Moving Communities Forward
Official Publication of Advance HOA Management, exclusively for board members
Board Newsletter | Issue 6
Enforcement
What is Taking So Long?
Our team consistently receives questions and comments related to board and/or resident frustration with the slow handling of violation compliance. We thought it would be helpful to recap the legal requirements for enforcement processes and policies.
In 2022, HB22-1137 was passed by the legislature which changed multiple sections of CCIOA (Colorado Common Interest Ownership Act), and Title 13 of the Colorado Revised Statutes related to violation enforcement, delinquency notice requirements, and allocation of fees and fines. Community associations throughout Colorado were required to update several community policies, with major changes to enforcement policies in particular.
The major changes to the Enforcement Polices included the following:
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Timeline: The law outlined specific timelines and cure periods for all enforcement policies subject to CCIOA is as follows:
a. First Notice - Owners are allowed 30 days to cure the violation before the Association may impose a fine. Notice must be sent by first-class, certified mail, and email (if email address is on file).
b. If after 30 days the Association has not received notice from owner that the violation is cured, the Association must reinspect the violation within seven days. If the violation is not cured, the Association may then impose a fine and send a Second Notice.
c. The Second Notice must allow for another 30-day cure period and must also be sent via first-class mail certified mail, and email (if email address is in file).
d. Legal action may not occur until two, 30-day cure periods have taken place.
e. If the Owner does cure a violation, the Association must send a notice that includes any fines due and that the Owner will not be further fined with regard to the specific violation. Notice of a violation cure is sent by US Mail and email (if email address is on file).
When this legislation passed, Advance HOA partnered with various HOA legal counsels to add a Courtesy Notice to the covenant enforcement process and timeline. The Courtesy Notice is sent prior to the First Notice via US Mail (not certified mail) and email (if email address is on file), asks for a ten-day cure period before the “First Notice” is sent, and does not impose any fines if the violation is not cured. This was inserted to the process to save Associations the cost of sending violation notices by certified mail, as most owners will cure with a Courtesy Notice. The average cost to the Association of sending a certified letter is $15.00.
2) Additional Requirements:
a. Content of violation notices: “Notices” must contain specific information including the nature of the violation, the specific actions required to cure the violation, any fines that may be imposed, the right to request a hearing to contest the violation, and a date by which a request for hearing must be made.
b. Hearings: Owner must require a hearing withing the cure period and the hearing must be held in Executive Session.
c. Fine Limitation: Fines may not exceed $500.00/violation, unless the violation is a threat to public safety or health.
d. Language: An Owner may request that notices be sent in an alternate language.
e. Health and Safety Violations: If the Association reasonably determines that a health and safety violation has occurred, it may send a “Health and Safety Notice” that requires a cure period of 72 hours. The policy will have specific language related to these types of violations.
f. Address for Notices: All notices and correspondence are mailed to the address of the unit. If the owner has provided the Association with an additional mailing address, notices are also sent to the additional address.
Advance HOA set up its enforcement system in the management software to comply with the requirements and requires oversight by the Manager to comply with the requirements of the law. We understand that waiting for 30+ days to fine an owner for a violation is frustrating, but the Association’s hands are tied in this regard.
Violations are a hot topic for many owners and boards. Many owners appreciate that their Association ensures their community is sightly and well-maintained. Some owners struggle with the need to comply with rules about property they own. In a single-family community, an owner decided to decorate a toilet and place it in his front yard as part of a neighborhood joke. He didn’t appreciate the violation notice and felt like it was a violation of his right to property and left it in his yard until legal counsel was able to be engaged --- over 60 days later with the new legislation. He even took donations to help pay the fines and the episode ended up on the local news station. Some of his neighbors thought it was fun, while others were not happy they had to drive by a toilet in their neighbor’s lawn for months.
While on the topic of enforcement, please remember to be consistent in managing violations, treat all individuals the same, and let the policy take its course. We appreciate your involvement with the oversight of violations. Please work in cooperation with your assigned manager in doing your best in keeping your communities presentable and enjoyable.
