On December 26th, in yet another change of direction, nationwide compliance by all small businesses, including Homeowners Associations, with the reporting requirement under the Corporate Transparency Act (the “CTA”) has been SUSPENDED AGAIN until further decision of the federal courts.

Here is a brief recap of the recent federal Court decisions:

• December 26, 2024: The U.S. Court of Appeals for the Fifth Circuit REVERSED its earlier decision to stay the District Court’s nationwide preliminary injunction, and reinstated the nationwide preliminary injunction.
• December 23, 2024: FinCen announced that the deadline for filing the necessary BOI Reports was extended to January 13, 2025.
• December 23, 2024: The U.S. Court of Appeals for the Fifth Circuit, issued a stay of the preliminary injunction issued by the U.S. District Court, effectively reinstating the enforceability of the January 1, 2025 BOIR deadline.
• December 3, 2024: The United States District Court for the Eastern District of Texas issued a preliminary nationwide injunction against the enforcement of the CTA in the matter of Texas Top Cop Shop, Inc., et al. v. Garland, et al. The injunction blocked the U.S. Department of Treasury from enforcing the CTA’s beneficial ownership information reporting requirements, rendering the previous January 1, 2025 deadline for compliance unenforceable.

IS YOUR HEAD SPINNING YET?

What does this mean for Homeowners Associations?

Once again, all small businesses subject to the CTA, including Homeowners Associations, have been given temporary relief from the enforcement of the CTA during the pendency of the ongoing legal process that continues to play itself out in the federal courts. Homeowners Associations, who have not yet filed a BOI Report, are now allowed to wait to file BOI reports until further decision from the federal courts. Clearly, as the circumstances can change quickly, it is advisable that all Homeowners Associations that are not otherwise subject to an exemption, be prepared with the necessary information to file a BOI Report promptly if required in the future.

What does this mean for Homeowners Associations that have already filed BOIRs?

If your Association has already filed its report with FinCen, then there is no further action necessary at this time. While enforcement of all BOI Reporting requirements, including any updated reporting following any change to any previously filed BOI reports, is again suspended, if you have a Board of Director’s election coming up in the first quarter of 2025, you should remain vigilant in awaiting further updates about the pending court proceedings as well as other legislative actions or administrative decisions related to the CTA and BOI Reporting.

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Of course, this case will be monitored closely for further developments, and further updates will be provided if there are any changes to compliance requirements.

Click here to be directed to the Community Associations Institute’s website with more information about the CTA. 

Last Updated: 12/27/2024

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UPDATE: As of December 27, 2024, the CTA Compliance Deadline has been SUSPENDED again. Please click here to be taken to the most up-to-date information.

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Nationwide compliance by all small businesses, including Homeowners Associations, with the reporting requirement under the Corporate Transparency Act (the “CTA”) has been REINSTATED until further decision of the federal courts. The result is that all small businesses, including homeowners associations not otherwise subject to an exception, MUST submit their Beneficial Ownership Information Reports (“BOIRs”) by the January 1, 2025 deadline.

Earlier this month, the United States District Court for the Eastern District of Texas issued a preliminary nationwide injunction against the enforcement of the CTA in the matter of Texas Top Cop Shop, Inc., et al. v. Garland, et al. The injunction blocked the U.S. Department of Treasury from enforcing the CTA’s beneficial ownership information reporting requirements, rendering the previous January 1, 2025 deadline for compliance unenforceable. However, late on Monday December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit, issued a stay of the preliminary injunction issued by the U.S. District Court, effectively reinstating the enforceability of the January 1, 2025 BOIR deadline.

What does this mean for Homeowners Associations?

Unfortunately, this means that the temporary relief from the enforcement of the CTA during the pendency of the ongoing legal process has now ended after only a few short weeks. Homeowners Associations, nationwide, like all other small businesses subject to the CTA, are once again under the legal obligation to file an initial BOIR by January 1, 2025.

