Greystar and 25 other property management companies have agreed to pay $141 million to settle a class-action lawsuit involving rent-setting algorithmic software coordination and other anticompetitive practices in rental markets across the country, according to reports.
The U.S. Department of Justice reached an agreement in August to settle with Greystar.
Greystar, the nation’s largest landlord, would pay $50 million under the proposed settlement agreement, which was filed Oct. 1 in a Tennessee federal court. The deal would still require a judge’s approval.
The companies have also agreed to no longer share nonpublic information with RealPage for its rent algorithm — a key stipulation, since plaintiffs say RealPage used that information to enable landlords to align their prices and push up rents.
“This represents a fundamental shift in the multifamily housing industry and will help reverse the type of anticompetitive coordination alleged in the complaint,” attorneys wrote in the settlement filing.
All companies involved in the settlement deny wrongdoing and have agreed to help plaintiffs in the ongoing case against RealPage and more than a dozen other property management firms that have not reached settlements. RealPage and others are also fighting an antitrust lawsuit filed last year by the Department of Justice and several state attorneys general.
The settlement funds from the rent-setting software class action lawsuit would be distributed among millions of tenants included in the settlement class.
RealPage has denied any wrongdoing and argues that the plaintiffs misunderstand how their product works. RealPage, which is based in Texas, has said its software is used on fewer than 10% of rental units in the United States, and that its price recommendations are used less than half the time.
“While the proposed settlements … do not include RealPage, we are encouraged to see this matter move toward closure,” said Jennifer Bowcock, RealPage’s senior vice president for communications, in a statement. “RealPage continues to believe that this litigation is without merit and that our revenue-management products, and our customers’ use of them, have always been legal.”
Among the other defendants, Iowa-based BH Management would pay $15 million, while Denver-based Simpson Property Group would pay $6.5 million. The other companies’ settlements range between $550,000 and $6 million.
