Further to our previous article of September 16, 2020, the Province of BC approved Order in Council No. 549 on September 20, 2020 which brings into force the Land Owner Transparency Act effective November 30, 2020. The Order further brings into force the Land Owner Transparency Regulation, which generally prescribes definitions, certain requirements of the transparency declarations and reports, and provisions regarding access to reported information and publicly accessible information. The Land Title Survey Authority has advised that work is ongoing to adapt the forms that will be used for the transparency declarations and reports. The completed forms are expected to be available over the next few weeks and will be available at landtransparency.ca.
The transparency declaration will be required to be filed by any person or entity applying to the Land Title Survey Authority to register an interest in land. The transparency declaration will disclose whether the entity is a “reporting body”, which captures nearly all corporate owners of land under section 15 of the Act that hold land for another indirect or beneficial owner though there are exceptions, such as government bodies and public that are excluded from the definition of “reporting body”.
The Regulation provides that the transparency report, which will be required to be filed by all reporting bodies, must be filed on or before November 30, 2021, providing existing owners with one year to file a transparency report, if required.
As set out in the Order, some sections of the Act and the Regulation will not be in force on November 30, 2020, including sections 30 to 38 of the Act and Part 4 of the Regulation, which collectively set out parameters of disclosed information being made public and searchable by certain entities, including regulators, ministry officials and enforcement officers, and the public. Such sections will not be in force until April 30, 2021.
Among the notable provisions of the Regulation are the added definition of “control” and the circumstances of indirect control that will guide the determination of beneficial ownership for the purposes of the Act. Control of corporations, partnerships or trust (as further described in our previous article) will trigger disclosure requirements under the Act. Generally, control will be triggered in the following circumstances:
- for corporations, if a person has the right to elect the majority of directors of the relevant corporation;
- for partnerships, if a person is a partner (other than a limited partner) in the partnership, or if a person is a limited partner in the partnership and is additionally:
- entitled to at least 25% of the profits of the partnership assets,
- 25% of the partnership’s assets on windup,
- has at least 25% of the votes in the partnership management, or
- has the right to approve or remove the majority of the partnership’s management; and
- for trusts, if a person has the power to direct how the trustee is to exercise rights owned in shares of a relevant corporation or the power to direct how a trustee is to exercise control over a relevant intermediary.
The Regulation further describes circumstances of indirect control where the beneficial owner indirectly controls a corporation, trust, or corporation via a “chain of relevant intermediaries.” A “relevant intermediary” is, generally, a corporation, partnership, or a trustee, agent, or personal or legal representative of a trust that is controlled by another person. In simpler terms, the Regulation sets out additional guidance and requirements to trace through layers of a particular ownership structure to determine the beneficial owners of land for the purposes of the Act.
Of importance to tenants, the Regulation has clarified that disclosure is not required if the interest in land to be acquired is a lease of 10 years or less, or the lease term is 10 years or less on November 30, 2020. In addition, when calculating the remaining term of a lease, any periods for which the lease may be extended or renewed are not included.
Reminder that the Land Title Transparency Register is separate from and not to be confused with the B.C. private companies Transparency Register (please see our FAQ here).
For a general overview of the Act, please review our previous article, and stay tuned for further updates from our Commercial Real Estate group.