UPDATED AS OF AUGUST 19, 2024
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
    • EXCEPTIONS:
      1. Associations that are actively tax exempt under Section 501(c)(4) of the Internal Revenue Code; or
      2. Associations with more than $5 million in annual gross receipts AND more than 20 full-time employees.
  • 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, UNLESS they meet one of the extremely limited exceptions cited above.
  • We are hopeful that all community associations will eventually be exempt from the CTA, however, we are no longer confident this will happen prior to the initial filing deadline of January 1, 2025.
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 few CAI articles that are informative:

For a list of our firm’s frequently asked questions regarding the CTA click HERE.

Do you have a question related to the CTA? Contact Mulcahy Law Firm, P.C. today.