This article is posted as an important update for owners of real estate in BC. On November 30, 2020, the Province introduced new legislation called the Land Owner Transparency Act (“LOTA”) with the purpose of establishing a registry known as the Land Owner Transparency Registry (“LOTR”). The LOTR will be used to publicly document beneficial and/or indirect ownership of BC real estate. The Province has placed the onus on owners to register beneficial ownership with the LOTR, if required. Owners are given until November 30, 2021 to register. Please note that registration is only required in certain circumstances, which are outlined below in more detail. The below is not an exhaustive list of the registration requirements and is intended to focus primarily on Trusts.
Registration with the LOTR will depend on the nature of your ownership. If you are the registered owner of property in your personal capacity and you are also the true beneficial owner of the property, then registration with the LOTR will not be required. Here are some examples of when registration with the LOTR will be required:
- Trusts. If real estate in BC is registered with the Land Title Office in the name of a Trust that is not specifically exempted (see below), then the Trust must register specific details about the beneficiaries and the Settlor(s) of the Trust with the LOTR.
- Bare Trusts. If real estate in BC is registered with the Land Title Office in the name of an individual, and that individual is holding title on behalf of another individual as the beneficial owner, then the individual on title (often referred to as the “Bare Trustee”) must register specific details about the individual beneficial owner with the LOTR. Registration will also be required where the Bare Trustee is a Trust or Company rather than an individual. Likewise, registration will be required where the beneficial owner is a Trust or Company rather than an individual. Where the Bare Trustee is holding title for a Trust or Company as the beneficial owner, then the Bare Trustee must register specific details with the LOTR about the beneficiaries and settlor(s) of the Trust or shareholders of the Company, as the case may be.
- Companies. If real estate in BC is registered with the Land Title Office in the name of a Company, then the Company must register specific details about certain shareholders of the company with the LOTR. If a Trust is a shareholder of the Company, then the Company may be required to register specific details about the beneficiaries and settlor(s) of the Trust in addition to those same details about the shareholders.
Some Trusts are exempt from registration with the LOTR. For example:
- Alter Ego/Joint Partner Trusts. If an Alter Ego Trust or a Joint Partner Trust is registered on title to property with the Land Title Office, then registration is not required with the LOTR.
- Testamentary Trusts. If a Trust is established through a Will as a result of an individual’s death, and that Trust is registered on title to real estate with the Land Title Office, then registration is not required with the LOTR.
- Estates. If the Executor or Administrator of an estate is registered on title to property in that capacity with the Land Title Office, then registration is not required with the LOTR.
IMPORTANT NOTE: the above exemptions may not be available if any of the above entities beneficially own real estate with a Bare Trustee on title.
As may be evident from the above, LOTA requires identifying information about certain individuals who beneficially or indirectly hold interests in BC real estate. That information is then registered with the LOTR, which will be accessible by tax authorities, law enforcement, regulators and the public.
The rules for determining when registration with the LOTR will be required or exempted are complex. As a result, we strongly encourage you to review and gather information on all of your ownership structures which hold BC real estate, and consider whether you may need legal assistance to comply with your LOTA obligations.