‘CARTEL LANDLORDS’ — State AG suing 10 biggest landlords over illegal rent scheme, including Russo

One of Kearny, Harrison, Belleville and Lyndhurst’s most noted landlords — among many other properties in North and Central Jersey — could be in some serious trouble with the law, as Attorney General Matthew J. Platkin and the Division of Consumer Affairs have filed a lawsuit against property management software company RealPage, Inc. (“RealPage”) and 10 of New Jersey’s largest landlords.

Platkin alleges collusion in a rent-raising scheme that violated state and federal antitrust and consumer protection laws and forced tens of thousands of New Jerseyans to overpay for rent month after month.

RealPage and the landlords — one of whom is Russo Development, which owns Vermella properties in Kearny, Harrison, Belleville and Lyndhurst —  allegedly agreed to set rents for multifamily housing properties statewide based on RealPage’s algorithmic pricing software and to exchange sensitive, non-public information to align their prices and avoid competition that would otherwise keep rent prices down.

The complaint, filed partially under seal April 23 in the United States District Court for the District of New Jersey, alleges the defendants engaged in multiple violations of the federal Sherman Act, the New Jersey Antitrust Act and the New Jersey Consumer Fraud Act (“CFA”).

“The defendants in this case unlawfully lined their pockets at the expense of New Jersey renters who struggled to pay the increasingly unlivable price levels imposed by this cartel,” Platkin said. “Today we’re holding them accountable for unlawful conduct that fueled the state’s affordable housing crisis and deprived New Jerseyans of their fundamental right to shelter.”

Platkin notes average rents in New Jersey are among the highest in the nation and the state currently has a shortage of over 200,000 affordable rental homes. The situation in North Jersey, where a significant amount of the alleged activity occurred, is particularly dire.

In some of these towns, including Kearny, developers were issued Payments in Lieu of Taxes — commonly known as PILOTs — as an incentive to build here and to clean up what was once considered blighted properties.

Cost-burdened renters

Half of low-income renters are cost-burdened, Platkin says — meaning they pay more than 30% of their income on rent — as are nearly a quarter of middle-income renters. Renters in locales throughout the state face a highly concentrated market, where individual landlords control thousands of apartments in the state.

Despite all of this, demand for multifamily housing is highly inelastic, meaning even as prices skyrocket, the demand for rentals remains relatively constant: renters need someplace to live and cannot forgo the essential human need of shelter.

Along with the Texas-based RealPage, the complaint names Russo Property Management, LLC; Morgan Properties Management Company LLC; AvalonBay Communities, Inc.; Kamson Corp.; LeFrak Estates, L.P. (“LeFrak”) and its subsidiary, Realty Operations Group LLC; Greystar Management Services, LLC (“Greystar”); Aion Management LLC; Cammeby’s Management Co. of New Jersey L.P.; Veris Residential, Inc.(“Veris”); and Bozzuto Management Company (“Bozzuto”) (collectively, “defendant landlords”), who collectively own and manage at least tens of thousands of rental units statewide. The complaint also references additional New Jersey landlords as unnamed co-conspirators.

These are landlords owning or managing multifamily rental properties who are believed to have also unlawfully colluded to raise rents by collectively setting rents based on RealPage’s software and unlawfully agreed to exchange competitively sensitive information (collectively“participating landlords”). The investigation into the alleged conspiracy is ongoing and additional defendants may be named, Platkin says.

According to the complaint, at the heart of the price-fixing scheme is RealPage’s Revenue Management (“RM”) Software. RealPage offers three RM products to landlords — YieldStar, AI Revenue Management (“AIRM”) and Lease Rent Options (“LRO”). The products are functionally similar in that they automate pricing of multifamily units using algorithms fueled by RealPage’s vast data repositories.

More simply, these products employ statistical models that use data — including proprietary, non-public data —to estimate supply and demand for multifamily housing that is specific to particular geographic areas and unit types and then generate a price to charge for renting those units that maximizes the landlord’s revenue.

RealPage charges the landlord an initial setup fee and then a monthly fee for each multifamily residential unit. In addition to fees, participating landlords compensate RealPage by providing their valuable proprietary data.

Specifically, participating landlords, including defendant landlords, agree to share their non-public information with competitors and know that their competitors’ information is being used to generate the rents they charge. For example, a “One Master Agreement” with RealPage expressly obligates the landlord to provide RealPage with “correct and accurate” data and acknowledge that RealPage may use that data to operate its products (including the RealPage RM Software), according to the complaint.

The complaint asserts the RealPage software is anti-competitive by design because it restricts meaningful price reductions and facilitates collective action to push rents higher. RealPage enforces strict adherence by landlords to its prices using tools like automatic price acceptance, compliance tracking, “secret shop” tests, and direct oversight by RealPage employees to ensure landlords stay in line. In the rare instance when landlords do deviate, they risk corrective action—both from RealPage and from their peers in the cartel, the complaint alleges.

