From Realpage website:
UPDATE Dec 9, 2024: US DOJ has ended their criminal probe of Realpage. The civil litigation continues.
UPDATE March 2024: In addition to their civil investigation, US Department of Justice has opened a criminal investigation into Realpage software.
UPDATE July 2024: Realpage’s new rebuttal website presents their answers to allegations their software enables rent setting collusion.
UPDATE July 2024: Statement from Realpage
Colorado Realpage Litigation News from Google search
It is alleged that:
Many residential landlords used a common database to illegally share non-public (think ‘insider’) information with their competitors regarding their rental properties.
They used RealPage software to analyze that shared data.
The software then recommended rental amounts to all the participating landlords.
This post is in reference to multiple similar lawsuits around the country involving RealPage software.
However, this software is widely used and the fact that a company happens to use RealPage software does not mean they are doing anything improper or illegal. There is no implication that simply using RealPage software is evidence of wrongdoing.
Feb 2024 – Arizona’s State Attorney General Kris Mayes has sued 9 major Arizona landlords and states that misusing RealPage software has:
“directly contributed to Arizona’s affordable housing crisis”
“the leasing companies were taught by RealPage to lie”
Mayes claims people were made homeless as a result.
Legislation has been proposed in Colorado to ban the use of ‘algorithmic devices’ including RealPage to set rent.
The bill states that a landlord, in setting the amount of rent to be charged to a tenant for the occupancy of a residential premises, may not employ or rely upon an algorithmic device that uses, incorporates, or was trained with nonpublic competitor data.
But House Bill 24-1057 faces a mountain of opposition from well-connected interest groups like the Denver Metro Chamber of Commerce, the Colorado Apartment Association, and some multifamily technology companies, which could imperil the bill’s progress.
Supporters of the bill include groups like the ACLU of Colorado, the Colorado Poverty Law Project, and the Colorado Center on Law and Policy.
The Federal Court finds that the…most persuasive evidence …
is the simple undisputed fact that
each RMS Client Defendant provided RealPage its proprietary commercial data, knowing that RealPage would require the same from its horizontal competitors and use all of that data to recommend rental prices to its competitors.
the Complaints adequately allege violations of Section 1 of the Sherman Act
The U.S. Department of Justice on Nov 15, 2023 stepped into a massive antitrust lawsuit filed by dozens of tenants who are accusing a tech company’s apartment software of helping landlords collude to inflate rents.
The DOJ action comes after a ProPublica investigation last year found that Texas-based software provider RealPage used algorithms to recommend rents to landlords across the country to maximize profits — a practice that experts said may violate antitrust laws.
Not every use of an algorithm to set prices violates federal law, they noted, but it is “unlawful when, as alleged here, competitors knowingly combine their sensitive, nonpublic pricing and supply information in an algorithm that they rely upon in making pricing decisions, with the knowledge and expectation that other competitors will do the same.”
It is alleged that a long list of national landlords including Cushman-Wakefield, Camden, Greystar, Thrive, and many others populated a shared database with non-public (think ‘insider’) information regarding their rental properties and the RealPage software then aggregated and analyzed that common data and generated recommended rental amounts.
Plaintiffs claim that violates Section 1 of the Sherman Act.
It is the sharing of data with competitors and collaboration with competitors by agreeing to use the software for rent setting that may have these defendants in legal trouble. Whether rental amounts increased or decreased is not material to whether the Sherman Act was violated.
https://www.justice.gov/d9/2023-11/418053a.pdf
See update from ProPublica
In their defense, RealPage stated to MultiFamily Dive: “There is a housing supply shortage and that alone drives prices higher. Occupancy has been at an all-time high.”
All defendants deny any wrongdoing and are vigorously defending against these allegations. See some of defendants’ responses in this filing.
However, defendants’ motion to dismiss was denied by Federal District Court on Dec 28, 2023.
The Court determined “that Plaintiffs have plausibly alleged that Defendants engaged in parallel conduct when they each became RealPage RMS clients and began prioritizing raising rent prices over decreasing vacancy rates.” p.27
James Martin originally wrote the book Stealing Home regarding the RealPage software and the alleged price fixing.
Subsequently, ProPublica investigated the charges in the book and published several reports at www.ProPublica.org. Numerous civil lawsuits were then filed around the country and have been consolidated and assigned to US District Court in Tennessee.
RealPage claims 24 million rental units are managed worldwide via the RealPage software!
