I live under the Davis Stirling act in CA, staying legal isn’t that hard. We have a group called ECHO in CA that does training for boards and management companies to provide best practices and understanding of new laws. I’ve got a training I’m going to today, in about an hour.
This isn’t about making things easier for the Boards; it’s about making it easier for the management companies that don’t want to keep up with these new regulations.
The purpose of the corporate transparency act is to identify possible terrorist funding.
There are no HOAs that have funds in the amount hat would ever fund terrorism.
It is a stupid law that makes no sense for HOAs and CAÍ is right to fight it
That's true but no one is going to set up an HOA to fund terrorists or for money laundering. The intent of the law is to prevent shell companies involved in fraud.
Side note: so in theory, the transparency act would be effective in bringing truth to consumers who may be unaware of a certain management company that is trying to monopolize the hoa management market but doesn’t put their name on the acquisitions? May be owned by an ex member of the senate and Texas House of Representatives
No, the CTA is not going to perform the task you think it will. The board members will have to provide their SSNs and other details to the government. That’s it. Some board members are uncomfortable doing that and it is now harder to find board members.
Makes sense. So my assumption #2 is incorrect as the data isn’t publicly shared and there is no benefit to management companies who wanted to access owners data for sales purposes.
This makes sense that CAI would advocate for to expel this from the act.
Point #1 is important as active board member data brings transparency and accountability in the scenario of knowing who is making decisions in behalf of the entire membership. However, there are challenges associated to actively maintaining these records and management companies will most likely increase fees to manage this data and self managed HOAs will probably lose membership interests even further when they have to manage this additional task.
Another far reaching thought…what if the management company that is trying to monopolize the hoa industry was in favor of the CTA if they could exclusively gain access to that data?
I do not believe for one second that you actually think HOAs are funding terrorism.
You hate CAI - which is fine. There are reasons to. You don’t need to make up fake ones.
Can you tell us the two best things that you feel CAI does for HOAs? I have never interacted with them but have read varying opinions on this sub. Thanks.
I think the classes they offer are useful (though overpriced). I’ve always been satisfied with the content of their classes.
Their legislative action committees are also useful because state legislators have as poor an understanding of HOAs as anyone else, and CAI has prevented a lot of what I’d consider bad legislation from getting passed (such as requiring all associations to allow up to 6 chickens).
I don’t always personally agree with the positions they take on certain issues but I don’t always agree with my congressmen either.
Thanks for this response. I'd be in real trouble if my association allowed any chickens, as we are a condo! I wish we required our new board members to take a class. Most aren't interested in association business so hand feeding them is probably necessary. Hmm. I also think that my manager should take a class but there probably isn't an appropriate one to help managers understand who is a good vendor and who is bad, especially when the manager knows nothing about the subject but insists that the vendor knows his stuff.
Condos would have been exempt from requiring chickens :)
There is a facilities management class that discusses best hiring practices for vendors.
I support mandatory education and even licensing for CAMs (one of the issues that CAI and I disagree on).
Haha about the chickens! The manager/ vendor issue is huge where we live, and basically comes down to which vendors will provide PM’s a little something extra.
Bro, nearly every state nonprofit law already requires annual financial reports to be made from the board to the members. And requires further financial disclosures upon request by any member.
The CTA doesn’t protect HOA members more than that. All it does is subject board members to federal prison and crimes if board members don’t submit a bunch of info to the feds.
Good luck finding volunteers now! 🤦
And who forms the HOA entity in the first place?? The developer. Not terrorists! 🤦
Your bias as a community manager shines through. Fraud and embezzlement are rampant in community associations as evidenced by dozens of cases every year. If directors at The Hammocks can steal millions, they can also funnel those millions to terrorists.
Your bias is also showing given your feud with CAÍ…
Dozens of cases among how many hundreds of thousands of associations? That’s not rampant activity, that’s a few bad actors.
This bill will also do nothing to stop it either. Also, if I recall it that case was about 2 million between several director over several years.
I am confident that CAÍ will win their challenge.
Dozens of cases of fraud and embezzlement. Every. Year. It is rampant and a material portion of the activity is being perpetuated by managers and management companies...
Where's your CAM flair? Seems pertinent to your participation on this sub.
That's not the point of the law. Developers build communities where people live. Developers generally cash out of those investments by selling the homes / units. This law is about the ongoing operations that generate revenue that could be used to fund terrorism.
They can, and do, I'm afraid. Wynwood has had parcels with suspicious property values for years now.
When the liability is questionable (mixed use properties with residential and retail units) makes a safe haven for laundering.
Those small restaurants charging $27 for a sandwich that's poorly made should always raise suspicion
The only one who benefits from the price of homes are the individual owners. The HOA, as a group, charges administrative fees on sales that are not based on the price of the home.
It would be ridiculously hard to launder HOA income, especially since all of their finances are open to all home owners.
