CTA Compliance Deadline Suspended

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: 12/4/2024