Collections and Reserves
By Bryan Farley, RS
Bryan Farley is the President of Association Reserves – Colorado. A Reserve Specialist, Bryan has completed ~3,000 Reserve Studies and has been a frequent speaker on the topic of Reserve Studies.
Inflation increasing, more bank instability, insurance costs rising, material shortages...
With news like this, it seems the sky is falling, or at least a roof is failing due to a lack of proper funding in a Reserve account. Why would that happen? It is because the board has been unable to increase or collect the money necessary to take care of the assets of their property due to homeowners being significantly impacted by the rising cost of everyday items and the rising cost to insure their homes.
Consider the following email we received from a concerned board member: “Our bylaws require us to get majority approval for any increase above 5%, as well as for any special assessment amount. Right now it seems residents, if given the option, vote any increase down, even if it will be to their eventual detriment.”
How can a Not-for-Profit Real Estate Corporation run if there is no capital to maintain the Real estate assets?
Based on data analyzed by CPR News, The average Colorado home gained 37 percent in value over just two years. That means even a small, 5-unit condo community is now collectively valued over seven figures. A condominium with over a million dollars worth of real estate should be run like a well-oiled machine. Monies are needed to repair, replace, and enhance the common area assets in a property. Boards need to make sure that monies are collected in a timely manner to maintain the assets of the Real Estate Corporation that the HOA is tasked to oversee.
There are a few issues that board members may face in the next year that could make their collection process a top priority.
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Rising Insurance Premiums.
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Legislated Payment Plans
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Increase in Costs and Labor
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Rising Insurance Premiums
Based on conversations with board members and community managers, there have been insurance premium increases from 25% up to 500%. One board member mentioned that the annual premium for his 100-unit condominium increased from $75,000 to $460,000 this year.
The problem with these premiums is that many of the insurance contracts renewed in Q3 of 2023, but the budget that will now pay for these premiums will not be implemented until Q1 2024. That means many boards had to borrow money from the Reserve account to cover the gap until the money could be collected from the homeowners.
That means there is a ‘due to, due from’ in the books for many properties across Colorado. If the monies are not collected, then the Reserve account will be short of the necessary funds needed to adequately fund the repair and maintenance of the property assets. This shortfall will either lead to increased contributions, special assessments, or loans. All of these options will cost the homeowner much more money.
This puts the board in a hard place since the HOA must be insured to secure mortgages and be compliant with the Colorado Division of Real Estate. Therefore, the board must have insurance and pay the large increases. The costs are now going to be shared by all homeowners moving forward as part of the budget and increased dues.
However, what if a homeowner cannot pay the increased dues?
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Legislated Payment Plans
In 2022, the Colorado legislature passed HB22-1137, which became effective on August 9, 2022. One of the outcomes of the legislation was the extension of the payment plan offered to delinquent homeowners. In the past, associations were required to offer homeowners a 6-month payment plan before sending the matter to an attorney or collection agency. HB22-1137 required that associations now offer an 18-month payment plan.
The minimum payment allowed as part of this payment plan is $25 a month. After these 18 months, the payment will balloon to the final balance with interest accrued capped at 8%.
When a roofing replacement project needs to occur, the monies will be needed immediately to cover the cost, not in 18 months. The intermediary period could require some creative solutions if a majority of the owners are unable to pay the increased assessments in a timely manner. However, if the board cannot come up with a payment plan that works for everyone, owners could fall into delinquency.
However, homeowners who live in a property that has multiple owners delinquent could face home resale obstacles. Freddie Mac now requires that any condominium, housing cooperative, or any multi-family common interest ownership association with more than five attached units have no more than 15% of owners more than 60 days delinquent in paying their assessments. If 15% or more of the owners are delinquent, then this could cause issues with mortgages being underwritten on the property, which could put homeowners that are selling in that property in a difficult situation.
