Major landlords, RealPage sued in DC for alleged rent-fixing scheme

In this picture illustration AvalonBay Communities, Inc. emblem seen displayed on a smartphone and in the background. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket through Getty Images)

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Washington, D.C., Attorney General Brian Schwalb’s workplace mentioned Tuesday that it is suing RealPage, a property administration software program firm, and 14 of the district’s largest landlords for allegedly colluding to boost rents.

The criticism names a number of publicly traded actual property funding trusts, comparable to UDR, AvalonBay Communities and Equity Residential.

The firms shared information with RealPage, which then used an algorithm to artificially increase costs for greater than 50,000 residences throughout the town, costing renters tens of millions of {dollars} in unlawful hire hikes, in accordance with a launch from Schwalb’s workplace. The alleged collusion violates the District of Columbia’s Antitrust Act, the workplace mentioned.

D.C. rent-fixing lawsuit

The 14 landlords named in the swimsuit are:

  • AvalonBay Communities Inc.
  • Avenue5 Residential LLC
  • Bell Partners Inc.
  • Bozzuto Management Co.
  • Camden Summit Partnership LP
  • Equity Residential
  • Gables Residential Services Inc.
  • GREP Atlantic LLC
  • Highmark Residential LLC
  • JBG Smith Properties LP
  • Mid-America Apartments LP
  • Paradigm Management II LP
  • UDR Inc.
  • William C. Smith & Co. Inc.

The landlords listed in the lawsuit did not instantly reply to a request for remark.

“Defendants’ coordinated and anticompetitive conduct amounted to a district-wide housing cartel,” Schwalb mentioned in a press release. “At a time when inexpensive housing in D.C. is more and more scarce, our workplace will proceed to make use of the legislation to battle for truthful market circumstances and make sure that District residents and law-abiding companies are protected.”

The full criticism may be learn here.

RealPage’s value expertise is utilized by greater than 30% of residences in multifamily buildings and greater than 60% of residences in giant multifamily buildings throughout the district, in accordance with the legal professional common’s workplace. The software program makes use of proprietary, nonpublic information and statistical fashions to estimate provide and demand and generate a value to maximise the owner’s income.

“In looking for to attract a causal connection between income administration software program like ours and will increase in market-wide rents, this copycat swimsuit repeats the inaccuracies of predecessor instances,” RealPage spokesperson Jennifer Bowcock mentioned in a press release to CNBC. “The criticism and others prefer it are incorrect on each the details and the legislation and we are going to vigorously defend towards it.”

The landlords listed in the criticism allegedly colluded to change aggressive and delicate information and undertake the rents set by RealPage’s “Revenue Management” expertise, in accordance with the legal professional common. The lawsuit alleges the businesses remodeled the aggressive actual property market into one the place they labored collectively on the expense of renters.

The legal professional common’s workplace can also be looking for to nominate a company monitor to cease any alleged anti-competitive colluding and is looking for monetary penalties for the district and residents whose rents had been allegedly illegally raised.

The D.C. lawsuit follows a Tuesday decision by a federal jury in Missouri that discovered the National Association of Realtors and a few brokerages, together with models of Berkshire Hathaway, liable for conspiring to artificially inflate dwelling gross sales commissions.

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