PROBLEM: ONE BOARD MEMBER WON’T PROVIDE BENEFICIAL OWNERSHIP INFORMATION

Our board is preparing to file the Beneficial Ownership Information Report (“BOIR”), but one member flatly refuses to provide the information we need. What can we do either to compel his cooperation or to avoid the penalties for filing late, or not filing at all, if he does not?

Solution: Start by identifying the reluctant board member’s concerns. If he or she fears disclosure of “personal” information, explain that the only information required is on his or her driver’s license.

If the person doesn’t want to disclose information to the individual who will be filing the report, he or she can send personal information directly to FinCEN using the portal on the agency’s Web site and obtain an ID number, which can be used in the associations BOIR.

If this trustee has slammed the door on any possible cooperation, the association may have to take further action for non-compliance including seeking the member’s removal from the board. Most condominium documents state that owners are required to comply with applicable laws.

The Corporate Transparency Act (CTA) is a law that applies (as currently interpreted) to condominium associations and the trustee is required to comply with it. If the member continues to refuse, the board could file suit, seeking a court order requiring compliance. Seeking a court order would be the most aggressive step and one that hopefully is not needed.

One way to try and avoid a potentially divisive situation and/or legal action, is to make board members and unit owners aware of the CTA requirements.

Amending the association’s governing documents to specify that trustees are required to comply with the CTA and that failure to do so will be grounds for removal from the board is one option. The board can also adopt a resolution establishing this requirement, but an amendment approved by a super majority of owners can be a stronger enforcement tool. Going forward, you should make sure that candidates for board positions understand the requirement. For now, if the tug-of-war with this trustee brings you close to the January filing deadline, we believe it makes more sense to go ahead and file your report using the information you have rather than not filing at all. If reasonable measures have been taken to try to comply there is a good case the association has not “willfully” violated the requirements.

Contact Mark Einhorn with questions or concerns relating to the filing of a Beneficial Ownership Information Report.