Regulatory Update: Corporate Transparency Act BOI Filing Enforcement
It’s important that community associations keep a finger on the pulse of what’s happening with the Corporate Transparency Act (CTA). A law enacted by Congress as part of the Anti-Money Laundering Act of 2021, the CTA sought to increase governmental awareness of who owns and operates small businesses, including homeowners’ associations (HOAs), in the United States.
Today, in March 2025, the Corporate Transparency Act continues to change, affecting reporting requirements for companies nationwide. Here in our legal update, we answer some of the most pressing questions about the CTA and HOA laws, CTA updates, CTA deadline extensions, and more.
What is the Corporate Transparency Act for HOAs?
Part of an effort by Congress to help combat money laundering, financial fraud, and terrorism financing, the Corporate Transparency Act is designed to prevent the masking of ownership through shell companies or other legal means.
While the CTA wasn’t intended to target community associations, HOAs are subject to its requirements. The government wants to better understand who owns or are the decision makers of businesses nationwide. Therefore, community association board members may be required to submit specific personal information to the federal government.
What’s the 2025 BOI Filing Deadline for Community Associations?
For most companies, the deadline for reporting beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) is now March 21, 2025. FinCEN is currently assessing this deadline. With more legal updates to follow, it may be modified again before March 21 approaches.
The original deadline for compliance with the CTA was January 1, 2025, but that deadline had been suspended by two federal courts considering legal challenges. On February 18, 2025, the last of those court injunctions was lifted, and FinCEN set a new reporting deadline of March 21. Accordingly, HOA laws have changed, and boards of community associations that haven’t filed their initial reports now have until March 21 to submit their information to FinCEN.
Is BOI Reporting and Enforcement Suspended?
On February 27, FinCEN announced that it didn’t plan to issue fines or penalties against companies that miss the new compliance deadline (March 21). It also intends to issue a new rule providing clearer guidance by that date.
On March 2, 2025, the Treasury Department announced that it had suspended enforcement of the beneficial ownership reporting requirements. The announcement specifically says it will not enforce penalties or fines against U.S. citizens and domestic reporting companies and their beneficial owners. It also stated it would propose narrowing the scope of its rule going forward to target only foreign reporting companies.
Do Homeowner Associations Need to File BOI Reports?
Yes, HOAs may be required to submit BOI reports since many are businesses that have filed Articles of Incorporation with a secretary of state. Reporting companies, company applicants, and beneficial owners must file under the CTA.
· Reporting companies: A corporation, limited liability company, or any company created by filing a document with a secretary of state or any similar office. Most community associations file Articles of Incorporation with their secretary of state’s office or similar agency.
· Company applicants: The person or persons (no more than two) who directly filed the documents that created the company (association) or the person who’s primarily responsible for directing or controlling the filing of the documents creating the association.
· Beneficial owners: Beneficial owners are “any individuals” who, directly or indirectly, exercise “substantial control” over a reporting company or own or control at least 25 percent of the company. Basically, any officer or director of an association can be considered a beneficial owner.
Do Condo Associations Need to File BOI Reports?
Similar to homeowners’ associations, condo associations are likely considered reporting companies and will need to file BOI reports pursuant to the law. Seek advice from an association attorney to understand what legal updates your condo is subject to.
Who is Exempt From Corporate Transparency Act?
Currently, enforcement efforts are stalled by the Treasury Department, and fines and penalties will not be levied against non-compliant domestic companies. However, this regulation continues to evolve.
Generally, it’s an HOA law, and community associations are required to comply with the terms of the CTA. For a reporting company to qualify for an exemption, it must be a larger business (or community association) with 20 or more employees and $5 million in annual receipts or sales. Congress also specifically exempted 23 types of entities that are subject to other significant regulatory guidelines, including:
· Unincorporated associations
· An association qualified as tax-exempt under section 501(c) of the federal IRS code
For a business owner to be considered exempt, they must be an agent or “act on behalf of a beneficial owner.” Community association managers, for example, would qualify for this exemption.
In March 2025, CTA exemptions are being evaluated and may be subject to change.
Does Local Law Supersede HOA Rules?
Yes, local laws supersede HOA rules. Just below local laws are a community’s Codes, Covenants, and Restrictions, or CC&Rs. CC&Rs are legally binding community procedures and requirements that hold HOA residents and the association to the standards set within them. Second to local laws, CC&Rs are the most significant and comprehensive documents in the homeowners’ association rules hierarchy.
What Does This All Mean?
As things stand today, the Corporate Transparency Act—the law—is still in place. However, FinCEN and the Treasury Department, the agencies responsible for enforcing the law, have announced they will not enforce or penalize U.S. citizens or domestic companies (including HOAs) for failure to comply with the law or current rules.
Stay tuned for more legal updates to HOA laws. Further formal guidance and action by both FinCEN and the Treasury Department is expected in the coming weeks.
More Legal Costs for HOAs in 2025 Was Our Expert’s Prediction
The CTA is top of mind for boards across the United States, underscoring the fact that HOA laws are constantly under the regulatory microscope. HOA boards are feeling the pressure of this legislation and have sought legal guidance to meet compliance. Alex Turner, business development executive for Associa, predicted this would happen. Read “Homeowners’ Association Industry Trends for 2025” to learn what else she sees coming for the year.