HOAs Alert: Navigate the New Corporate Transparency Act
Hello everyone, this is Mark Saunders with Saunders HOA Management. I wanted to send out an important update to all of our homeowners associations (HOAs), and I thought it would be beneficial to share this information on my blog as well. If you're part of a community managed by Saunders HOA Management or involved in Winston-Salem HOA Management, this is especially relevant to you.
Understanding the New Federal Law
As part of our ongoing commitment to keeping our communities informed, I wanted to take a moment to highlight a new federal law that is impacting many homeowners associations. It's called the Corporate Transparency Act, and while it makes sense on paper, it’s going to create some challenges when it comes to implementation.
So, what exactly does this law entail?
The Corporate Transparency Act is a new federal regulation aimed at reducing fraud and improving transparency in business structures, including nonprofits. The law requires that anyone who is a part of an LLC or nonprofit organization must register their personal information. This includes:
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Name
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Date of birth
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Mailing address
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A government-issued photo ID (like a driver’s license or passport)
While this new regulation is designed to prevent scammers from easily setting up fake businesses, it creates some unique challenges for Homeowners Associations.
Impact on Homeowners Associations
Now, how does this new law apply to HOAs? Well, most homeowners associations—especially in communities like those in Winston-Salem HOA Management—are classified as nonprofit entities. As a result, they are subject to the Corporate Transparency Act.
In practical terms, this means that every board member of an HOA will need to file their personal information with the government to ensure the HOA is compliant with the new law. At Saunders HOA Management, we're making this process as smooth as possible for the communities we manage.
We’ve partnered with our CPA to collect and submit the necessary information for all board members of each HOA we manage. This data will be filed with the IRS or through the government portal to keep the HOA’s registration up-to-date.
The Importance of Compliance
If you’re serving on an HOA board, it’s crucial to take this law seriously. Non-compliance could lead to hefty fines, as high as $500 per day for each day the HOA is not registered. That can add up quickly, so it's important to act now and stay compliant.
This filing requirement applies not just once, but every time the board changes. So, if you have new board members after an annual meeting, their information must also be submitted to ensure the HOA remains in good standing with the government.
At Saunders HOA Management, we are here to support all of our community management clients throughout this process. If your board is changing or if you have any questions about the Corporate Transparency Act, don’t hesitate to reach out. We're ready to assist in navigating this new requirement.
Final Thoughts
As always, I’d love to hear your thoughts. Do you think this is an overreach of government authority, or is it a step in the right direction to protect consumers? Let me know in the comments below, or reach out if you have questions about how the Corporate Transparency Act might affect your HOA.
If you’re one of the communities we manage, please ensure your HOA board has completed this registration. If not, let’s get on it as soon as possible. We're here to help you stay compliant and avoid unnecessary fines.
Thank you for reading, and remember—when it comes to HOA management, Saunders HOA Management is here to make things easier and ensure you're always in the know.
This post should help you understand the Corporate Transparency Act and its impact on HOAs. Stay informed, stay compliant, and if you have any questions, we’re here to support your community management needs!
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