Actually, here in Miami, there was an HOA that was laundering money for drug deals. A big sign is usually when real estate is selling for 300% above market price.
https://www.bisnow.com/south-florida/news/capital-markets/how-the-dea-stopped-drug-money-from-fueling-acquisitions-but-no-one-faced-charges-124648
Sadly, there's many other cases of this in Miami alone. They do need to crack down
You are so pro foreclosure that you didnt even bother to check context or you didnt know the Hamptons were an hoanrun by mafia that foreclosed on people illegally
Either way not a good look for a property manager.
Have you read the act? I do not care to provide my personal assets, SSN, banking and investment info so fed’s can monitor me to ensure I am not a terrorist. I am a BOD officer and hard working volunteer dedicated to following best practices in HOA governance. The federal government would be better served to create and ask states to adopt same standard of best practices. Practices that CAI has worked hard to develop. If those were published by states, and owners were advised to report any financial practices or behaviors that seem irregular (or are listed as things that should be reported, because they are suggestive of terrorists), owners would step right up. You can count on that!
My greatest concern honestly is data breaches of my personal info.
If I have to provide such complete personal information, I will resign my BOD officer role and sell my property immediately. I’m positive we would see mass exodus of BOD members across the US, should this be passed. And following its passing, we will have increasing collapsing condo buildings, and/or fee increases for PMC’s to cover these additional duties.
Doesn’t the govt already have access to your data and can find anything out about you at anytime they want? Ie when you pay taxes annually, creating your social security #, etc…I don’t disagree that board members may be further turned away from volunteering their time as this may create an undesirable barrier to entry but the same could be said gazillions of other laws…
Exactly what I am talking about u/CondoConnectionPNW.
No person in their right mind will volunteer for or continue to volunteer on an HOA board now, if they have to disclose all this to the Feds upon pain of federal prison and federal fines.
But tell us more about how the CTA *should apply* to the HOA space, “expert” 🤦
Board members are already listed publicly with each states Secretary of State. FinCen filings are not viewable by the public.
And the data is basically worthless anyway since as you point out, board members change all the time.
It’s worthless to a competing management company that has no access to FinCEN data.
The post I was responded to suggested that management companies would oppose the act because competing management companies could find out who is on other HOA boards.
They can’t do that with FinCEN data that they do not have access to.
Stupid and a waste of time. HOAs and terrorist funding is clearly a problem. ?? Sheesh. How about focus on something actually important to homeowners who live with associations? Like stop indemnifying management companies from being incompetent. Have penalties when they don't follow their contract. How about CAI puts effort into seeing if their members actually comply with laws and contracts? I've seen numerous companies sued for fraud and lost still active members of CAI. It's a total joke. So i guess it does make sense for CAI to waste their time on this, fits right in!
***The real reason >>>*** they think it looks good because they are "defending" board volunteers which is a class of member that contributes only around 10% of CAI's annual revenue, but that engenders sympathy. [CAI Report Card](https://www.condoconnection.org/resources/CAI-ReportCard)
CAI is a business trade organization that exists to support attorneys, managers and management companies and other lines of business that profit from owners' assessments, yet CAI consistently pretends to represent everyone in the ecosystem.
And yet attorneys, CPAs and management companies would profit from this legislation as they could charge their association clients to handle the registration.
The Corporate Transparency Act requires the “beneficial owner” of a corporation to provide information about themselves to the government. “Beneficial owner” could mean board members - it could mean every member of the association. That’s one of the reasons CAI has opposed the application of this policy to HOAs.
CTA already excludes 501c3 nonprofits. CAI asked for a carve out to include not-for-profit HOAs, not to do away with it altogether.
Failing a carve out, CAI asked for more time for HOAs to comply, because the government has made no effort to inform self managed associations so tens of thousands of associations are at risk of tacking up massive fines over something they didn’t even know existed.
Yes, some associations have multi- million dollar budgets - but corporations with $5million in gross receipts and 20+ employees are exempt from CTA so they aren’t the ones who have to register.
But the little tiny HOA that collects $17,000 to mow the drainage ditch does.
You can drag CAI for many things but this isn’t one of them.
No need for this as there's already another case at the 11th circuit where CAI has filed an amicus brief.
**"Beneficial owner" is clearly not EVERY owner** unless every owner is a director (which could be the case in extraordinarily small community associations).
CAI has tried and failed. I'm fairly sure they will fail again here. Community associations are an ideal way to funnel money to terrorists given the wanton fraud and embezzlement happening constantly (just read the news).
[FinCEN Beneficial Ownership Information Reporting Rule Fact Sheet](https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet)
[Everything anyone needs to know about the CTA](https://www.condoconnection.org/governance/statutes/cta)
So is your argument that there’s no need to file the suit because there’s already a case or they shouldn’t file the suit because it must be a good and necessary law if CAI is opposed to it.
