The province is extending the deadline for people to file information to a registry intended to track the “hidden ownership” of real estate in B.C. The deadline, originally the end of this month, is now the end of November 2022.
The Land Owner Transparency Act came into effect in December, giving both new property buyers and existing property owners a year to disclose interest holders in corporations, trusts and partnerships.
The goal was a publicly searchable database of information about who directly or indirectly owns real estate in hopes of curbing rising home prices fuelled by shell companies, nominees and trusts that allow for obscuring owners’ identities and, potentially, money laundering.
The extension to next year, in part, acknowledges the administrative strain caused by COVID-19. However, it was also sparked by points made by many lawyers and others.
“It’s much easier to say you are doing something than to actually do it,” said Ron Usher, a lawyer who represents B.C.’s notaries public that work on real estate transactions and sat on the panel that led to an overhaul of real estate regulations.
“It’s a very complex law, and it’s going to take time and staffing to explain it to the public and then to enforce it,” said Usher.
An Oct. 25 letter from the Canadian Bar Association’s B.C. branch to the Ministry of Finance said the original deadline was “unrealistic for a number of reasons.”
Even though there was awareness among lawyers, notices were never sent to property owners “alerting them to the Nov. 30, 2021 deadline,” said the letter.
Since trust arrangements don’t require owners to appear on property titles, there was the challenge of figuring out who to inform of the filing deadline.
The letter, more pointedly, also said “there has been a lack of meaningful guidance to legal professionals through authoritative policy statements by the ministry regarding the interpretation and application of the Act.” It warned that a year after the law being enacted people in the legal profession often have differing views of the correct interpretation of the law.
As one lawyer pointed out, the Ministry of Finance provides dozens of bulletins and publications interpreting the Property Transfer Tax, but little information on the much more complex topics of interpreting “indirect control” of real estate and transactions by foreign buyers.
“Legislative complexity coupled with inadequate guidance means that legal professionals are spending more time handling each [transparency] matter, which, in turn, leads to backlogs of client requests and the inability to provide adequate legal representation,” said the letter.
The lawyers’ group argued for an extended deadline because the act is so complex, but has a “scope of penalties” and there is the significant potential for misfilings due to misinterpretations.