If you’ve been holding your breath that HOAs and COAs would be exempt from filing under the Corporate Transparency Act (CTA), “the time for hoping is over,” says the Community Associations Institute. Associations will have to file since FinCEN has confirmed that associations are considered “reporting companies” unless they are unincorporated associations under state law or designated as a 501(c)(4) social welfare organization. 

Most community managers and management companies are not considered “beneficial owners” required to file under the CTA since beneficial owners are individuals (not corporations), and managers typically perform services at the board’s direction. That means individual board members will need to file as beneficial owners. Managers can provide value by helping board members understand the requirements and answering questions. 

We created a slide deck that decodes the CTA and its requirements. This deck can be used in board meetings or distributed to board members. Here’s some additional guidance and resources.

When is the deadline to file?

Established associations should start preparing to file their initial Beneficial Ownership Information Report (BOIR) before the January 1, 2025 deadline. Those formed in 2024 have 90 days after the date of formation to file. 

The CAI recommends that most associations begin preparing now and aim to file in Q3 or early Q4 because of the expected volume at the end of the year.

How do I file?

Reports are filed through the FinCEN Report Company’s online portal, boiefiling.fincen.gov, and filing is now open. If you or your board members want a demo, you can request one here. FinCEN REPORT representatives are also available to work with you and answer questions:

Email: hello@fincenreport.com

Phone: 1-845-393-4623

Filing is free of charge.

How often will my association have to file in the future?

Beneficial ownership information reporting is not technically an annual requirement. However, most associations must update their filings regularly since board members (“beneficial owners”) change. Every time new board members are voted in, associations will need to update their filings within 30 days. Other changes that would require updating your filing include:

• Changes to the legal name or DBA of the HOA/COA
• Death or replacement of a board member
• If applicable, change in management company or to the terms and conditions of the management agreement
• Change in the name, address, or unique identifying number (new driver’s license, passport, etc.) of a board member
• Changes to the exemption status of the HOA/COA

What information will board members need to provide?

Associations must submit a Beneficial Ownership Report, which requires the association’s legal name, all trade names or DBAs, address, jurisdiction of formation, and Tax Identification Number (TIN).

Each board member will also need to provide the following:

• Legal name
• Date of birth
• Residential address
• Information from a government-issued I.D. such as a driver’s license or passport (along with a photo of the I.D.)

Will board members’ personal information be secure?

According to FinCEN, “Beneficial ownership information reported to FinCEN will be stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect nonclassified yet sensitive information systems at the highest security level.”

While data submitted to FinCEN is secure, board members may be concerned about sharing their personal information over email or other unsecured channels. Fortunately, BOSS allows beneficial owners to enter their personal information into the portal and receive a code (FinCen Identifier) to provide to their HOA/COA.

Beware of scams! With the new filing requirement, scammers are widely expected to try to trick users into giving away sensitive information. Malicious websites may appear legitimate or even appear at the top of search engine results pages. Associations should not report beneficial ownership information to any organization except for FinCEN. When submitting the report to FinCEN, go to the online filing system on FinCEN.Gov.

Can CINC Systems’ platform help associations comply with the Corporate Transparency Act?

We have added fields to ensure that required information about board members or other “beneficial owners” is readily available. We’ve also enhanced permissions to restrict access and protect board members’ data.

We are evaluating ways to automate and streamline report filing. Soon, we will enable the capture of the required information from board members through WebAxis so the management company won’t need to enter it manually. Stay tuned!