Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
Better drops challenge against Vishal Garg
The Better Home & Finance Holding Company (commonly known as Better) announced in an Oct. 5 press release that their Special Committee withdrew its challenge to the “preliminary report of the independent inspector of elections regarding the consent solicitation initiated by (Vishal Garg).”
On Oct. 2, the independent election inspector First Coast Results Inc.—who was hired by Better—provided preliminary verification that the votes obtained by the Garg Group to remove five incumbent directors exceeded 52%.
Prior to the Oct. 5 release, Garg and his associates submitted a Schedule 14a form to the U.S. Securities and Exchange Commission on Sept. 30, alongside another press release announcing that Garg had secured written consents representing over 51% of the voting shares of Better Home & Finance Corporation.
The release also stipulates that Garg and his group will execute the following 90-day plan:
- Reconstitute the company’s board of directors: Remove Daniel Lewis, Harit Talwar, Bhaskar Menon, Arnaud Massenet and Prabhu Narsimhan, and appoint Silicon Valley venture capitalists Bing Gordon and Steve Sarracino.
- Appoint interim chief executive officer: Engage a senior executive from a Tier 1 Advisory Firm with specialized expertise in mortgage origination, servicing and corporate growth to serve as Interim CEO.
- Expand operational efficiency targets: Retain a Tier 1 Advisory Firm to streamline operations across sales, origination and corporate functions, leveraging AI-driven workflows to raise annual cost-savings targets from $45 million to $60 million.
- Accelerate revenue and production: Finalize high-value Tinman AI platform partnerships and scale HELOC production to achieve $2 billion in quarterly combined volume.
- Divest non-core assets: Complete the strategic sale of the UK banking operations.
- Authorize share repurchase program: Implement a $30 million stock buyback plan following asset sales and efficiency realizations, beginning with an initial $10 million tranche upon Board approval.
Compass/CRMLS standoff
On Sept. 30, California-based CRMLS stated that it had rejected a Compass “demand” to alter its rules surrounding public marketing. CRMLS also warns that they are preparing their own counter lawsuit against Compass.
In a letter sent by Compass to CRMLS on Sept. 8, Compass gave CRMLS an Oct. 6 deadline to stop fining agents for “publicly marketing” office exclusive listings.
Compass appears to not be backing down, as a spokesperson confirmed to RISMedia that the company would take the dispute “to the courts” and continue to pressure MLSs that “tell people how to buy and sell their homes.”
The Sept. 8 letter also focused heavily on office exclusives, and claimed that NAR and MLSs “lost virtually every antitrust suit and government investigation challenging their mandatory rules over the last 60 years.”
CRMLS seems prepared to engage in the legal standoff with the brokerage. In its response to the Compass letter, CRMLS General Counsel Ed Zorn accused Compass of previously unreported backroom maneuvers, including offering $1,000 to induce CRMLS members to leave and join a competing MLS.
The tense relationship between the brokerage and MLS began as early as 2024, with several comments and issues arising throughout the years. Zorn claims that Compass “made almost identical demands” in November 2024, and that previous talks between the two companies have been fruitful, but ultimately the tension persists.
New York to redo pied-à-terre tax rollout
On Sept. 29, Judge Wayne M. Ozzi of State Supreme Court on Staten Island ruled that New York City’s attempt to tax expensive second homes within the five boroughs was not handled properly, and they must start anew.
The “pied-à-terre”—French for “foot on the ground,” and used in reference to secondary homes—tax would’ve been imposed on second homes valued above $5 million or condos and co-ops over $1 million. The tax has been under scrutiny after New York City Mayor Zohran Mamdani and Department of Finance (DOF) Commissioner Richard Lee began notifying property owners via mail and through an online list that they would be subject to the tax on July 23.
It should be noted that the pied-à-terre tax itself was not ruled against, but rather, the way in which it was rolled out and implemented.
Ozzi wrote that “Homeowners are being substantially harmed and penalized needlessly by D.O.F. (Department of Finance)’s method of implementing the tax law,” in his decision.
The ruling was hailed by Jason Haber, co-founder of the American Real Estate Association (ARA), and who took part in a major protest recently.
“Today’s ruling confirms what we said on the steps of City Hall in August: the rollout of the pied-à-terre tax was botched,” he said in a statement. “We have opposed this tax from day one. But this case was about something even more basic; whether the City follows its own rules before it puts the burden on the people it serves.”
After Ozzi’s ruling, The New York Times reported that the city had filed court papers indicating that it would appeal, which would place the ruling on hold until an appellate court weighed in.
Massachusetts and National Fair Housing Alliance await judge’s decision
The Massachusetts Fair Housing Center and National Fair Housing Alliance (NFHA) submitted a motion for a preliminary injunction on Oct. 2 against the Department of Housing and Urban Development (HUD) in their closely-watched lawsuit.
The move would set aside the July 2 Notices of Funding Opportunity (NOFOs) for the 2026 Fair Housing Initiatives Program (FHIP) that were issued by HUD. For their preliminary injunction to take place, the NFHA and Fair Housing Center must prove that they would suffer irreparable harm if no injunction took place, they have a strong chance of winning the lawsuit, the harm to the plaintiffs is worse than the defendants and that the order would not harm the general public.
To provide substance behind their motion, the NFHA and Fair Housing Center submitted a dense memorandum in support of the motion—consisting of 338 pages—highlighting differences between how funding was allocated prior to the 2026 fiscal year and the new standards set forth by HUD.
“The estimated number of awards under the FY2026 Private Enforcement Initiative (PEI) NOFO is 13, including 12 PEI General awards and one award under a new ‘State and Local Housing Discrimination Component.’ That number is a sharp reduction from the number of new PEI awards in FY2024 (26 PEI awards), FY2023 (37 PEI awards) and FY2022 (34 PEI awards),” the memorandum continued.
“Had HUD followed that normal structure, with the money set aside for new PEI awards, the $13,546,112 set aside for new PEI grants in the FY2026 NOFO could have funded the first years of approximately 32 new PEI awards of $425,000—that is, enough to replace nearly all FY2022 PEI grants that expired or are set to expire this year. Instead, the FY2026 PEI, NOFO contemplates only 12 two-year awards of $1,000,000 each (or $500,000 per year) and one $1,500,000 two-year award.”
The presiding judge—U.S. District Judge Myong J. Joun—has not yet made his decision on the preliminary injunction motion, but he has ruled in favor of the NFHA and Fair Housing Center on multiple occasions throughout the lawsuit.
