The Building Group is committed to ensuring compliance with the latest legal and regulatory changes affecting the communities that we manage. With that in mind, below is an update about the Corporate Transparency Act (CTA) and how it will impact your Community Association. Below is a detailed overview of the CTA, its requirements, and the steps The Building Group will be taking to assist in compliance with your community.

 

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What is the Corporate Transparency Act (CTA)?

The Corporate Transparency Act (CTA) was enacted by the U.S. Congress on January 1, 2021, and will go into effect on January 1, 2024. This legislation aims to enhance corporate transparency to combat illegal activities such as money laundering and tax evasion. It requires certain companies, including HOAs, to report specific information about their “beneficial owners” to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

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Please know that Community Associations Institute (CAI) and other industry leaders are working diligently to insist that community associations be exempt from this Act. More information and current updates on CAI’s open lawsuit against the U.S. Department of the Treasury, Secretary Janet Yellen, and the director of the Financial Crimes Enforcement Network can be found at the link here.

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What Does the CTA Mean for Your Community?

Under the CTA, your community is considered a "Reporting Company" and is required to submit key information about each of its beneficial owners through a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). For community associations, “Beneficial Owners” generally means the Board of Directors.

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As a Reporting Company, the key information required to be reported by the Association includes:

‐     Full legal name of community

‐     Any trade names, D/B/A names, or T/A names

‐     The current street address of its principal place of business

‐     Its jurisdiction of formation or registration and the date of formation

‐     Its Taxpayer Identification Number

‐     Any beneficial owner/Board member

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As a Beneficial Owner, the key information required to be reported by the Board of Directors individuals includes:

‐    Full legal name

‐    Date of birth

‐     Current residential address

‐     A unique identification number (such as a driver’s license or passport number)

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When reporting, the community will need to indicate whether the report is the initial report or a correction/update of a previous report.

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When and How to File the Report

‐    Initial Report:

‐    Any community created or registered to do business before January 1, 2024, has until January 1, 2025 to file its initial BOI report.

‐    Any community created or registered to do business after January 1, 2024, that has confirmation that its creation is final, has 90 calendar days to file its initial BOI report.

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‐  Updates To the Report:

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‐    Any changes to beneficial ownership, such as a change in Board members, must be reported within

30 days of the change.

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At the Board’s election, The Building Group can assist in ensuring that the reports are filed accurately and on time.

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Penalties for Non-Compliance

Failure by beneficial owners to comply with the CTA reporting requirements can result in significant penalties, including:

‐     Civil Penalties: Up to $500 per day for each day the violation continues. Note: this penalty is updated annually based on inflation.

‐     Criminal Penalties: Fines of up to $10,000 and/or imprisonment for up to two years for willful violations.

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The Building Group's Partnership with FinCEN Report Company

Given the sensitive nature of the information required under the CTA, The Building Group is pleased to announce that we will be partnering with FinCEN Report Company to manage and store the confidential data on behalf of your community. FinCEN Report Company is a private third-party company and is not affiliated with the government agency of FinCEN. FinCEN Report Company will ensure that all necessary information is securely entered and transmitted to FinCEN as well as track required updates and notify of any changes that are needed.

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Costs and Billing Information

To facilitate this service and ensure compliance, The Building Group will coordinate with FinCEN Report Company to manage the reporting process on behalf of your community for an annual fee of $400.00, which includes the annual cost to submit the information through FinCEN Report Company’s secure system. This fee will also cover an unlimited amount of required updates and filings throughout the year, in the event a Board position turns over or is needed for any reason.

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Can a community file on its own, without The Building Group’s support and cost?

Yes, an Association may engage a different third-party (such as the Association’s legal counsel) to gather the information and submit the filing, or it may electronically file directly through a secure filing system through FinCEN’s BOI e-filing website at the link here. There is no fee for submitting your BOI directly to FinCEN. We’ve outlined how to do so below:

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• Access the form by going to FinCEN’s BOI E-filing website at https://boiefiling.fincen.gov/, and select “File BOIR.”

The Building Group does not recommend that an Association and its Board of Directors own compliance with this Act on their own directly through the site. There are many steps that are required to monitor compliance of this Act, and failure to do so may result in penalties that can be both large and personal. If the Association opts-out of having The Building Group assist with the filing, then we recommend that each Association work closely with the Association’s attorney to ensure compliance.​

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Next Steps

Please indicate below whether you will have The Building Group manage the submission process and ensure that your Association remains in compliance with the Corporate Transparency Act.

 

As a Beneficial Owner, each individual Board Member will need to submit their personal information through FinCEN Report Company’s secure site once prompted through The Building Group and FinCEN Report Company. There will be additional communication and training coming in the following weeks on how to do this. Please note that no individual will be able to see the information submitted by another individual.

 

If you have any questions or concerns, please do not hesitate to reach out. The Building Group will continue to work with Community Associations Institute to support the claim that Homeowners Associations and Volunteer Board Members should be exempt from this Act.

 

Thank you for your attention to this important matter and for your ongoing partnership with The Building Group.