Common Interest Services, Inc.

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CAI Advocacy Summit

 

Nels Atha visited Capitol Hill to meet with the offices of some of California’s members of Congress to discuss federal legislation affecting community associations, including Representative Maxine Waters (CA 43rd District) and Senators Kamala Harris and Dianne Feinstein.

While the Davis-Sterling Act provides for the majority of legislation presiding over California community associations, federal housing legislation can have a very impactful influence on California communities. Taking the time to educate our legislators about what community associations are and how they function, as well as giving a voice to their constituents that belong to community associations, can have a powerful influence on the way federal legislation affects the communities we serve. A few of the federal legislative priorities that we focused on at the summit were Housing Finance Reform, Disaster Relief for HOAs, and the National Flood Insurance Program. Below is an overview of how these issues are affecting community associations:

Housing Finance Reform

After the housing crisis of 2008, Congress has been tasked with reforming the housing finance system. In 2016, the Housing Opportunity Through Modernization Act (HOTMA) was passed with the goal of increasing access to FHA loans. In practice however, the number of associations with FHA approval has decreased.  According to CAI, only 6% of condo associations have FHA approval. The department of Housing and Urban Development (HUD) published a proposed rule in 2016 to make FHA approval more attainable by condominium associations but has not approved it.

Click Here to View HUD Press Release

Check out this post for a legislative update by a local industry leader in the FHA condo approval process.

You can learn more from CAI:

CAI Online - Mortgage Finance Reform

Disaster Relief

Did you know that community associations are not eligible for emergency relief from FEMA following a natural disaster? Although community association members pay the same federal taxes as owners of single family homes, they are not allotted the same support from FEMA following a natural disaster. You can help support CAI’s efforts to change this by contacting your representatives in Congress and asking them to support the Disaster Assistance Equity Act of 2017, H.R. 3238.

Watch this video from CAI to learn more:

Or read more about it here:

CAI Online - Disaster Relief Fairness

National Flood Insurance Program (NFIP)

The NFIP is the largest insurer of flood risk in the U.S. and Congress votes every 5 years to extend its authority to sell insurance policies. The NFIP’s current authorization is set to expire on July 31, 2018 and has been caught up in some controversy in the Senate.

Learn more about the controversy from CAI:

Be an Advocate!

As members of CAI, our staff regularly lends our voice locally and nationally to advocate for the needs of our clients. We invite board members, owners and residents to join us and help to make our voice that much more powerful. Our representatives want to hear from you, their constituents, to take the lead on how they can better serve community associations.

Join CAI Today

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CAI National Conference

Last week, CAI held the Annual Conference in Washington D.C. Our executives, Nels and Bre Atha were in attendance to meet with and learn from trendsetting leaders of the community association industry from all over the world. CIS is committed to offering the most innovative products and services to our clients. We accomplish this by keeping our staff educated on current industry trends and recent legislative changes that affect our business and the communities we serve. It is our goal to provide the resources, knowledge, and guidance to the board members we work with in order to bring harmony and order to the associations they serve. Events like the CAI Annual Conference help us to achieve these goals.

Stay tuned for more details about all the happenings at the conference, including:

And more...

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FAQ: 1099’s and DE 542’s

Part I: 1099's

What: Form 1099 is a federal tax form used to report miscellaneous income to the IRS for those that do work for the association. Many associations pay independent contractors and other unincorporated entities for work throughout the year. Form 1096 is a summary of the 1099’s filed by the association and is provided to the IRS. Read more about Form 1099 here.

Who: 1099’s are required by the IRS.

When: 1099’s must be issued when the association pays over $600 to an independent contractor or other unincorporated entity.  They must be mailed by January 31st of the following tax year (i.e. 2017 payments must be reported by January 31, 2018).

Why: Accurate and timely filing of 1099’s ensures the association will avoid penalties. The penalty rates range from $50-$530 per form. For more details, click here.

How: All payments that the association has made for the calendar year are summarized by our accounting department and 1099’s are issued to all vendors that meet the federal requirements. We have controls in place to ensure we obtain all pertinent tax information from the association’s vendors to make sure the 1099 filings are as accurate as possible.

Part II: DE 542's

What: Form DE 542 is a report of independent contractors. The association is required to report independent contractor information when it hires an independent contractor and the following statements apply:

  • The association is required to file a Form 1099-MISC for the services performed by the independent contractor (see Part I: 1099’s).
  • The association pays the independent contractor $600 or more or enter into a contract for $600 or more.
  • The independent contractor is an individual or sole proprietorship.

Read more at the EDD website, here.

Who: DE 542’s are required by the California Employment Development Department (EDD).

When: A DE 542 must be filed within 20 days of either making payments of $600 or more or entering into a contract for $600 or more with an independent contractor in any calendar year, whichever is earlier.

Why: The information reported on a DE 542 is used to assist state and county agencies in locating parents who are delinquent in the child support obligations. Accurate and timely filing of the DE 542’s ensures the association will avoid facing penalties. The association may be charged a penalty of $24-$490 for each failure to report within the required time frames.

How: When a new vendor is entered into our software, we determine if these filing requirements will apply to them. Once any qualifying vendors reach payments of $600 or more, our accounting department generates and files a DE 542 for that vendor.

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