Are HOAs Required to File BOI Reports? Find Out How to Start

What are BOI Reports?

BOI reports primarily serve as an anti-money laundering tool. They compel various types of entities to report information about their ultimate owners or their beneficiaries, in some cases.

HOAs and BOI Reporting: A Terrifically Nuanced Landscape

Reporting requirements of BOI vary with HOAs. Such requirements depend upon a number of considerations, such as the following:

Jurisdiction : There might be some state and local laws that make specific regulations regarding BOI reporting to HOAs.

Entity Type :The legal structure of the HOA may even be a corporation or a nonprofit, which, in turn has something to do with reporting requirements.

The more activity your HOA has regarding financial crimes, the bigger the reporting will be.

Critical Factors to Discuss

The following are factors by which you can determine whether your HOA should file a BOI report:

State Laws :Find out how your state governs BOI reports by corporation, nonprofit, or other incorporated entities.

Type of Legal Structure :Know the legal structure of your HOA and how it's limited to that.

Operations :Determine whether or not your HOA conducts operations with a high-risk level, which can include real estate investment and financial activities.

Filing BOI Reports

In case you decide to file BOI reports for your HOA, you may follow these steps:

1. Identify Beneficial Owners:Find out who the beneficial owners or owners of your HOA are. This may even prompt you to study your HOA's governing documents, bylaws, or articles of incorporation.

2. Gather Needed Information:Gather information on all the beneficial owners that will include name, address, date of birth, and citizenship.

3. Method of Filing Report:Determine whether you are going to file your HOA's BOI report online or by mail.

4. File the Report:File the completed report with the appropriate jurisdiction as required.

Because reporting is a very complex matter, it's even better if you see an attorney or tax professional who specializes in HOAs. This will give you specific recommendations that regard the particular scenarios that your HOA is facing and assure full compliance with all governing regulations.

Conclusion

Although the requirements of the report may differ according to the HOA, it is their mandate to be well-informed regarding the laws and regulations involved. Knowing who the beneficial owners are, gathering needed information, and adhering to the right procedures for reporting can serve the purposes of HOAs for fulfilling legal obligations towards preventing financial crimes.