Over the past several months, the attorneys at Williams & Strohm, LLC have provided various updates and information related to the Corporate Transparency Act (CTA) to both board members and property managers. For those who may be unaware of the CTA, it is federal legislation adopted through the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This legislation was enacted to combat money laundering, terrorism, and white-collar crimes in relation to corporate finances.

The CTA defines the term “beneficial owners” very broadly and unfortunately members of a board of directors for a condominium or homeowners association fall within the definition. This means that, with very few exceptions, members of a condominium or homeowners association board of directors will be required to report to FinCEN no later than January 1, 2025. The exceptions to the reporting requirement are: 1) if your association is actively held as a 501(C)(4) organization with an IRS exemption or 2) if your association is operating within the United States, has an annual revenue of $5,000,000.00 or more, and has 20 or more employees.

Despite consistent work through national, state, and local efforts to get the federal government to eliminate condominium and homeowners’ association board members from the reporting requirements of the CTA, nothing has changed. There are several federal lawsuits pending in various states but none have been successful in eliminating the CTA or its reporting requirements. Unless your community association meets one of the two exceptions above, each member of the board is required to report to FinCEN no later than January 1, 2025.

The reporting requirements of the CTA are fairly simple. Board members are required to provide your name, date of birth, address, and a valid current drivers’ license or U.S. Passport. We recommend reviewing the following documents to learn more about the reporting requirements for board members:

• Community Associations Institute Guidance Document
• Online Filing Instructions
• PDF Filing Instructions
• Filing Portal

NOTE: Board members may face personal liability for not reporting to FinCEN as required. There is a civil penalty of $500/day, criminal penalties of up to $10,000, and 24 months in prison for each beneficial owner who fails to report. 

Each association or board member must file a report with FinCEN and update that information within 30 days of any change. If you have questions or need more information about the CTA and reporting requirements, please reach out to one of our attorneys at (614) 228-0207.