The landlords using RealPage’s RM Software not only agreed to use RealPage’s anticompetitive RM Software and impose its artificially high — or “supracompetitive”— rents, but they also collaborated directly with one another, the complaint alleges.

They shared sensitive, real-time data on occupancy rates, leasing activity, concessions and pricing strategies, Platkin says. They participated in user groups, secret shops and industry meetings where they coordinated tactics and reinforced their collective commitment to the scheme. And they worked actively to recruit other landlords into the scheme, knowing broader participation would drive rents even higher, according to the complaint.

As an example, at Vermella West, in Kearny, as of Sunday, April 27, the most inexpensive apartment available was a 515-square foot studio fetching $1,936 in rent. The most expensive was a 1,267-square-foot, two-bedroom unit fetching $3,358 per month.

Not mentioned in the complaint — but apparently a result of these alleged actions — is what has happened to rent prices elsewhere, or rental prices not controlled by these landlords, but by regular, multi-family homeowners, which over the last 10 years have skyrocketed.

For example, in the April 23, 2025, edition of The Observer, a three-bedroom apartment in Kearny was going for up to $2,500 per month, while in Lyndhurst, one, two-bedroom apartment was going for $3,200 per month.

Conversely, in the April 22, 2015, edition of The Observer, the most expensive rental in Kearny was $1,300 for a three-bedroom apartment, while similarly in Lyndhurst, the asking price for a two-bedroom apartment was $1,500.

Meanwhile, the complaint also asserts in some instances, landlords’ employees may disclose the use of RealPage’s RM Software, but they misrepresent the nature of the algorithm to renters. Specifically, these employees mislead consumers to believe that the RM Software merely determines what the “market rate” is.

In truth, RealPage’s RM Software does not merely determine a “market rate,” but instead generates a supra-competitive price designed to push the entire market higher, the complaint alleges.

Overall, the complaint alleges the defendants violated the Sherman Act and the New Jersey Antitrust Act by engaging in conduct that includes:

• Entering into contracts, combinations or conspiracies that unreasonably restrain trade or commerce;

• Agreeing to have RealPage set prices for multifamily residential real estate leases in New Jersey rather than competing with other landlords on the basis of price and agreeing not to override these prices the vast majority of the time;

• Conspiring to reduce the supply of multifamily housing units in the form of limited target occupancy rates and to fix and increase the price of leases for multifamily housing units in New Jersey; and

• Further advancing the anticompetitive scheme by agreeing to share and in fact sharing competitively sensitive, non-public information with their competitors, through RealPage and directly with each other.

The complaint also alleges the defendants violated the New Jersey Consumer Fraud Act by engaging in commercial practices that violate state and federal antitrust laws, which constitute unlawful commercial conduct under the law.

Each violation of the Sherman Act and New Jersey Antitrust Act constitutes a separate unlawful practice and violation of the New Jersey Consumer Fraud Act. The complaint also alleges RealPage engaged in “unconscionable commercial practices and acts of deception,” including:

• Engaging in an unlawful rent-setting scheme to inflate prices for multifamily real estate leases in New Jersey by offering the RM software and related services to participating landlords;

• Providing consumer-facing communications in connection with advertising and offering rates for apartment leases that contained misrepresentations that were disseminated by the participating landlords and further instructing the participating landlords how to communicate to renters about RealPage-generated prices, which limited the information available to consumers and undermined consumers’ ability to make informed choices;

• Directly causing supracompetitive prices generated pursuant to the unlawful scheme to be pushed to Internet listing services, where they are displayed directly to consumers to advertise the apartments whose prices have been unlawfully inflated;

• Promulgating instructions to participating landlords to misrepresent the nature of their pricing decisions to renters and conducting secret shops to ensure that participating landlords did not disclose the existence of the RM software and instead misrepresented to and/or omitted from renters the truth of their pricing decisions as previously instructed by RealPage; and

• Enforcing participating landlords’ compliance in the scheme through RealPage’s directions and training on consumer-facing messaging, including through secret shops

Finally, the complaint alleges certain landlords engaged in unconscionable practices, acts of deception or misrepresentations under the Consumer Fraud Act. Among other allegations, the complaint alleges that the defendant landlords engaged in an unlawful conspiracy to set prices for multifamily apartment leases in New Jersey through the advertising and offering of rates for apartment leases to New Jersey consumers and employed misleading consumer-facing communications strategies designed to obfuscate the cause of rent increases and limit the information available to consumers.

The civil lawsuit seeks a number of remedies, including:

• An injunction to stop the defendants from engaging in anticompetitive and consumer fraud practices;

• The appointment of a corporate monitor — at the defendants’ expense — to ensure implementation of all structural or practice remedies ordered by the court and to not engage in further unlawful conduct;

• Equitable relief, civil penalties, and damages; and

• The disgorgement (reimbursement) of any profits generated in New Jersey through this unlawful behavior.