Given the short period of time between the Fifth Circuit’s ruling on December 23, 2024 and the January 1, 2025 deadline, questions about “what happens if we file after the deadline?” are understandable. In September 2024, FinCen provided the following guidance on its FAQs page on its website (https://fincen.gov/boi-faqs):

“FinCEN is working hard to ensure that reporting companies are aware of their obligations to report, update, and correct beneficial ownership information. FinCEN understands this is a new requirement. If you correct a mistake or omission within 90 days of the deadline for the original report, you may avoid being penalized. However, you could face civil and criminal penalties if you disregard your beneficial ownership information reporting obligations.”

What does this mean for Homeowners Associations that have already filed BOIRs?

If your Association has already filed its report with FinCen, then there is no further action necessary at this time. All future reporting under the CTA within 30 days of any change to any information in a previously filed BOIR is required and enforceable.

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Of course, this case will be monitored closely for further developments, and further updates will be provided if there are any changes to compliance requirements.

Click here to be directed to the Community Associations Institute’s website with more information about the CTA. 

Last Updated: 12/27/2024

Happy holidays from all of us at Goldschmidt|Shupe!

Our office will be closed Monday, December 23rd through Wednesday, January 1st, for the holidays. We will reopen Thursday, January 2nd, at 9:00am.

If you have any questions, feel free to email us at office@gshoalaw.com. During the closure, email and voice messages will be monitored for urgent situations.

SECOND UPDATE: As of December 27, 2024, the CTA Compliance Deadline has been SUSPENDED again. Please click here to be taken to the most up-to-date information.

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UPDATE: As of December 23, 2024, the January 1, 2025 deadline has been REINSTATED. Click here for the post related to this update.

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Nationwide compliance by all small businesses, including Homeowners Associations, with the reporting requirement under the Corporate Transparency Act (the “CTA”) has been suspended indefinitely until further decision of the federal courts. On December 3, 2024, the United States District Court for the Eastern District of Texas issued a preliminary nationwide injunction against the enforcement of the CTA in the matter of Texas Top Cop Shop, Inc., et al. v. Garland, et al. The injunction blocks the U.S. Department of Treasury from enforcing the CTA’s beneficial ownership information reporting requirements, rendering the previous January 1, 2025 deadline for compliance unenforceable.

What does this mean for Homeowners Associations?

This preliminary injunction, like its name indicates, is not a final determination about the unconstitutionality of the CTA. Instead, it is a temporary measure that the Court has the authority to implement when, among other things, it finds that the enforcement of a law is likely to be unconstitutional. In effect, a preliminary injunction allows the legal process to continue, while providing protection to the parties against whom the law would be enforced during the pendency of the legal proceedings. This means that Homeowners Associations nationwide, like all other small businesses subject to the CTA, are no longer required to file Beneficial Ownership Information Reports (“BOIR”) by the January 1, 2025 deadline. Any and all reporting is effectively put on hold until the Court issues a final ruling in the case. Even then, the matter is likely to be appealed. It is yet to be seen how long the preliminary injunction will last and/or whether it will be made permanent at some time in the future.

What does this mean for Homeowners Associations that have already filed BOIRs?

If your Association has already filed its report with FinCen, then there is no further action necessary at this time. All reporting under the CTA, including future updates within 30 days of any change to any information in a previously filed BOIR, is suspended by the preliminary injunction.

Of course, this case will be monitored closely for further developments, and further updates will be provided if there are any changes to compliance requirements.

For more information, click here to be directed to a statement issued by the Community Associations Institute about the injunction. The Court’s full written opinion can be downloaded here.

Last Updated: 12/27/2024

This year’s Arizona legislative session adjourned on June 15, 2024. The general effective date for new laws is September 14, 2024. Summaries for the new and/or amended statutes that impact planned communities and condominiums are below and the full text of the statutes can be found at www.azleg.gov. Updated copies of the Arizona Condominium Act and Arizona Planned Communities Act are available to view and download on our website under the G|S Resources tab.

