What co-op and condo boards need to know about the federal Corporate Transparency Act
Herrick partner, Andrew Freedland, was quoted in a Brick Underground article discussing how the upcoming deadline for the Corporate Transparency Act (CTA) impacts condominiums and cooperatives. Enacted in 2021, the CTA requires U.S. businesses to disclose some information about their owners in an effort to target tax fraud, money laundering and terrorism. NYC's condo and co-op buildings need to comply with the rule by January 1, 2025 or face steep fines.
The article states, "The CTA also requires that beneficial owners -- those with influence over the business -- provide their personal information. In a condo or co-op's case, your building’s beneficial owners would include the board of directors and anyone who owns at least a 25 percent interest in the company, which could be your building’s sponsor, Andrew Freedland, [notes].
Andrew continues, "In most co-ops or condos, it is going to be really uncommon [to have an owner with a 25 percent equity interest]. The party that would be most likely to fall into that category is a sponsor."
In asking if Board's should count on or wait for an exemption the general consensus is no.
"Compliance can be a little bit time consuming, but it sure is going to be less time consuming than dealing with the penalties on the back side, Andrew said. "You should be getting your BOI reports in as soon as possible. Don't leave it to the last minute."