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In a significant legal move, New Jersey has filed a lawsuit against RealPage, a Texas-based property management software firm, and ten of the state's major landlords, including AvalonBay Communities. The state accuses them of colluding to inflate residential rents through RealPage's revenue management software, which allegedly facilitated the sharing of non-public data like lease prices and amenities to suppress competition. This purported collusion has reportedly led to hundreds of thousands of residents, especially low-income renters, paying over 30% of their income on housing. The lawsuit seeks civil penalties, profit recovery, an injunction, and the appointment of a monitor to prevent further misconduct. This action follows a similar federal lawsuit filed by the U.S. Department of Justice and eight states against RealPage in 2024.
In a bold legal action, New Jersey has initiated a lawsuit against RealPage, a property management software company based in Richardson, Texas, and ten of the state's largest landlords, including AvalonBay Communities. The state alleges that these entities conspired to artificially inflate residential rents, violating both federal and state antitrust laws as well as New Jersey's consumer fraud statutes. Advertisement
According to the complaint filed earlier this week by Attorney General Matthew Platkin, the defendants utilized RealPage's revenue management software to coordinate pricing strategies. This software allegedly enabled the sharing of sensitive, non-public data such as lease prices, amenities, concessions, property values, and housing inventory among competitors, effectively suppressing market competition and driving up rents.
Jeremy Hollander, acting director of New Jersey's Division of Consumer Affairs, stated that the lawsuit aims to halt what he described as "corporate greed at its worst," emphasizing that the housing market is already skewed in favor of landlords, and this alleged collusion exacerbated the issue.
RealPage has defended its software, asserting that it sometimes recommends lowering rents and that landlords retain ultimate decision-making authority. Spokeswoman Jennifer Bowcock contended that the claims lack merit and that the software is designed to comply with housing laws, arguing that the lawsuit misrepresents the technology's role in rent setting.
The lawsuit seeks various remedies, including civil penalties, the recovery of illicit profits, an injunction to stop the alleged practices, and the appointment of a monitor to oversee compliance.
This legal action by New Jersey comes approximately eight months after the U.S. Department of Justice, along with eight other states, filed a similar lawsuit against RealPage, accusing the company of enabling landlords to collude on rent prices through its software. In response to regulatory pressures, RealPage has also sued the city of Berkeley, California, challenging a local ordinance that bans the use of rent-setting algorithms, claiming it infringes on constitutional rights
The outcome of this legal battle could set a precedent for how digital tools are regulated in the real estate industry, potentially prompting nationwide reforms to protect tenants from exploitative practices.
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