Do board members "exercise substantial control" over the HOA if each has only one out of x amount of votes?
Under the CTA, "substantial control" is defined by the influence an individual has over significant decisions or the general direction of an entity, rather than solely by their percentage of voting power. While a single board member with one out of five votes (20%) might not independently meet the threshold for substantial control, there is consideration for the overall structure and decision-making processes of the HOA.
Does holding a 25% separate interest mean having a stake in our individual home or does it refer to an interest in the HOA as a whole?
Holding a 25% separate interest means having a stake in the HOA as a whole, not just in your individual home. Under the Corporate Transparency Act (CTA), this refers to owning or controlling 25% or more of the entire HOA. For example, this would apply to someone owning 4 out of 16 homes in a small association.
Are there any rules about sharing a board member's info from a BOI with other board members or homeowners?
The law is clear about keeping information private. The BOI data is mainly for Financial Crimes Enforcement Network (FinCEN) for law enforcement not for general disclosure. The CTA does not allow for the sharing of a board member's info with other board members or neighbors unless there's some legal reason for it.
If one board member submits changes do all board members need their data to be re-entered?
Yes, the data is entered for the entity as a whole each time there is an update. Individual updates are not available.
If my Driver’s License expires and I get a new one does this mean I need to resubmit my information?
When you renew your Driver's License, your personal information and the unique identification number on it remain the same. You won't need to resubmit any information.
On the other hand, when you renew your passport, you'll receive a new passport with a new passport number. In this case, you will need to resubmit your information.
Are association advisors (management, legal team, etc.) or committee members considered to be Beneficial Owners?
No, only the board members are considered to be executing substantial control of the association as well as any owner (or developer) owning more the 25% of the community.
What does this mean to us?
Starting next month, we will initiate the process to ensure compliance with the Corporate Transparency Act (CTA) by collecting the necessary Beneficial Ownership Information (BOI) from current board members. Here’s what you can expect:
1. Collection of Information:
We will provide a form for each board member to complete, which will include:
Full legal name
Date of birth
Current residential or business address
A unique identifying number from an acceptable identification document (e.g., passport, driver's license
2. Ongoing Updates:
Moving forward, NCM will incorporate reminders for updates and changes to the board packages. NCM or a third party will track the expiration dates of the provided identification documents to ensure continuous compliance
3. Administrative Fee:
There will be an administration fee for managing this compliance process. We are currently receiving quotes ranging from $295 to $500 per year.
4. Insurance and Liability:
We are in discussions with our insurance professionals to understand and mitigate the added liability associated with these new requirements.
5. Protections in Governing Documents:
We need to consider updating the association's governing documents to include protections in case a new board member refuses to provide the required BOI. Failure to comply could result in significant fines, up to $591 per day, which the association would be responsible for paying. Without these protections, removing a non-compliant manager would be a lengthy process and could incur additional legal costs. Furthermore, non-compliance can even lead to imprisonment for severe cases.