There's a whole 'LOTA' people getting angry letters!

Since 2022, hundreds of thousands of land owners have filed a declaration and/or report as required under the Land Owner Transparency Act, SBC 2019, c 23 ("LOTA")

Now the BC Government is sending warning letters to land owners who didn't file a LOTA report, but probably should have.

This month's newsletter is a LOTA refresher, in case you or someone you know gets one of these letters.

Answers to your most common questions:

• You got a warning letter - now what?

• How does the government know who didn't file?

• What are the key terms to understand?

• What kind of situations usually require a LOTA rep …

• What kind of situations DO NOT usually require a L …

• How much does a LOTA Report cost?

You got a warning letter - now what?

File the LOTA report ASAP - a LOTA enforcement officer can exercise discretion in applying a penalty when you’re working in good faith to meet the requirements.

The penalties for failing to file a LOTA Report are very steep:

How does the government know who didn't file?

LOTA declarations and reports, like titles, are a matter of public record linked to land's PID.

It appears the government cross referenced PIDs without a corresponding LOTA declaration/report with PIDs where title is held by a corporation, partnership, or trust.

What are the key terms to understand?

• Reporting Body: A corporation, trust, or partnership with an interest in land.

• Interest in Land: LOTA applies to any "interest in land", including:

  • registered ownership of a property;

  • leases with a term of more than ten years;

  • right to purchase (not option to purchase);

  • transmission to an executor/administrator; and

  • Transmission to surviving joint tenant.

• Interest Holder: Every piece of land has an entity with an "interest in land" but not every interest in land has an "interest holder". LOTA reports are required for any interest in land held by an interest holder. Interest holders include:

  • Corporate interest holders: people who own, directly or indirectly, 10% or more of the issued shares or voting shares, or have the right or ability to elect, appoint, or remove the majority of the directors.

  • Trust interest holder: certain people and corporations who have power over, or are beneficiaries of trusts that have an interest in land.

  • Partnerships interest holders: people and corporations who are partners in a partnership.

• Land Owner Transparency Declaration: The LOTA Declaration is required even when land has no "interest holders" involved, because the entity which holds the "interest in land" changed.

• Land Owner Transparency Report: Unless the land is exempt from LOTA, or wholly owned by individuals listed on title, a Land Owner Transparency Report is required setting out the exact ownership structure.

What kind of situations usually require a LOTA report?

• You are an owner of a corporation, trust or partnership that has a legal interest in land in BC (for example, an investment in commercial or residential real estate), regardless of length of ownership.

• You are a part owner of a company which is a part owner of another company which has a legal interest in land in BC, regardless of length of ownership.

• Your company, which is based either inside or outside of BC, invests in real estate in BC, regardless of length of ownership.

• There are changes to your company’s ownership, and your company has a legal interest in land in BC, even if you’ve previously filed a Land Owner Transparency Report.

• You or your company is transferring ownership of all or part of a legal interest in land in BC.

• You are acting as executor on an estate which has a legal interest in land in BC.

• You are not sure if you or your company needs to submit a transparency declaration or a transparency report.

What kind of situations DO NOT usually require a LOTA report?

• You are an individual who directly owns land, unless the land is held in trust or with a partnership.

• You are purchasing property as the full owner, and not holding it in trust for a person or partnership - you’re not required to file a Land Owner Transparency Report, only a Land Owner Transparency declaration at the time of purchase.

How much does a LOTA Report cost? 

At Arora Zbar LLP, a simple LOTR starts at just $400 (including taxes and out of pocket expenses), meaning a report concerning one property with one interest holder. There's an additional $250 for each additional property and interest holder within the same report. For complex holding structures, we're able to provide pricing in advance after a preliminary review of the structure and relevant documents.

Reply to this email if you need help getting a LOTA report done

To better understand our pricing, consider the following examples:

1. Mr. Sidhu owns 100% of a holding company that owns one property. The cost of the report will be $400.

2. Mr. Sidhu owns 100% of a holding company that owns two properties. The cost of the report will be $650.

3. Mr. and Mrs. Sidhu each own 50% of a holding company that owns two properties. The cost of the report will be $900.

4. For a group of five people who each own 20% of the shares in a company that owns one property, the cost of the report will be $1,400.

Further Reading:

1. BC government LOTA enforcement info

2. LOTA Policy Help

3. BCFSA LOTA Guidance

4. BCREA LOTA Guidance

Did You Know?

We offer real estate agents and mortgage brokers complimentary short phone consultations. Message me on WhatsApp, or book a call.

A reminder that Arora Zbar LLP has 5 lawyers offering services in real estate transactions, construction disputes, corporate law, commercial litigation, tenancy/strata disputes, and estate planning.

Recently, one of our lawyers, Raminder Arora was awarded the Best Lawyers 2024 “Lawyers to Watch” award for construction law.

We offer services in English, Punjabi, and Farsi.

We are super transparent about pricing, check out our app at www.pricemyconveyance.com - it calculates property transfer tax, too!

Contrary to what people think, a lawyer is not more expensive than a notary. Remember that all lawyers are notaries, but notaries are not lawyers. In my experience, most notaries refer clients to a lawyer as soon as there’s a problem with a deal. Why not start with a lawyer?

Check out some previous newsletters: