The Corporate Transparency Act (“CTA”) is now in effect and Mulcahy Law Firm, P.C. has received several questions on this complex new law that impacts corporations, including Arizona HOAs/condos. 

Overview of CTA:
  •   Federal law passed in 2021 to track criminal or terrorist money laundering
  •   The goal of the CTA was to safeguard national security and the U.S. financial system
Does the CTA Apply to HOAs and Condos in Arizona?
  •   Short Answer:  Yes
  •   However, many HOA/condo industry professionals throughout the U.S. do not believe the CTA was intended to apply to HOAs and condos
  •   For now,  the 10k or so HOAs and condos in Arizona must comply with the reporting requirements under the CTA by 1/1/25
  •   Keep the CTA on your HOA/Condo radar during 2024  – it is possible (but, unlikely) that the CTA will be amended prior to Jan. 1, 2025 to exclude HOAs and condos
What are the CTA Reporting Requirements?
  •   The following information must be reported by HOAs and condos by 1/1/25 using the government provided form/link*: 

(a)    business name of association;

(b)    The following information for all board members: legal names, birthdates, home addresses, and driver’s licenses, state IDs or passport numbers;  and

(c)     the same information in (b) above for individuals with substantial control over the association (unclear who this will be under the CTA, but, likely the CEO of the management company)   

*Note:  This is an ongoing reporting requirement – any changes, corrections and additions to the filing must occur within 30 days of changes (board elections, board resignations/appointments, changes in management company, etc.)

Potential Penalties for CTA Noncompliance:
  •   Civil penalties: $500 per day
  •   Criminal penalties: Up to $10,000 and a maximum of 24 months in prison
Here are a two CAI articles that are informative:

Do you have a question related to the CTA? Well, good news – you don’t have to wait long for your question to be answered! Bring your question to our Live Virtual First Friday Event happening tomorrow (details below!).