November 2021 Update: Extended Deadline for Pre-Existing Owners Filing a Transparency Report on the Land Owner Transparency Registry

November 2021 Update: Extended Deadline for Pre-Existing Owners Filing a Transparency Report on the Land Owner Transparency Registry

Background

On November 30, 2020 the Land Owner Transparency Act (“LOTA”) came into force. LOTA introduced mandatory disclosure of the beneficial ownership of land with the purpose of ending anonymous land ownership in British Columbia. LOTA also created and governed the Land Owner Transparency Registry (the “LOTR”) which is a searchable database allowing members of the public to view information related to the beneficial owners of land in BC.

Since November 30, 2020, any person or entity that applies to the Land Title Office to register an interest in land must also file a transparency declaration disclosing whether they are a relevant corporation, a trustee of a relevant trust, or a partner of a relevant partnership (“Reporting Body”). Reporting Bodies are required to file a transparency report identifying any interest holders in the land to be registered.

If a Reporting Body owned land prior to LOTA coming into force, then they are considered a pre-existing owner (“Pre-existing Owner”) under LOTA and are only required to file a transparency report. For further information on LOTA and the LOTR, please see our previous bulletins published in October 2020 and June 2021.

Extended Deadline and Implications

On November 2, 2021, the government of British Columbia (the “Government”) published a notice that they extended the deadline for Pre-Existing Owners to file a transparency report on the LOTR from November 30, 2021 (the “Previous Deadline”) to November 30, 2022 (the “Extended Deadline”). The Extended Deadline is a response to comments from legal professionals in BC pointing out that Pre-existing Owners need more time to gather all of the disclosure information required by LOTA in order to properly prepare and file transparency reports on the LOTR.

The Extended Deadline provides a few key advantages to Pre-existing Owners in BC. For example, Pre-existing Owners have more time to determine whether they will be selling their interest in land. If a Pre-existing Owner is selling their interest in land prior to the Extended Deadline, then they will no longer be an interest holder and as a result are not required to file a transparency report. Pre-existing Owners should review their internal plans in advance of the Extended Deadline and determine whether they will still be interest holders in land subject to LOTA by the Extended Deadline.

This extension will also work to the advantage of Pre-existing Owners and legal professionals still working through the grey areas and nuances of LOTA. As with any new legislation, it will take time for those engaging with LOTA to understand and comply with the specific obligations outlined in the legislation while also understanding which entities are exempt from the disclosure requirements. Pre-existing Owners will not only have time to compile the information that must be disclosed on the LOTR, but the Government will be able to provide additional guidance through outreach and education as the “kinks” in the legislation are worked out.

Unfortunately, because of the Extended Deadline, the LOTR cannot be relied on to accurately disclose the interest holders of a particular parcel of land at this point. Given that not every Reporting Body will have disclosed their interest in the LOTR before the Extended Deadline, there will be gaps in the disclosure.

Conclusion

The Extended Deadline will be extremely helpful for Pre-existing Owners and legal professionals. It is clear that due to the broad array of entities captured by LOTA, more time was required to understand which entities are captured by LOTA and which entities are exempt. The Extended Deadline provides the time Pre-existing Owners and legal professionals needed to become familiar with LOTA’s disclosure requirements and comply effectively.

If you wish to obtain further particulars on the Extended Deadline and its implications, please do not hesitate to contact us.

by Damon Chisholm and Stephen Lewis

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2021