by Barbara Buchanan, Practice Advisor, Conduct & Ethics
New provincial budget affects Property Transfer Tax
The Property Transfer Tax exemption was increased for first-time homebuyers in the provincial budget introduced on February 19, 2008. For land title registrations by first-time homebuyers on or after February 20, 2008, the fair market value threshold for eligible residential property is now $425,000. A proportional exemption exists for eligible property with a fair market value of up to $25,000 above the threshold — in other words, up to $450,000.
Buyers must meet all of the eligibility criteria set out in the Property Transfer Tax and the First Time Home Buyers’ Program. Note that a purchaser is no longer required to meet any financing requirements to qualify for the program. (See www.sbr.gov.bc.ca/individuals/ Property_Taxes/Property_Transfer_Tax/first_Time_home_buyer.htm.)
Certified trust cheques
Sometimes a lawyer will ask another lawyer to provide a certified trust cheque in connection with a client’s purchase and sale transaction. Unless the parties’ agreement specifically requires a certified cheque, a lawyer must not refuse to accept another lawyer’s uncertified trust cheque. It is not improper for a lawyer, at his or her own expense, to have the other lawyer’s cheque certified (Professional Conduct Handbook Chapter 11, Rule 8(b), footnote 1).
Sailing off the coast of Mauritius?
I sometimes receive calls from distraught legal assistants who have been left alone without supervision by a travelling lawyer who cannot be reached by cellphone or email. If you are a sole practitioner planning a holiday in a remote location where you will be difficult to reach, you must carefully plan how your practice will be looked after. Arrange for a lawyer who is competent to supervise your practice while you are away and make sure that lawyer and your legal assistant can get in touch with you. Your legal assistant should not be left unsupervised. It is not fair to him or her and your clients may be at risk. Furthermore, Chapter 12 of the Handbook provides that lawyers must maintain direct supervision over each non-lawyer staff member.
Retention period for records of dissolved company
When a company fails to make the annual filings required under the Business Corporations Act (the “Act”), the registrar may cancel the incorporation of the company and declare it to be dissolved. This has been commonly referred to as “letting the company die.” If the law firm had custody of the records at the time of dissolution, the law firm must retain and produce the records in accordance with ss. 351 to 353 of the Act.
Currently the statutorily prescribed period for retention of a dissolved company’s records is two years (s. 351(2) of the Act and s. 25 of the Act’s regulations) or until the expiration of any shorter period the court may order. A dissolved company’s records may be retained in electronic, microfilmed, or bound or looseleaf form (s. 351(4)(b) and s. 25.1 of the regulations). Any person who would have been entitled to inspect the company’s records before dissolution can do so after.
If the location of the dissolved company’s records changes, a notice of the change must be filed promptly with the registrar setting out the new location (s. 351(3) of the Act).
Unless there is an agreement between the law firm and the client setting out a different retention period, 10 years from the dissolution date is a suggested minimum guideline for keeping a dissolved company’s records. Lawyers will need to apply their own judgment to each situation to determine the appropriate period.
Take note that a person may apply to restore a company more than two years after the dissolution date. If the dissolution occurred before the coming into force of the Act, the application must be made within 10 years after the dissolution, or may, in any other case, “be made at any time” (s. 356(4)(b)). Theoretically, a person could apply to restore a company 20 years after the dissolution.
Lawyers may wish to make provisions in the initial records office agreement between the company and the law firm so that the law firm is not in the sometimes unhappy position of being the records office for a dissolved company.
For further information regarding Practice Watch, feel free to contact Barbara Buchanan at 604-697 5816 or email@example.com.