In August 2024, we wrote about the Corporate Transparency Act (“CTA”), its applicability to Washington’s Community Associations (condominium associations and homeowners associations), and the reporting requirements that Community Associations should be aware of prior to December 31, 2024. A link to our August article is here: https://brandtlawgroup.com/corporate-transparency-act-and-washington-homeowners-associations/. The following is an important update on the progress of the Community Associations Institute’s efforts to overturn the current requirements that Community Associations comply with the CTA.
Community Associations Must Comply with CTA Requirements by January 1, 2025
Given the burdensome nature that the CTA reporting requirements would have on Community Associations, the Community Associations Institute filed a lawsuit against the U.S. Department of Treasury and brought a motion for preliminary injunction seeking to postpose the deadline for Community Associations to comply with the CTA. Unfortunately, on October 24, 2024, this motion was denied. While the case will proceed to trial, this decision does force Community Association’s to assure they comply with the CTA requirements by filing a Beneficial Owner Report no later than January 1, 2025.
FinCEN Provides Individual Access for Secure Processes
One of the concerns that many of us have with the CTA is that associations’ volunteer Board members will be asked to provide sensitive personal identification and information to properly complete a Beneficial Owner Report for their Community Association. However, the Financial Crimes Enforcement Network (“FinCEN”), a bureau within the U.S. Department of Treasury tasked with accepting the Beneficial Ownership Reports in accordance with the CTA, allows individuals to submit an application through the FinCEN database to receive a unique identifying number (“FinCEN ID”), which can then be used on the Beneficial Owner Report in lieu of personal information. Thus, individuals can actually keep their personal information secure and private.
While this process may take bit of effort by some less tech savvy Board members, each Board member can obtain their own unique FinCEN ID by following the process found at https://fincenid.fincen.gov.
Conclusion
While we await a final resolution of the Community Associations Institute v. U.S. Department of Treasury lawsuit, we are advising our Association and Management Company clients to move forward to abide by the CTA compliance process. Please have Board members start working on obtaining their unique FinCEN ID numbers now in anticipation of filing the Beneficial Owner Reports by J
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