[BREAKING NEWS!] Frickin’ FINCEN BOI Reporting is back ON!

🍹 Thirsty Thursday: [BREAKING NEWS!] Frickin’ FINCEN BOI Reporting is back ON!

Howdy, and Happy Thirsty Thursday folks. Some Friday Eve industry news and information comin’ in hot! And if you hear an lol from a few cubicles away… yeah, they’re reading this too 😄 

Is it Groundhog day? I feel like we’ve been here before 😂 "FINCEN's BOI Ruling: What HOAs and Board Members Need to Know (Because Bureaucracy Loves Company)"

Just when you thought your communities may be free of this mess, NOT SO FAST! Let's dive into the recent Beneficial Ownership Information (BOI) ruling and how it applies to our beloved homeowners associations.

🏛️ 1. The Corporate Transparency Act (CTA): A Quick Refresher

Enacted in 2021, the CTA aims to unmask the true owners of entities to combat illicit activities. This means many corporations and limited liability companies must report their beneficial owners to the Financial Crimes Enforcement Network (FINCEN). Yes, even your HOA might be on their radar.

🗓️ 2. The Rollercoaster of Legal Decisions

• December 2024: A federal judge in Texas blocks the enforcement of the CTA, providing a temporary reprieve for entities scrambling to understand the new requirements.

• February 18, 2025: The same judge lifts the injunction, reinstating the BOI reporting obligations. This sudden reversal has left many organizations, including HOAs, rushing to comply with the revived mandates.

• February 19, 2025: In response to the legal back-and-forth, FINCEN extends the filing deadline to March 21, 2025. This extension offers a brief window for entities to gather necessary information and submit their reports, but the clock is ticking.

🏡 3. How This Affects HOAs and Board Members

While the CTA primarily targets corporations and LLCs, many HOAs fall under these categories. This means your association is likely required to report its beneficial ownership information. Yes, even if your biggest asset is a communal swimming pool.

📋 4. What Needs to Be Done and By When

To ensure your HOA remains in compliance (and avoids those pesky fines), here's what you need to do:

• Determine Applicability: Confirm if your HOA is considered a reporting company under the CTA. If it's an incorporated entity, chances are it is.

• Gather Information: Collect the necessary details of all beneficial owners, which typically include:

  • Full legal name

  • Date of birth

  • Residential or business address

  • Unique identifying number from an acceptable identification document (like a driver's license or passport)

• File the BOI Report: Submit the required information to FINCEN using their E-Filing system. The current deadline is March 21, 2025.

• Stay Updated: Given the legal back-and-forth, keep an eye on FINCEN announcements for any changes to reporting requirements or deadlines.

📰 The Karen Report: HOA News Highlights

Keeping you informed about the latest in HOA happenings:

• Proposed Sprinkler Rule Sparks Debate in New York: A new regulation in New York proposes mandatory automatic sprinkler systems in all newly constructed single-family and two-family homes. Contractors argue this could increase home prices by $20,000 to $30,000, making homeownership less attainable. Conversely, the Firefighters Association supports the proposal, emphasizing its potential to save lives.

• Florida Condo Residents Face Exorbitant HOA Fee Hikes: Residents of a Florida condominium complex are grappling with HOA fees that have more than tripled, soaring to over $3,000 monthly. The increases are attributed to county fines, essential repairs, and compliance with new safety regulations. Some homeowners are now at risk of losing their properties due to these unaffordable fees.

• California HOA Imposes Hefty Fines for Minor Infractions: In San Jose, California, residents of Garden Park Village are facing substantial fines from their HOA for minor violations, such as briefly leaving a car unattended while unloading groceries. One resident has accumulated $2,800 in fines, leading to feelings of harassment and financial strain among the community members.

• Hawai‘i Condo Owners Struggle with Rising Insurance Costs: Condominium owners in Hawai‘i are experiencing significant increases in their monthly HOA fees, primarily due to escalating insurance premiums. For instance, fees at Mākaha Valley Plantation have risen from $550 to $880 per month over four years. State lawmakers are exploring solutions to stabilize the insurance market and alleviate the financial burden on homeowners.

• HOA Fees Becoming More Prevalent and Costly: A recent study indicates that homeowners association fees are not only increasing but also becoming more widespread. In 2024, 41% of homes listed for sale included HOA fees, up from 39% the previous year. This trend suggests that prospective homeowners should be prepared for the additional financial obligations associated with HOA-managed communities.

🎭 Final Thoughts: Understand the why

While navigating these regulations might feel like a chore (because it is), ensuring your HOA's compliance is crucial. We get it, this one is annoying…and perhaps invasive. But, the law is in place to protect you, your homeowners, and outside the HOA world, consumers in general. Like you all, I’m all for less beauocracy and regulation…well hopefully like you (I’m looking at you, the person who enjoys writing citations). Find a way to make this work for you and your board, with advice from your management company and/or attorney, and move on.

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