The RealPage lawsuit alleges the company used a pricing algorithm to collect private data from competing landlords, then used that data to recommend higher rental rates. This allowed large property managers to inflate prices while discouraging undercutting. The Department of Justice and state attorneys general have taken legal action against RealPage, accusing it of anticompetitive conduct. To learn more about the ongoing developments and implications of this case, keep reading.
Key Takeaways
- The DOJ alleges that RealPage’s rent-setting algorithm collected private data from competitors to recommend higher rental rates in an alleged price-fixing scheme.
- Renters who signed a lease after October 21, 2018 on properties where RealPage’s revenue management software was used may be eligible to explore legal options.
- The DOJ’s amended complaint accuses RealPage and six major landlords of communicating about rents, occupancy, and pricing, representing more severe misconduct.
- The DOJ’s consent decree with Cortland prohibits using revenue management products relying on nonpublic competitor information and allows DOJ monitoring.
- RealPage has faced legal challenges, with Washington state suing the company and nine others for alleged Consumer Protection Act violations.
The Alleged Rent Price Fixing Scheme
The alleged rent price fixing scheme outlined in the Department of Justice’s lawsuit against RealPage appears to be a significant concern. The U.S. Department of Justice and state attorneys general allege that RealPage’s rent-setting algorithm collected private data from competing landlords and used it to recommend higher rental rates, allowing large property managers to inflate prices while minimizing the risk of undercutting each other.
This anticompetitive pricing software developed by RealPage is claimed to have advised users to keep prices high even with low occupancy and adjusted lease timeframes to keep supply low, violating antitrust laws. As a result, renters are estimated to have been overcharged between 5% and 7% in some markets.
Eligibility for the RealPage Lawsuit
Who may be eligible to seek compensation in the RealPage lawsuit? Renters who signed a lease after October 21, 2018, and whose property manager used RealPage’s revenue management software during that time, may qualify.
This major property management software provider is accused of sharing competitively sensitive information. Estimated eligible renters can fill out a form to check if they rented a private unit where the landlord used the RealPage software. Providing a valid email address and consenting to updates are required.
Filling out the form is the first step for renters to explore their legal options and potential compensation from the RealPage lawsuit.
The Justice Department’s Amended Complaint
Building on the overview of who may be eligible for the RealPage lawsuit, the Justice Department has now filed an amended complaint alleging more severe misconduct.
The amended complaint accuses RealPage and six major landlords of communicating with competitors about rents, occupancy, pricing strategies, and other sensitive information. The DOJ filed a consent decree with Cortland, requiring cooperation and stopping the use of competitors’ data in its pricing software.
The amended complaint includes new allegations that the companies shared nonpublic information through methods beyond their use of RealPage software, representing an escalation in the DOJ’s civil antitrust battle against algorithmic pricing practices in the multifamily housing market.
Is the Realpage Lawsuit Related to Other Lawsuits About Background Check Violations?
The Realpage lawsuit brings attention to significant issues surrounding tenant screening practices. Many are drawing parallels to the sheetz background check controversy, highlighting the growing concerns over how background checks are conducted and the potential violations of consumer rights. This intersection of cases could reshape industry standards for compliance and transparency.
The Cortland Management Consent Decree
One key aspect of the proposed settlement with Cortland is the prohibition on using any revenue management product that relies on nonpublic information concerning a competitor’s occupancy and rents. The consent decree would allow the DOJ to monitor Cortland’s compliance with these prohibitions.
Cortland must notify the DOJ before adopting a third-party revenue management product and certify it doesn’t base pricing recommendations on competitor information. The consent decree applies to Cortland’s own developed product and any third-party revenue management product it might use in the future.
The DOJ challenges RealPage’s pricing products that establish rental price floors and limit price reductions as anticompetitive.
Ongoing Legal Battles
The U.S. Department of Justice and state attorneys general have taken legal action against RealPage for its alleged role in enabling landlords to coordinate pricing and inflate rents.
Simultaneous with the amended complaint against RealPage, the DOJ filed a proposed consent decree allowing Cortland Management to settle claims by prohibiting the use of revenue management products relying on nonpublic competitor information.
Washington state has also sued RealPage and 9 other companies, alleging violations of the Consumer Protection Act through their use of revenue management software. RealPage has asked a court to dismiss the Washington lawsuit, but the outcome remains pending.
Conclusion
Ah, the RealPage lawsuit – a tale of alleged rent price fixing that’s sure to have you on the edge of your seat. But don’t worry, the Department of Justice‘s got it all under control. With the Cortland Management Consent Decree and ongoing legal battles, you can rest assured your rent won’t be going up anytime soon. Isn’t that just peachy?
