June 3, 2026 | Mark Luis Foster

Just when you think things couldn’t get any more “interesting” for HOAs, here’s a doozy from Realtor.com:

A bubbling legal battle over a federal anti-fraud law has sparked worries from homeowners association advocates that they could be newly buried in bureaucratic red tape—and face increased costs.

This is all about the (a-hem) Corporate Transparency Act.  CTA was indeed bubbling throughout HOA land in 2024, and at the time board leaders were required to register their name and contact information with the federal government as part of a anti-money laundering effort under the Biden Administration. We covered it continuously in our chapter meetings. The requirement fell apart when the HOA requirement was “de-emphasized” (read: Not Required) when Trump came into office. The focus turned more to international fraud.

The CTA, which is still on the books, was a mess ever since it was conceived. It originally faced a series of legal challenges since its 2021 inception, and it was on again, off again several times leading up to a major push to get HOAs and businesses to register in 2024.

Now a group of small businesses and others are going after the constitutionality of the law as it stands:

After a series of courts upheld the law, a group of business entities led by the National Small Business Association are asking the U.S. Supreme Court to weigh in to overturn the law. They argue it’s unconstitutional. And they’re joined by several HOA groups, which are concerned that costs will increase.

The group challenging the law has gone to the U.S. Supreme Court to have them “strike it down on constitutional grounds,” after several lower courts upheld the legality of the CTA, according to Realtor.com. If the Supreme Court opts to take up the CTA challenge, it could kill it, or force other changes to the entire law.

Community Associations Institute (CAI) has indicated its own concerns on the impacts of the law today. A CTA requirement, they say, has HOAs  facing a special dilemma because boards change regularly, so the burden of disclosing ownership is more onerous.

CEO Dawn Bauman said she believes the act unintentionally swept in community associations. The CTA has exceptions for 20 different kinds of groups, including several kinds of nonprofits with 501(c) designations. Most HOAs are under 528 tax-exempt status, and the law treats them similarly to other nonprofits in many ways. But they aren’t protected from CTA enforcement in any specific carve-out.

Something else to keep our eyes on.  Read the Realtor.com article HERE.