The U.S. Court of Appeals for the Fifth Circuit (“Federal Appellate Court”) cannot seem to make up its mind regarding enforcement of the Corporate Transparency Act (“CTA”). Recall that the CTA requires condominium and homeowners associations, as well as co-ops (“Associations”), to file documents and information with the Financial Crimes Enforcement Network (“FinCEN”).
On December 3, 2024, a U.S. District Court instituted a “pause” (i.e., preliminary nationwide injunction) on the CTA filing requirement. On Monday, December 23, 2024, the Federal Appellate Court lifted the injunction to (once again) require condominium and homeowners associations to complete their filings by January 13, 2025.
On December 26, 2024, the Federal Appellate Court flip-flopped, reinstating the preliminary injunction (or “pause”), which means that FinCEN is once again prohibited from enforcing the CTA filing requirement.
FinCEN has publicly stated that companies (including Associations) are “not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
Our recommendation is for each Association to make its own decision. For those boards that wish to voluntarily file in order to ensure compliance if the Federal Appellate Court again changes its mind, we encourage them to do so. Boards that prefer to continue the “wait and see” approach may do so, with the understanding that the situation can change rapidly and a deadline for filing can be reinstated.
BRK will continue to monitor the situation and issue updates as they become available.