The Corporate Transparency Act (CTA), signed into law in late 2020, is designed to combat financial crimes such as money laundering, tax evasion, and fraud by increasing the transparency of corporate ownership. While this legislation targets large corporations and LLCs, its implications have an impact on Homeowners’ and Condominium Associations as well.
One of the key aspects of the CTA is the requirement for corporations to disclose their beneficial ownership information to the Federal Government. This information includes the identities of individuals who control the association (that is, the Board Members). At this time, there is no exception for Community Associations.
Under the current definitions, Board Members must share the following information: the full legal name, date of birth, current address, a driver’s license or passport number, and a scanned copy of the driver’s license or passport.
The deadline for existing Associations to report the personal information of the Board Members to the federal government is January 1, 2025.
As of the date of this writing, no form currently exists to submit this information.
Failure to report the personal information of the Board members or erroneous filing will lead to a civil fine of $500.00 per day, up to $10,000.00, plus criminal penalties of up to two years in prison.
Although there are many more details to come, including how to file the requested reports, our office is continuing to monitor the legislation for updates. Hopefully the efforts currently being made to exclude community associations from the requirements of the CTA will be successful.
If you have any questions or concerns with regard to the Corporate Transparency Act, please do not hesitate to contact our office.
CAI is calling on members and advocates to learn more and help educate Congress about the unintended consequences of this law and urge them to delay implementation and exempt community associations from the requirements. Click on the link for additional information. CAI Campaign