New Jersey Attorney General Matthew J. Platkin and the state’s Division of Consumer Affairs have sued RealPage and 10 of the largest landlords operating in the state.

In the suit, filed in the U.S. District Court for the District of New Jersey last Wednesday, Platkin alleges that the Richardson, Texas-based software company and the apartment operators engaged in multiple violations of the federal Sherman Act, the New Jersey Antitrust Act and the New Jersey Consumer Fraud Act.

Echoing other suits against RealPage, New Jersey accused the company and landlords of colluding to set rents for apartments statewide based on the company’s algorithmic pricing software and to exchange sensitive, non-public information to align their prices and avoid competition that would otherwise keep rent prices down.

In the process, the plaintiffs alleged thousands of New Jerseyans have overpaid for rent. The attorney general said renters throughout the state, which has some of the highest rental costs in the country, face a highly concentrated market, where individual landlords control thousands of apartments.

“The defendants in this case unlawfully lined their pockets at the expense of New Jersey renters who struggled to pay the increasingly unlivable price levels imposed by this cartel,” Platkin said in a news release. “Today we’re holding them accountable for unlawful conduct that fueled the state’s affordable housing crisis and deprived New Jerseyans of their fundamental right to shelter.”

The complaint names the following companies:

• Aion Management
• AvalonBay Communities
• Bozzuto
• Cammeby’s Management Co. of New Jersey
• Greystar 
• Kamson Corp.
• LeFrak Estates and its subsidiary, Realty Operations Group
• Morgan Properties
• Russo Property Management
• Veris Residential

The complaint also references additional New Jersey landlords as unnamed co-conspirators. The state said that additional defendants may be named.

Other allegations

New Jersey’s complaint alleges that the RealPage software is anticompetitive because it restricts price reductions and facilitates collective action to raise rents. It states that RealPage enforces adherence to its recommendations through automatic price acceptance, compliance tracking, “secret shop” tests and direct oversight by RealPage employees to ensure landlords stay in line. 

If landlords deviate from RealPage’s recommendations, they risk corrective actions from RealPage and from their peers using the system, according to the complaint.

The suit also accuses the landlords of collaborating outside of the property management system by sharing sensitive, real-time data on occupancy rates, leasing activity, concessions and pricing strategies. It alleges that they coordinated tactics through user groups, secret shops and industry meetings.

The lawsuit seeks several remedies, including:

• An injunction to stop the defendants from engaging in what the Attorney General’s office calls anticompetitive and consumer fraud practices.
• The appointment of a corporate monitor — at the defendants’ expense — to ensure implementation of all structural or practice remedies ordered by the court and not to engage in further unlawful conduct.
• Equitable relief, civil penalties and damages, and the disgorgement of any profits generated in New Jersey through unlawful behavior.

RealPage responds

None of the landlords named in the lawsuit responded to Multifamily Dive’s request for comment on the case.

RealPage Senior Vice President of Communications and Creative Jennifer Bowcock said Platkin was recycling inaccuracies of predecessor cases to blame RealPage for the state’s housing affordability challenges. 

“Today’s action against RealPage was a surprise, as there were no efforts by them to engage with RealPage prior to filing the lawsuit, further underscoring the problem with this process and the politics in play,” Bowcock said.

Bowcock said RealPage’s revenue management software was built to be legally compliant and has always used data legally and responsibly.

“RealPage’s revenue management software helps housing providers comply with Fair Housing laws, rent control laws and state of emergency price gouging laws, and does not use any personal or demographic data to generate rent price recommendations,” she said.

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