CTA National Update

The U.S. Supreme Court granted a stay on the nationwide injunction against the Corporate Transparency Act (CTA), but a separate Texas court order still pauses reporting requirements, meaning companies are not currently required to file beneficial ownership information. FinCEN confirmed that while reporting is paused, companies may still voluntarily submit reports. The CAI is tracking court developments, urging the Treasury Department to delay enforcement due to legal confusion. The legal battle continues, with the Fifth Circuit upholding an injunction and CAI filing amicus briefs to support the pause on enforcement.

Source: CAI

Florida has made changes to HOAs as of July 1

A new Florida law, effective July 1, 2024, significantly limits the power of HOAs, aiming to address widespread homeowner complaints about excessive fines, selective enforcement, and lack of transparency. The law prohibits HOAs from enforcing arbitrary rules, such as banning vegetable gardens, regulating non-visible home improvements, or fining residents for minor infractions like trash can placement or holiday decorations. It also caps fines, mandates recordkeeping and financial transparency, and requires HOAs to provide accessible meeting notices and documentation. Additionally, HOA board members must complete training, and accepting kickbacks is now a felony offense, ensuring greater accountability and fairness in community governance.

Source: TallahasseeDemocrat

Trump taps western NC real estate broker as Austrian ambassador

President-elect Donald Trump nominated Art Fisher, a real estate broker from western North Carolina, as the U.S. ambassador to Austria. Fisher, president of Fisher Realty, has been an active supporter of "America First" policies and a donor to multiple Republican campaigns in the 2024 cycle. He is also involved in several organizations, including Brevard College, Pisgah Health Foundation, and the North Carolina Travel and Tourism Board. Fisher holds degrees in business and corporate communications from the College of Charleston and has traveled extensively worldwide.

Trump announced four other ambassadorial nominations: George Glass (Japan), Lou Rinaldi (Uruguay), Stacey Feinberg (Luxembourg), and Leah Francis Campos (Dominican Republic). All nominations require Senate confirmation.

Read More: NC Newsline

Can an HOA in SC make you take down your Christmas lights and decorations when it wants?

Homeowners in neighborhoods with HOAs should be mindful of restrictions on holiday decorations, as most HOAs limit the time they can remain up. Columbia attorney Kathleen McDaniel notes that HOAs can regulate outdoor decorations, flags, and displays if allowed by their restrictive covenants, which commonly include such provisions. HOAs help maintain community standards, which can boost property values.

In South Carolina, about 25% of homes are under HOA regulation, and many allow holiday lights from 30 days before the holiday until the second week of the new year. Non-compliance may result in fines. The South Carolina Department of Consumer Affairs oversees HOA-related complaints but lacks enforcement power, instead tracking and reporting issues to the General Assembly.

Read More: TheState

Navigating HOA Taxes: Deadlines, Forms, and Expert Tips

Homeowners’ associations (HOAs) are generally classified as corporations for federal tax purposes and must file annual tax returns. Even if an HOA is organized as a non-profit at the state level, it typically doesn’t qualify for federal tax-exempt status under Section 501(c)(4) unless it meets specific criteria, such as serving the general public rather than just its members.

HOAs have two primary options for filing federal taxes:

1. Form 1120-H (U.S. Income Tax Return for Homeowners Associations): This form is tailored for HOAs, allowing them to exclude exempt function income—like membership dues and assessments—from gross income. The taxable income is subject to a flat rate of 30% for condominium management associations and residential real estate associations.

2. Form 1120 (U.S. Corporation Income Tax Return): While this form offers a lower tax rate of 21% on net income, it requires more detailed financial reporting and doesn’t provide the same exclusions for exempt function income. HOAs should compare their tax liabilities under both forms annually to determine the most advantageous option.

It’s essential for HOAs to file their tax returns by the 15th day of the fourth month after the end of their tax year, typically April 15 for calendar-year associations. Late filings can result in penalties and interest. Given the complexities of HOA taxation, consulting a certified public accountant (CPA) experienced in this area is advisable to ensure compliance and optimize tax outcomes.

For more detailed information, refer to the IRS guidelines on homeowners’ associations. If you have questions, your HOA manager can provide additional information or connect you with qualified professionals who specialize in HOA taxation.

Editor’s Note: The above information is only provided for general informational purposes and derived largely from the IRS website.

Breaking News: CTA Filing Requirements Paused Again by Fifth Circuit

This article was originally published on December 27, 2024 by Thomas Skiba for Community Association Institute.

On Dec. 26, the full panel of judges of the Fifth Circuit Court of Appeals issued an order vacating the stay of a preliminary injunction halting reporting compliance under the Corporate Transparency Act. The U.S. Department of Treasury’s FinCEN released a statement this afternoon announcing BOI filings are voluntary.  

The most recent decision suspends the upcoming Jan. 2025 deadline requiring community association boards to file sensitive personal information with the government in an effort to combat terrorist activities.  

The latest dramatic decision in Texas Top Cop Shop v. Garland follows a Dec. 23 order reversing a temporary preliminary injunction imposed by the U.S. District Court for the Eastern District of Texas.  

This means beneficial ownership information reporting requirements have been paused again by a federal court for applicable community associations under federal statute. This continues to be a developing issue. Association boards should remain vigilant and informed on these ongoing updates.  

FinCEN issued the following statement “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.” 

Please visit CAI’s Corporate Transparency Act resource page for additional information. 