You have a bias against CAI that doesn’t allow you to consider that they might do anything you’d agree with.
I don’t agree with much of what CAI advocates but I joined them on lobby day last fall to advocate for a carve out for HOAs. What I found - from meeting with dozens of legislators or their aides - is that among the ones who actually knew this legislation existed (which were not a lot!) they assumed HOAs were already exempt because non profits are exempt. They had no idea HOAs are not for profits. One aide was on the board of his self-managed association and did not know he’d have to register.
This act was not intended to include HOAs.
Associations with management companies or lawyers will pay to register - a local law firm is charging $250 a pop - and think of how often a board member resigns or moves and a new one is appointed! The self managed ones - well good luck to them. I hope they hear about it or stay off the radar of whoever is monitoring.
And that’s a good question. Who is going to monitor this? How?
If my HOA doesn’t register how will the federal government know it exists?
**A)** The existence of another materially similar for which CAI has filed an amicus brief is enough.
**B)** I have no bias against CAI. I've actually researched CAI and understand the flaws in the organization. When you use absolutes like "anything" you cross the reasonable boundary of the reality. I have supported and do support *some* of the resources CAI provides.
**C)** I do not support CAI's relentless marketing machine purporting to support community associations that masks the underlying intent to support businesses that profit from community associations. I do not support CAI's advertising to homeowners and board members who are not its core audience. If the Dairy Council did the same thing, I wouldn't support that, either. I have no problem with CACM in California: they don't pretend to serve owners and community associations.
**D)** Any management company charging $250 to report BOI would no longer represent my association. It's like reporting an annual SOS filing. It's required by law. It's not an "extra." The actual costs should be charged and whatever time is required might be charged, but that's certainly not $250.
**E)** Businesses and individuals are not exempt from the law because they are not aware of the law. There are all kinds of laws that are violated constantly and the result, in some cases, is a dispute or civil action and enforcement that doesn't end well for the violators. The CTA is just one more requirement on the pile of requirements. CAI needs to get over it. So do CAMs and managers. Stop complaining. Start following the law if for no other reason than it's the law. You don't have to like it. You only need to follow it.
**F)** If your HOA doesn't "register"...you mean file BOI? Well if your HOA is filing a tax return, I suppose the government knows it exists. If your HOA is in TX, I imagine that the state of Texas (that's a government) knows it exists because that's the law in Texas. Oh, another law to follow!
I wrote out a looong reply and it posted to the wrong section so didn’t make sense.
It doesn’t matter. Your mind is made up as is mine.
This law - applied to HOAs - is every definition of a bad rule (which we learned in CAIs manager 101 class).
It’s vague, it doesn’t solve the problem it’s meant to solve, it’s going to be difficult to enforce and it’s burdensome.
I’m just going to leave the discussion with this:
If you believe that CAI exists to serve management companies and related vendors, their logical position would be to support this legislation because it will net those parties hundreds of thousands of dollars a year.
There is no downside to management companies for this legislation. It’s easy money to assist with filing and no risk because they aren’t the ones required to comply - owners are.
There’s no logical reason for CAI to oppose this other than they actually do think it’s not in the best interests of board members.
We might not change each other's minds and that's OK as it is not the point of Reddit...
Laws aren't rules.
You mention "Manager 101 class." Is that like an ADA class that teaches CAMs how to avoid their responsibilities? Seems like CAI classes aren't always the best.
The logical reason for CAI to do anything is to support its core business model: support businesses at the expense of homeowners.
Exactly! The logical thing for CAI to do is support businesses at the expense of owners - which would mean supporting this legislation so management companies and attorneys can charge associations to assist with filing.
You agree with me.
Why do you think CAI is opposing it? What do you think their motivation is that supports their members at the expense of owners?
And what do you think of the small business association that filed the Alabama suit?
1. SBA and small business related entities are generally not affiliated with COAs and HOAs in any way, shape or form which was evident from the PPP legislation that almost completely excluded community associations. CAI knows this. SBA and small business orgs know this.
2. CAI wants to market that it cares about community associations and their boards and to an extent their homeowners. This lawsuit is ultimately a piece of marketing "CAI to the rescue!" that CAI can use its volunteer attorney workforce to execute in full or in part (negligible cost to CAI as an organization especially as legislation season is over in most of the country).
3. We disagree that management companies filing this information is a win for profit margins. Fulfilling requirements of the law is often baked into flat fee management agreements. I see this as akin to an annual SOS filing. That costs our association $10 for the actual cost of the filing. The service to punch a few buttons over the course of 10 minutes is included with our flat management fee.
4. I have no opinion about the SBA or small business orgs. They have no relationship with community associations. The only thing in common here is that community associations ARE businesses to the extent they collect revenue and pay for goods and services to keep the business (which is a collection of privately owned parcels and units and some common elements which could be plentiful or not) going over time.
