Getting volunteers to serve on the Board of a Community Association can be difficult. After weeding out the people who may have joined for personal agendas, you are left with a few dedicated individuals who selflessly give of their time, knowledge and energy to run the association. Even with professional management, running a community association takes time.
A new law has been put in place that will have some of these dedicated individuals thinking twice about serving on the Board.
Congress passed the Corporate Transparency Act in an effort to stop money laundering and terrorism financing. Which most people would consider a reasonable goal.
However, by January 1, 2025, associations must file the following information with the Financial Crimes Enforcement Network (FinCEN) for the association, each of its Board members and possibly the manager:
- Business
- Legal Name
- Birthdate
- Home address
- Drivers license, state ID or passport number.
If any of those things change, (and Board members change almost every year), the new information must be reported to FinCEN within 30 days. Non-compliance could result in penalties of $500 per day and criminal penalties of up to $10,000 and 24 months in jail.
The act went into effect Jan 1, 2024 and the current filing deadline for existing corporations is January 1, 2025. Information can be filed online here.
A little extra paperwork to help combat the funding of terrorist organizations seems like a no-brainer. But if volunteering for the Board could result in jail time because you or some other volunteer worker didn’t fill out the right form in the right amount of time – it may lead to some very talented people leaving the association. The requested data points are Personal Identifiable Information (PII), and anyone who has had their identity hacked in the past may be extra wary of giving out this information.
Community Association Institute has taken the position that the act was not intended to apply to community associations and it should not apply to community associations. They are asking for help from community association owners to talk to their Senators and Congressional Representatives about stopping this legislation. To learn more, click here.
Trying to get new volunteers in your community leadership? Check out this reference on Motivating the Forces from CAI Motivating the Forces (caionline.org)
This article was updated on March 28, 2024 to clarify the filing deadline of Jan. 1, 2025 and add the link to FinCEN’s filing site. Please contact your accountant for additional information.
