. If you’re still unsure of how this act will impact you or your estate plan, contact an experienced estate lawyer today. We’ll make sure you’re on the right track.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.