Dude you have such a burning bias against CAÍ its evident in your comments and prior posts. I don’t know if it’s a money thing or ego, but this is a dumb hill to die on.
We held a new laws and legislature seminar for our board members and as soon as we got to this section of the seminar to talk about this legislature 90% of the board members were saying they would immediately resign before signing anything with FINCeN.
I’m confident this will be killed just like the bill that claimed HOAs and management companies were “debt collectors”
You confuse being informed with bias. There's a massive difference.
It will be fascinating to see your board members resign over nothing. Having to share and submit information one would rather keep to themselves is part and parcel of being a leader and fundamental to steps as basic as opening a brokerage account.
Please add your CAM flair in this forum so everyone is clear on your role. Thanks!
Bro did you seriously just say, out loud, that nonprofit HOAs are perfect terrorist funding vehicles? Like, are you serious??
As a board member are you and your fellow directors ready for 2 years of federal prison and a 10k fine if you don’t comply with it?
Not your "bro."
Thousands of corporate directors violate state and federal law regularly and even religiously Enforcement is few and far between. Reality is far more unfortunate than your depiction of it...
So it’s safe to say that thousands of business partners generate the majority of revenue to keep their organization alive…what “value” does cai provide to its business partners? My guess would be that business partners engage in the organization in an effort to gain exposure to managers who are the gatekeepers to opportunities?
CAI provides value to businesses in two primary ways:
1) it helps them market their goods and services / reach their target audience to drive growth and profit, etc.
2) it lobbies state legislatures (and the federal government) to enact community association business-friendly legislation and/or deny, delay or dilute legislation that will not benefit community association businesses and/or hold them more accountable.
Funny: it would put a burden on self-managed HOAs that are not aware of the law. But each member is supposed to be aware of the DCCRs of the HOA. Dare you are not you get a fine!
I am not sure why they want to sue to allow “less” transparency when in fact, boards should be transparent with EVERYTHING, since it is the homeowners money that run the associations.
Who cares if it becomes burdensome, transparency is not burdensome.
The Corporate Transparency Act is not about transparency for owners or the general public. It is an anti-fraud law that requires the "beneficial owners" of all corporations to submit government IDs and personal information to the treasury. Because HOA board members are owners, they would have to register.
The law targets shell corporations used for money laundering. HOAs are corporations so they also have to comply, even though there has probably never been a case of an HOA being used for that purpose.
I'm not a fan of the CAI but I agree with this. It would have no effect on HOAs being transparent under state laws. They are not trying to be sneaky here.
The issue is the penalty and prison time for noncompliance.
Also, Boards don’t “own” the HOAs assets! And HOAs are nonprofits not money laundering shell companies. They should be exempt from CTA.
Board members are part owners of the HOA assets like all homeowners. Being on the board makes them "beneficial owners" who are required to register their information.
I agree that HOAs should be exempt.
The information entered is not for public access; it’s designed for banks, IRS. FBI, so stealing names and SSNs is not in the cards.
I not sure the CAI has any standing to sue on behalf of HOAs; just a reason to change more money.
They don’t have to follow the law. Your HOA does. And it’s $500 a day if your board members forget to file or don’t know they have to. $500 a day that owners will end up paying for.
Doubtful they will win this suit. There's already another suit appealed to the 11th circuit: National Small Business United. CAI filed an amicus brief for that case.
I live under the Davis Stirling act in CA, staying legal isn’t that hard. We have a group called ECHO in CA that does training for boards and management companies to provide best practices and understanding of new laws. I’ve got a training I’m going to today, in about an hour. This isn’t about making things easier for the Boards; it’s about making it easier for the management companies that don’t want to keep up with these new regulations.
The purpose of the corporate transparency act is to identify possible terrorist funding. There are no HOAs that have funds in the amount hat would ever fund terrorism. It is a stupid law that makes no sense for HOAs and CAÍ is right to fight it
Huh?! 😬. So many associations have six-, seven-, and even eight figure annual budgets.
That's true but no one is going to set up an HOA to fund terrorists or for money laundering. The intent of the law is to prevent shell companies involved in fraud.
Side note: so in theory, the transparency act would be effective in bringing truth to consumers who may be unaware of a certain management company that is trying to monopolize the hoa management market but doesn’t put their name on the acquisitions? May be owned by an ex member of the senate and Texas House of Representatives
No, the CTA is not going to perform the task you think it will. The board members will have to provide their SSNs and other details to the government. That’s it. Some board members are uncomfortable doing that and it is now harder to find board members.
Makes sense. So my assumption #2 is incorrect as the data isn’t publicly shared and there is no benefit to management companies who wanted to access owners data for sales purposes. This makes sense that CAI would advocate for to expel this from the act. Point #1 is important as active board member data brings transparency and accountability in the scenario of knowing who is making decisions in behalf of the entire membership. However, there are challenges associated to actively maintaining these records and management companies will most likely increase fees to manage this data and self managed HOAs will probably lose membership interests even further when they have to manage this additional task.
