The newly installed North Carolina Attorney General filed a lawsuit against six landlords for working together with a software company to illegally fix rental rates. The six landlords are Camden Property Trust; Cortland Management, LLC; Cushman & Wakefield and its subsidiary Pinnacle Property Management Services, LLC; Greystar Real Estate Partners, LLC, LivCor LLC; and Willow Bridge Property Company, LLC. These landlords own or manage more than 70,000 rental units throughout North Carolina.
The North Carolina Attorney General’s office claims that the landlords, along with the software company RealPage, worked together to raise rental rates in North Carolina. According to the Complaint, RealPage provides landlords with commercial revenue management software. Landlords submit competitive, sensitive information to Real Page including the landlord’s rental prices from its leases. Using an algorithm, RealPage provides daily pricing recommendation back to the landlords that otherwise are in competition with the others. The Complaint alleges that the landlords effectively agree to allow RealPage to determine the price that a renter will pay. The claim is that, because these competing landlords are all using RealPage, there is no effort by individual landlords to compete by, for example, reducing rates in down markets. Instead, the competing landlords are effectively agreeing to set the same rental rates for similar properties thereby avoiding competition.
Price fixing, a practice typically associated with goods and services, is illegal in most markets because it prevents competition and leads to unfair pricing. In this case, the lawsuit alleges that the landlords’ coordinated efforts restricted competition in the rental market, allowing them to increase rents without regard to market forces or individual property conditions.
The lawsuit, if successful, could provide relief to renters by potentially reducing rental costs and restoring competition to the market. Legal consequences for the landlords could include fines, restitution for affected renters, and a restructuring of rental practices among the accused landlords. In addition, it may inspire similar legal challenges in other states that are dealing with high rental costs and questionable landlord practices.
For renters, this lawsuit could signal a shift toward greater transparency and fairness in the rental market, potentially lowering costs and fostering healthier competition. For landlords, it underscores the importance of adhering to antitrust laws and engaging in fair business practices.