Sincerely, 

Thomas M. Skiba, CAE 

Chief Executive Officer  

Community Associations Institute  

UPDATE: Corporate Transparency Act Compliance Back on Hold

UPDATE: Corporate Transparency Act Compliance Back on Hold

December 26, 2024

The Corporate Transparency Act (CTA) is once again on hold. On December 26, 2024, a Fifth Circuit panel reinstated a nationwide injunction blocking enforcement of the CTA, just days after another panel lifted it. This ongoing legal back-and-forth has created significant uncertainty for compliance efforts nationwide.

To recap:

• The CTA, enacted as an anti-money laundering measure, requires U.S. entities that existed before 2024 to disclose their beneficial owners - individuals who own or control the business - by January 1, 2025.

• On December 3, a district court issued a nationwide injunction halting enforcement of the law following a legal challenge.

• On December 23, a Fifth Circuit motions panel lifted that injunction, stating the government is likely to succeed in defending the law's constitutionality.

• On December 26, another Fifth Circuit panel reinstated the injunction to "preserve the constitutional status quo" while the merits of the case are considered.

For AMG clients, this means compliance with the CTA is not currently required. If you are unsure about how to proceed, each community should consult with their legal counsel to determine the best course of action.

AMG encourages clients to wait until compliance is unequivocally required. We offer this recommendation for two key reasons:

1. Avoiding Unnecessary Costs: Premature action could result in expenses that may not ultimately be needed.

2. Minimizing Effort for Volunteer Members: Preparing and submitting the required information is a time-consuming task. Until compliance is mandatory, we believe communities should focus their resources elsewhere and avoid unnecessary burdens on their volunteer members.

For further information, you can refer to the following resources:

• Corporate Transparency Act Blocked by US Appeals Court Again (Bloomberg Tax)

• Corporate Transparency Act Back on Hold for Now (Law Firm Carolinas)

AMG does not provide legal advice. We strongly recommend that clients consult with their attorney before making important legal decisions regarding the CTA or any other matter. We remain committed to monitoring developments and keeping you informed. If you have any questions on this issue, please feel free to reach out to your Community Manager. 

Warm regards,

Dacy Cavicchia, CMCA, AMS, PCAM 
President 
Association Management Group, Inc.

Storage Caves, a Luxury Condo Garage Storage Developer, to Build 119 Luxury Garages in Fort Mill South Carolina

Storage Caves has acquired 5.5 acres in Fort Mill, SC, to develop a luxury storage facility for RVs, boats, cars, and business inventory. The facility, expected to open by summer 2025, will feature 119 spacious, climate-controlled units with cutting-edge security. Located near the Greater Charlotte area, the development addresses a growing demand for secure and customizable storage solutions. Storage Caves also plans additional projects in the region over the next 18 months.

Read More: Newswire

One dead after carbon monoxide leak at Fayetteville condo, officials say

A fatal gas leak occurred Sunday morning at Lionshead Condos in Fayetteville, N.C., leaving one person dead. Firefighters responding to the scene detected high levels of carbon monoxide throughout the building and began evacuations. Hazmat teams are working to identify the source of the leak, and authorities advise avoiding the area due to ongoing police and fire presence.

Read More: CBS17

Editor’s Note: AMG urges all owners to install and regularly maintain CO2 and smoke detectors. 

Construction prep begins on $18M downtown Greenville luxury condo development

Construction is set to begin this year on The Avant, an $18 million luxury condo development in downtown Greenville, expected to be completed by summer 2026. Located at 702 S. Main St., the four-story building will feature innovative design elements, including an 84-foot water feature and an automated basement parking system to optimize space and sustainability. Developer Stephen Mack emphasized local talent and Greenville’s heritage in the project, which overcame delays through value engineering to manage costs and enhance efficiency. The Avant aims to set a new standard for Southeast development while offering lifestyle-focused residences.

Read More: GSA Business Report

AMG Continues Tradition of Showing Gratitude for Employees with 5th Annual Thanksgiving On Wheels Meal

PHOTO CUTLINE: This week, AMG’s Thanksgiving On Wheels event brings fully-cooked turkey and sides to team members across the Carolinas.

“People say it’s not happiness that makes us grateful; it’s gratefulness that makes us happy. We believe that,” said AMG President, Dacy Cavicchia. “At this time of counting blessings, we feel it’s especially important to honor the efforts of the most important asset our company has–our staff. They are the key to our success and we appreciate their excellence, commitment, and professionalism.”

AMG is showing appreciation for the team with its fifth annual Thanksgiving On Wheels event. The company is making the holiday a little easier for its busy, dedicated employees by gifting them with the cornerstone elements of their Thanksgiving dinners. Each team member across its five offices in Greensboro, Winston-Salem, Charlotte, and Raleigh/Durham, NC, and Greenville and Aiken, SC, received a delicious fully cooked turkey and gravy, plus two scrumptious side dishes of beans and mac n’ cheese.

Since 1985, Founder and CEO Paul Mengert and Vice-President May Gayle Mengert have worked to instill a culture of service in the organization. But that ethos of giving isn’t just for association clients and nonprofits in the community–it also includes the company’s internal team. “AMG has a long history of excellent customer service, as well as tireless and dedicated community service to a number of organizations that focus on helping others,” Mengert said. “At this time of year, we just want our team across the Carolinas who give so much of their time and talent to our clients and communities that they are important to us, we need them, and we thank them for who they are and how masterfully they ‘show up’ for AMG day after day. We couldn’t do this–we wouldn’t be us–without them.”