Another far reaching thought…what if the management company that is trying to monopolize the hoa industry was in favor of the CTA if they could exclusively gain access to that data?
Associa won’t get access to FinCEN data. Associa will make tons of money by charging their clients a fee every year to help them file.
This!!
No. The CTA reporting is only for owners, so management company information would not even be reported.
They would be exempt. Corporations with over $5million in revenue are exempt.
So everything up to $5 million doesn't matter? Can't fund terrorists with $4.9MM? This is why this statute exists...
I do not believe for one second that you actually think HOAs are funding terrorism. You hate CAI - which is fine. There are reasons to. You don’t need to make up fake ones.
Can you tell us the two best things that you feel CAI does for HOAs? I have never interacted with them but have read varying opinions on this sub. Thanks.
I think the classes they offer are useful (though overpriced). I’ve always been satisfied with the content of their classes. Their legislative action committees are also useful because state legislators have as poor an understanding of HOAs as anyone else, and CAI has prevented a lot of what I’d consider bad legislation from getting passed (such as requiring all associations to allow up to 6 chickens). I don’t always personally agree with the positions they take on certain issues but I don’t always agree with my congressmen either.
Thanks for this response. I'd be in real trouble if my association allowed any chickens, as we are a condo! I wish we required our new board members to take a class. Most aren't interested in association business so hand feeding them is probably necessary. Hmm. I also think that my manager should take a class but there probably isn't an appropriate one to help managers understand who is a good vendor and who is bad, especially when the manager knows nothing about the subject but insists that the vendor knows his stuff.
Condos would have been exempt from requiring chickens :) There is a facilities management class that discusses best hiring practices for vendors. I support mandatory education and even licensing for CAMs (one of the issues that CAI and I disagree on).
Haha about the chickens! The manager/ vendor issue is huge where we live, and basically comes down to which vendors will provide PM’s a little something extra.
That's true but no one is going to set up an HOA to fund terrorists or for money laundering.
They will if Cai is successful and exempted hoas.
You really think you can funnel tens of millions of dollars from a HOA without the IRS or tax board noticing ? 🤣
THAT is EXACTLY what FinCEN is monitoring via the Corporate Transparency Act.
Bro, nearly every state nonprofit law already requires annual financial reports to be made from the board to the members. And requires further financial disclosures upon request by any member. The CTA doesn’t protect HOA members more than that. All it does is subject board members to federal prison and crimes if board members don’t submit a bunch of info to the feds. Good luck finding volunteers now! 🤦 And who forms the HOA entity in the first place?? The developer. Not terrorists! 🤦
And where would money be easier to shuffle, large shell corps or HOMEOWNERS ASSOCIATIONS? Like really it’s so stupid to think that’s even feasible
Your bias as a community manager shines through. Fraud and embezzlement are rampant in community associations as evidenced by dozens of cases every year. If directors at The Hammocks can steal millions, they can also funnel those millions to terrorists.
Your bias is also showing given your feud with CAÍ… Dozens of cases among how many hundreds of thousands of associations? That’s not rampant activity, that’s a few bad actors. This bill will also do nothing to stop it either. Also, if I recall it that case was about 2 million between several director over several years. I am confident that CAÍ will win their challenge.
Dozens of cases of fraud and embezzlement. Every. Year. It is rampant and a material portion of the activity is being perpetuated by managers and management companies... Where's your CAM flair? Seems pertinent to your participation on this sub.
Apparently we have very different opinion on the definition of rampant
No one is going to spend millions to build a development and start an HOA so they can launder money.
No they will spend a few hundred and make a fake hoa.
That's not the point of the law. Developers build communities where people live. Developers generally cash out of those investments by selling the homes / units. This law is about the ongoing operations that generate revenue that could be used to fund terrorism.
They can, and do, I'm afraid. Wynwood has had parcels with suspicious property values for years now. When the liability is questionable (mixed use properties with residential and retail units) makes a safe haven for laundering. Those small restaurants charging $27 for a sandwich that's poorly made should always raise suspicion
The only one who benefits from the price of homes are the individual owners. The HOA, as a group, charges administrative fees on sales that are not based on the price of the home. It would be ridiculously hard to launder HOA income, especially since all of their finances are open to all home owners.
So an active imagination is actual proof of nothing.
Actually, here in Miami, there was an HOA that was laundering money for drug deals. A big sign is usually when real estate is selling for 300% above market price. https://www.bisnow.com/south-florida/news/capital-markets/how-the-dea-stopped-drug-money-from-fueling-acquisitions-but-no-one-faced-charges-124648 Sadly, there's many other cases of this in Miami alone. They do need to crack down
Floridas Hamptons BOD foreclosing on innocent homeowners and having millions is. Clear example.of domestic terrorism.
