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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:
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Aion Management
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AvalonBay Communities
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Bozzuto
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Cammeby’s Management Co. of New Jersey
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Greystar
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Kamson Corp.
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LeFrak Estates and its subsidiary, Realty Operations Group
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Morgan Properties
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Russo Property Management
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Veris Residential
The complaint also references additional New Jersey landlords as unnamed co-conspirators. The state said that additional defendants may be named.
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.
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