If the board of directors is unable to complete a project on time due to the lack of funds available, then the board may need to defer the project. Yet, there is a risk of seeing the price of the project increase.
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Increasing Labor and Material Cost
In 2021 and 2022 a common response from clients regarding completing a project on time was that the board decided to defer the project until inflation normalizes. The problem with this line of thinking is that inflation will at some point indeed ‘normalize’ to historical averages, but that does not mean that the prices will deflate to pre-2020 costs. Inflation is perpetual and compounding.
For example, per The Mortenson Cost Index, indexed construction costs have increased ~40% since 2019. Within the last year, when national CPI inflation was tracked at 3.2%, construction costs in Denver increased by 3.8%, and Denver construction labor costs increased by 5.2% during the same period.​​
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Internally, Association Reserves has tracked the following increases in typical Colorado association assets:
400k BTU Boiler = ~ 70% increase since 2020
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Asphalt Overlay = ~ 60% increase since 2020
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Asphalt Seal = ~ 60% increase since 2020
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Comp Shingle Roof = ~ 30% increase since 2020
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Exterior Paint = ~ 50% increase since 2020
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Wood Fencing = ~ 25% increase since 2020
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Traction Elevators = ~ 25% increase since 2020
The board of directors must run the association in a fiscally responsible manner. Increased costs on the life safety systems of the association (such as the roof and elevators) require adequate funding. Adequate funding requires that owners pay their fair share of the deterioration of these expenses, and not just defer the projects until something potentially dangerous could occur.
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What Can Be Done?
It is always challenging to raise dues. It is tough to tell your neighbor that the fees will be more than last year. However, based on the increasing costs and external pressure on HOAs that boards may see shortly, the risk of not having adequate funding could cause much greater problems for the owners who live in an association.
During this volatile time, the board and the owners need to be proactive to protect the interests of their community. The board needs to remember that they have a fiduciary responsibility to maintain, repair, and enhance the common area assets. The owners must also remember that the board was elected to protect the community’s interest.
It is recommended to have a Reserve Study completed and updated to provide a non-biased opinion on how much should be collected and contributed to the Reserve account. Having an updated Reserve Study will help both the board and the owners realize that there are important projects in the community that need to be taken care of.
Therefore, plan to have a Reserve Study completed. Use the Reserve Study as a map for the financial future of the community. If the community runs into a detour (like a large hail deductible), then update the Reserve Study to find out how to stay on the correct course.
The future is not predictable, however, a professional Reserve Study will provide the board with the information to decide what the best course of action is given what we know today.
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The Budget Process for Your Community
Impacting the Financial and Physical Health of Your Community
It’s July, which means budget season is officially upon us! Partnering with our boards in developing the annual budget is an essential task, as the budget has a direct impact on the financial and physical health of the community and property values and is the single most important tool a community needs to manage and implement the association’s objectives effectively, while maintaining fiscal responsibility.
Typically, two budgets will be adopted for each association: an operating budget, and a reserve budget. The operating budget pays for the services that help carry out the everyday functions in the community, such as landscaping, management costs, security, insurance and taxes, utility expenses, office expenses, legal expenses, and general maintenance of common areas.
The reserve budget is used for larger-scale capital improvement projects that don’t necessarily occur on an annual basis and are determined per your reserve study or capital improvement program. Examples of reserve expenses would be roof replacements, road and sidewalk repair, mechanical system replacements, etc.
We recommend the below steps for boards/managers in developing the operating budget:
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Set Goals. Boards should plan for long-term goals to avoid maintenance and financial issues that could cause hardships for residents.
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Review Historical Data. Examining prior year actuals helps to determine trends and anticipate future cost that may impact the operating fund.
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Don’t Defer Maintenance. Include in your budget operating expenses for the upkeep and general maintenance of the community, to include painting cycles, fence repairs, siding repairs, pool furniture. This will keep your community well-maintained and aesthetically pleasing for residents.
