During the October 22, 2024 zoom meeting of the board and homeowners, Brown Management required a decision on how the board wanted to handle the Corporate Transparency Act (CTA) requirement for board members to comply with providing personal “Beneficial Ownership Information (BOI)”. There is a lawsuit pending to exempt volunteer boards of homeowners’ association from this requirement, but the deadline to comply is quickly approaching (December 31, 2024) and penalties could be steep for non-compliance.
According to Community Associations Institute (CAI), “Failure of a volunteer community association boards to comply—intentional or not—could result in up to $10,000 in fines and up to two years in prison. ” Source: https://www.caionline.org/advocacy/advocacy-priorities-overview/corporate-transparency-act/
The board voted to engage Brown Management’s “third-party partner” (Jeff with Brown could not identify the Third Party) at a cost of $350 to facilitate this requirement. When asked if legal counsel had been consulted regarding this requirement, the answer was “no, because that could cost up to $400/hour.”
MORE INFO:
What is the Corporate Transparency Act (CTA)?
The Corporate Transparency Act (CTA), effective January 1, 2024, requires businesses to report Beneficial Ownership Information (BOI) to FinCEN, a federal agency under the U.S. Treasury. New entities must file within 90 days of formation, while existing ones must submit forms by December 31, 2024. Businesses should contact FinCEN or professional service providers for assistance. More details are available here.
As it Relates to Home Owner’s Associations:
The Corporate Transparency Act (CTA) requires many community associations, including homeowners’ associations (HOAs), to report beneficial ownership information to FinCEN. Noncompliance can result in significant penalties, including fines and imprisonment. The Community Associations Institute (CAI) argues that HOAs were unintentionally impacted by this law and has filed a lawsuit seeking an exemption. HOAs are advised to prepare for compliance by December 31, 2024, in case the legal challenge is unsuccessful. For more details, visit CAI’s page on the CTA.
What is Beneficial Ownership Information (BOI)?
Beneficial Ownership Information (BOI) refers to details about individuals who own or significantly control a company or organization. Under the Corporate Transparency Act (CTA), companies must report these individuals to FinCEN to increase transparency and combat financial crimes. BOI typically includes names, birth dates, addresses, and identification numbers of beneficial owners.