A.R.S. §33-531-539 (NEW): Unlawful Restrictive Covenants; Uniform Act

Permits the governing body (i.e., a Board of Directors) in a common-interest community to amend governing documents to remove unlawful restrictive covenants without a vote of the owners/members of the common-interest community association and notwithstanding any provision in the governing document or other law. An unlawful restriction means a prohibition, restriction, covenant, or condition in a document that interferes with or restricts the transfer, use or occupancy of real property on the basis of race, color, religion, national origin, sex, familial status or disability in violation of state or federal law. Allows an Owner/Member to request such an amendment and provides 90 days for the governing body to determine whether the governing document includes an unlawful restriction. If so, the governing body then has 90 days to amend the governing document to remove the unlawful restriction.

A.R.S. §§9-462.10 & 11-820.04 (NEW): Unlawful Restrictive Covenants; Uniform Act

Applies only to Municipalities and Counties, defining “fowl” as “a cock or hen of the domestic chicken” and specifically protecting the ability of a resident of a single family detached residence on a Lot of ½ acre or less in size from keeping up to six (6) fowl in the backyard. Regulations may be adopted to prohibit male fowl, including roosters, to prohibit fowl “running at large”, to require enclosures (20-foot setbacks, max. 200 square feet, max. height 8 feet), to limit enclosures to shorter than the fence line of Lots less than 1 acre, and to require regular maintenance, disposal of waste, storage of food, and appropriate water sources.

A.R.S. §33-1820 (NEW): Declarant Control; Planned Communities

Establishes new requirements regarding Declarant Control of Planned Communities. Declarations must include the date or method of calculating the date of the termination of the Declarant Control Period, which shall in no circumstance be later than the date on which the Declarant conveys the second to last Lot to a buyer. Also requires the Association to maintain the Common Area to at least the same standard as under Declarant Control and to not impede the Declarant’s development rights or use of the Common Areas in the same manner as other Members so long as the Declarant still owns at least one Lot.

A.R.S. §§33-1202, 33-1256, 33-1802, & 33-1807 (AMENDED): Condominiums; Planned Communities; Lien; Assessment

Defines new terms: “Assessment (Condo Act only),” “Common Expense Lien,” and “Unit Owner/Member Expenses.” Clarifies the distinction between amounts secured by the Association’s automatic lien and other Owner/Member charges. Modifies the assessment lien to include only assessments, charges for late payment of assessments if authorized in the Declaration, reasonable collection fees incurred or applied by the Association, and reasonable attorneys’ fees and costs incurred with respect to those assessments, if the attorneys’ fees and costs are awarded by a court. Requires that the Association’s Board of Directors exercise “reasonable efforts” to communicate with the Owner/Member and to offer a reasonable payment plan before filing a foreclosure action. Modifies the priority of payment application to include payment of due, but not yet delinquent, assessments before charges for late payment of the assessment(s), and any collection costs or attorneys’ fees and costs. Prohibits an Association from transferring ownership or control of debt for common expense liens or Owner/Member expenses to a third-party entity or collector.

A.R.S. §§33-1248 & 33-1804 (AMENDED): Homeowners’ Associations; Meeting Agendas

For Members’ meetings, the Association Secretary must provide an agenda along with the meeting notice for Members’ Meetings by hand-delivery, mail, website posting, email or other electronic means or posting at a community center or other similar location. For Board meetings, the meeting agenda must be delivered in advance of the Board meeting along with the meeting notice at least 48 hours before the meeting.

A.R.S. §33-442 (AMENDED): Homeowners’ Associations; Fees

Prohibits an Association from charging a Transfer Fee otherwise allowed in accordance with ARS §33-442(C) for any conveyance between parties prescribed by ARS 11-1134(B)(3) or (7). These provisions apply to conveyances involving nominal or no consideration between certain enumerated related-parties.

A.R.S. §33-1808 (AMENDED): Homeowners’ Associations; Flagpoles

Associations cannot prohibit an Owner from using two or fewer wall-mounted flagpole holders.

A.R.S. §33-1221 (AMENDED): Condominiums; Interior Improvements; Approvals

Prevents a Condominium Association from either: 1) prohibiting a Unit Owner from using any manner of decoration on the interior of a Unit; and 2) prohibiting a Unit Owner from improving or altering the interior of a Unit in a manner that may disturb adjacent Unit occupants if the Unit Owner purchases and installs reasonably necessary improved materials, accessories or other adjustments that eliminate or minimize the potential disturbance.

