The Eighth Circuit Affirms the NAR Settlement and a Staten Island Court Halts the Pied-à-Terre Tax Rollout
This month’s column takes the form of a legal update covering two significant rulings handed down within weeks of each other, one federal and one local, and each of real consequence to our members. Part I addresses the Eighth Circuit’s affirmance of the NAR settlement and what it means for everyday practice. Part II addresses a Richmond County decision halting New York City’s rollout of the pied-à-terre surcharge.
Part I. The NAR Settlement Is Affirmed
For two years, every practice change our industry adopted under the National Association of REALTORS® settlement carried a quiet asterisk. The settlement itself was on appeal, and a reversal could have unwound the release and, potentially, the practice changes with it. On August 19, 2026, that asterisk was removed. A unanimous three-judge panel of the United States Court of Appeals for the Eighth Circuit affirmed the final approval of the settlement in Burnett v. National Association of Realtors, No. 4:19-cv-00332 (W.D. Mo.), the case formerly captioned Sitzer v. National Association of Realtors, in all respects. The panel rejected the arguments of seven separate objectors and left intact more than $1 billion in settlement funds, including NAR’s $418 million contribution, the $333 million attorneys’ fee award, and, most importantly for members, the practice changes that took effect on August 17, 2024. (see Opinion, Burnett v. Nat’l Ass’n of Realtors, Nos. 24-3444 et al. (8th Cir. Aug. 19, 2026); see also NAR, Appeals Court Rules Settlement Remains Intact)
What the Court Decided
The objectors advanced a range of theories, arguing (i) that the named plaintiffs lacked standing that; (ii) the monetary recovery and its proposed distribution were inadequate; (iii) the settlement improperly swept home buyers into a home-seller class release; and (iv) the district court erred in requiring objectors to appear in person at the fairness hearing. The panel rejected each argument, holding in its thirty-five-page ruling that the settlement satisfied the requirements of the federal rules, that the so-called copycat cases arose from the same factual predicate as the original action and were properly within the release, and that the practice changes address the challenged rules and attempt to remediate the harm alleged. The court also addressed and rejected the argument, advanced by Professor Tanya Monestier, that the district court had ignored the views of the Department of Justice. (see RISMedia, Appeals Court Affirms NAR Settlement)
What the Affirmance Means for New York Practice
The practical message for members is simple. The rules under which you have been operating since August 2024 are no longer provisional. The elimination of offers of compensation on the MLS, the requirement of a written buyer agreement before touring a home, the cap prohibiting a buyer’s broker from receiving compensation from any source exceeding the amount agreed to with the buyer, and the disclosure that commissions are fully negotiable and not set by law are now in effect in accordance with the decision of the federal appellate court. Compliance systems built over the past two years should be treated as permanent infrastructure, not interim measures awaiting a different outcome. And the fiduciary framework this column discussed in July, built on disclosure, informed consent, and the discipline of the compensation cap, stands on firm ground.
What Remains Open After the Affirmance
The decision closes the main chapter, but there are still the buyer commission cases. On September 1, the same panel affirmed the related settlements in Gibson v. National Association of Realtors, No. 4:23-cv-00788 (W.D. Mo.), a consolidated action that includes the Umpa case, adding another $110.6 million to the affirmed total. (see Opinion, Gibson v. Nat’l Ass’n of Realtors, Nos. 24-3473 et al. (8th Cir. Sept. 1, 2026).) On September 15, the panel rejected three more objector appeals as already resolved by its August ruling, and on September 24 it denied the two remaining objectors’ petitions for rehearing, both by the panel and by the full Eighth Circuit sitting en banc. Of particular note to New York members, those two objectors had argued that claims involving the rules of the Real Estate Board of New York should not have been swept into the nationwide release, an argument the court declined to revisit. The objectors’ only remaining avenue is a petition to the United States Supreme Court, which grants review in only a small fraction of cases. A separate rehearing petition in the Gibson matter was still pending at the time of this writing. Several related commission lawsuits in other courts will remain on hold until the Eighth Circuit issues its mandate and the remaining appeals are exhausted. A final approval hearing on the related home buyer settlements, including NAR’s, is scheduled for November 2, 2026. Separately, the Department of Justice’s stated concerns about how buyer agreements operate in practice have not disappeared with the affirmance. Members should understand the distinction. The settlement is secure, but the regulatory conversation around buyer-broker compensation continues. (see Real Estate News, Gibson Settlements Will Stand; see also Inman, Where the Commission Lawsuits Stand; Inman, NAR Settlement Objectors Lose Again at 8th Circuit)
Practical Guidance for Members
With the settlement affirmed, the compliance posture for members shifts from watchful waiting to permanence. The following points deserve renewed attention:
- Treat the practice changes as settled law. Written buyer agreements before touring, no MLS offers of compensation, and the compensation cap are not going away. Any lingering office practice premised on “waiting to see how the appeal comes out” should be retired now.
