Corporate Transparency Act Info for Associations

We are getting lots of questions about the Corporate Transparency Act (CTA) and how its reporting requirements affect community associations. Did you know that last week, FinCen published its Beneficial Ownership Reporting Outreach and Education Toolkit? Linked here, this resource is intended to help companies comply with the CTA’s reporting requirements.

The CTA requires all companies created through a secretary of state, including non-profit community associations, to file Beneficial Owner Information (BOI) reports, unless an exemption applies. Most community associations will not qualify for an exemption, but of course, you should consult with your own association attorney for any specific questions about your community.

We have been telling clients that the simplest way to comply with the CTA, once they are ready to do so, is for each board member (considered a beneficial owner) to apply for their own FinCen ID number, a process which should only take a handful of minutes. This allows individual board members to protect their personal identification information (reporting it only to the government, which already has it!). Then, board members provide their individual FinCen ID numbers to their association, which as the reporting company, can use those ID numbers in its own report.

A few other things to note: Document your association’s decisions and steps to comply with the CTA. If your compliance is ever at issue, having a clearly documented process and “chain” of decisions could be helpful.

Note also that you must report a “principal place of business,” which cannot be a P.O. Box – a street address is required.

If there is a change in BOI info – such as after board elections or when a board member resigns – the Association must update its CTA report within 30 days.

Finally, entities created in 2024 must file a CTA report within 90 days of the entity’s creation. Entities created before 2024 have until December 31, 2024 to file a report.

WUCIOA For All – SB 5796

Did you know that the “WUCIOA for all” bill also makes changes to WUCIOA as it governs communities already subject to the statute? Most of those changes will take effect on June 6, 2024, while the “for all” portion of the bill does not take effect until January 1, 2028. The bill is a 197-page…

New Foreclosure Requirements for Community Associations

The Legislature adopted new restrictions on all community associations’ ability to foreclose on homes for delinquent assessments. These restrictions are found in HB 1482. Key Provisions: You cannot start a foreclosure if less than 3 months of regular dues or $200 (whichever is larger) is delinquent. You cannot count fines, late fees, interest, or attorney…

Governor’s Proclamation Affecting Association Delinquencies & Meeting Procedures

Washington State Governor Jay Inslee has issued many proclamations suspending and/or modifying state laws in order to provide financial relief to individuals affected by COVID-19. Recent proclamations affect what community associations can do when an owner falls behind on assessments, but also allows electronic meetings for all associations for the next month. It is possible…

Common Facilities and COVID-19

Many communities have questions about managing their common facilities in light of the COVID-19 virus. Associations need to balance the needs of the larger community against protecting the health and safety of their members. This memo contains general information, not legal advice. We cannot give legal advice without review of your governing documents and your…

Annual Meetings and COVID-19

Many communities have questions about whether and how to conduct annual meetings in light of the COVID-19 virus. Especially given the ban on gatherings and closures of schools. Communities need to balance the need to conduct Association business against protecting the health and safety of their members. Before discussing some options, remember that the general…

Does WUCIOA Eliminate Restrictions on Assessments in the CC&Rs of an Existing HOA?

We believe that section 326 of the Washington Uniform Common Interest Ownership Act (“WUCIOA”) eliminates any restriction on assessment increases within the CC&Rs of an existing HOA. Our legal argument is strongest in cases of a special assessment. However, the argument should also prove to be successful for dues increases contained within the regular budget….

How does a Community Adopt WUCIOA?

For currently existing condos, co-ops, and homeowner associations, there is a process to adopt the Washington Uniform Common Interest Ownership Act (“WUCIOA”). First the owners must vote to amend the declaration and choose to be governed by WUCIOA. Second, the board must vote to amend the declaration to remove provisions which directly conflict with WUCIOA….

Short Term Rentals – Commercial Use?

One question we get from clients more and more frequently in this age of Airbnb (and all of its competitors) is how an association can deal with short-term rentals under their existing documents. Many association documents restrict the use of dwellings to “residential purposes,” but this undefined term has led to problems in its use…

WUCIOA – What is it, and why should my community association care? Topic 7: Board Committees

WUCIOA provides an ability for Boards form Committees to conduct some Board Business. (But this is not legal advice for your specific association) The Washington Uniform Common Interest Ownership Act (WUCIOA) is a new law that takes effect on July 1, 2018. Most of it only applies to HOAs and Condos created after that date….

