Corporate Transparency Act Saga Ends for HOAs; Reader Question – What About Renter Problems?

By Kelly G. Richardson, Esq. CCAL, HOA Homefront Column 

CORPORATE TRANSPARENCY ACT WILL NOT BE ENFORCED AGAINST HOAs.

Many HOA attorneys, managers and boards have been following the saga of the Corporate Transparency Act, which originally required HOAs to file “Beneficial Ownership Information” reports with the FinCEN, a subdivision of the U.S. Treasury Department. Court challenges and appeals had suspended and then reinstated the Act’s deadlines so that the original January 1, 2025 deadline had most recently slid into later March 2025. The filing requirement was on, then off, then most recently back on, resulting in confusion.

That saga ended on Sunday March 2, 2025, as the Treasury Department announced it is suspending enforcement of the CTA against US Citizens and domestic corporations (Treasury press release sb0038). This means HOAs can now ignore the CTA and its BOI reporting requirements. HOAs which have already filed such reports should now be relieved of having to update those reports going forward.

Congress had a pending bill on the subject, but it appears President Trump’s public comments in social media against the CTA indicate he may have had a hand in the reversal of the Treasury Department’s position on CTA enforcement. So, it appears now that HOAs can breathe easier and not worry further about the BOI requirement.

READER QUESTION

Kelly: We live in a massive HOA. Our board members and management do a great job of overall maintenance and landscaping of the complex, but rental units have become a consistent problem. At a recent HOA meeting our board and manager refused to reveal how many units are rentals. They said the residents do not have the right to know who our legal counsel is, nor do they have access to them. Some of these problem renters brought into the HOA by negligent landlords linger around for years before they are evicted. The HOA is saying there is no transparency from our counsel as to why it takes so long for the evictions. E.G., Santa Clarita. 

Dear E.G.:

Rentals are often a problem in HOAs, but Civil Code 4741 bans “unreasonable” restrictions on rentals. We don’t know what is “unreasonable” because the statute doesn’t define that term, but we do know that rentals can be capped at no less than 25% and that short-term (30 days or less) rentals can be banned. HOAs often forget that the landlord can still be held responsible for the problems caused by their tenants, and we often remind landlords that if the HOA must pursue court relief against their tenant the HOA will seek attorney fee reimbursement from the landlord. We normally do not seek eviction of a homeowner’s tenant, but we do frequently pursue restraining orders against tenants who are a threat or nuisance to their neighbors. 

Most HOAs do not allow homeowners to contact the HOA’s legal counsel, because boards do not want bills run up from homeowner calls unless the board has approved the expense in advance. Also, lawyers normally report confidentially to the board on the progress of legal matters but those reports are not shared with the entire HOA. That can be frustrating, but the protection of confidential legal strategies and other reasons dictate that such updates are not shared publicly with the HOA members.

Best Regards, Kelly