Land Owner Transparency Registry Filing Extended to 2022

The Land Owner Transparency Registry (LOTR) filing deadline has been extended to November 30, 2022, without incurring penalties. This extension gives reporting bodies with interests in land more time to file a transparency report. 

According to the BC government, they “heard from legal professionals in BC that pre-existing owners need more time to gather information about ownership and prepare to file with the registry.” 

In addition to the new deadline, Realtors should be aware of these requirements and advise their clients to speak to legal professionals for more details. 

Since April 30, 2021, the LOTR has been a publicly searchable registry of records about individuals who have an indirect interest in land held through corporations, trusts and partnerships. LOTR aims to address housing affordability, end hidden ownership and crack down on fraud and money laundering in the province. The Land Title and Survey Authority administers the LOTR under the Land Owner Transparency Act (LOTA). 

For more information about the LOTR and LOTA, here are some resources: 

Five Insurance Tips for Wildfire Season

 

Sadly, it seems that in addition to spring, summer, fall and winter, BC now has a fifth season: wildfire season. What’s worse is that this year the wildfire season has gotten off to an early start, making it more important than ever for REALTORS® to help clients manage wildfire risks. While there are some things homeowners can do to make their properties more wildfire-resilient (check out the province’s FireSmartTM website), it largely comes down to homeowner insurance. Here are five insurance tips for buying and selling during wildfire season.

1. Know the 50km radius rule.

During wildfire season, most insurance providers won’t bind insurance policies on properties within a certain radius – typically 50km – of an active and uncontained wildfire. However, there are a few that will consider insuring a home with a wildfire more than 25km away but less than 50k on a case-by-case basis. For example, if there is a fire that is considered to be under control within a 50km radius (shown as green on the BC Wildfire Dashboard), an insurer may be willing to bind a policy.

2. Consider wildfire risks when drafting a contract.

Buyers can help mitigate some of the risks of buying a home in wildfire season by including a “subject to insurance” clause in their offer. If the buyer can’t secure insurance by the completion date, the mortgage company may not fund the mortgage, which could lead to the buyer not being able to complete, based on the terms of the contract. Click here for a sample clause from the Real Estate Council of BC. As always, advise clients to seek legal advice regarding the addition of clauses to the Contract of Purchase and Sale.

Another way to help mitigate wildfire risks from the get-go is by asking for a long completion. For example, a buyer could ask for a fall completion or at another time when wildfire activity has decreased.

3. Get a “binder” from an insurance provider, not just a quote.

There’s a big difference between getting a quote from an insurance provider and an insurer “binding” a policy. A quote just summarizes the coverages being offered and the annual premium (price). When an insurance provider binds an insurance policy, it means they’ve issued the policy and coverage will come into effect on the agreed-upon date. Buyers should request that the insurer binds the policy to align with the closing date so that coverage is active when the sale has been completed. However, if the closing date changes, a bound offer won’t become valid until the buyer becomes the owner and the buyer should notify the insurer to change the effective date.

Once a policy has been bound, the insurer is generally bound to honour the policy (assuming there is no misrepresentation on the buyer’s part), even if a fire were to ignite that is a potential threat to the home or a pre-existing wildfire were to spread.

4. Buyers: secure insurance as early as possible!

Since buyers are likely to find it more difficult to secure insurance during wildfire season, it’s important that they begin shopping around as early as possible. Delays in securing insurance can hold up the sale process and even cause a deal to collapse if a buyer’s financing depends on securing insurance. And, as per tip 3, don’t forget the importance of getting a binding offer and not just a quote for a policy!

5. Get legal advice.

In situations where buyers and sellers are in a legally binding contract and are facing the potential of a sale not completing or requiring extensions, they should be advised to seek legal advice as soon as possible. Remember, changing dates on a contract effectively reopens the contract. Obtaining legal advice will help ensure buyers and sellers are aware of their rights and obligations.

