Community associations, like many other entities, generally have reporting requirements under the Corporate Transparency Act (CTA). Beneficial owners of the community association, like board members, have to be registered, but how about property managers. The CTA defines a beneficial owner as any individual who, directly or indirectly:   Owns or controls at least 25% of the ownership interests of the entity or exercises substantial control over the entity.

Property managers for community associations do not typically need to register as a BOI member under the CTA. Here’s why:

• Beneficial Ownership: The CTA focuses on identifying individuals who ultimately own or control a company.Property managers usually don’t have this level of ownership or control over a community association. They act as agents for the association, carrying out the decisions of the board of directors or the association members.   
• Significant Control: A property manager would only need to be reported as a beneficial owner if they had control over the association, such as owning a stake in the entity or holding a position with significant decision-making authority. This is rare in a typical property manager role.   

However, there are some exceptions:

• Direct Ownership: If the property manager has a substantial ownership stake in the community association, it would likely meet the definition of a beneficial owner and need to be reported.
• Unusual Control: In rare cases, a property manager might have an unusual level of control over the association’s operations, giving them significant influence over decision-making. This could trigger the beneficial ownership reporting requirement.
• Officers: Many property managers serve as Assistant Secretaries of the Community Association. They don’t exercise decision making control over the association, but being an officer of the association calls into question whether they should be included as BOI registrants for the association. Management should review their management contract to see if it answers the questions as to substantial decision making authority. Management may also consider changing its contract moving forward to make sure it doesn’t have substantial decision making authority for the association and thus, not have to report as a BOI member.

For all of your community association CTA compliance and electronic voting needs, visit www.ballotmanagement.com.