How the Treasury’s Corporate Transparency Act Suspension Impacts HOAs

The U.S. Treasury Department’s recent announcement to suspend enforcement of the Corporate Transparency Act (CTA) against U.S. citizens and domestic reporting companies marks a significant shift in regulatory requirements for businesses and organizations, including homeowners associations (HOAs). This decision eliminates the burdensome reporting requirements that would have impacted thousands of HOAs nationwide.

What Was the Corporate Transparency Act?

The CTA, originally enacted to combat financial crimes such as money laundering and fraud, required many U.S. businesses—including HOAs structured as corporations or LLCs—to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN). This meant that board members of affected HOAs would have been required to disclose personal information, such as their legal name, date of birth, residential or business address, and a government-issued identification number.

Failure to comply with the CTA could have resulted in hefty penalties, including fines of up to $10,000 and possible jail time. Many HOAs were scrambling to determine whether they fell under the law’s requirements and how to navigate compliance without adding unnecessary administrative burdens.

What the Treasury's Suspension Means for HOAs

With the new Treasury Department ruling, enforcement of the CTA has been completely halted for U.S. citizens and domestic entities—including HOAs. The key takeaways for community associations include:

• No More Reporting Requirements: HOAs no longer need to submit beneficial ownership reports to FinCEN.
• No Risk of Penalties: Any potential fines or legal consequences related to noncompliance with the CTA have been eliminated.
• Regulatory Focus Shifted to Foreign Companies: The Treasury Department is revising the rule to apply only to foreign reporting companies, meaning HOAs and other U.S.-based organizations will be exempt moving forward.

A Win for HOAs and Small Communities

For many HOAs, the now-defunct reporting requirements were seen as an unnecessary regulatory burden. Volunteer board members, who are often community residents, were facing the prospect of navigating complex federal filing procedures or hiring legal professionals to ensure compliance. The suspension of the CTA means HOAs can now focus on their primary role—managing their communities—without the looming threat of administrative red tape and penalties.

This decision aligns with broader efforts to reduce regulatory burdens on small businesses and local organizations. As U.S. Treasury Secretary Scott Bessent noted in the announcement, this move is aimed at "unleashing American prosperity by reining in burdensome regulations." For HOAs, this means less paperwork, lower costs, and more time spent on improving community living rather than dealing with federal compliance concerns.

What Should HOAs Do Now?

While HOAs no longer need to worry about CTA compliance, it is still good practice to:

• Stay Informed: Federal regulations can change, and while the Treasury has halted enforcement, HOAs should keep an eye on any future developments.
• Maintain Internal Records: Even though reporting is no longer required, keeping accurate internal records of board members and financial transactions remains a best practice for accountability and governance.
• Review Governing Documents: HOAs should periodically review their bylaws and governance policies to ensure they align with current legal and regulatory standards.

Final Thoughts

The Treasury Department’s decision to suspend the Corporate Transparency Act’s enforcement removes a significant compliance hurdle for HOAs across the country. This shift ensures that community associations can continue to operate without additional administrative burdens, allowing them to focus on enhancing their neighborhoods.

For HOAs that were previously concerned about meeting the CTA's deadlines, this announcement provides much-needed relief. Looking ahead, HOAs should continue prioritizing transparency and good governance while keeping an eye on any further regulatory updates.