REBNY changes “predatory” Hackathon terms after Twitter backlash

At first sight, the Real Estate Board of New York’s upcoming Hackathon looked like a great deal. Participants could spend three days mingling with other coders, build real estate tech software together and “compete for a total of $75,000 in cash and prizes.” But buried in the event’s terms and conditions was a big catch: any software created during the event would belong to REBNY, without compensation.

After a public backlash, the industry group on Monday rewrote the rules and removed the clause in question.

“Hey @GCTech @REBNY want to be more tech-forward? Get rid of the predatory terms in your hackathon,” Brad Hargreaves, founder of coliving company Common wrote on Twitter Monday morning, addressing REBNY and Grand Central Tech, the Milstein Companies-controlled incubator at 335 Madison Avenue hosting the event. REBNY is organizing the event as part of Real Estate Tech Week.

The terms Hargreaves was referring to forced participants to assign all rights to software created during the event to REBNY “without further compensation during and after the REBNYTech Hackathon.” Hargreaves told The Real Deal that such terms were common five to seven years ago but are frowned upon today.

Richard Murby, a director at Devpost, a company that creates Hackathon management platforms, said it’s “standard practice” at Hackathons to let participants keep any software they create.

Brian Koles, a Property Markets Group executive and former director at Devpost, called REBNY’s terms “highly problematic.”

“Hackathon participants are not free labor,” he said. “Asking them to hand over their work, especially without compensation, (…) is totally against the open innovation ethos you’re trying to inspire.”

At Hackathons, coders usually spend days together building new software in groups. Some are open only to employees of a single company, others are open to pretty much anyone. In the latter, intellectual property ownership disputes can easily arise, which is why the terms and conditions matter a great deal.

Michael Mandel, CEO of crowdsourced leasing comp database CompStak, pointed out that the prize money isn’t exactly huge either. The most cash coders can win at the event is $2,500. They have a shot at another $15,000 (plus $20,000 in unspecified non-cash prizes), but only if they win a three-month “Gauntlet Challenge.”

“I wouldn’t allow our employees to take three months off of work to participate in a hackathon and give all of the (intellectual property) that they’ve created to REBNY (if that’s really what REBNY’s intention is),” Mandel said.

REBNY reacted quickly. Two hours after Hargreaves’ tweet went up, the trade group had updated the terms and conditions, removing any mention of transferring ownership to REBNY. “We’re working within the best practices of organizing a hackathon to foster more innovation in the real estate market,” Carl Hum, who handles management services and government affairs at REBNY, said in a statement. “We support the tech community and look forward to hosting participants this weekend.”

On Twitter, Grand Central Tech claimed that is merely hosting the event and didn’t necessarily look into all the details. “As with any event hosted in our space, we advise all attendees to read all terms of participation closely and act accordingly,” the company said.