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Obtain Bids from Contractors. Don’t wait until the last minute to obtain updated pricing from your vendor partners. Begin the process early and ensure the scope of services in your contracts are aligned with your community’s maintenance requirements and goals.
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Review Collections. Reducing delinquencies can save your community money. If you have collection issues in your community, budgeting for uncollectable/bad debt may be needed.
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Determine Assessments. One main outcome of developing an operating budget is determining the assessment rate per unit needed to fund the expenses. We recommend always starting with expenses to estimate cost, then you can determine revenue needed and source, and if an increase in assessments or a special assessment will be required.
Our managers are trained annually on budget planning and our internal procedures, but they need to partner with Board members to make sure budget deadlines are met. Below is the timeline we are all striving to achieve for calendar year budgets.
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July – Begin drafting budget and obtaining bids and add budget planning to the next board meeting agenda.
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August – Present draft budget to boards. If this requires an additional board meeting, then set the date. Conducting a review via Zoom or Teams can be very productive.
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September-October – Approve final budget and establish assessment billing procedures.
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October-November-December – Hold budget ratification meetings (usually with the Annual Meetings).
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Following budget ratification – Advance HOA generates assessment billing and imports 2025 budgets.
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*CAI How to Draft a Budget and Basic Budgeting Guidelines
2024 Legislative Update
What You Need to Know for Your HOA
This year’s legislative session again passed laws that impact community associations and special districts. The new and revised laws will require some adjustments due to the procedural regulations included with the laws. Below is a summary of the laws that directly impact communities and the actions that will be taken to respond to the changes. Most of the laws will become effective August 7, 2024. If you have any questions, please contact Judy Smeltzer at judy@advancehoa.com.
Link to Colorado Bills, Resolutions, & Memorials: https://leg.colorado.gov/bills
HB 24-1233 – Concerning modifications to certain procedural requirements with which a unit owners' association must comply when seeking payment of delinquent amounts owed by a unit owner.
Summary:
The law modifies procedural requirements with which a unit owners' association must comply when seeking payment of delinquent amounts owed by a unit owner, including:
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Removes a requirement that an HOA physically post notice of a unit owner's delinquent account on the unit owner's unit.
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In addition to sending notice of a delinquency by certified mail, requiring that an HOA contact a unit owner about the unit owner’s delinquent account by two of the following means: by telephone, by text, or by e-mail.
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Owners may only be charged the cost of certified mail for any notices or other documentation an Association sends a unit owner.
Impact:
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Currently, delinquent owners are sent Notice of Delinquency by Certified Mail, US Mail, and email, as required by law. An additional step will now need to be taken, to include telephone or text message, and added to the current internal procedure and system.
Action:
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Associations to work with legal counsel to update Collection Policy by August 7th, 2024.
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Advance HOA to post adopted revised policy to community website and CondoCerts for resale disclosures, as well as email to membership (template eblast to be sent separately).
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Advance HOA to set up new procedures to conduct collection calls and texts.
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Advance HOA to adjust administrative fee schedules.
HB 24-1337 – Concerning the Rights of a Unit Owner in a Common Interest Community in Relation to the Collection of Amounts Owed by the Unit Owner to the Common Interest Community.
Summary:
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In relation to collection of assessments or other money owed to the Association, without a lawsuit, the amount the association could seek and be entitled to for reimbursement from the owner for attorney and collection fees is limited to the lesser of $5,000 or 50% of the actual costs incurred by the association for the unit owner’s failure to comply.
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In relation to covenant enforcement, without a lawsuit, the amount the association could seek and be entitled to for reimbursement from the owner for attorney fees is limited to the lesser of $5,000 or 50% of the actual costs incurred by the association or the unit owner for the failure to comply.
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If a lawsuit is filed for collection of any money owed to the association, and the association prevails, the amount the association can be awarded for attorney fees are limited to the lesser of $5,000 or 50% of the actual costs incurred by the association. The law provides an exception to this limitation if the court finds that the unit owner was financially, physically, and reasonably able to comply but willfully failed to do so.