Corporate Transparency Act Info for Associations

We are getting lots of questions about the Corporate Transparency Act (CTA) and how its reporting requirements affect community associations. Did you know that last week, FinCen published its Beneficial Ownership Reporting Outreach and Education Toolkit? Linked here, this resource is intended to help companies comply with the CTA’s reporting requirements.

The CTA requires all companies created through a secretary of state, including non-profit community associations, to file Beneficial Owner Information (BOI) reports, unless an exemption applies. Most community associations will not qualify for an exemption, but of course, you should consult with your own association attorney for any specific questions about your community.

We have been telling clients that the simplest way to comply with the CTA, once they are ready to do so, is for each board member (considered a beneficial owner) to apply for their own FinCen ID number, a process which should only take a handful of minutes. This allows individual board members to protect their personal identification information (reporting it only to the government, which already has it!). Then, board members provide their individual FinCen ID numbers to their association, which as the reporting company, can use those ID numbers in its own report.

A few other things to note: Document your association’s decisions and steps to comply with the CTA. If your compliance is ever at issue, having a clearly documented process and “chain” of decisions could be helpful.

Note also that you must report a “principal place of business,” which cannot be a P.O. Box – a street address is required.

If there is a change in BOI info – such as after board elections or when a board member resigns – the Association must update its CTA report within 30 days.

Finally, entities created in 2024 must file a CTA report within 90 days of the entity’s creation. Entities created before 2024 have until December 31, 2024 to file a report.

WUCIOA For All – SB 5796

Did you know that the “WUCIOA for all” bill also makes changes to WUCIOA as it governs communities already subject to the statute? Most of those changes will take effect on June 6, 2024, while the “for all” portion of the bill does not take effect until January 1, 2028. The bill is a 197-page…

New Foreclosure Requirements for Community Associations

The Legislature adopted new restrictions on all community associations’ ability to foreclose on homes for delinquent assessments. These restrictions are found in HB 1482. Key Provisions: You cannot start a foreclosure if less than 3 months of regular dues or $200 (whichever is larger) is delinquent. You cannot count fines, late fees, interest, or attorney…

Governor’s Proclamation Affecting Association Delinquencies & Meeting Procedures

Washington State Governor Jay Inslee has issued many proclamations suspending and/or modifying state laws in order to provide financial relief to individuals affected by COVID-19. Recent proclamations affect what community associations can do when an owner falls behind on assessments, but also allows electronic meetings for all associations for the next month. It is possible…

Common Facilities and COVID-19

Many communities have questions about managing their common facilities in light of the COVID-19 virus. Associations need to balance the needs of the larger community against protecting the health and safety of their members. This memo contains general information, not legal advice. We cannot give legal advice without review of your governing documents and your…

Annual Meetings and COVID-19

Many communities have questions about whether and how to conduct annual meetings in light of the COVID-19 virus. Especially given the ban on gatherings and closures of schools. Communities need to balance the need to conduct Association business against protecting the health and safety of their members. Before discussing some options, remember that the general…

Does WUCIOA Eliminate Restrictions on Assessments in the CC&Rs of an Existing HOA?

We believe that section 326 of the Washington Uniform Common Interest Ownership Act (“WUCIOA”) eliminates any restriction on assessment increases within the CC&Rs of an existing HOA. Our legal argument is strongest in cases of a special assessment. However, the argument should also prove to be successful for dues increases contained within the regular budget….

How does a Community Adopt WUCIOA?

For currently existing condos, co-ops, and homeowner associations, there is a process to adopt the Washington Uniform Common Interest Ownership Act (“WUCIOA”). First the owners must vote to amend the declaration and choose to be governed by WUCIOA. Second, the board must vote to amend the declaration to remove provisions which directly conflict with WUCIOA….

Short Term Rentals – Commercial Use?

One question we get from clients more and more frequently in this age of Airbnb (and all of its competitors) is how an association can deal with short-term rentals under their existing documents. Many association documents restrict the use of dwellings to “residential purposes,” but this undefined term has led to problems in its use…

WUCIOA – What is it, and why should my community association care? Topic 7: Board Committees

WUCIOA provides an ability for Boards form Committees to conduct some Board Business. (But this is not legal advice for your specific association) The Washington Uniform Common Interest Ownership Act (WUCIOA) is a new law that takes effect on July 1, 2018. Most of it only applies to HOAs and Condos created after that date….