To view and/or download a PDF of the Condominium Act, click here.

The Arizona Condominium Act packet contains the following:

• General Provisions
• Creation, Alteration, and Termination of Condominiums
• Management of the Condominium
• Administration of the Condominium Act
• Other Pertinent Statutes

Effective: September 14, 2024

To view and/or download a PDF of the Planned Communities act, click here.

The Planned Communities Act packet contains the following:

• Applicability; exemptions; voluntary election to be subjected to chapter
• Definitions
• Assessment limitation; penalties; notice to member of violation
• Open meetings; exceptions; notice; agenda; policy statement
• Association financial and other records
• Resale of units; information required; fees; civil penalty; definition
• Rental property; member and agent information; fee; disclosure
• Common expense liens; priority; mechanics’ and materialmen’s liens; notice
• Flag display; political signs; caution signs; for sale, rent or lease signs; political and community activities; definitions
• Parking; public service and public safety emergency vehicles; definition
• Board of directors; annual audit
• Board of directors; contracts; conflict
• Proxies; absentee ballots; definition
• Removal of board member; special meeting
• Slum property; professional management
• Association authority; commercial signage
• Solar energy devices; reasonable restrictions; fees and costs
• Declaration amendment; design; architectural committees; review
• Community Authority Over Public Roadways: Applicability
• Artificial turf ban; prohibition; restrictions; attorney fees; applicability
• Declarant control
• Other Pertinent Statutes

Effective: September 14, 2024

Thank you to everyone that joined us for Goldschmidt|Shupe’s 2024 Summer Series. If you weren’t able to attend, or just want to rewatch a session, REPLAYS are now available for all three sessions for on-demand viewing. Please note that even if you previously registered for the Live session, you will still need to register for the Replay. Once you’ve registered, the Replay will be available to watch immediately.

Corporate Transparency Act: Six Months Later
Original Air Date: Tuesday, June 25th at 12:00pm
Registration for On-Demand Replay: https://my.demio.com/ref/NxAoOS1eAwYibAHP

Mike reviews the origins and requirements of the Corporate Transparency Act as it applies to Homeowners Associations, and provides updates as to recent events in the Courts and Congress during the first six months that the Act has been in effect.

2024 Legislative Update 
Original Air Date: Wednesday, July 17th at 12:00pm
Registration for On-Demand Replay: https://my.demio.com/ref/SUxlZAWFp1wJ0Fsb

Highlights from the 2024 Legislative session, including new laws, and their impact on community associations

Common Issues in Community Associations
Original Air Date: Tuesday, August 20th at 12:00pm
Registration for On-Demand Replay: https://my.demio.com/ref/3FGonPtRSOLLrjMg

Mike presents several factual scenarios to examine common questions and real-world disputes that arise in community associations and the most effective strategies to address or resolve them.

December 2023

After almost four decades of service to hundreds of common interest communities across southern Arizona, I will be retiring at the end of 2023.

I have been fortunate to have had such a long career in HOA law and have met so many wonderful professionals and volunteers over the years– many of whom I am honored to call friends. You all have enriched my own life experiences and made me a better legal practitioner and person.

My law partner, Mike Shupe, and our loyal and skilled staff at Goldschmidt|Shupe will continue to be available to serve you going forward for all your community association legal needs. I do not believe that I could leave you in more competent and capable hands. If you have any questions or concerns, please do not hesitate to reach out to Mike, Mary, and Shannon.

While I am delighted to now have more time to spend with family and friends, and to pursue other personal activities and projects, I will be continuing to volunteer with the Community Associations Institute and on my own community Board. I look forward to still communicating with many of you in these roles.

Thank you for your trust in me as legal counsel and for the opportunity to assist you and your communities over the past many years. I wish you all the best in the new year and beyond!

Yours Truly,
Carolyn Goldschmidt