As previously discussed in our related posts on the Corporate Transparency Act (“CTA”), the deadline for filing the beneficial ownership interest report (“BOI”) is December 31, 2024 for the vast majority of community associations.
On December 3, 2024, a nationwide injunction order was issued in Texas Cop Shop v. Garland in the U.S. District Court of the Eastern District of Texas. In sum, the Financial Crimes Enforcement Network (“FinCEN”) is barred from enforcing the CTA, and the injunction applies to all entities that would need to comply even if they are not a party to the lawsuit. We anticipate an appeal of the injunction.
As the Court of Appeals or the U.S. Supreme Court could intervene and lift or narrow the injunction, community associations are left with a dilemma. With very little notice, the injunction could be lifted or narrowed requiring board members to scramble, creating the dilemma of whether to file and comply or not. The incoming Administration could also take actions that impact implementation and enforcement.
In light of the potential penalties and the uncertainty, each and every board will need to decide whether to proceed with compliance or be ready to file at a moment’s notice.
