27 Firms Strike Deal In Rent-Fixing Class Action, RealPage And Others Fight On
Twenty-seven landlords and property managers have reached a deal to settle their part of a class-action lawsuit that alleges RealPage helped multifamily operators collude to inflate rents.
The preliminary deal, which still needs a judge’s approval, would involve some of the country’s largest landlords paying a combined $141M to resolve allegations that RealPage’s AI Revenue Management software helped them cooperate to set rents. None of the landlords will admit to any wrongdoing in their deal, but they will agree not to share some data with RealPage or other third parties.
If approved, RealPage and roughly 20 other landlords would remain standing to fight the allegations in a Nashville court. A separate federal antitrust case is also pending.
“While the proposed settlements announced last night do not include RealPage, we are encouraged to see this matter move toward closure,” Jennifer Bowcock, a spokesperson for the Texas-based software firm, said in a statement. “RealPage continues to believe that this litigation is without merit and that our revenue management products, and our customers’ use of them, have always been legal.”
Greystar will pay $50M to resolve its claim, the most of any landlord and the second deal the firm has struck in a case relating to RealPage. BH Management is set to pay $15M under the deal, Brookfield would pay $5.3M, and Pinnacle Property Management Services would pay $3.5M. Houston-based AOG Living’s $550K fine is the smallest of the individual settlement amounts.
The landlords will also agree, for five years, not to provide RealPage or any other company “any nonpublic data concerning multifamily residential leases” that could be commingled with competitor data in any revenue management software.
All of the settling parties will also agree to cooperate to some degree with investigators as they continue to build the class-action case, which was brought by a group of renters from across the country.
The separate federal antitrust case, filed in August 2024 after a nearly two-year investigation, is ongoing. In August, Greystar reached a deal with federal prosecutors to resolve the antitrust claims with the government and cooperate with the investigation.
All of the court wrangling kicked off after a 2022 ProPublica story put RealPage’s software under a public spotlight. The legal and public complaints center around RealPage’s AI Revenue Management software, previously known as Yieldstar, which helps owners track occupancy, set rents and get real-time insight into their portfolios.
Federal prosecutors and attorneys for tenants allege that the software effectively enables landlords to create a rent-setting cartel that artificially props up rents.
RealPage has consistently said its software is compliant with antitrust laws, but it nonetheless said it made adjustments to its software last year to assuage concerns from regulators.
Still, a barrage of local legislation has targeted the use of rent-setting algorithms. At least nine municipalities have passed rules banning or regulating their use. More than a dozen states have considered some kind of legislation to address the tech, although none of the proposals have become law.
Stephen Weissman, an attorney at Gibson, Dunn & Crutcher LLP representing RealPage, told Bisnow last month that the company felt that it was being blamed for what is fundamentally a shortage of housing. He said his client was ready to go on offense to defend its software, including on First Amendment grounds.
“We've been very clear that we want to be part of the solution,” Weissman said. “If there's a way we can continue to innovate that addresses concerns, we're open to that, but we're not open to a scapegoating of our product.”
Court documents outlining the settlement paint the picture of a voluminous and tangled case.
The defendants have collectively provided more than 24 terabytes of data to prosecutors, including the names and contact information of potentially impacted tenants and 14,778,268 documents.
RealPage doesn’t anticipate that it will have to make any changes to its software to be in compliance with the settlements. The company’s rental algorithm hasn’t used “any nonpublic data of one customer as an input when calculating rental pricing recommendations for any other customers” since 2024, Bowcock said.
