On December 10, 2016, the Ontario Corporations Act (“OCA”), which is the corporate statute that governs not-for-profit organizations incorporated in Ontario, was amended to provide that Ontario not-for-profits must maintain certain records in respect of any land in Ontario in which they have an interest. The date of incorporation of the particular organization affects when the organization will be expected to comply with these new rules.
The rules specifically require organizations to maintain a “Register of ownership interests in land in Ontario” (a “Register”). An organization’s Register must:
- Identify each property in which the organization has an ownership interest; and
- Show the date the organization acquired the property and, if applicable, the date the organization disposed of it.
Together with their Register, organizations must keep copies of any deeds, transfers, or other similar documents that contain any of the following with respect to each property listed on their Register:
- The municipal address, if any;
- The register or land titles division and the property identifier number;
- The legal description; and
- The assessment roll number, if any.
The OCA provides that the Register and supporting documents must be kept at the organization’s registered office address and must be open for inspection by any director or member during the organization’s normal business hours.
The OCA also provides that a director, officer, or employee that makes or assists in making any entry in the Register, knowing it to be untrue, is guilty of an offence under the OCA and on conviction is liable to a fine or imprisonment.
The date of incorporation of the organization affects when the organization is expected to be in compliance with the new rules. Organizations incorporated or continued in Ontario prior to December 10, 2016 have until December 10, 2018 to comply. Organizations incorporated or continued on or after December 10, 2016 are required to comply immediately.
The new Ontario Not-for-Profit Corporations Act, which is expected to come into force in a few years and replace the OCA, contains the same requirement to maintain and keep a register of ownership interests in land.
Generally speaking, an “interest” in land can appear in many different forms, such as beneficial and registered interests (including freehold and leasehold interests), mortgage interests, easement rights, options to purchase, and restrictive covenants. Clearly, there are a number of vehicles through which an organization may hold an interest in land. However, an integral aspect of the new legislation is that the Register is required only for “ownership interests” in land. Unfortunately, the term “ownership interest” is not defined in the legislation. Thus, for the time being, we are left guessing as to exactly which types of interests in land must be kept in an organization’s Register. Despite the fact that there remains this need for clarity, it would be prudent to include in an organization’s Register, beneficial and registered interests, mortgage interests, and easement rights (in gross).