Effective November 30, 2020, a new Act and Registry come into effect in BC, that will require buyers to complete new, time-sensitive, legal obligations.
As BCREA thoroughly detailed in a recent update, REALTORS® are advised to advise their clients of their new disclosure requirements as defined in the Land Owner Transparency Act (LOTA) and the Land Owner Transparency Registry (LOTR).
The Act creates and governs the Registry, which is intended to end anonymous land ownership in BC. The goal is to make public the identity of those who benefit from a land purchase in order to combat fraud, money laundering and tax evasion.
As explained in a NewsReal article spring of 2019, when the Act was introduced, the BC government’s aim is to crack down on illegal activities to ensure homes in BC are used for people, not speculative investment, or money laundering.
The new Land Owner Transparency Registry will work in tandem with the existing Land Title Registry (LTO). As of November 30, anyone who applies to the LTO to register an “interest in land” must also file a “transparency declaration” that will be stored in the Registry, disclosing whether they are a “reporting body”.
As you know, an “interest in land” means the right that someone has with respect to a parcel of land and with this new registry, it doesn’t only mean ownership, it also includes leases with a term greater than 10 years.
Under the Act, a “reporting body” is described as a “relevant corporation”, “trustee of a relevant trust” or a “partner of a relevant partnership”. You can see that these categories are meant to capture ownership of property through numbered companies, offshore trusts, and blind trusts that in the past have circumvented detection – and as we are hearing from the Cullen Commission Inquiry into Money Laundering in BC, many deliberately.
After applying, reporting bodies then must file a transparency report detailing specific information about each interest holder.
It’s worth mentioning that the disclosure requirements of reporting bodies are ongoing, meaning that every time there is a change in the land’s interest holders, even if the registered ownership of the land hasn’t changed, reporting bodies must file an updated transparency report.
The LOTR will become searchable beginning April 30, 2021.
Additional guidelines around LOTA and LOTR coming
BCREA will continue to keep BC Realtors informed regarding clients’ LOTA requirements. Watch for industry updates. For more information about the Act, go to landtransparency.ca.
Source: FVREB Communications