For more information on helping clients manage wildfire risks, go to:

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3 Tips to Stay Safe During BC’s 2nd Wave

With BC in its second COVID-19 wave, it’s time to reaffirm our shared commitment to slowing transmission. As a REALTOR®, that means continuing to demonstrate leadership in your community by following public health orders and professional safety guidelines. Here’s a reminder of three steps you can take to help make yourself, your clients, your families and your communities safer.

1. Prioritize Virtual Tools Above all, we need to continue reducing our in-person interactions whenever possible. Realtors and other real estate professions were quick to adapt in the early days of this pandemic, with new technology tools to facilitate virtual transactions. Continue, to encourage your clients to take advantage of the many impactful virtual marketing tools to make buying and selling safer for everyone.

2. Wear a Mask Dr. Bonnie Henry recommends that all British Columbians wear masks in public places. In July, BCREA and the Real Estate Council of BC (RECBC) recommended that Realtors require anyone entering a home for an open house or showing to wear a mask. Be sure to communicate your expectations around masks with consumers before meetings or showings. Realtors are often well-known members of their communities. Wearing a mask whenever in public – whether for business or personal reasons – is a great way to show leadership in your community.

3. Review and follow COVID-19 guidelines Now that we’re in the second wave, it’s a good time to review WorkSafeBC’s Real Estate Protocols for Returning to Operation and the guidelines for safer open houses we issued in partnership with Council earlier this summer. Reassess whether there are any additional measures you can take to increase your clients’ and your safety and make sure to have a plan to communicate any changes to clients. If you have any questions or concerns, make time to discuss them with your managing broker.

Remember that things are still changing quickly. We all have to remain prepared to adapt to new public health guidance as it comes available. BCREA continues to stay in close contact with RECBC, WorkSafeBC and member boards to support Realtors in adapting their practice to meet the challenges of COVID-19. By taking steps like these, we can help the whole province bend the curve so that our businesses and schools can stay open and our loved ones stay safe.

The BC Energy Step Code and What It Means for REALTORS®

In the coming years, new homes in BC are about to get measurably healthier, quieter, more durable, and more energy efficient than those on the resale market, thanks to a regulation called the BC Energy Step Code. BCREA is collaborating with BC Hydro to ensure REALTORS® understand the BC Energy Step Code, so they can better advise their clients and meet the growing demand for “high-performance homes.”

What is the BC Energy Step Code?

In short, the BC Energy Step Code sets performance requirements for new construction and groups them into “steps.” Authorities with jurisdiction over the BC Building Code – including local governments – can choose to require or incentivize builders to meet the performance requirements of one or more steps.

The province has set a goal that by 2032, the BC Building Code will set Step 5 as the base requirement for all new houses. This means new homes will be up to 80 per cent more energy efficient than those built today. The province has also set interim targets and aims to set a base requirement of Step 3 by 2022.

What does this mean for Realtors?

As new homes become healthier, quieter, more durable, and more energy efficient over the coming years, Realtors can help homebuyers make informed decisions by educating them on these benefits. New homebuyers are also showing unprecedented interest in energy-efficient homes and will expect Realtors to be knowledgeable on the subject. In a recent Canadian Home Builders Association national survey, nine out of 10 respondents said they either “really want” or “must have” an energy-efficient home.

As leaders in their communities, Realtors can also act as agents of change by further educating consumers on the benefits of energy-efficient homes. In doing so, Realtors can ensure demand continues to grow for homes that are better for their clients, their communities, and the environment.

How is BCREA here to help?

BCREA is collaborating with BC Hydro to ensure Realtors have the knowledge and resources they need to understand the BC Energy Step Code and to market high-performance homes. Over the coming months, we will produce a podcast episode on the topic, additional blog posts, and host an all-Realtor webinar. In 2021, BCREA will also launch an accredited Professional Development Program course on energy-efficient homes.

Stay tuned for the next episode of Open House by BCREA, featuring Zachary May, Chair of the BC Energy Step Code Council, who will speak to the BC Energy Step Code and how it’s implementation will affect real estate practice.

