I can’t tell you how many e-mails and calls I received about whether condo associations and HOAs must comply with a federal statute called the Corporate Transparency Act which required companies to submit beneficial ownership information to FinCEN, a United States Department of the Treasury bureau that works to detect and prosecute financial crimes, including money laundering and terrorist financing.
Boards wanted to know if they were required to now provide the government with personal information about everybody on the board and it was making a lot of board members very uncomfortable.
There certainly was an argument that condos and HOAs were supposed to be exempt from these reporting requirements as nobody is laundering money through condos and HOAs. But, there was no specific exclusion for condos and HOAs under the Act.
So here is where we are at the moment. There was a case filed in a federal district court in Alabama that declared the entire Corporate Transparency Act unconstitutional. That case was appealed to the 11th Circuit Court of Appeals. Why is that important? Florida is also in the 11th Circuit. However, there no decision yet from the 11th Circuit..
Another case proceeded out of Texas that also got a lot of attention. That case was called Texas Top Cop Shop, versus Merrick Garland, U.S. Attorney General; Treasury Department; Director Fincen, Andrea Gacki, Director Of The Financial Crimes Enforcement Network; Financial Crimes Enforcement Network; Janet Yellen, Secretary, U.S. Department Of Treasury, and it was filed in the Eastern District of Texas.
In that case, on December 3rd, 2024, the District Court entered a nationwide injunction enjoining enforcement of the Corporate Transparency Act.
The Government then requested a stay of the preliminary injunction, which the district court denied. The Government appealed, and the court granted the government’s emergency motion for a stay of the injunction pending appeal. The court then reconsidered and said…….OK in order to preserve the constitutional status quo, the nation-wide injunction is back in effect for the time UNTIL the 5th Circuit Court of Appeals decides the entire issue.
SO THE BOTTOM LINE ----CONDOS AND HOAS CAN IGNORE THE CORPORATE TRANSPARENCY ACT --------------- FOR NOW.
If a condo or HOA already complied, you wasted your time and any fee paid to prepare and file it.
If that’s not starting the year with some confusing stuff ---- I don’t know what is.
Wishing all of you and you families a happy and healthy new year.
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