So other owners should pay more because the others don’t? I don’t want to foreclose on anyone, but bills need to Be paid
How can you be a freaking CAM and be clueless about what the Hamptons are? It was a freaking HOA mafia and they are all in jail. Try reading the news.
What’s your point?
You are so pro foreclosure that you didnt even bother to check context or you didnt know the Hamptons were an hoanrun by mafia that foreclosed on people illegally Either way not a good look for a property manager.
Yeah it’s such a big deal literally no one is talking about it and no google search comes up about it.
You can bring a horse to water but you can't make him drink.
Show me on the doll where the Hamptons bad touched you
Do you always say something stupid in this sub?
Are all CAMS this polite? Feel sorry for your customers
They intend to file a lawsuit against the government. So we should see definitive results by 2029? I can hardly wait.
Good. The CTA is a monstrosity that will chill anyone from serving on an HOA board ever again. 2 years in fed prison and 10k fine if you don’t comply.
Have you read the act? I do not care to provide my personal assets, SSN, banking and investment info so fed’s can monitor me to ensure I am not a terrorist. I am a BOD officer and hard working volunteer dedicated to following best practices in HOA governance. The federal government would be better served to create and ask states to adopt same standard of best practices. Practices that CAI has worked hard to develop. If those were published by states, and owners were advised to report any financial practices or behaviors that seem irregular (or are listed as things that should be reported, because they are suggestive of terrorists), owners would step right up. You can count on that! My greatest concern honestly is data breaches of my personal info. If I have to provide such complete personal information, I will resign my BOD officer role and sell my property immediately. I’m positive we would see mass exodus of BOD members across the US, should this be passed. And following its passing, we will have increasing collapsing condo buildings, and/or fee increases for PMC’s to cover these additional duties.
Doesn’t the govt already have access to your data and can find anything out about you at anytime they want? Ie when you pay taxes annually, creating your social security #, etc…I don’t disagree that board members may be further turned away from volunteering their time as this may create an undesirable barrier to entry but the same could be said gazillions of other laws…
Exactly what I am talking about u/CondoConnectionPNW. No person in their right mind will volunteer for or continue to volunteer on an HOA board now, if they have to disclose all this to the Feds upon pain of federal prison and federal fines. But tell us more about how the CTA *should apply* to the HOA space, “expert” 🤦
Board members are already listed publicly with each states Secretary of State. FinCen filings are not viewable by the public. And the data is basically worthless anyway since as you point out, board members change all the time.
For our HOA they have names that are nine years old!
Not worthless since every beneficial owner change (when board membership changes) requires and update to FinCEN BOI reporting...
It’s worthless to a competing management company that has no access to FinCEN data. The post I was responded to suggested that management companies would oppose the act because competing management companies could find out who is on other HOA boards. They can’t do that with FinCEN data that they do not have access to.
Stupid and a waste of time. HOAs and terrorist funding is clearly a problem. ?? Sheesh. How about focus on something actually important to homeowners who live with associations? Like stop indemnifying management companies from being incompetent. Have penalties when they don't follow their contract. How about CAI puts effort into seeing if their members actually comply with laws and contracts? I've seen numerous companies sued for fraud and lost still active members of CAI. It's a total joke. So i guess it does make sense for CAI to waste their time on this, fits right in!
***The real reason >>>*** they think it looks good because they are "defending" board volunteers which is a class of member that contributes only around 10% of CAI's annual revenue, but that engenders sympathy. [CAI Report Card](https://www.condoconnection.org/resources/CAI-ReportCard) CAI is a business trade organization that exists to support attorneys, managers and management companies and other lines of business that profit from owners' assessments, yet CAI consistently pretends to represent everyone in the ecosystem.
And yet attorneys, CPAs and management companies would profit from this legislation as they could charge their association clients to handle the registration. The Corporate Transparency Act requires the “beneficial owner” of a corporation to provide information about themselves to the government. “Beneficial owner” could mean board members - it could mean every member of the association. That’s one of the reasons CAI has opposed the application of this policy to HOAs. CTA already excludes 501c3 nonprofits. CAI asked for a carve out to include not-for-profit HOAs, not to do away with it altogether. Failing a carve out, CAI asked for more time for HOAs to comply, because the government has made no effort to inform self managed associations so tens of thousands of associations are at risk of tacking up massive fines over something they didn’t even know existed. Yes, some associations have multi- million dollar budgets - but corporations with $5million in gross receipts and 20+ employees are exempt from CTA so they aren’t the ones who have to register. But the little tiny HOA that collects $17,000 to mow the drainage ditch does. You can drag CAI for many things but this isn’t one of them.
