Many condominium associations and homeowners’ associations throughout Florida are now finding themselves dealing with a legal issue that, frankly, very few board members ever expected to have to think about in the first place. In recent years, the federal government enacted the Corporate Transparency Act, which created certain reporting obligations for businesses and organizations throughout the United States. One of those obligations is known as Beneficial Ownership Information reporting, or BOI reporting, which requires certain entities to submit information to the Financial Crimes Enforcement Network, more commonly referred to as FinCEN. Naturally, many HOA board members now have several important questions on their minds, especially regarding what may happen if their association fails to file a required BOI report.
Because the rules surrounding these filings have changed several times and continue to face legal challenges throughout the country, many associations are understandably confused about their obligations. Please continue reading and contact an experienced Florida condo and HOA attorney today to learn more about BOI reporting requirements and how an attorney may help your association remain compliant moving forward. Here are some of the questions you may have:
Does Every Florida HOA or Condo Association Have to File a BOI Report?
The answer to this question is not always straightforward. While some condominium associations and HOAs throughout Florida may be required to file BOI reports, others may qualify for exemptions under the Corporate Transparency Act. Unfortunately, one of the main problems associations are currently facing is that there has been a significant amount of confusion surrounding who exactly must file and who may be exempt from filing requirements altogether.
Generally speaking, some of the factors that may determine whether your association must file a BOI report can include the following:
- Whether the association is incorporated
- Whether the association qualifies as a nonprofit organization
- The number of employees working for the association
- Whether the association owns physical office space
- The association’s yearly revenue
- Whether any exemptions under federal law apply
What Penalties Could an HOA Face for Failing to File?
Naturally, one of the biggest concerns most associations have is whether failing to file a BOI report could result in penalties. Under the Corporate Transparency Act, entities that willfully fail to submit required information, or knowingly submit inaccurate information, may potentially face both civil and criminal penalties in certain situations. Some potential consequences associated with failing to file may include the following:
- Financial penalties that continue accruing daily
- Additional fines for knowingly providing inaccurate information
- Government investigations into the association’s reporting practices
- Increased legal expenses
- Internal disputes between homeowners and board members
- Allegations that the board failed to satisfy its fiduciary obligations
What Should an HOA Board Do if It Missed a Filing Deadline?
If your condominium association or HOA believes it may have missed a BOI filing deadline, one of the most important things you can do is act quickly and avoid ignoring the situation. In many cases, taking prompt action may help demonstrate that the association is attempting to comply with the law in good faith. A Florida condo and homeowner association attorney may help your association in a variety of ways. including by:
- Determining whether your HOA is actually required to file
- Reviewing whether exemptions apply
- Evaluating the latest FinCEN guidance and court rulings
- Correcting incomplete or inaccurate filings
- Helping establish compliance procedures moving forward
- Addressing disputes involving board members or homeowners
The truth is, most HOA board members are not federal compliance professionals, nor are they expected to constantly monitor changing federal regulations and ongoing court decisions. Unfortunately, however, these reporting obligations may still have a serious impact on your association if they are ignored.
Fortunately, with the assistance of an experienced Florida condo and HOA lawyer, your association can gain a clearer understanding of its obligations and take the steps necessary to protect both the board and the community. If you have additional questions or would like to speak with a knowledgeable attorney about your circumstances, please don’t hesitate to contact Ansbacher Law today.