As noted in a prior post, the Community Associations Institute – an international organization that works to provide education, information, and resources to those professionals working in the community association world as well as homeowners who voluntarily serve their communities – filed a lawsuit in September against the U.S. Department of the Treasury, Treasury Secretary Janet Yellen, and the Director of the Financial Crimes Enforcement Network (FinCEN), challenging the application of the Corporate Transparency Act (CTA) to community associations.
As part of the lawsuit, CAI filed a request for a preliminary injunction to preclude enforcement of the CTA against CAI’s members during the pendency of the lawsuit. The hearing on that request took place October 11, 2024. On October 24, 2024, CAI learned that its request for a preliminary injunction was denied.
Despite this ruling, CAI remains committed to seeking an exemption for all community associations from the act’s filing requirements.
- CAI’s legal team is reviewing the decision and exploring all options for moving forward including a potential appeal.
- CAI staff, legal, and lobbying teams will continue to use the regulatory process to urge the U.S. Department of Treasury to grant an exemption to community associations.
- CAI will continue to urge members of Congress to pass legislation to exempt community associations or pass legislation to delay filing requirements for at least one year.
It is unlikely that any action will be taken on this matter before the 2024 election.
Unless and until the Treasury Department issues an exemption from the CTA’s reporting requirements for all community associations, all associations must report certain information about “beneficial owners” of the association, which, by definition, includes members of an association’s Board of Directors.
Hellmuth & Johnson will continue to keep you updated on the proceedings and on the CTA’s reporting requirements for community associations.