The Corporate Transparency Act (CTA) is a federal law to combat illicit activity, including tax fraud, money laundering, and financing for terrorism, by capturing more ownership information for specific U.S. businesses. It is intended to increase transparency in corporate entities by requiring certain companies to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

On January 1, 2024, the new reporting requirements of the CTA became effective. A beneficial ownership information (BOI) report must be filed by January 1, 2025. A beneficial owner is any individual (1) who directly or indirectly exercises “substantial control” over the reporting company or (2) who directly or indirectly owns or controls 25 percent or more of the “ownership interests” of the reporting company. This means that Board members for an HOA must report.

The Community Association Institute (CAI) is the international trade organization for HOA’s. They have a team of lobbyists who have been working diligently with lawmakers to exempt condominium, cooperative, and homeowners associations from the new reporting requirements, but as of now, all must comply.

To report via the government website, the report for all Board members must be done as one submission. This means that all Board members would need to gather at one sitting to enter their personal information, OR all Board members’ info can be provided to one board member to enter on their behalf. The information required for each Board member: legal name, date of birth, address, unique identifying number and issuing jurisdiction of driver’s license or passport (as well as a copy of), the full legal name of the reporting HOA, state of formation, and the TIN or EIN.

The CTA provides that willfully reporting or attempting to report false or fraudulent beneficial ownership, or willfully failing to report or make updates to the reported data shall be punished with a civil penalty of up to $500 for each day that the violation continues or criminal penalties, including imprisonment for up to two years and/or a fine of up to $10,000.

We have teamed up with FincenFetch software. It is a cloud platform with API access to our portal software, Vantaca. It Is a timesaver that is easy to use and has eFiling capabilities. Each Board member can privately enter her/his own personal information when it is convenient for her/him to do so. It is SOC2 certified so your personal information is protected – Ghertner & Company employees cannot access your personal data -the only information we can see is the name of the Board member(s) who have filed. This enables us to send reminder emails to those board members who have not completed the filing.

When Board members change (via election, resignation, or replacement), the new member(s) will be automatically notified of the requirement to report, provided the FincenFetch link to do so, and reminded again until it has been done.

We want to do what we can to ensure that the board members comply with this new federal reporting requirement. The cost to the HOA for annual filings is $275. Subsequent filings in the same year are $125. If your HOA does not want to utilize our oversight in the reporting process, your Board members will be responsible for overseeing and reporting the information. The HOA Board will need to sign a waiver indicating that you do not want to participate in this optional reporting service.

For additional information on “substantial control” and “ownership interests”, please review the language in the Beneficial Ownership Information Reporting Regulations: https://www.govinfo.gov/content/pkg/FR-2022-09- 30/pdf/2022-21020.pdf or on the FinCEN website https://www.fincen.gov/boi-faqs

Click here for advocacy information from CAI https://www.caionline.org/Advocacy/Priorities/CTA/Pages/default.aspx.