Land Owner Transparency Registry (LOTR) - Affects Current & Purchasing Real Estate Owners - Beverly Carter Notary Public
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Land Owner Transparency Registry (LOTR) – Affects Current & Purchasing Real Estate Owners

Posted on December 8, 2020

On November 30, 2020, The Land Owner Transparency Registry went live.  The Registry is an initiative of the current BC Government with intent of cracking down on hidden property ownership, fraud and money laundering in BC. Essentially, the Government wants to uncover the true nature of ownership for every single property in British Columbia.

The Registry aids in rooting out who really owns the land (property) – any person who has an indirect (unregistered) interest in land, whether through corporations, trusts, or partnerships must be disclosed.  If you think this does not apply to you …think again.  By law, at the end of November 2021, all registered Land Owners’ will be required to submit either a declaration or a declaration and a report in this new registry – LOTR.

For Notaries or lawyers dealing with purchasers of residential real estate it means that the process of acquiring a property has become more complex and time consuming.  A property where a declaration only is required is generally much simpler.  However, a property where the owners of the land are:

  1. not correctly identified as to the proportion of ownership, or
  2. where other people who are not showing as a registered owner have an interest, or
  3. where someone registered as an owner is not really an owner

there is a requirement to fill out a lengthy report.

The report to fill out is cumbersome and created by someone who works inside a box who has not truly considered the practical aspects of the stakeholders in the process.  Not only is the report 23 pages long, but it is also complex, as to the numbering systems and legal terms, so that the average person would not really understand what they are supposed to do and what information is required.

Many residential property owner scenarios are simple, but some have a story behind the scenes.  As a rule, if there is a story to explain how the property is owned, then it is more likely to be a more complex property ownership scenario.

To help simplify or understand how the LOTR might affect you, here are a variety of possible residential scenarios.

Purchasing – Common Simple Scenarios

  • A single person or a couple buy a home. No one else has an interest in the ownership.

***Likely only a declaration of this straightforward ownership will be completed. ***

Purchasing – Common Complex Scenarios

  • Son or daughter buys a home with parents helping to acquire mortgage. Parents listed on title as a 1% owner.  Son or daughter listed on title as a 99% owner.
  • Spouses listed on title as 99% and 1% interest holders in effort to take advantage of property transfer tax exemption.
  • One spouse buys the home. The other spouse is not listed as an owner of the property (reasons don’t matter but include not t qualifying for a mortgage, residency, bad credit rating, not working, nature of work).
  • A person buys a home with the help of a large gift. Is the gift really a gift?
  • A person buys a home with the help of a large money contribution from a family member.

***Likely a declaration and a report will be necessary to fill out.***

Existing– Common Simple Scenarios

  • A single person or a couple own a home or property. No one else has an interest in the ownership.

***Likely only a declaration of this straightforward ownership will be completed. ***

Existing – Common Complex Scenarios

  • Son or daughter owns a home with parents helping to acquire mortgage. Parents listed on title as a 1% owner.  Son or daughter listed on title as a 99% owner.
  • Spouses listed on title as 99% and 1% interest holders.
  • Spouses listed on title as joint owners, or as tenants in common (share percentage) but have a blended family.
  • One spouse registered as the owner. The other spouse is not listed as an owner of the property.
  • A person bought the real estate with the help of a large gift.
  • A person bought the land with the help of a large money contribution from a family member.

***Likely a declaration and a report will be necessary to complete.***

Existing – Family Transfers/Unique Ownership Arrangements

  • A parent dies or is divorced. The solo parent, in addition to themselves, adds only one child as a registered owner.
  • A parent dies or is divorced. The solo parent takes themselves off as a registered owner and adds all the children as registered owners. The parent continues to live in the property.
  • A property is transferred to one, some, or all the children.

***Likely a declaration and a report will be necessary to complete.***

The onus to provide accurate and transparent information in a declaration and report is placed squarely on the registered owner.  As part of the reporting process, the people who have an unregistered interest in the land or property must be notified in writing by the person(s) registered as owners.

The word ‘Transparency’ in the name of the legislation and the registry makes sense.  When filling out the declaration and report just be transparent.  Describe your situation as factually and clearly as possible, for that is what the British Columbia government has made as an absolute legal requirement for all BC land owners.

Once your declaration and/or report are filled out in the registry system, the information will be available for public search.  It is expected that the registry searches are available after April 30, 2021.  What information will be made available for the public is not yet disclosed by the Government to us.  However, it is evident that Government agencies (i.e. Canada Revenue Agency) and police or other criminal seeking organizations will be given deep access to the registry.

Time will determine what the outcomes of the registry hold and how the searches are used in the fight to combat crime or money laundering.  The scenarios provided in this article are certainly not an exhaustive list.   There is no discussion of ownership and corporations or partnerships for the simple fact that in this office we do not do any real estate where corporations or partnerships are concerned.  By providing some insight into the complexities of people’s arrangements around financial assets, financing, and real estate ownership where other people may have an interest.  Essentially the registered owner of land may not be the only owner, or the true owner.  If you have a complex scenario, it does not necessarily mean a report is required but the odds are much higher that the report will be mandatory to complete.

For our own learning, we would appreciate your feedback about the article or any experiences around the registry.  If you have a unique scenario and are not sure how the registry will apply to your situation, please email me with details to hello@carternotary.com

Beverly Carter Notary Public, Practices in the areas of Residential Real Estate, Buying and Selling Houses, Mortgage Refinancing, Private Real Estate Contracts, Land Title Registry applications, Transfers of Ownership to Survivors & Others

 

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