Do Homeowners Associations and Property Managers Have to File BOI Reports?
The Corporate Transparency Act (CTA) aims to prevent money laundering and misuse of shell companies. It requires most U.S. companies to share details about their owners and founders with the Financial Crimes Enforcement Network (FinCEN). Effective January 1, 2024, this law affects various entities, including homeowner associations (HOAs) and property managers. These will have specific HOA BOI reporting requirements for their filings.
Property managers play a crucial role in assisting HOAs with BOI filings by collecting and verifying information about beneficial owners. Given the high turnover and frequent elections of board members in HOAs, having property managers who know how to handle these filings is essential. This approach helps maintain compliance and ensures the HOA remains transparent and trustworthy.
Why Do HOA BOI Reporting Requirements Matter?
BOI (Beneficial Ownership Information) reporting mandates specific companies to provide FinCEN with details about their primary owners. This includes names, addresses, birthdates, and ID numbers. FinCEN’s goal is to ensure transparency in ownership and control, making it harder for individuals to use HOAs for illicit activities like money laundering or hiding assets. Failure to submit a BOI report can lead to daily fines of up to $500, total fines reaching $10,000, or imprisonment for a maximum of two years.
Do Homeowners Associations Have to File BOI Reports?
Most HOAs will need to file BOI reports, except those organized as 501(c)(3) tax-exempt organizations. Since most HOAs do not meet the criteria for charitable organizations under the Tax Code, they must comply with BOI reporting requirements. Furthermore, to determine if an HOA qualifies for an exemption, use our exemption checker tool. This tool helps property managers and HOAs quickly verify their status and ensure compliance with BOI reporting requirements.
Key Deadlines You Need to Know
Here are the key deadlines for submitting BOI reports under the CTA:
- Companies established before January 1, 2024: Submit initial BOI reports by January 1, 2025.
- Companies formed on or after January 1, 2024: File initial BOI reports within 90 days of establishment.
- Companies established on or after January 1, 2025: File initial reports within 30 days of formation.
Keeping Your Information Up-to-Date
HOAs and property managers must update their Beneficial Ownership Information report within 30 days of any changes in information, such as a new address or DBA name. Similarly, any changes to a beneficial owner’s details, including name or ID number, must be reported promptly. For HOAs and condo associations, updated reports are typically required when board members change. Even a single board member’s replacement requires an updated report for the community
Who are HOA Beneficial Owners?
Beneficial owners play a vital role in a company’s operations or control. For HOAs, beneficial owners include:
- Members of the Board of Directors will typically have substantial control and must be included on reports.
- Individuals with 25% or more ownership stake in the HOA, which will be extremely rare as it will require owning 25% or more of the units or homes in the community.
Do Property Managers Have to Report BOI?
Generally, No:
- Property Managers as Beneficial Owners: Property managers generally do not meet the criteria for beneficial ownership in the HOA or condo association unless they own a significant stake (25% or more) or hold a position with significant control over operations. They typically act under the direction of the board, so they would not be considered to have significant control.
Specifics for Property Managers
- Employed or Contracted Property Managers: Most property managers are employed by or contracted with the HOA or condo association to manage day-to-day operations. They typically do not own a significant stake in the HOA or condo association nor hold a role that would be considered as having significant control in the context of beneficial ownership.
- Reporting Requirements: Unless a property manager fits into the beneficial ownership criteria mentioned above, they are not required to be reported in the BOI reports.
Maximizing the Property Management Role While Generating New Revenue
Assisting in BOI Reporting: Property managers can assist HOAs by collecting and verifying information about beneficial owners, ensuring all details are accurate and up-to-date.
Filing BOI Reports: Property managers can file BOI reports on behalf of the HOA, provided they have all the necessary information. In addition, they must ensure that the report is complete and accurate to avoid compliance issues.
Generating New Income: By providing comprehensive HOA BOI reporting services, property managers can enhance their value and unlock a lucrative new revenue stream for their business.
Best Practices:
- Stay Informed: Understand CTA requirements to assist effectively.
- Documentation: Maintain accurate records of all collected information and filed reports.
- Training: Get training on the BOI reporting process to ensure proper handling and compliance.
- Use FincenFetch Software: Streamline the process with our BOI reporting software for Real Estate.
- Consult Legal Counsel: When unsure, seek legal advice to ensure compliance with the CTA.
By following these guidelines, property managers can effectively assist with BOI reporting and generate more income, while staying within their professional scope and avoiding unauthorized practice of law.
Using FincenFetch for HOA BOI Filings
Why Choose FincenFetch?
FincenFetch simplifies the process of BOI reporting for Property Managers and HOA BOI Filings. Here’s how it helps:
- Simplifies BOI reporting: Collects and organizes essential details about beneficial owners and company applicants.
- Ensures accuracy: Minimizes errors and omissions in reporting.
- Provides reminders: Keeps you on track with reporting deadlines.
- User-friendly interface: Makes compliance effortless and reduces training time to begin managing BOI.
- Generates New Income: By offering comprehensive BOI reporting services, property managers can add value and create an additional revenue stream for their business.
Simplifying HOA BOI Reporting Requirements with FincenFetch
Compliance with the Corporate Transparency Act is crucial for all affected entities, especially HOAs. In addition, HOA’s will need to have these reports filed, meaning Property Managers will need an understanding of all the rules or leveraging tools like FincenFetch. Otherwise, you can risk penalties and operational disruptions.
Take Action Now! Schedule a demo with FincenFetch to learn more about how the Corporate Transparency Act affects your HOA and how our platform can simplify your compliance process.
Click here to book your demo today and ensure your HOA stays compliant!
