The B.C. government is extending by a year the deadline for corporations, partnerships and trusts that own property to disclose who is the ultimate owner of the real estate, a move that will delay efforts to shine more light on the province’s hot housing market.
The province said the change was made after lawyers and other legal professionals complained that owners need more time to gather the information they are required to file with the registry. In announcing the delay, the province said the pandemic has placed additional administrative strain on the resources of businesses in British Columbia.
Vancouver immigration lawyer Richard Kurland said it seems odd that owners need more time to gather information about what they already own. He called the change a “big bang” for disclosure in B.C. property.
“If they can get their money out before the curtain rises on who owns what, they have a better chance at keeping themselves and their money invisible,” he wrote in an e-mail. “People who want to stay hidden need more time to sell.”
British Columbia’s Land Owner Transparency Act, passed by the NDP government in 2019, requires that every person who has an interest in a corporation, trust or partnership with real estate holdings file a transparency report. Information divulged includes full names, country of residence, citizenship, social insurance number, tax number and last known address. It’s Canada’s first publicly accessible registry of those who have a beneficial interest in land.
The previous deadline to file a transparency report was Nov. 30, 2021.
The registry is one of several measures taken by the provincial government to address hidden property ownership linked to money laundering. A 2016 report by Transparency International showed that half of Vancouver’s top-100 most expensive homes were purchased by shell companies, or other forms of ownership that hid the owners’ identities.
Kevin Comeau, a retired lawyer and anti-money laundering expert, said pre-existing owners of B.C. land have known for more than a year that they were required to file an initial transparency report, and it’s hard to imagine a filer that has so many companies and trusts that their lawyer couldn’t identify the beneficial owner within that time.
“While I’m sympathetic to the complications posed by COVID, I think the citizens of B.C. are likely eager to get dirty money out of their real estate market,” he said.
However, some other experts believe the extension of the deadline is a reasonable move to encourage widespread compliance.
“It’s a relatively new policy. So I think that it isn’t that you had a large amount of professionals who knew exactly how to fill all the forms. But they themselves are kind of muddling through,” said Andy Yan, a housing analyst and director of Simon Fraser University’s city program.
Ron Usher, a lawyer for the organization representing 430 B.C. notaries public, agreed, adding there was a huge last-minute rush of people trying to ask for advice on compliance.
In a notice to clients last week, Canada’s largest law firm, Borden Ladner Gervais, credited its lawyers for helping spur the reprieve.
Parisa Hurst, a member of the committee working to get a delay, said the complexity of the legislation, coupled with the pandemic, meant that not all land owners had an adequate understanding of their obligations under the new transparency act, nor were they provided with adequate notice or legal advice despite best efforts by the legal community to reach out to their clients.
She added this extension will allow the provincial government more time to issue policy guidance on complicated interpretations under the act.
The province said consequences for not filing with the registry can be substantial, with penalties up to $25,000 for an individual, or $50,000 for a corporation, or 5 per cent of the assessed value of the property, whichever is greater.
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Xiao Xu