CTA Deadline for Community Associations Imminent

   As has been reported in prior articles in A Legal Moment, the CTA requires various entities to file personal information about their owners, directors and officers ‒ all in the government’s efforts to fight money laundering.  Although the objective is laudable, the requirement extends to not-for-profit entities including most home- and condominium owner associations, a group hardly given to illegal money laundering.
 
   In recognition of that fact, in September 2024 the Community Associations Institute (CAI), a not-for-profit trade association supporting community associations across the country, filed suit in federal district court in the Eastern District of Virginia, seeking, among other things, a preliminary injunction that, if granted, would have suspended the filing requirement pending the ultimate disposition of the suit.
 
   On October 24, 2024, the trial court denied CAI’s motion, finding that the association was unlikely to prevail on the merits of its lawsuit ‒ a necessary prerequisite to the issuance of a preliminary injunction.   While a somewhat ominous forecast by the court, CAI has already filed an appeal of the ruling with the Fourth Circuit Court of Appeals.  That appeal is pending and not likely to be resolved ahead of the deadline.
 
   For the moment, however, the law remains active and it is therefore advisable for home- and condominium owners associations to comply with the CTA’s reporting requirements inasmuch as noncompliance carries potential criminal and civil penalties.
 
   MRG’s earlier articles on the subject include Corporate Transparency Act Launches January 1, 2024 and Deadline for Community Association Reporting Under the Corporate Transparency Act Approaches