CEWS Now Allows for Accrual-based Accounting

The latest round of changes to the Canada Emergency Wage Subsidy (CEWS) program broaden its reach by allowing entities that use the cash method of accounting to use accrual-based accounting to calculate their revenues. This is one of the changes that the Canadian Real Estate Association (CREA) had advocated for to make the program accessible to more brokerages.

CEWS has also been extended until December 19, 2020, another change advocated for by CREA.

Sliding Subsidy Scale Also Introduced

In addition, employers no longer have to meet a 30 per cent revenue decline threshold. Instead, employers can apply for a base subsidy that matches the level of revenue decline they’ve experienced. This subsidy will increase or decrease in line with revenue losses and gains. Employers hardest hit by COVID-19 may also qualify for a top-up subsidy of up to an additional 25 per cent. For details on the varying base rate, go to Department of Finance’s CEWS backgrounder.

LTSA Historic Records: Discriminating Covenants in the Land Title Register

If a property owner or buyer encounters a discriminating covenant in land title records, it can be a shocking surprise. Discriminating covenants are clauses that restrict the sale, ownership, occupation or use of land on the basis of sex, race, creed, colour, nationality, ancestry or place of origin of a person, and reflect a different cultural reality from our province’s history. In spite of several efforts to amend these records over the past 40 years, they are still periodically found on title for certain residential properties in British Columbia. But are these clauses legitimate? Why do these covenants still appear? And what can be done to change them?

First, it’s important to know that these covenants are not enforceable. Enacted in 1978, Section 222 of the Land Title Act operates against any registered covenant that directly or indirectly has a discriminating effect, whenever registered and in whatever form created. In short, discriminating covenants are void and have no effect.

Discriminating clauses appear most often in land title records from the first half of the 20th century. In some cases they appeared to be a standard covenant for all properties in a particular development, as was the case for the British Properties in West Vancouver. They can also occur more randomly, added to the records for one land parcel but not an adjacent one. These clauses are an artifact from our racist heritage and, with your help, the Land Title and Survey Authority of British Columbia (LTSA) can act to make it clear that these restrictions are invalid.

If your client would like to amend the covenant document to cancel the offensive covenant, please notify the Registrar of Land Titles. In most cases, restrictive covenants contain other provisions that are still valid, so the Registrar will make an endorsement by the offensive covenant indicating it has been cancelled pursuant to s.222 of the Land Title Act. Because the Registrar is prohibited under the Land Title Act from erasing or rendering illegible the original words on a record, the words are struck through so that it is more apparent on the face of a record that the discriminating language is void. The LTSA published Practice Note 01-15, which outlines in more detail how discriminating covenants are treated. There is no cost for this amendment.

Over the decades, a number of initiatives have been undertaken to identify and amend documents that contain discriminating covenants. The Land Title Office did a significant amount of work after section 222 was enacted in 1978 to identify restrictive covenants and add an endorsement on title to draw attention to the clauses that were void. Due to the technological limitations of the time, microfilm records were not altered but now, modern digitization provides an opportunity for these records to be amended to reflect today’s laws and values.

The effort to identify documents with discriminating clauses is ongoing. There are millions of documents in the LTSA vaults in the form of microfilm, bound book volumes, survey plans and other paper and digitized documents. The LTSA relies on the assistance of property owners, local governments, and other property professionals to help identify the land title records that need to comprehensively reflect that any discriminating covenant is void. Some municipalities, including the City of Vancouver and the District of West Vancouver, have begun initiatives to explore the feasibility of striking any remaining covenants from properties within their jurisdictions. More broadly, some community members are proposing that legislative changes be introduced to enable these covenants to be erased entirely; many voices have an opportunity to be heard in this ongoing dialogue.

UPDATE: Extension of BC’s State of Emergency – What it means for REALTORS®

 

This post, originally titled “Government Announcement on Renters and Landlords – What it Means for Realtors”, was updated on May 28, 2020 following the two-week extension of BC’s State of Emergency.