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The dollar limit on attorney fees in the statute are subject to adjustment for inflation.
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Associations are not able to bring a foreclosure action for a lien on an owner-occupied unit unless (1) the association has obtained a personal judgment against the owner; (2) the association has attempted to bring a personal action against the owner, but is prevented from doing so by the death or incapacity of the owner; (3) the association attempted to bring a personal action against the owner but is unable to serve the owner within 180 days; or (4) the owner is in bankruptcy.
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Prior to initiating a foreclosure, an association must provide the unit owner with 30 days’ written and electronic notice that the unit owner has the right to engage in mediation prior to litigation.
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The law prevents an association from foreclosing on its lien if an owner is in compliance with the payment plan the association is required to offer.
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The law creates a right of redemption for 180 days following a foreclosure sale, with an order of priority of those with a right to redeem.
Impact:
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Associations will need to cover 50% of collection legal expenses. In other words, only 50% of legal expenses are recoverable for legal collection actions.
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Boards will need to consider increasing budgeted legal expenses related to collection efforts.
Action:
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Associations to work with legal counsel to update Collection Policy by August 7th, 2024.
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Associations to adjust future budgets as needed to account for any future legal costs that are not recoverable by the delinquent owner.
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Advance HOA to implement internal system adjustments for posting of collection fees for legal costs.
SB24-134 - Operation of Home-Based Businesses - Added to CRS 38-33.3-106.5
Summary:
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The law provides that unit owners associations cannot prohibit the operation of a home-based business in a common interest community.
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The operation must comply with any reasonable and applicable rules and regulations governing architectural control, parking, landscaping, noise, nuisance, or other matters concerning the operation of a home-based business.
Impact:
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If home-based businesses are currently prohibited in the Declaration, this law will trump the prohibition.
Action:
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Adjust enforcement measures, with the understanding that the unit must comply with current rules and regulations.
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If the home-based business results in a violation of rules and regulations related to architectural control, parking, landscaping, noise, nuisance, or other matters, enforce accordingly per the covenant enforcement policy.
HB24-1051 – Towing Carrier Regulation
Summary:
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The law modifies HB-22-1314 Towing Carrier Nonconsensual Tows passed in 2022 to allow the public utilities commission additional authority to deny new carrier permits as well as refuse renewal or suspend current carrier permits.
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The law additionally revises the steps required to be carried out by the tow carrier at the time of a tow and while storing a vehicle, and prohibits a towing carrier from patrolling or monitoring a property to enforce parking policies on behalf of the property owner. The provisions of this law apply exclusively to tows conducted on private property.
Impact:
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Associations with parking rules/policies on association property may no longer be able to conduct nonconsensual towing under certain conditions.
Action:
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Associations to revise towing policy. There are several requirements imbedded into the law and most of the responsibility will be with the towing carrier in determining whether a tow can take place. There is a question as to who will be able to authorize a tow.
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Associations will likely need to change signage.
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Work with your respective legal counsel and towing carrier in outlining the steps to take in conducting a nonconsensual tow.
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Any additional duties being asked of the manager will need to be approved by Advance HOA.
HB24-1152 – Accessory Dwelling Units – CRS, add article 35 to title 29.
Summary:
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The law requires municipalities and counties of a certain size, residing within a metropolitan planning organization, to allow for one accessory dwelling unit of a certain size as an accessory use to a single-unit detached dwelling, where single-unit detached dwellings are currently allowed. This law is effective immediately.
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An accessory dwelling unit is defined as an internal, attached, or detached dwelling that provides complete independent living facilities for one or more individuals, is located on the same lot as a proposed or existing primary residence, and includes facilities for living, sleeping, eating, cooking and sanitation.
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The same jurisdictions are prohibited from enacting or enforcing certain local laws restricting the construction or conversion of an ADU or requiring that an ADU be occupied by the property owner. The law also establishes criteria for a jurisdiction to qualify as a supportive jurisdiction by adhering to specific filings and by implementing strategies to encourage and facilitate construction or conversion of ADUs and a program for the Colorado Housing and Finance Authority to provide direct loans for the construction and conversion of an ADU.
