November 2024

YEAR END COMPLIANCE By Robert Arnone, MSRE, AMS, CPM, RCA Management Properties, LLC

A re the recent deadlines set in place by the state and federal government in your best interest? From the perspective of the property manager, we are faced with an encompassing challenge of man aging an asset for the members of its communities. We need to be constantly aware of outside variables that can impact the community we manage. Now it may not be as dramatic as the butterfly effect in which a butterfly flaps its wings in one state and causes a tornado in another, but for the community leaders we represent, it can feel like a sandstorm -- rubbing their eyes at how we are going to get through this. This article addresses three recent deadline requirements. FinCen Corporate Transparency Act (CTA) In January of 2024 the United States Congress passed the Corporate Transparency Act (CTA), requiring that com panies report and provide certain information about own ers with beneficial ownership or control. The classification for control in your community is the board of trustees. The reactions have been mixed, such as, “Why do you need my ID?”, “I don’t feel comfortable emailing it.”, and “I’ve been told by my attorney that it’s not necessary.” The purpose of the law was to prevent illegal activities with foreign and domestic companies including fraud,

domestic terrorist activities, and money laundering, among other criminal activities – scenarios unlikely to be present in most community associations. That is why CAI National advocated for community associations to be exempt from CTA requirements. There is an ongoing legal challenge by a number of interest groups to the CTA, and CAI has filed briefs of its own to exempt community associations from the law’s reach. Unfortunately, however, this challenge will not likely be resolved before the statutory compliance deadline of January 1, 2025. Therefore, while we remain hopeful of a legislative or legal solution, you must be prepared to file the required information no later than January 1, 2025. Structural Integrity Inspections Buildings covered by this legislation, as described below, that were newer than 15 years old as of January 8, 2024, must have a structural inspection of the primary load bear ing system and report issued within 1 year of the 15th anniversary of the building’s Certificate of Occupancy. For communities with covered buildings that were older than 15 years as of January 1, 2024, there is a firm deadline of January 8, 2026, to obtain an initial structural integrity report. Notwithstanding these deadlines, if a covered building shows signs of any “observable damage” to its primary load bearing system, the community must have CONTINUES ON PAGE 26

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NOVEMBER 2024