Are you ready for BC’s assignment registry for new development?
The real estate developer’s guide to CSAIR
New development real estate is big in BC, with a flourishing market and high demand making cities like Vancouver, and the surrounding areas, desirable places to live.
With the intense demand on the market comes more regulations around the sale and purchase of new development homes, such as the RECBC regulations around information disclosure. The latest of those is CSAIR.
The Condo and Strata Assignment Integrity Registry is a database intended to help crack down on tax evasion and create transparency.
While the database won’t affect developers or realtors in the actual presales process, it does require all “developers who market residential strata lots for sale or long-term lease” to provide data on flipped condos or assignments.
Luckily, most developers already have the data now required by the BC government and CRA, as assignments have to go through the developer’s contracting process regardless. The main potential issue comes from the ability (or inability) to pull that info from the database.
Here’s what developers need to know about new Assignment Integrity Registry.
What is CSAIR?
The British Columbia government, together with the Canada Revenue Agency, created CSAIR (Condo and Strata Assignment Integrity Registry) as a means to regulate and track condo flipping, with the intent to pursue the flippers for applicable income taxes.
Simply put, CSAIR will be a centralized database which records instances where condo buyers have sold the unit to another buyer before the construction is completed. In most of these cases, the buyer makes a profit from the sale. Loopholes in regulations, and the fact that there’s no centralized data source, means that there’s currently no way for the government to accurately tax these assignments.
This is where the developer comes in: the BC government needs this data to come straight from the developer selling the units in order to maintain the database.
The information stays confidential, and is required on a quarterly basis. For example, the regulation is in effect starting on January 1, 2019, with the first report, covering the beginning of the year through to March 31, 2019, is due at the end of the following month on April 30, 2019.
What developers need to do for CSAIR
As a developer, you’ll need to send in quarterly reports to the BC government. The information will go to the online Condo and Strata Assignment Integrity Register, which is operated by the Land Title and Survey Authority.
Due to data privacy laws, developers also need to take steps to ensure that buyers are aware of the data report exchange.
Essentially, the new CSAIR regulations mean that developers must:
1. Collect information about assignments of purchase agreements
Including: identity and contact information of all parties, details of the terms of assignment, and amounts paid for the assignment. Details on these are on the BC government website.
2. Include terms in the purchase agreements, informing purchasers of these collection and reporting requirements
3. Report the information online at an as-of-yet unleased website, once quarterly
Based on the available information, the quarterly reports for CSAIR will be due at the end of the following month. So essentially the reporting schedule is as follows:
- First Quarter, January 1 to March 31 inclusive. Report due April 30th.
- Second Quarter, April 1 to June 30 inclusive. Report due July 31st.
- Third Quarter, July 1 to September 30 inclusive. Report due October 31st.
- Fourth Quarter, October 1 to December 31 inclusive. Report due January 31st the following calendar year.
While the regulations don’t officially take effect until January 2019, it’s important to start setting up your data processes now! This will make the process simple, and won’t interrupt your team’s workflow in the new year.
How to pull CSAIR reports from your database
As the Assignment Integrity Registry is only interested in assignment contracts in your projects, the easiest way to run these reports is to create reports on assignment contracts, and pull the associated contact and inventory information from there.
Make certain to mark all assignment deals properly in the contracts portion of your software, no matter what software you’re using. Maintaining a clean database is beneficial to all of your reporting.
If you’re currently using different software platforms for your contacts and inventory management, generating the CSAIR reports is unfortunately a matter of exporting the relevant data from each, and manually combining it into one report. Make sure to check with your technology provider to make sure that the exports you need are available. Manual contracting will also make the CSAIR reports more tedious, as you’ll have to make sure to create digital copies of each contract first.
You can then use a Zapier to ensure that the contract status updates are reflected in the contact and inventory data as well. Setting this up to update continually will save you huge amounts of the time in the long run!
If you’re using a platform like Spark, all of this data is kept together, which makes reporting far easier.
In this case, your CSAIR reports are a straightforward matter of exporting data on assignment contracts. Running the reports on the actual contracts is the easiest and most straightforward way to go about generating the data.
You can customize the data output so that it includes all of the required fields. Again, it’s important to make sure that your team categorizes assignment contracts properly. Once you ensure that your data entry is accurate, all of your reporting — not just for CSAIR — is simple and straightforward.
CSAIR’s Impact on your organization
Overall, the Condo and Strata Assignment Integrity Registry shouldn’t have a major impact on the day-to-day of your organization. Most developers have databases in place, and tracking contracts — whether assignments, reservations, or otherwise — are an integral part of that. As such, the new regulations won’t have a negative impact: it will just be an additional report that needs to be generated once per quarter.
In fact, the introduction of a quarterly report might even help your team keep cleaner data!
How do you plan to get ready for CSAIR? Let us know in the comments!
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