Impact:
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Detached single family community associations and districts may not prohibit the creation of an ADU, but can apply reasonable restrictions, as long as the restrictions do not unreasonably increase the cost to construct.
Action:
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If the Association receives an application for an ADU, review and consider any reasonable restrictions at that time. ADUs will first need to be approved through your local city or county.
HB24-1267 – Metropolitan District Covenant Enforcement Policy
Summary:
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The law requires a metropolitan district engaging in covenant enforcement and design review services to comply with certain procedural requirements. Similar to homeowners associations subject to the Colorado Common Interest Ownership Act, this includes adopting written policies governing the imposition and collection of fines, governing how disputes between the metropolitan district and a resident are addressed, and refraining from prohibiting residents from certain activities on their property.
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The law also prohibits a metropolitan district from foreclosing on any lien based on a resident's delinquent fees or other charges owed to the metropolitan district as a result of covenant violation or enforcement.
Action:
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Metropolitan district communities to work with respective district counsel for creation of needed policies.
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Advance HOA to implement policies and adjust internal systems as needed.
SB 24-021 – Exempting Certain Small Communities from Certain Requirements of the Colorado Common Interest Ownership Act. Amends CRS 38-33.3-209.5 amend (1.7)(a)(I); and add (11) and (12)
Summary:
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If cooperative or planned community was created after July 1, 1992 and either contains only units restricted to nonresidential use or contains no more than twenty (20) units and is not subject to any developer rights, or a planned community with a declaration that provides the annual average common expense liability of each unit restricted to residential purposes must not exceed $400 (as adjusted since July 1, 1999 for changes in the CPI), it is subject only to sections 38-33.2-105 to 38-33.3-107, unless the declaration provides that 33.3 is applicable of the Colorado Common Interest Ownership Act.
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If the Association elects to be subject to the entirety of 33.3 (CCIOA), the community shall adopt an amendment to its Declaration.
Action:
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Board to provide to Advance HOA whether it is subject to CCIOA, as stated in Declaration.
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If the Board determines it is not subject to CCIOA, but decides to make itself subject, proceed with Declaration amendment. Legal counsel advice required.
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See attached law and sections of CCIOA.
Other Legislation to Note:
SB24-005 – Prohibit Landscape Practices for Water Conservation
The law prohibits, as of January 1, 2026, local governments, including metropolitan districts, from allowing the installation, planting or placing of nonfunctional turf, artificial turf or invasive plant species on commercial, institutional or industrial property, common interest community property, or a street, parking lot, median, or transportation corridor.
HB24-1091 – Fire Hardened Building Materials in Real Property
The law prohibits covenants and other restrictions that do not allow the installation, use or maintenance of fire-hardened building materials in residential properties, including in common interest communities. The common interest community may adopt reasonable standards as to the design, dimensions, placement or external appearance of the fire-hardened building materials used for fencing within the community, with the limitation that the standards may not increase the cost of fencing by more than ten percent or require a review period of more than sixty days. The law was signed by the Governor on March 12, 2024, and takes effect immediately.
HB24-1007 – Prohibit Residential Occupancy Limits
The law prevents local governments, defined as a home rule or statutory city, home rule or statutory county, town, territorial charter city, city and/or county, from limiting the number of people who may live together in a single dwelling based on familial relationship.
SB24-145 – Uniform Unlawful Restrictions on Land Records
Current law declares a restriction in a land record unlawful if the restriction is based on race, color, religion, national origin, sex, familial status, disability, or other personal characteristics. The act enacts the "Uniform Unlawful Restrictions in Land Records Act (2023)", as drafted by the Uniform Law Commission, which establishes a process for a person to remove these unlawful restrictions from a title or other document related to real property. This Act pertains to the Declaration of an Association and if an owner believes a section or sections of the Declaration to be unlawful, owners may ask for removal of the section(s).
