RealPage, 6 Landlords Face New Lawsuit Over Pricing Conspiracy

HIGHLIGHTS:

• RealPage and six landlords are facing a lawsuit filed by the DOJ and 10 states for alleged collusion to inflate and fix property prices
• The defendants expressed disappointment, saying that the amended lawsuit was baseless and flawed
• The landlords said the lack of property supply was the primary cause of higher property prices

RealPage Inc. along with six landlords are facing a new lawsuit over allegations of conspiracy to inflate the prices of property rentals.

An amended lawsuit was filed by the Department of Justice (DOJ) on Tuesday, along with the states of North Carolina, California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, Oregon, Tennessee, and Washington.

According to the plaintiffs, RealPage and landlords Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc., Willow Bridge Property Co., and Cortland Management LLC shared information to each other to fix leasing prices, thereby resulted in decreasing competition and forcing tenants to pay higher rents.

Defendants disappointed

RealPage expressed its disappointment, saying that the DOJ’s allegations were baseless and flawed.

“We are disappointed that the DOJ, just one month after abandoning its baseless criminal investigation and less than two weeks before the agency changes hands, is expanding its civil lawsuit related to the use of revenue management software,” a representative from RealPage said in a statement.

“It is also unfortunate that Attorneys General of Massachusetts and Illinois are joining this flawed civil case that seeks to blame pro-competitive technology that has been used responsibly for years. Lack of supply is the root cause of the housing affordability crisis,” it added.

Law firms Axinn, Veltrop & Harkrider LLP, and Lewis Brisbois Bisgaard & Smith LLP, which represent Cortland, said that they will cooperate with the Justice Department and enter into a settlement to end the use of common rental pricing algorithms.

“We look forward to putting the federal government’s investigations behind us in 2025, as we continue to seek opportunities to invest in tools and services that will improve resident experience and the success of our managed communities,” Cortland said in a statement provided to the National Law Journal.

For its part, Greystar denied participation in an anti-competitive pricing scheme, saying that the company “will conduct its business with the utmost integrity. At no time did Greystar engage in any anti-competitive practices. We will vigorously defend ourselves in this lawsuit.”

Cushman & Wakefield, which acquired Pinnacle Property Management Services LLC in 2020, similarly denied the allegations and defended RealPage, saying that the latter helped property owners efficiently manage rents and prevent discrimination and bias in decision-making.

“But ultimately, Pinnacle is solely a property manager and does not own any properties or set strategy, pricing, or occupancy targets. We also do not decide whether the properties managed by Pinnacle use revenue management services and software, which software provider to use, if any, and whether to accept recommendations provided by such software,” Cushman & Wakefield said.

Last month, RealPage’s subsidiary YieldStar Systems was also slapped with a similar lawsuit in Canada for allegedly conspiring with property owners and brokers to control leasing rates.