CTA Compliance Deadline Reinstated
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.
* * *
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.
***
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