The Corporate Transparency Act
The Impact on Homeowner Associations
We’re spotlighting a pivotal Federal law that’s set to reshape the landscape for community associations across the US: the Corporate Transparency Act (CTA). This article will unpack how the CTA will influence your community and what you need to know to stay ahead. This law imposes strict reporting requirements on nearly all business entities in the US, including community associations. Compliance with this new law is mandatory and failure to comply may lead to fines, to include civil penalties of $500 per day and criminal penalties of up to $10,000 and up to 24 months in prison.
The purpose of the law is to make it more difficult for smaller business entities to engage in money laundering by requiring these entitles to provide information about the natural persons who directly or indirectly own or operate the entity. The CTA required the United States Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) to adopt regulations to implement the provisions of the CTA, to create the forms required to be filed, and the procedures for filing them.
The regulations require many types of legal entities to file a “beneficial ownership information” (“BOI”) report to FinCEN. Specifically, any entity that is a corporation, limited liability company, or any entity created through a filing with a Secretary of State or any similar office under the law of any State or Native American tribe is required to submit a BOI.
A beneficial owner is an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise (i) exercises substantial control over the entity; or (ii) owns or controls not less than 25 percent of the ownership interests of the entity.​
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Exercises Substantial Control – This is the standard under which HOA Directors and Officers will be required to register with FinCEN.
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The 25% ownership criterion is fairly straightforward. In practice, for a community association, this test likely will be triggered for communities under development by a declarant, for commercial condominiums or for smaller associations.
All homeowners associations will have until December 31, 2024, to file with the FinCEN. Below is the information needed to be filed for all Board Members:
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Full legal name
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Date of birth
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Current address
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Unique identifying number from an acceptable form of identification (e.g., unexpired passport, driver’s license) or a FinCEN identifying number, along with an image of the document used.
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Changes, corrections, and additions to the filing must occur within 30 days of when there is a change, (i.e., board member moves, is replaced, etc.), meaning continued reporting updates will be required.
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We have been aware of this law and were hopeful that the Community Association Institute (a national organization dedicated to the HOA industry) would be successful in lobbying for the exclusion of HOAs from the law, but as of today, homeowners associations are still required to file. CAI has an excellent site specific to the work they have been doing and we invite you to read more about this requirement and the work they are doing here: caionline.org/Advocacy/Priorities/CTA/Pages/landing.aspx
So, what does this mean to your association and to you as a Board member?
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All HOA’s will need to file a Beneficial Ownership Information (BOI) report.
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Included with the filing is the personal information (listed above) for each board member.
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Board members will be able to obtain an identifying number through FinCEN to be used for the BOI to protect your personal information.
What is Advance HOA Management’s plan?
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Advance HOA will request that Board Members obtain an identifying number directly through FinCEN (we will provide instructions). Advance HOA does not want to obtain any personal identifying information from Board members.
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The FinCEN identifying number will be provided to a designated person with Advance HOA.
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Advance HOA will file the BOI report on behalf of the HOA.
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We will instruct newly elected or appointed board members on how to obtain a FinCEN identifying number and Advance HOA will update the BOI as part of new board member onboarding.
Advance HOA is still determining the additional work involved with this requirement and will introduce any fees as part of the annual administrative fee presentation. In addition, we are working on creating step-by-step instructions to assist board members in obtaining a FinCen identifying number. Advance HOA will not obtain FinCen identifying numbers on behalf of board members so as not to have access to personal identifying information of board members.
We are concerned that this requirement may deter owners from volunteering to serve as board members. As part of board recruitment, we recommend specifying the BOI filing requirements and associated steps in obtaining a FinCen identifying number.
Below are links to learn more:
Beneficial Ownership Information
CAI - The Corporate Transparency Act Advocacy and Resources
If you have any questions, please direct them to judy@advancehoa.com. We understand this is frustrating and we hope that continued efforts to exclude HOA’s from these burdensome requirements will continue. We will keep you posted.