Landlords Raise Rents Based on RealPage Software, Suspects Allege

And the Justice Department, beyond its role in the tenant dispute, has signaled a broader scrutiny of large landlords. In May, the Federal Bureau of Investigation executed a limited search warrant at the Atlanta headquarters of property management company Cortland in connection with a Justice Department investigation into potential antitrust violations in the multifamily housing industry.

“We are fully cooperating with this investigation and understand that neither Cortland nor any of our employees are ‘targets’ of this investigation,” the company said. Cortland is a defendant in the tenant dispute, but it’s unclear how RealPage’s software affects the federal investigation, if at all.

A Justice Department representative declined to comment.

The government has a legal advantage over private lawyers because it can use civil investigative demands to “open the hood” of RealPage’s software and analyze how its algorithm works before taking the case to court, said Sandeep Vaheesan, legal director at the Open Markets Institute, a research and advocacy group focused on antitrust issues.

Ms. Bowcock, the RealPage spokeswoman, said property managers are “finding value” in its software. But there are signs that some customers are starting to worry about legal threats. In February, Pinnacle and another multifamily landlord named as a defendant in a federal lawsuit in Tennessee agreed to settle claims in that lawsuit that they inflated rental prices using RealPage’s software.

Although a federal judge in Tennessee has allowed the tenants’ dispute to proceed, none of the pending lawsuits have gone to trial. To win, they will need to present enough evidence of collusion via RealPage software to convince courts to declare the information exchange illegal.

Some antitrust lawyers argue that these facts need to be clarified and verified in court.

“Right now we’re fighting a hypothetical battlefield,” said Douglas Ross, a professor of antitrust law at the University of Washington.