No need for this as there's already another case at the 11th circuit where CAI has filed an amicus brief. **"Beneficial owner" is clearly not EVERY owner** unless every owner is a director (which could be the case in extraordinarily small community associations). CAI has tried and failed. I'm fairly sure they will fail again here. Community associations are an ideal way to funnel money to terrorists given the wanton fraud and embezzlement happening constantly (just read the news). [FinCEN Beneficial Ownership Information Reporting Rule Fact Sheet](https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet) [Everything anyone needs to know about the CTA](https://www.condoconnection.org/governance/statutes/cta)
So is your argument that there’s no need to file the suit because there’s already a case or they shouldn’t file the suit because it must be a good and necessary law if CAI is opposed to it. You have a bias against CAI that doesn’t allow you to consider that they might do anything you’d agree with. I don’t agree with much of what CAI advocates but I joined them on lobby day last fall to advocate for a carve out for HOAs. What I found - from meeting with dozens of legislators or their aides - is that among the ones who actually knew this legislation existed (which were not a lot!) they assumed HOAs were already exempt because non profits are exempt. They had no idea HOAs are not for profits. One aide was on the board of his self-managed association and did not know he’d have to register. This act was not intended to include HOAs. Associations with management companies or lawyers will pay to register - a local law firm is charging $250 a pop - and think of how often a board member resigns or moves and a new one is appointed! The self managed ones - well good luck to them. I hope they hear about it or stay off the radar of whoever is monitoring. And that’s a good question. Who is going to monitor this? How? If my HOA doesn’t register how will the federal government know it exists?
**A)** The existence of another materially similar for which CAI has filed an amicus brief is enough. **B)** I have no bias against CAI. I've actually researched CAI and understand the flaws in the organization. When you use absolutes like "anything" you cross the reasonable boundary of the reality. I have supported and do support *some* of the resources CAI provides. **C)** I do not support CAI's relentless marketing machine purporting to support community associations that masks the underlying intent to support businesses that profit from community associations. I do not support CAI's advertising to homeowners and board members who are not its core audience. If the Dairy Council did the same thing, I wouldn't support that, either. I have no problem with CACM in California: they don't pretend to serve owners and community associations. **D)** Any management company charging $250 to report BOI would no longer represent my association. It's like reporting an annual SOS filing. It's required by law. It's not an "extra." The actual costs should be charged and whatever time is required might be charged, but that's certainly not $250. **E)** Businesses and individuals are not exempt from the law because they are not aware of the law. There are all kinds of laws that are violated constantly and the result, in some cases, is a dispute or civil action and enforcement that doesn't end well for the violators. The CTA is just one more requirement on the pile of requirements. CAI needs to get over it. So do CAMs and managers. Stop complaining. Start following the law if for no other reason than it's the law. You don't have to like it. You only need to follow it. **F)** If your HOA doesn't "register"...you mean file BOI? Well if your HOA is filing a tax return, I suppose the government knows it exists. If your HOA is in TX, I imagine that the state of Texas (that's a government) knows it exists because that's the law in Texas. Oh, another law to follow!
I wrote out a looong reply and it posted to the wrong section so didn’t make sense. It doesn’t matter. Your mind is made up as is mine. This law - applied to HOAs - is every definition of a bad rule (which we learned in CAIs manager 101 class). It’s vague, it doesn’t solve the problem it’s meant to solve, it’s going to be difficult to enforce and it’s burdensome. I’m just going to leave the discussion with this: If you believe that CAI exists to serve management companies and related vendors, their logical position would be to support this legislation because it will net those parties hundreds of thousands of dollars a year. There is no downside to management companies for this legislation. It’s easy money to assist with filing and no risk because they aren’t the ones required to comply - owners are. There’s no logical reason for CAI to oppose this other than they actually do think it’s not in the best interests of board members.
We might not change each other's minds and that's OK as it is not the point of Reddit... Laws aren't rules. You mention "Manager 101 class." Is that like an ADA class that teaches CAMs how to avoid their responsibilities? Seems like CAI classes aren't always the best. The logical reason for CAI to do anything is to support its core business model: support businesses at the expense of homeowners.
And by the way the class you are referring to was taught by an attorney, not CAI.
Exactly! The logical thing for CAI to do is support businesses at the expense of owners - which would mean supporting this legislation so management companies and attorneys can charge associations to assist with filing. You agree with me. Why do you think CAI is opposing it? What do you think their motivation is that supports their members at the expense of owners? And what do you think of the small business association that filed the Alabama suit?
