Renters nationwide are filing class action lawsuits against Texas-headquartered property management software company RealPage, Inc. and landlords who subscribe to RealPage’s services and software. These lawsuits claim that RealPage and the subscribing landlords formed a “cartel” that improperly controls a growing number of rental properties and, thus, violates federal antitrust laws.
New Jersey renter Kevin Weller filed one of these proposed class action lawsuits in a Washington federal court on April 7, 2023, seeking damages, fees, and costs on behalf of himself and those “similarly situated.” Weller’s complaint names RealPage and over 25 landlords as defendants and alleges violations of the Sherman Act, which prohibits the restraint of trade or commerce. Essentially, Weller and the plaintiffs in the other cases allege that RealPage and the landlords unlawfully monopolize the residential lease market because the software requires subscribing landlords to put vacant housing on the market at certain times and for certain prices. According to Weller, subscribing landlords must obtain and report sensitive data to RealPage’s “price advisors,” such as planned price increases and irregular lease durations. These pricing advisors then run the data through an algorithm and determine the highest price that landlords have to “accept” at least 80% of the time, which in practice turned out to be nearly 100% of the time. Further, Weller claims that RealPage’s pricing advisors are paid according to how well they inflate prices across their assigned area or city overall.
Recently, the United States Judicial Panel on Multidistrict Litigation transferred the Weller case and 20 other cases to a Tennessee federal court. Then, just two days later, the same panel transferred 12 more actions to the same court and judge. RealPage has denied the allegations in these cases generally, stating that it “will vigorously defend against the lawsuits.”
These lawsuits are in the early stages, and we will continue to monitor them for noteworthy developments and potential implications. Landlords should consider speaking with an attorney regarding the potential risks of the alleged conduct as well as particular concerns posed in class action lawsuits and by federal antitrust laws in particular. Should you have questions or want more information on these actions or other landlord/tenant law issues, please contact Steven Williams or the Cohen Seglias attorney with whom you work.
