"A bubbling legal battle over a federal anti-fraud law has sparked worries from homeowners association (HOA) advocates that they could be newly buried in bureaucratic red tape — and face increased costs," reported realtor.com on Monday.
The news couldn't have come at a worse time for financially stressed homeowners. Not only are they facing high gas and grocery prices, and climbing property taxes and homeowners insurance premiums, but HOA fees themselves have already risen steeply in recent years.
"The median monthly condo fee was $420 in 2025, up 29% from 2019," said The Wall Street Journal in April, citing Realtor.com data. And Donald DeFesi, a homeowner in California, told The Journal his HOA fees had more than doubled since 2015, to $1,500 a month. Residents of other states reported similar jumps.
HOAs Fight Back in Supreme Court and Congress
Many HOAs are aware of their members' difficulties and are using advocacy groups and joining others to fight the law in the U.S. Supreme Court. The Community Associations Institute (CAI) is one of those groups, and it says it represents HOAs, condominium communities and housing cooperatives.
Indeed, in its Supreme Court amicus brief filing last month, it says it is "serving more than 78 million homeowners who live in more than 373,000 community associations in the United States."
Ideally, the CAI would like the Supreme Court to strike down the Corporate Transparency Act of 2019 (CTA) as unconstitutional. And, in a pincer movement, it has also lobbied Congress to repeal the law using the H.R. 425 — Repealing Big Brother Overreach Act, which is currently only a bill.
In fact, the Financial Crimes Enforcement Network (FINCEN) has already paused enforcing the CTA, but there's nothing to stop it from changing its mind. So, the CAI and other lobby groups for small businesses want the law dead and buried.
What's Wrong With the Corporate Transparency Act?
Beyond its impact on organizations like HOAs, condos and co-ops, there's not all that much wrong with the CTA. Its biggest victims will likely be drug dealers, terrorists, pedophile rings, and other criminals.
It requires corporate entities to divulge their "beneficial owners" (the people who actually own a company, not nominees) and executives, those who run the entity day to day. In other words, it strips away the anonymity behind which bad players can operate with impunity.
Of course, there may be legitimate business uses for such anonymity. But fans of movies and police procedurals will be familiar with the frustration investigators encounter when they uncover impenetrable webs of anonymized shell companies.
Is the CTA Actually a Problem for HOAs?
The CTA wasn't even politically controversial. It was signed into law by President Donald Trump during his first administration, prepared for implementation during the Biden administration, and finally implemented last year by the second Trump administration.
One might even wonder just how burdensome the CTA might be for HOAs. Presumably, they already maintain current, accurate records of who owns the homes in their associations. How much longer would it take to update FINCEN when they're making occasional ownership changes to their rolls?
Of course, if the CAI can demonstrate to the Supreme Court that this burden is intolerable, then the justices could exempt such bodies from the CTA. But how keen should we be to see the entire act struck down?
