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Corporate Transparency Act Requires Condominium Associations to Submit Board Member Information by January 2025

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Congress has adopted The Corporate Transparency Act (CTA), requiring domestic reporting companies, including condominium and community associations, to submit information to the federal government regarding the beneficial owner of the corporate entity (i.e., the person who has substantial control or at least 25% ownership interest in the corporate entity) by January 1, 2025. The definition of "beneficial owners" has been extended to include board members of condominium associations.

Associations will need to take action to file necessary reports disclosing beneficial ownership information by the end of 2024. There are significant fines that may be levied for failure to complete this reporting.

The US Department of the Treasury's Financial Crimes Enforcement Network website can be accessed here: https://www.fincen.gov/ The required report can be submitted online.

Learn more here

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New Condoly Webinar on Thursday, May 30th - "Reserve Study Basics"

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Maybe you've heard the term "Reserve Study" and don't know what it is. Maybe you've never heard of a Reserve Study at all! If you live in a condominium building, however, this is a term you should know.

Reserve studies combine an inspection and funding plan that addresses all of the repair and replacement of your building's components over time. Many states are beginning to require Reserve Studies, and while Illinois is not currently one, that could change in the future. 

Join Condoly and their vendor partner on Thursday, May 30th at 6:30 pm to learn the basics of Reserves Studies.

Register your FREE Condoly account or Sign in to your existing Condoly account to register.

 

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Will sales in your condominium association be complicated by Freddie Mac’s Not Eligible List?

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Freddie Mac has made its list of condominium and housing projects categorized as "not eligible status" accessible to authorized representatives of condominium associations or housing cooperatives, indicating potential noncompliance with lending guidelines. This could lead to problems for owners wanting to sell.

Condominium project eligibility is crucial as Fannie Mae and Freddie Mac support around 70% of the mortgage market. Freddie Mac utilizes green and yellow statuses for condominium projects, with green indicating compliance and yellow suggesting caution due to non-compliance with requirements. To determine eligibility status, authorized representatives must complete a form on Freddie Mac's website, including project details and, if appealing a "not eligible" status, supporting documentation. 

Learn more here.

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Smoking in Community Associations: Carey v. The 400 Erie Condominium Association

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In the recent Rule 23 opinion Carey v. The 400 Erie Condominium Association, the Illinois Appellate Court addressed smoking nuisance cases in condominiums, indicating that smoking within units is permissible under certain conditions outlined in the association's rules, provided it does not cause a nuisance or unreasonable disturbance to others. The court emphasized the importance of objective evidence in proving breaches of fiduciary duty by the board and highlighted the need for fair and consistent enforcement of smoking policies while balancing the interests of smokers and non-smokers. The decision underscores the significance of drafting formal smoking policies that align with the community's needs and legal requirements. It also offers guidance for property managers and board members in handling similar situations within their associations, emphasizing the complexities involved in such cases and the importance of thorough investigation and communication with unit owners.

Learn more here

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FREE Webinar: Delinquent Accounts: The Legal Collection Process - Thursday, 4/25 at 6:30 pm

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Have owners who have unpaid balances? Not sure what the board can do to get the owner caught up? Learn about the legal remedies available to condominium associations at Condoly's next free webinar on Thursday, April 25th at 6:30 pm.

Ensuring the financial of your condominium association is a key responsibility for board members. The board has a fiduciary duty to collect all amounts owed, but it can be tricky addressing unpaid balances with your neighbors. Here are a few things the board can do to reduce delinquencies and maintain financial stability for your association:

  • Establish a Collection Policy. This should be a written policy that applies a penalty for a late payment and states that balances more than 60 overdue (or whatever the board decides) will be referred for debt collection. Include this policy in your Rules & Regulations and communicate it to all owners.
  • Be proactive. The longer an account goes unpaid, the harder it can be for an owner to get caught up. Reach out to the delinquent owner and try to get a payment plan agreement for getting caught up before the balance grows. It's always best to work out an arrangement with an owner, if possible, before you take further action. (Be sure to get any agreement in writing and signed by the owner and the board!)
  • When needed, call in an expert. Engage an attorney or debt collector to take action if an owner is unresponsive or defaults on an agreement. Sometimes it is simply necessary to turn the account over to a professional to collect.

Enforcing payment for unpaid charges can be a challenge, but understanding the process can make it easier for the board to effectively uphold its fiduciary responsibily to collect what is due. 

A Condoly partner attorney will review the legal process for collecting unpaid balances from unit owners, and field general legal questions (time permitting). 

Register your FREE Condoly account or Sign in to your existing Condoly account to register.