Tenant sues Yardi over rent-setting software

Lawsuit alleges antitrust violations by Revenue IQ product

Tenant Suing Yardi Over Rent-Setting Software
Yardi's Anant Yardi (Yardi, Getty)

On the heels of a major lawsuit alleging rent-setting software violates antitrust laws, another property management company is facing similar accusations.

A Seattle renter sued Yardi last week, accusing the company of driving up rents through its RENTmaximizer product, Inman reported. Apartment owners took advantage of the product to unfairly drive up prices, according to the class-action lawsuit, which named 18 property management companies as defendants.

Apartment owners who use the software do so “to foil the operation of the competitive market,” the suit said. Yardi customers, who are typically landlords, allegedly provide rental and occupancy data into an algorithm that spits out pricing recommendations, allowing owners to essentially collaborate to set rents.

Yardi marketed the product, which has since been renamed Revenue IQ, as a way to drive up rental income by at least 6 percent, according to the lawsuit. 

The company, which recently concluded its annual North American conference, didn’t immediately respond to requests for comment from Inman or The Real Deal.

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The lawsuit hits many of the same points as a legal challenge against RealPage and dozens of multifamily landlords. The class-action case, which generated widespread media coverage, is moving forward on the other side of the country after being consolidated from numerous other challenges.

Tenants from multiple markets accused RealPage and its rent-setting software of helping property owners raise rents in an anticompetitive fashion because it suggested rental prices based on what other RealPage customers were charging. Most of the time, landlords raised rents when the software suggested it.

RealPage said the lawsuit lacked merit, and customers said its product helped them to avoid underpricing their rentals, but an effort from some of the defendants to dismiss the case was rejected by a judge.

The litigation against RealPage dates back to a ProPublica article published nearly a year ago detailing how the company’s YieldStar software could inflate rents and suppress competition through its algorithm. U.S. Senators have pushed the Justice Department to investigate RealPage.

Holden Walter-Warner

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