Talk to Your Boards About CTA Compliance Now

The Corporate Transparency Act (CTA) is a federal law that took effect on January 1, 2024. It aims to combat financial crimes by requiring certain Homeowners Associations (HOAs) to report board member information to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). Non-compliance could result in significant penalties like $500 daily fines and imprisonment. The deadline to file is January 1, 2025. For more info on CTA, the Tinnelly Law Group offers an educational webinar for board members and managers, approved for 1 Continuing Education Unit (CEU). Request to join a free webinar HERE.

The community management industry has been actively opposing this regulation. Community Associations Institute (CAI) has advocated for the exemption of all HOAs for over a year. There are no guarantees that an exemption will be granted in time to avoid the upcoming deadline. CAIs activity to fight this regulation can be found HERE. Your boards must be informed and empowered to make the best decision for them.

Time is Running Out

Many boards remain unaware of the CTA and the legal requirement to file, and the filing deadline is approaching quickly. Penalties are real, and boards that ignore the law risk fines, which could lead to very unhappy HOA boards. As managers, it’s critical to inform boards about this requirement and empower them to decide on the best approach for them.

Simply put, have the conversation with your boards now.

Key Considerations When Filing

All HOA Board members and individuals (or entities) that own 25% or more of the units in the community must submit their personal information and a valid ID as part of the HOA’s report. Each board member must provide their ID for inclusion in a single report—they cannot file individually. When deciding how to file, boards must also consider privacy laws like the General Data Protection Regulation (GDPR) and other federal and local regulations regarding handling personal ID images and information.

Filing Options: What Are the Pros and Cons?

There are three main paths to file available:

The board files itself.

Pros: No cost.

Cons: High risk of errors. The board is responsible for securely handling personal ID information and complying with privacy laws. There is no way to confirm whether submitted IDs are fraudulent or stolen.

The board must repeat the process for each ID expiration or board member change.

Management files on the board’s behalf.

Pros: Could be a value-added service offered to the HOA.

Cons: Management may become liable under GDPR and other privacy laws. Time-consuming, with the potential for errors. The manager or management company is liable for the validity of IDs submitted.

Management would need to repeat the process each time an ID expires or the board changes.

Hire a third-party filing service.

Pros: Reduces the board’s and management’s liability.

Has the potential to offload busy work from the property manager.

Cons: Be cautious—some services may only provide basic online forms without sufficient security protocols. Look for providers with automated communication features.

Introducing hoacta.app: A CTA Compliance Solution just for HOAs

A group of CAI members and industry experts developed hoacta.app to streamline the filing process, ensure compliance, and protect from bad actors. Founded and operated by industry professionals, including PCAMs, National BP Council members, and a CAI Chapter President, hoacta.app offers a comprehensive, secure solution for CAT compliance specifically for HOAs.

World-Class Security and Privacy Compliance

Hoacta.app uses high-grade encryption technology and dynamic code updates to ensure data security. It complies with federal and international standards, including:

• GDPR (General Data Protection Regulation)
• CCPA (California Consumer Privacy Act)
• ISO/IEC 27001, and others

Fraud-Proof Filing

Hoacta.app utilizes optical character recognition (OCR) technology, artificial intelligence, and government record integrations to verify ID validity. The platform employs biometric selfie scans to ensure that only rightful ID owners submit information.

Automated Communication

The system automatically reminds board members when their IDs are about to expire and prompts them to update their information without restarting the entire filing process. To start, simply enter the HOA’s address, Tax ID (or EIN), and board member name and contact, and the system manages the rest.

With one year of unlimited updates, edits, and revisions included, hoacta.app keeps HOAs compliant year-round–guaranteed.

Management Dashboards: Stay Informed

The platform’s management dashboards allow managers to monitor the progress of each report. You’ll always know which tasks are complete and what still needs attention, ensuring your HOA stays on track for compliance.

In summary, the Corporate Transparency Act requires immediate action—informing your board. Educate your boards now to avoid penalties later. hoacta.app can reduce your workload, ensure compliance, and safeguard your association from costly fines and security risks.

Filing with hoacta.app is guaranteed and starts at under $200 with bulk pricing. Contact an hoacta.app rep today today.