Here are the latest developments regarding the Corporate Transparency Act and how it might impact community associations.
As many of you are aware, the CTA mandates that business entities in the U.S. report the identities of their beneficial owners to the Financial Crimes Enforcement Network. For community associations, beneficial owners are the volunteers serving on the board of directors.
This requirement has been met with significant resistance from community associations due to concerns about the cost, complexity, legal liability, and potential privacy issues.
In a promising development, Rep. Rich McCormick from Georgia recently introduced HR 9045, a bill that specifically seeks to exempt community associations from the CTA’s reporting requirements. This legislative move is critical, as it recognizes the unique structure of community associations and the undue burden the CTA imposes on them.
We’ve updated CAI’s call to action to give you an opportunity to contact your member of Congress, urging them to support HR 9045. Please participate by clicking here – https://www.votervoice.net/CAI/Campaigns/116499/Respond
As reported previously, the National Small Business Association won a significant victory in an Alabama federal court challenging the CTA. This lawsuit has sparked a series of similar legal challenges across the country as businesses argue the CTA oversteps Congress’s power to regulate interstate commerce. The federal government has appealed the Alabama decision to the U.S. Court of Appeals for the 11th Circuit. Oral arguments are scheduled for Sept. 27.
NOTE: It is important to note that this court ruling does not negate the requirement for community associations to comply with the Corporate Transparency Act by Jan. 1.
In support of our members, Community Associations Institute has hired a law firm to file a lawsuit challenging the CTA. We expect to file the lawsuit sometime this summer, including a request for a preliminary injunction so community associations won’t have to comply with reporting requirements prior to the January reporting deadline.
NOTE: We are collecting data from community associations about their knowledge and sentiments about the Corporate Transparency Act. Please take a few minutes to provide feedback on the survey today: https://www.surveymonkey.com/r/CD3TNR6
For more detailed information and resources, including a guidance document specifically tailored for community associations, please visit CAI’s Corporate Transparency Act Resource Page – www.caionline.org/cta
We will continue to advocate on your behalf and keep you informed on any new developments.
I think you guys are bad for HOA’S.
Thank you for sharing such valuable information. Definitely supporting the call to action.
Thank you for working so hard to protect our Board members! It’s hard enough to find good people willing to serve their communities and this has become a huge concern for those currently serving.
The CTA is the missing link between homeowners and managing directors/Managementcompanies. So many communities and homeowners are subjected to the mismanagement and dishonesty of board members. Board members have a fiduciary responsibility to the association and the homeowners. The Corporate Transparency Act protects homeowners from ommission of the board members with personal agendas. Board members should not have the ultimate power and stakeholders should have insight in the operations of their assets.
We are a small 88 unit community with 5 board members. It is a challenge to find members to serve. The CTA will make our Association unmanageable. Thank you CAI for fighting against the CTA.
We are a small 77-unit community with 5 board members. It is a challenge to find members to serve and 3 of our members have said they will resign if we have to comply with the CTA. Thank you, CAI, for fighting against the CTA.
We are a small 18-Unit residential Condominium with all volunteer Board of 5 members and no professional management. No amenities. Very frugal annual budget. The law should exempt small condo associations with budgets of under $100,000. Penalties in this law could seriously jeopardize our ability to attract Board members and costs to comply adds an additional financial burden for our homeowners.