In a significant development for real estate investors and business owners, the U.S. Treasury Department has suspended enforcement of the Corporate Transparency Act’s (CTA) beneficial ownership disclosure requirements. This decision follows a federal court ruling in Texas that challenged the law’s constitutionality, creating relief and uncertainty for those using LLCs and other entities for commercial real estate investments.

What’s Changing?

The CTA was designed to combat illicit financial activity by requiring many businesses, including real estate investment entities, to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). However, a recent court ruling found aspects of the law unconstitutional, prompting the Treasury to pause enforcement while reviewing legal options.

What This Means for CRE Investors

No Immediate Reporting Requirements – Investors with LLCs and partnerships do not currently need to file ownership disclosures.

Legal Uncertainty Ahead – The ruling applies only to businesses under the court’s jurisdiction, meaning future enforcement may still apply in other areas.

Potential Regulatory Revisions – The Treasury has signaled it may propose changes to narrow the CTA’s scope, particularly for small, domestic businesses.

How Should Investors Prepare?

While the suspension offers temporary relief, regulatory changes could still be on the horizon. Investors should:

  • Stay informed about Treasury announcements and legal developments.
  • Consult legal or financial advisors to understand their exposure if enforcement resumes.
  • Consider long-term compliance strategies in case new disclosure requirements are introduced.

What’s Next?

The Treasury may challenge the court ruling or adjust the CTA’s scope through new rulemaking. For now, affected businesses should continue monitoring updates while preparing for potential changes.