An antitrust class-action lawsuit was filed today in Seattle alleging property management software giant Yardi Systems and 18 property management companies colluded to fix rent prices in multifamily markets across the country. The complaint was filed in U.S. District Court in the Western District of Washington and, along with Yardi, names one of the largest real estate services firms in the world, JLL, and several well-known real estate firms in the U.S., including McWhinney, Kushner Real Estate Group, and Bridge Property Management.
The suit accuses the companies of using Yardi’s pricing software RENTmaximizer and revenue management software Revenue IQ in a coordinated effort to raise costs at the same time while maintaining occupancy, erasing any competition between them. “Yardi’s RENTmaximizer is specifically, and publicly, marketed as a means to eliminate the discounting that would occur in a competitive market,” attorneys wrote in the complaint.
The antitrust suit comes less than a year after a similar complaint was filed against RealPage and seven apartment operators, including Greystar, Lincoln Property Company, and Equity Residential, accusing the group of teaming together to unlawfully artificially inflate rents using the company’s YieldStar software. At least two other lawsuits against RealPage followed, and several U.S. Senators called on the DOJ to investigate the company. Law firm Hagens Berman is representing the plaintiffs in the new complaint against Yardi and the property companies, the same firm that represented the plaintiffs in the RealPage suit.
Similar to the RealPage lawsuit, this case is likely to get a lot of attention from the real estate industry and elected officials. However, a key difference is that two anonymous witnesses from Bridge Property Management claim the software provided them with an “unfair advantage” over potential renters. This case is still in the discovery phase, so it will take some time for the legal matters to play out. Regardless of the case’s outcome, it is prompting many PropTech firms to reassess their offerings and causing property owners and management companies to be more careful about the software they use, considering the potential legal risks involved.