In 2021, Congress passed the Corporate Transparency Act with the intention of strengthening efforts to detect and combat money laundering and terrorist financing. While the law may sound like it primarily concerns large corporations and financial institutions, it has implications for smaller entities, including community associations. In this blog post, we will delve into the details of the Corporate Transparency Act, explain how it applies to community associations, and highlight the key reporting requirements that community associations need to be aware of.

Key Points for Community Associations:

• Reporting Requirements: Community associations must provide certain information to FINCEN annually. The filing process is expected to be electronic. The information to be reported includes:
  1. Business name
  2. Legal name, birthdate, home address, and an identifying number (e.g., driver’s license, state ID, or passport) of each board member.
  3. Identity of the individual with substantial control: This includes the same information (name, birthdate, home address, and identifying number) of individuals who exercise substantial control over financial reporting for the community association corporation. It is currently unclear whether community managers or management companies qualify as individuals with substantial control.