HOAleader.com - Tip of the Week - June 16, 2023
Published: Fri, 06/16/23
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HOAleader.com - Tip of the Week - June 16, 2023
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The Corporate Transparency Act is likely going to catch many condo and HOA boards off guard. That's according to Elizabeth White, counsel at the law firm of Sands Anderson PC in Williamsburg, Va., where she leads the firm's national community association industry team.
In this week's tip, we help White and her colleague, Danielle Wang, of counsel at the firm, sound an alarm to the community association world about new reporting requirements under law as part of the Anti-Money Laundering Act of 2020. Essentially, the government wants financial information to combat money laundering, terrorist funding, and other financial crimes. But White and Wang say the new requirements may have a chilling effect on the willingness of members to run for election.
"This legislation passed with bipartisan support, and the intentions are good," says Wang. "But this hasn't gotten a lot of attention in the community association industry. We're doing our best to spread awareness with our clients and management company partners and to raise the alarm and national awareness."
This issue is surely evolving, but here's what White and Wang know so far. "The CTA is intended to enhance beneficial ownership transparency for reporting companies," explains White. "The law requires reporting companies to submit beneficial ownership information to the U.S. Department of the Treasury's Financial Crimes Enforcement Network, or FinCEN.
"In other words, the federal government wants a better idea of who owns or controls companies so it can better monitor corruption and financial crimes," she adds. "Unfortunately, the law is so broadly written that it captures incorporated community associations in its broad net, and very few will qualify for an exemption.
"The exemptions for HOAs are mainly limited to companies with more than 20 full-time employees and those that are tax-exempt for IRS income tax purposes under Section 501(c)(3)," says White. "Most associations aren't."
Our new article, Tax Law May Spell Serious Challenges for Condos/HOAs, https://www.hoaleader.com/members/4716.cfm, walks you through White and Wang's advice for jumping on this issue now so you don't get hit with the seriously hefty fines—and possibly even jail time!—for failure to comply.
Best regards,
Matt Humphrey
President
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Feds Crack Down on Condos: What to Do If You're Caught in Their Web
In this week's tip, we discuss the ever-growing number of condos banned from receiving federal financing due to Fannie Mae and Freddie Mac lists that one of our experts, Kelly Richardson, says are like the double-secret probation so hilarious in the movie "Animal House."
Click here for more:
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What to Do If You Land on Fannie Mae or Freddie Mac's Blacklist
One of our experts, Kelly Richardson, calls Freddie Mac's list of condos unavailable for its federal backing a farcical double-secret list, like the double-secret probation so hilarious in the movie "Animal House."
Click here for more:
https://www.hoaleader.com/members/What-Do-You-Land-on-Fannie-Mae-or-Freddie-Macs-Blacklist.cfm
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New HOA Treasurer: Our Owners Have Overpaid—Maybe? I'm Not Sure!
In this week's tip, we answer a reader's question about credits found in the wake of a recent transition from developer control. In a nutshell, this treasurer says numerous residents have credits on the accounts, some from overpayment of dues, some because of monthly autodrafts when dues are due annually, and some because of a credit at closing. Credits range from $25 to more than $2,000...
Click here for more:
https://www.hoaleader.com/members/New-HOA-Treasurer-Our-Owners-Have-Overpaid-Maybe-Im-Not-Sure.cfm
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Condo/HOA Owners May Have Overpaid, and the Manager Didn't Catch It—Now What?
An HOAleader reader asks: "As the treasurer of our HOA, I've discovered that numerous residents have credits on the accounts. In some cases, they've overpaid dues. Should this not have been caught by our property management team?
Click here for more:
https://www.hoaleader.com/members/Condo-HOA-Owners-May-Have-Overpaid-Manager-Didnt-Catch-It-Now-What.cfm
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What to Know About Keeping Your Condo/HOA Funds Safe During Banking Instability
Did you have bank collapses on your 2023 bingo card? We're guessing that's a no. Given that two banks cratered in March, it's fair to ask whether your condo/HOA's funds are safe. Here's what our experts are telling their clients...
Click here for more:
https://www.hoaleader.com/members/What-Know-About-Keeping-Your-CondoHOA-Funds-Safe-During-Banking-Instability.cfm
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