As of November 30, 2020, individuals and “reporting bodies” (including relevant corporations, trusts, and partnerships) that became the registered owners of an “interest in land” in British Columbia had to comply with the requirements of a new publicly searchable registry, the Land Owner Transparency Registry (the “Registry”). While the Registry has been collecting information about transferred interests in land for almost a year now, there are additional requirements for reporting bodies that will be enforced as of November 30, 2022. These requirements will apply to nearly all corporations, partnerships, and trusts, that owned land prior to November 30, 2020 and continue to own that land.
All reporting bodies that held a registered interest in land prior to November 30, 2020, must file a report in accordance with the Registry’s requirements by November 30, 2022, unless the interest in land will be transferred to another entity prior to that date. There are significant fines for failure to comply with these requirements, so if you believe they apply to you please contact McQuarrie at [email protected].
Is this different from the requirement to create a transparency register for my corporation?
Yes, the requirement under the Land Owner Transparency Act, SBC 2019, c 23 that a corporation that owns an interest in land must file a transparency report is separate from the requirement under the Business Corporations Act, SBC 2002, c 57 that a corporation must maintain a transparency registry. Corporations must comply with both requirements, as applicable.
What is the Land Owner Transparency Registry?
The Registry is a publicly searchable database that collects information prescribed by the Land Owner Transparency Act (the “Act”) about the ownership of land within British Columbia. The Act requires reporting bodies to file “transparency reports” that disclose information about both the reporting bodies themselves, and the reporting bodies’ “interest holders” (the people who benefit from an interest in land held by a reporting body). The purpose of the Registry is to prevent money laundering by creating transparency as to who benefits from land owned by corporations, trusts, and partnerships in British Columbia.
What is a “reporting body”?
The definition of reporting body includes all corporations, trusts, and partnerships that hold an interest in land in British Columbia, subject to certain exclusions provided for by the Act.
What constitutes an “interest in land”?
The definition of an “interest in land” includes not only registered ownership of a parcel of land in British Columbia or the right under a contract to require the transfer of such ownership, but also a life estate in land, and a lease of land that has a term of more than ten (10) years.
Who is an “interest holder”?
There are three primary types of interest holders:
- In respect of a relevant corporation, individuals with registered or beneficial ownership of 10% or more of the total outstanding shares (or 10% or more of the outstanding voting shares) of that corporation are interest holders. Individuals who indirectly control 10% or more of the total outstanding shares, or 10% or more of the voting shares, of a corporation through another entity (such as a corporation or a trust) are also interest holders;
- In respect of a relevant partnership, all the partners in the partnership are interest holders, and in the case of a corporation that is a partner, that corporation’s interest holders are also considered interest holders of the partnership; and
- In respect of a relevant trust, the beneficial owners, or beneficiaries, are interest holders, and where a corporation is the beneficiary of a trust its interest holders are also considered interest holders of the trust.
There are some exceptions to the general rules provided above, and several more complex ways to become an interest holder in a reporting body. If you are uncertain how the reporting requirements apply to you or a reporting body you have an interest in, please contact McQuarrie at [email protected].
When is a Land Owner Transparency Registry filing required?
A filing with the Registry is required in two circumstances. First, a “transparency declaration” must be filed any time an interest in land is registered in the Land Title Office; transparency declarations disclose whether the recipient of the interest in land is a reporting body or not. If the recipient is a reporting body, a transparency report must also be filed.
The second circumstance arises if a reporting body acquired an interest in land prior to November 30, 2020 and will continue to hold that interest past November 30, 2022. All reporting bodies that hold such an interest in land must file a transparency report prior to November 30, 2022.
What should you do?
If you believe these requirements apply to you or a reporting body you have an interest in, you should contact McQuarrie at [email protected] as soon as possible. There are significant fines for failure to make the applicable filings with the Registry. Fines for individuals are up to $25,000 or 15% of the assessed value of the property to which the filings relate, whichever is greater. For entities other than individuals (for example corporations or partnerships) that fail to make the required filings, the fine can be up to $50,000 or 15% of the assessed value of the property to which the filings relate, again whichever is greater.
Transparency declarations and transparency reports must be certified and filed by legal professionals, through the Land Title Survey Authority. McQuarrie is happy to assist you with determining the scope of your obligation to make filings, collecting the information relevant to the filings, and preparing the filings. We can also make the filings on your behalf. For more information, please contact us at [email protected].