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Renters filed a lawsuit this week alleging that an organization that makes price-setting software program for residences and 9 of the nation’s greatest property managers fashioned a cartel to artificially inflate rents in violation of federal legislation.
The lawsuit was filed days after ProPublica revealed an investigation elevating issues that the software program, bought by Texas-based RealPage, is probably pushing lease costs above aggressive ranges, facilitating price-fixing, or each.
The proposed class-action lawsuit was filed in US District Courtroom in San Diego.
In an e mail, a RealPage consultant stated that the corporate “strongly denies the allegations and can vigorously defend towards the lawsuit.” She declined to remark additional, saying the corporate doesn’t touch upon pending litigation.
The 9 property managers named within the lawsuit didn’t reply instantly to a request for remark.
They included among the nation’s largest landlords, resembling Greystar, Lincoln Property Firm, Fairness Residential, Mid-America Condo Communities, and FPI Administration—which collectively handle a whole lot of hundreds of residences.
4 of the 5 renters named within the swimsuit have been Greystar tenants. A fifth rented from Safety Properties. Their residences have been positioned in San Diego, San Francisco, and two Washington state cities, Redmond and Everett.
The lawsuit accused the property managers and RealPage of forming “a cartel to artificially inflate the value of and artificially lower the availability and output of multifamily residential actual property leases from aggressive ranges.”
RealPage’s software program makes use of an algorithm to churn via a trove of knowledge every evening to counsel each day costs for accessible rental models. The software program makes use of not solely details about the condominium being priced and the property the place it’s positioned, but in addition personal information on what close by rivals are charging in rents. The software program considers precise rents paid to these rivals—not simply what they’re promoting, the corporate informed ProPublica.