<<<Update: On December 3rd, the U.S. District Court for the Eastern District of Texas issued a preliminary, nationwide injunction against the CTA. This preliminary injunction halts the enforcement and compliance of the Act’s Beneficial Ownership Reporting requirements nationwide. The Summit will continue to monitor the situation closely and will hold off filing the Beneficial Ownership Information Report until a final decision is reached. We apologize for any pressure we may have put on Board Members to complete the registration, as we were facing a January 1 deadline with financial penalties for failing to report.>>>
Important: If You are a Current Board Member or Joining the Board.
Board Members Must Register with the Financial Crimes Enforcement Network (FinCEN) of the Department of Treasury by January 1, 2025.
What is the Corporate Transparency Act?
The Corporate Transparency Act is a federal law passed by Congress to combat financial crimes such as money laundering, terrorist financing, and tax evasion by increasing transparency about who owns and controls these entities. By requiring HOAs to report this information, it becomes more difficult for individuals to use these organizations for illicit activities.
The law requires most corporations, LLCs, and other entities (including condominium and community associations), to register with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury. The CTA became effective on January 1, 2024.
How does this impact new and existing Board Members?
Homeowners’ Association (HOA) board members must register with FinCEN by January 1, 2025, or within 30 days of assuming their role after election or appointment, by filing a Beneficial Ownership Information Report (BOIR).
The BOIR includes the legal name, birth dates, address, and identification numbers (e.g., driver’s license, state ID, or passport) of board members and any individuals with substantial control over the association, including your Community Association Managers.
This helps create a federal database that law enforcement and regulatory agencies can use to track and prevent financial crimes.
How do I register?
To obtain a FinCEN ID for yourself, you can register online. Go to the FinCEN website click the Create Account button to create an account and begin the application for a FinCEN ID. If you already have a FinCEN ID, you do not need to re-register. You will need to provide your FinCEN ID number to your community manager for their records. The Community Manager will file the BOIR on behalf of the HOA using the FinCEN ID numbers provided by board members. All personal information, therefore, will remain confidential.
Failure to Register:
Failure to submit the BOIR report may lead to fines of up to $500 per day for ongoing violations in addition to criminal consequences which may include imprisonment for up to two years and/or a fine of up to $10,000.
Note:
The Community Association Institute (CAI) does not believe that the legislation should apply to HOAs and is actively seeking an exemption from compliance. We will keep you informed of any changes to the existing law, but for now, you must register.
A Board Member that does not register exposes the Association to significant legal and financial risk.