On May 27, 2020, Premier John Horgan extended BC’s state of emergency until June 9, 2020. This means that the Residential Tenancy Order (RTO), which expires only when the state of emergency is lifted, has also been extended.

The Residential Tenancy Order bans evictions and provides other protections for renters – see below for more information. To avoid a situation where there are a lot of evictions, the provincial government intends to have a transition plan in place before the state of emergency ends. They are well aware of the need for real estate transactions to complete and for buyers to be able to occupy their new homes. BCREA will provide more information as the transition plan develops.

Here is an overview of the order:

Eviction moratorium – Landlords can no longer give a tenant a notice to end the tenancy except in situations where people or the rental unit are at significant risk. However, if a landlord gave a tenant a notice to end the tenancy before March 30, then the notice remains in effect, subject to the dispute resolution process, and an order of possession can still be granted.

This may be complicated in cases where a tenant is under mandatory quarantine, self-isolation or a medical facility. In those cases, it’s advisable to seek legal advice.

Landlord’s right to enter rental unit – A landlord can enter a rental unit for repairs or showings, as long as the tenant consents. Follow the standard procedure of requesting access at least 24 hours in advance, noting the proposed date and time – and be sure to wait for the tenant’s consent. Landlords can enter rental units without tenant consent if there is an emergency in relation to the COVID-19 pandemic and the entry is necessary to protect health, safety or welfare of the landlord, the tenant or other occupants.

Rent freeze – Rent increases set to occur while this order is in effect, including previously announced rent increases set to take effect from March 30 onwards, do not take effect until after the state of emergency has ended. Exceptions for rent increases include if there one or more occupants are added and the tenancy agreement specifies how the rent varies with the number of occupants.

Restricting access to common areas – Landlords can reasonably restrict access to common areas to prevent the spread of COVID-19

More information is available on the Residential Tenancy Branch website.

Rental supplement on the way

Another significant government program to support renters and landlords is the BC-Temporary Rental Supplement Program (BC-TRS). Tenants who have lost or reduced income because of COVID-19 will be eligible to apply for the program through the BC Housing website.

The Canada Commercial Rent Assistance Program Can Help You And Your Clients

When the Canada Emergency Commercial Rent Assistance (CECRA) program launched on May 25, it included updated eligibility criteria to make it available to property owners who do not hold a mortgage, addressing an oversight identified by the Canadian Real Estate Association (CREA) earlier in May. Here’s an overview of what REALTORS® – and their commercial clients – should know about the program.

How it works

CECRA provides forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments to compensate for small business tenants experiencing financial hardship during April and May (retroactive), and June.

The CECRA loans will be forgiven if the qualifying property owner agrees to reduce the small business tenants’ rent by at least 75% and not to evict the tenant during the term of the written agreement. The small business tenant would pay the remaining 25% of rent.

However, the qualifying small businesses tenants must:

  • pay no more than $50,000 in monthly gross rent per location
  • generate no more than $20 million in gross annual revenues
  • have experienced at least a 70% decline in pre-COVID-19 revenues, compared to revenues in the same period in 2019, or average of revenues earned in January and February of 2020

The upside and downside of CECRA

The upside is that both sides of the deal get something from this program. The tenant pays only one quarter of their normal monthly rent and the landlord gets 50 per cent of the total rent covered, which may be enough to keep both the landlord and the tenant afloat.

On the downside, the landlord is still short 25% of the rent. However, keeping a good tenant solvent over the longer term is likely preferable to trying to get 100% of the rent and losing the tenant altogether. Also, it’s up to the landlord to apply for the CECRA program. But the tenant can make a convincing case to their landlord that the program would benefit both parties.

There’s also a risk if the small business cannot demonstrate that they’ve actually lost the required 70 percent of revenue, because if not, they won’t qualify for CECRA.

