Costs, requirements of new real estate transparency law concerning
By AdvocateDaily.com Staff
Although the idea of transparency sounds “laudable,” there are risks if new legislation aimed at ending hidden ownership of real estate in British Columbia make it too onerous or expensive to register property, Vancouver corporate lawyer Jonathan Reilly tells The Lawyer’s Daily.
As the article notes, the Land Owner Transparency Act, introduced in June as part of B.C.’s plan for housing affordability, would create a new, publicly accessible registry of those who own real estate in the province. The legislation is intended to increase transparency around land ownership in B.C. by eliminating the ability to hide behind vehicles like trusts and shell corporations.
Under the new Act, corporations would be required to provide personal information about individuals who control 25 per cent or more of the property, including their date of birth and social insurance number, with the same information required for partnerships and trusts.
However, Reilly, founder of English Bay Law Corporation, tells The Lawyer’s Daily that the government already has tools at its disposal to pursue those who are not being honest about their transactions.
“If the process of transferring property becomes too onerous, it encourages people to fudge on the details and corrupt the information, or, worse, to start maintaining private records pertaining to land ownership so that the title registry is no longer accurate and reliable,” says Reilly, whose firm practises real estate law.
“If the government makes it too onerous or too expensive to comply with the law on registering property, I think there’s a real risk we’re going to see straw agents as the owners, and then the real records of who owns those properties will never ever be discovered or shown to the government,” he adds.
Under the proposed legislation, says Reilly, a land transfer can be defected — or not legally transferred — if the provincial Land Transfer Office does not like the information provided.
“Defecting a transfer also defects any mortgage registered at the same time and would put lawyers in breach of their undertakings to sellers and banks,” says Reilly.
Ultimately, he says, the bill adds to the time, and difficulty of verifying information, as well as creates an added expense that clients do not want to pay for. It also seems as though there is an expectation that lawyers should bear the cost, he adds.
Although the government was scheduled to hold consultations on the bill until Sept. 19, Reilly says he is concerned the legislation is being rushed without wide enough consultation with those who are being most affected. He says he is in favour of extending the consultation period to ensure all voices are heard.
“The government is asking us to make determinations that create problems for the professionals making those determinations in terms of where control of a corporation lies, where all the shareholders are and where they live,” Reilly tells The Lawyer’s Daily.
“I think we need to spend some more time on how to get that streamlined and not cause problems for the professionals that are trying to make these transactions go smoothly.”