- Audit your buyer agreements. Confirm that every agreement states compensation in an objectively ascertainable amount and contains the required negotiability disclosure, and that agents understand the cap applies to compensation from any source.
- Revisit the compensation-cap conversation. As discussed in this column in July, an agent who receives a seller-side offer exceeding the agreed amount must disclose it and let the buyer decide, whether through a price concession or a written amendment made with informed consent, rather than silently retain the excess.
- Do not mistake finality for the end of scrutiny. The DOJ’s interest in buyer-broker compensation practices continues, and state-level legislation may yet add obligations on top of the settlement framework. New York’s own proposal to codify written buyer agreement requirements in the Real Property Law remains in committee in both houses, but the concept is unlikely to disappear.
- Do not wait on further appeals. The Eighth Circuit has now denied rehearing, and Supreme Court review, if sought, is rarely granted. Nothing about the remaining avenues justifies deferring compliance or telling clients the rules might change.
Part II. The Pied-à-Terre Tax Rollout Is Halted on Staten Island
New York practitioners received a second significant ruling in late September, this one from Richmond County. On September 29, 2026, Supreme Court Justice Wayne Ozzi held that New York City’s rollout of its new pied-à-terre surcharge on non-primary residences, which took effect on July 1, 2026, as part of the City’s fiscal year 2027 budget, was procedurally defective, finding the mailed notices “arbitrary and capricious, affected by errors of law, and in violation of the recipients’ due process rights.” The court found that the City failed to make individualized initial determinations as to which properties are actually non-primary residences before blanketing the owners of more than 900,000 properties with notices and publishing a list of them online.
The remedy is sweeping, requiring that (i) all previously mailed notices be canceled; (ii) the public list be removed from the City’s website; and (iii) any new notice be sent only to a property individually assessed as a non-primary residence, using current tax year information and including the procedures and records an owner needs to challenge the determination. Members should note what the ruling does and does not do. The surcharge itself survives; it is the process that must be redone. However, the City appealed the same day. Under New York law, an appeal by the City automatically puts the ruling on hold while the appeal is pending, so the City may continue its rollout in the meantime. For clients who received a notice over the summer, the practical advice is caution. The notice should not be ignored, and owners should consult with their own counsel about preserving their rights and meeting any deadlines while the appeal proceeds. (see The Epoch Times, Judge Orders City to Scrap Pied-à-Terre Tax Notices; see also Decision and Order, Sup. Ct. Richmond Cnty., Sept. 29, 2026; Inman, Judge Orders NYC to Redo Pied-à-Terre Rollout)
Two years ago, the settlement’s practice changes arrived as an earthquake, and the Eighth Circuit’s affirmance is the opposite, a quiet confirmation that the ground has stopped moving. The Richmond County decision teaches the companion lesson from the other direction. Even a duly enacted revenue measure cannot reach an individual homeowner until the government does the individualized work that due process demands. Taken together, the two rulings converge on a single professional standard for our industry and for government alike. Process, notice, documentation, and informed consent are not formalities; they are the law. The members who already practice accordingly will find that neither a national settlement nor a municipal surcharge changes what they do on a day-to-day basis.
About the author: John Dolgetta, Esq., is the principal of the law firm of Dolgetta Law, PLLC. For information about Dolgetta Law, PLLC, and John Dolgetta, Esq., please visit http://www.dolgettalaw.com. The foregoing article is for informational purposes only and does not confer an attorney-client relationship and shall not be considered legal advice. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views or positions of HGAR, its affiliates, or any other entity.
