A new federal law may require all condominium and homeowner associations to report information pertaining to the association's board members with the Federal Crimes Enforcement Network (FinCEN). This must be done by January 1, 2025.
Here is what board members need to know now:
- Eligibility and Penalties: Starting January 1, 2024, certain types of corporate entities, including potentially all Illinois condominiums and homeowner associations, must comply with the Corporate Transparency Act (CTA). This law aims to prevent fraud and money laundering by requiring reporting of beneficial ownership information. Failure to comply can result in daily penalties of up to $10,000.
- Reporting Requirements: All reporting companies under the CTA, including eligible associations, must file yearly reports with FinCEN identifying beneficial owners, defined as those with substantial control or owning 25% or more. This likely includes Board officers and directors. Information about the entity itself, the company applicant, and each beneficial owner (including ID documents) must be reported through a secure online system.
- Support and Resources: Associations can designate Board members or their property manager as the company applicant to submit reports. While submitting information may raise privacy concerns, access is restricted to authorized officials and financial institutions with permission.
We encourage all board members to address this requirement as soon as possible. See more and file online on the FinCEN website.