Barsalou & Associates P.L.L.C. | Attorneys

Call Us: 713-396-3871

Barsalou & Associates P.L.L.C. | Attorneys

Call Us: 713-396-3871

October Newsletter – Corporate Transparency Act

On Behalf of | Oct 9, 2024 | Firm News

Barsalou & Associates, PLLC

Your HOA’s Responsibilities under the Corporate Transparency Act: What You Need to Know Before January 1st
HOA

Dear Valued Clients & Friends,

As you may know, the Corporate Transparency Act (CTA) introduces requirements for corporations, including Homeowners’ Associations (HOAs), to file Beneficial Ownership Information (BOI) with the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025. But what does this mean for your Board?

At Barsalou & Associates, we’ve received numerous questions about the CTA’s impact on HOAs, and we’re here to guide you through the process.

What is the CTA and Why Does it Matter for HOAs?

The CTA was designed to combat illicit activity such as money laundering and terrorism financing by requiring entities, including HOAs, to submit information to FinCEN.

Key Requirements for HOAs:

  1. Reporting of Beneficial Owners: HOAs must report personal details for individuals who exercise substantial control over the HOA. Our interpretation is that this includes directors of the Board. 
  2. Confidential Database: The BOI information is required under law to be kept in a confidential, non-public database accessible only to authorized government agencies.

Current Status of the CTA for HOAs

The Community Associations Institute (CAI) has filed a lawsuit seeking relief for community associations and challenging whether the CTA applies to HOAs. Most importantly, the lawsuit seeks a declaration that the CTA does not apply to HOAs.

While this legal battle unfolds, the CTA remains in effect, and your HOA is still required to comply by the January 1, 2025 deadline unless a court rules otherwise.

“We learned from the National Small Business Association (NSBA) lawsuit that “association standing” protects all members of the organization in the lawsuit. If CAI’s lawsuit is successful in exempting community associations from the Corporate Transparency Act, it is very possible the exemption will only apply to community associations that are members of CAI. ” – CAI

More Information
Dont Wait

Steps Your Board Should Take Now

To ensure compliance, we recommend taking the following steps:

  1. Determine Whether Your HOA is a Reporting Company: While the interpretation has been that the act generally applies to HOAs, each HOAs governing documents should be reviewed to ensure it qualifies as a reporting entity.
  2. Identify Beneficial Owners: Gather the necessary information for the Association and directors of the Board, including the personal details of those who have substantial control over the HOA.
  3. File the BOI with FinCEN: Prepare to submit the required information by January 1, 2025.

 What You Must Report:

  • Full Legal Name
  • Date of Birth
  • Complete Residential Address
  • Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents: (U.S. passport, driver’s license, or identification document issued by a state, local government, or tribe)

Our Commitment to Supporting HOAs

Navigating the CTA can be complex, but Barsalou & Associates is here to assist you at every step. We specialize in HOA representation and are monitoring the developments of the CAI lawsuit closely. We will continue to keep you informed of any changes that may affect your filing requirements.

For tailored guidance on how to comply with the CTA, or if you have any questions, please don’t hesitate to contact us.

HOA Collections, Enforcement & Compliance since 1981

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