How will it work for you and your tenant clients?

Commercial tenants, including Realtors, who can leverage the boost that this rent relief scheme provides, will benefit if they meet the thresholds stipulated by the program, and if they can gain some competitive ground in one of several ways such as:

  • recover their business income fairly soon following the pandemic slowdown
  • restructure their business to lower overhead costs while increasing efficiency
  • establish new market share
  • devise ways to attract new clients through marketing and value added benefits
  • ably adopt new modes of operating arising from the pandemic, such as social distancing, sanitizing, and whatever remains necessary for public health and safety

What landlord clients need to know about CECRA

Landlords of commercial space may evict tenants who are struggling to pay rent and on the brink of bankruptcy. But, in so doing may face a new set of problems if the landlord:

  • receives zero rental income to cover their mortgage and other costs
  • continues to pay mortgage payments, property tax, maintenance and other costs
  • incurs debt waiting to install new tenants which can typically take 6 months up to 18 months and possibly longer if the economy remains in recovery mode
  • rents out a space, for far lower rental income due to the significant competition from other commercial landlords, desperate for tenants in the post-pandemic economy

What is known about CECRA, and all the many other government financial aid programs on tap, is that they were designed over the course of weeks, not months and years as is usually the case. Policy created out of urgent need is bound to have gaps and flaws. That is why it makes sense for commercial business to consult their Realtor to help them come to a decision about the various financial aid programs, such as CECRA.

Realtors’ expertise fills the knowledge gap

Given the complex nature of the CECRA program, business clients should consult with their banks, their lenders, and their accountants to get a complete picture of the risks and benefits of proceeding with the CECRA program. Realtors with commercial expertise can assist by:

  • assessing how well CECRA can form part of a strong business plan, or not
  • breaking down the numbers for potential scenarios
  • helping negotiate the terms of the rental agreements that will be financially viable
  • making market projections about the feasibility of their current properties
  • supporting any downsizing or restructuring plan for their commercial properties
  • looking for prime opportunities to swap out or acquire new properties that may be available during a time when businesses are closing out and owners are looking to make a change

Find out more specific details on the program requirements and how to benefit from it by going to the Canada Mortgage and Housing Corporation website.

Keeping Clients Out of Hot Water Over Groundwater Licencing

Droughts, water restrictions and wildfires have all become part of a typical BC summer, just like Okanagan cherries or a BC Day barbecue. Despite all of BC’s lakes and rivers, the truth is that water scarcity is a serious concern. That’s why the provincial government introduced the Water Sustainability Act in 2016, which requires anyone diverting and using groundwater for non-domestic purposes to apply for a groundwater license by March 1, 2022.

Groundwater licensing & REALTORS®
If you have a client who uses groundwater for non-domestic purposes but doesn’t apply for a water license by March 1, 2022, they risk losing their right to access groundwater on their property. As a REALTOR®, you can add value to your clients by making sure they understand this requirement and how to apply for their license.

How groundwater licensing works
The groundwater licensing requirement came into effect on February 29, 2016. But that doesn’t mean it only applies to anyone who began using groundwater after this date-it applies to everyone. If you were a non-domestic groundwater user on or before February 29, 2016, you will submit an existing use licence application. If you were a non-domestic groundwater user on or after March 1, 2016, you will submit a new use application.

The deadline to apply is March 1, 2022 and the government is waiving the one-time application fee to people who submit their application on or before this date.

What about domestic users?
If you use groundwater for domestic use in a private home, you do not require a licence. However, as a REALTOR®, you should encourage your clients to register their well, if they have one. By registering their well, they create a record of their water use, which helps ensure it’s considered by the decision-makers dealing with other licence applications.

How to apply for a licence
For information on how to apply or to submit an application for groundwater licensing or register a well, please visit the Province’s Secure Your Water Rights Today portal. FrontCounter BC has also recently published a useful webinar on how to submit an application for an existing use groundwater licence.

Posted by
April van Ert