The Corporate Transparency Act (CTA) has been a hot topic for businesses and organizations nationwide, and community associations are no exception. Designed to prevent illicit financial activity, this federal legislation requires certain entities, including many homeowners’ associations (HOAs) and condominium associations, to file Beneficial Ownership Information (BOI) with the Financial Crimes Enforcement Network (FinCEN).
If your association has not yet filed, the deadline has been extended to March 21, 2025—but waiting until the last minute is not advised. Here’s what you need to know.
What Is the Corporate Transparency Act?
The CTA is a federal law aimed at increasing transparency in business ownership to combat money laundering, fraud, and other financial crimes. Under this law, certain entities, including community associations, must disclose details about their beneficial owners—individuals who directly or indirectly control or own 25% or more of the entity or have substantial influence over it.
The information submitted to FinCEN includes:✅ Full legal name✅ Date of birth✅ Residential address✅ A unique identifying number (such as a driver’s license or passport number)
Who Needs to File?
Many HOAs and condo associations will fall under the CTA’s filing requirements, particularly if they are structured as corporations or limited liability companies (LLCs). If your association was formed before January 1, 2024, and has not yet submitted its BOI report, you must file before the new deadline—March 21, 2025.
Associations formed after January 1, 2024, have a 90-day window from their formation date to file.
What Happens If You Don’t File?
Failure to comply with the CTA can result in significant penalties, including fines of up to $500 per day for noncompliance and potential criminal charges for willful violations.
What Should Your Board Do Next?
1️⃣ Determine if your association must file. Check with your legal counsel or management team if you’re unsure.2️⃣ Gather the required information. Ensure you have all necessary details about your association’s beneficial owners.3️⃣ Submit your filing before March 21, 2025. Associations that have not yet filed should aim to complete the process by March 14, 2025, to avoid last-minute issues.4️⃣ Keep records updated. If there are changes in beneficial ownership, you must report them within 30 days of the change.
Final Thoughts
The CTA filing requirement is a new and significant responsibility for many community associations. While the extended deadline offers more time to comply, waiting too long could leave your association scrambling at the last minute. By taking action now, you can ensure compliance and avoid potential penalties.
For additional guidance, consult your community association manager or legal counsel to confirm your association’s obligations under the CTA.
For more updates and expert advice on community association management, visit our blog Word on myStreet:https://www.mystreetva.com/wordonmystreet
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