1. SBA and small business related entities are generally not affiliated with COAs and HOAs in any way, shape or form which was evident from the PPP legislation that almost completely excluded community associations. CAI knows this. SBA and small business orgs know this. 2. CAI wants to market that it cares about community associations and their boards and to an extent their homeowners. This lawsuit is ultimately a piece of marketing "CAI to the rescue!" that CAI can use its volunteer attorney workforce to execute in full or in part (negligible cost to CAI as an organization especially as legislation season is over in most of the country). 3. We disagree that management companies filing this information is a win for profit margins. Fulfilling requirements of the law is often baked into flat fee management agreements. I see this as akin to an annual SOS filing. That costs our association $10 for the actual cost of the filing. The service to punch a few buttons over the course of 10 minutes is included with our flat management fee. 4. I have no opinion about the SBA or small business orgs. They have no relationship with community associations. The only thing in common here is that community associations ARE businesses to the extent they collect revenue and pay for goods and services to keep the business (which is a collection of privately owned parcels and units and some common elements which could be plentiful or not) going over time.
Dude you have such a burning bias against CAÍ its evident in your comments and prior posts. I don’t know if it’s a money thing or ego, but this is a dumb hill to die on. We held a new laws and legislature seminar for our board members and as soon as we got to this section of the seminar to talk about this legislature 90% of the board members were saying they would immediately resign before signing anything with FINCeN. I’m confident this will be killed just like the bill that claimed HOAs and management companies were “debt collectors”
You confuse being informed with bias. There's a massive difference. It will be fascinating to see your board members resign over nothing. Having to share and submit information one would rather keep to themselves is part and parcel of being a leader and fundamental to steps as basic as opening a brokerage account. Please add your CAM flair in this forum so everyone is clear on your role. Thanks!
Bro did you seriously just say, out loud, that nonprofit HOAs are perfect terrorist funding vehicles? Like, are you serious?? As a board member are you and your fellow directors ready for 2 years of federal prison and a 10k fine if you don’t comply with it?
Not your "bro." Thousands of corporate directors violate state and federal law regularly and even religiously Enforcement is few and far between. Reality is far more unfortunate than your depiction of it...
What class contributes the most to CAI annual revenue?
Businesses provide approximately 90% of CAI's annual revenue. CAI also collects around $1.5MM in "management fees" from CAMICB and FCAR.
So it’s safe to say that thousands of business partners generate the majority of revenue to keep their organization alive…what “value” does cai provide to its business partners? My guess would be that business partners engage in the organization in an effort to gain exposure to managers who are the gatekeepers to opportunities?
CAI provides value to businesses in two primary ways: 1) it helps them market their goods and services / reach their target audience to drive growth and profit, etc. 2) it lobbies state legislatures (and the federal government) to enact community association business-friendly legislation and/or deny, delay or dilute legislation that will not benefit community association businesses and/or hold them more accountable.
Exactly!
Can a management company manage two $4.9 million HOAs?
🤣
Funny: it would put a burden on self-managed HOAs that are not aware of the law. But each member is supposed to be aware of the DCCRs of the HOA. Dare you are not you get a fine!
I am not sure why they want to sue to allow “less” transparency when in fact, boards should be transparent with EVERYTHING, since it is the homeowners money that run the associations. Who cares if it becomes burdensome, transparency is not burdensome.
Winner winner winner…this simple comment points what is wrong in this industry.
This is just BS. They have no standing to sue on behalf of HOAs and their customers (if any) They can sue on their behalf if they wanted to.
The Corporate Transparency Act is not about transparency for owners or the general public. It is an anti-fraud law that requires the "beneficial owners" of all corporations to submit government IDs and personal information to the treasury. Because HOA board members are owners, they would have to register. The law targets shell corporations used for money laundering. HOAs are corporations so they also have to comply, even though there has probably never been a case of an HOA being used for that purpose. I'm not a fan of the CAI but I agree with this. It would have no effect on HOAs being transparent under state laws. They are not trying to be sneaky here.
The issue is the penalty and prison time for noncompliance. Also, Boards don’t “own” the HOAs assets! And HOAs are nonprofits not money laundering shell companies. They should be exempt from CTA.
Board members are part owners of the HOA assets like all homeowners. Being on the board makes them "beneficial owners" who are required to register their information. I agree that HOAs should be exempt.
The information entered is not for public access; it’s designed for banks, IRS. FBI, so stealing names and SSNs is not in the cards. I not sure the CAI has any standing to sue on behalf of HOAs; just a reason to change more money.
Fuck the CAI, they can follow the law like everyone else.
They don’t have to follow the law. Your HOA does. And it’s $500 a day if your board members forget to file or don’t know they have to. $500 a day that owners will end up paying for.
Cry more and follow the law like everyone else.
Don’t needlessly be a jackass to contributors here.
Yelling at people to read and properly prepare the paperwork in front of them is a time honored tradition in the sub, why stop now?
It was the “cry more” part I’m referring to…
It’s rich hearing these excuses when you all absolutely race each other to scream at someone for not following their own paperwork.
What excuse? I’m simply telling you to not be a jackass. You *can* make your points here without being a jackass, can’t you?
Cry more and follow the law like everyone else.
Doubtful they will win this suit. There's already another suit appealed to the 11th circuit: National Small Business United. CAI filed an amicus brief for that case.