While you were busy watching the Oscars, the Treasury Department announced that it will take no enforcement action for failure to file CTA beneficial ownership reports. Moreover, the Department announced that its upcoming rules will apply to foreign entities only. This means that, unless your HOA is incorporated outside of the United States, the CTA is dead. Thanks for sticking with us during this roller coaster! Now, back to your regularly scheduled broadcast… Who will win Best Picture??? I haven’t watched anything…been too busy watching the CTA!

FinCEN is as sick of the CTA as you all are. Yesterday, they announced that no fines, penalties, or other enforcement action will occur for the failure to file a BOI report while they figure out what the heck they’re doing with the CTA and new rulemaking. We should have more information on what those rules will look like – maybe a common interest community exemption? – by March 21. Until then, go ahead. Break the law. Don’t file. Or do. I won’t tell.

Tl;dr*: File your CTA beneficial owner registration by March 21, 2025. Probably.

The CTA has been the subject of various federal lawsuits and as a result, various conflicting rulings. We have focused primarily on the Texas Top Cop Shop cases, but other cases have also resulted in local and nationwide injunctions against the CTA. The United States Supreme Court had stayed the injunction in Texas Top Cop Shop, but a nationwide injunction remained in place due to a January ruling in Samantha Smith and Robert Means v. U.S. Department of the Treasury, No. 6:24-CV-336 (E.D. Texas 1/7/25).

That injunction has now also been lifted, which means that – as of right now, BOI reporting requirements are legal, and FinCEN has issued a 30-day filing delay making your filing due date March 21. FinCEN has also stated that it “will assess its options to modify further deadlines or reporting requirements for lower-risk entities, including many U.S. small businesses, while prioritizing reporting for those entities that pose the most significant national security risks.”

We believe that our community association clients are lower-risk entities, as they are typically non-profit corporations with simple governance structures and transparent financial recordkeeping obligations. (I’m sure some people believe HOAs are among the country’s most significant national security risks, but I digress.)

In addition, on February 10, 2025, the U.S. House of Representatives voted unanimously in favor of pushing the BOI reporting deadline out to 2026. See, the country can come together!!!

Reach out to any WLPP attorney for the latest news on CTA obligations, and come back here for more tired jokes about state and federal legislation!

*tl:dr means “too long, didn’t read!”

Many years ago, even before Suzanne Leff and I were young, bright-eyed, idealistic baby lawyers, Rich Johnston worked at WLPP. By the time we started practicing, Rich had moved on to his own illustrious firm, Tobey and Johnston, but Suzanne and I have seen his name and work in the firm’s client files for years. Rich has been instrumental in reviving and coordinating our monthly attorney breakfast roundtables, and his diligence has helped to make the Colorado HOA bar the professional, collegial, and creative group that it is today.

Rich recently decided to come back to WLPP, and we couldn’t be more thrilled to welcome him as our colleague, instead of just our predecessor. Rich’s official start date is February 1, 2025, and you’ll be able to reach him at rjohnston@wlpplaw.com.

Welcome home, Rich!

Are you sick of “As the CTA Turns” yet? Yesterday, “to preserve the constitutional status quo,” the Fifth Circuit Court of Appeals vacated the order that stayed the trial court’s preliminary injunction against the CTA and its mandatory BOIR reporting. So, yesterday, when we told you that you have until January 13 to file your reports, yeah – ignore that. For today, anyway.

The order is here.

This afternoon, the Fifth Circuit Court of Appeals granted the government’s emergency motion to stay the trial court’s nationwide injunction against the CTA and its reporting requirements, pending a final determination of the appeal of that order. Finding that the government made a strong showing as to the CTA’s constitutionality, and that the lower court had misapplied precedent, the Court of Appeals reinstated the reporting requirements and ordered that the appeal itself be expedited in an unpublished opinion.

The dispute over the CTA is likely to reach the Supreme Court, as different federal courts have found for and against its constitutionality. The Trump administration will have its own position on the CTA, but in the meantime, everyone who paused reporting needs to go back to the FinCEN website, fill in their FinCEN IDs, and make their happy little beneficial ownership reports.

Merry Christmas.

In a memorandum opinion issued on December 3, 2024, Judge Mazzant out of the Eastern District of Texas issued a preliminary injunction against the Corporate Transparency Act, finding that the Act is likely beyond the scope of Congressional authority. Reporting companies do not have to comply with the CTA’s January 1, 2025 reporting deadline, pending further order from the court. The case is Texas Top Cop Shop Inc., et al., v. Garland, 4:24-cv-00478-ALM.

Unlike the earlier case out of Alabama, the Court’s order in Texas Top Cop Shop applies nationwide. If the preliminary injunction stands (it will certainly be appealed), corporations across the country – including our HOA clients – do not have to file their beneficial owner reports. We will update as soon as we hear news on this front!

Many of our clients have been following CAI’s lawsuit regarding the Corporate Transparency Act’s applicability to HOA clients, Community Associations Institute v. U.S. Department of Treasury, very closely. CAI sought a preliminary injunction, which would postpone the deadline for community associations to file beneficial ownership information reports until the case could be fully heard by the court. That preliminary injunction was denied today, which means that community associations that are not subject to the CTA’s exemptions (e.g., 20+ employees and revenue in excess of $5,000,000 per year) will be required to register no later than January 1, 2025.

So, what is this Corporate Transparency Act thing? What does the government need us to do NOW??? Come join me for lunch at noon on Thursday (September 26, bring your own food to the Zoom!) and we will learn everything you wish you never needed to know about the CTA, with screen grabs from the actual websites. I promise to be less boring than the CTA!

https://us02web.zoom.us/j/89137421569?pwd=6O5lpi0gBt9afbNfBqskVu0qcLoBFO.1

As we predicted in 2022, the Colorado legislature has revised provisions that were created by House Bill 1137, which now means that community associations need to again update their Collection Policy.

What does this mean for you?  Existing clients that previously received WLPP Collection Policies under House Bill 1137 will be entitled to a revised version at a discounted rate upon request.  New clients, or clients that have not yet updated their policies as required by House Bill 1137, can reach out to any of our attorneys to discuss a fixed fee to ensure your community is compliant with its policy obligations.

House Bill 24-1337 goes into effect on August 7, 2024.  Make plans now to have your updated policy in place!  You can email covenants@wlpplaw.com to be directed an attorney who can assist.

In addition, please plan to attend one of our lunchtime classes on House Bills 24-1337 and 24-1233 and what they mean for you and future compliance and collection activities.  Space is limited only to client Board members and client management representatives.  You can register here for July 17 at 12:00 noon, or here for July 18 at 12:00 noon.