Federal judge advances seismic RealPage lawsuit

The massive legal challenge against RealPage and dozens of multifamily landlords is moving forward.

A federal judge in Nashville declined to dismiss tenants’ claims against the defendants, Bisnow reported. The judge did order the plaintiffs to amend and refile their complaints, however, which will give the software firm and landlords another opportunity to have the case dismissed. The plaintiffs have until Sep. 7 to refile.

Tenants from a slew of markets have accused RealPage and its rent-setting software of aiding landlords’ efforts to spike rents in an anticompetitive fashion. The class-action lawsuit against RealPage and the landlords consolidated more than 30 lawsuits from various states into Nashville federal court.

Those accused in the case include some of the biggest names in multifamily real estate: Essex Property Trust, Equity Residential, Camden Property Trust and Greystar Real Estate Partners are among those involved. Equity and BH Management Services launched individual efforts to dismiss litigation, though there was a joint effort to dismiss on either jurisdictional grounds or the lack of a stated case. But the judge kept the case alive.

RealPage told Bisnow it does not comment on pending litigation, but the company previously said the allegations lack merit.

Several of the real estate investment trusts tied to the case appear wary of how the litigation could affect them. Essex CEO Angela Kleiman said the firm had been cutting back on its RealPage use ahead of the lawsuits, and Equity CEO Mark Parrel said in the company’s first-quarter earnings it was increasing legal reserves to prepare for the legal battle.

Most have not shared in the fortune of AvalonBay, which was released from the consolidated suit after speaking with the plaintiffs’ counsel. However, the tenants could still bring the firm back into the case as a defendant.

Litigation against RealPage dates back to a ProPublica article published in October, which detailed how the YieldStar software could inflate rents and suppress competition across the country based on its algorithm.

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The varying lawsuits claimed the data analyzed from clients includes private information on competitors’ charges and is used to make rent recommendations to clients for an available unit. While landlords don’t need to adhere to RealPage recommendations, they generally do.

Several U.S. Senators are also pushing for the Department of Justice to investigate the company.

RealPage merged with Lease Rent Options in 2017, creating one of the country’s largest providers of rent-setting analytics.

— Holden Walter-Warner