The proposed class action, which has been filed in the Ontario Superior Court, alleges that the companies used an anti-competitive price-setting revenue management software (RMS) product called YieldStar, created by U.S.-based RealPage Inc., which is also a defendant.
RealPage is facing a similar lawsuit in the United States that was filed by the U.S. Department of Justice in August.
“Using RealPage's RMS, owners, operators and property managers continuously share competitively sensitive, non-public information with their market competitors,” the Canadian lawsuit has alleged.
The plaintiff, Cynthia Black, is seeking certification of the lawsuit as a class proceeding on behalf of all persons who have leased and resided in a unit owned, operated or managed by one of the defendants since Nov. 26, 2009.
In 2023, Black received an early notice of rent increase by letter from one of the defendants, GWL Realty Advisors Inc. (GWLRA). When Black and other tenants of the same building requested that they be allowed to collectively negotiate rent, representatives of the company told the plaintiff and other tenants that it was using RealPage's YieldStar to set rents for rental units at the building.
The statement of claim alleges that the defendants purchased, used, received and acted on recommendations from YieldStar to fix, maintain, control and increase the price of rental units.
“By using RealPage RMS, the Defendants co-ordinated their pricing for Rental Units. The Defendants' use of RealPage RMS restrained competition and increased prices in the market for Rental Units,” the plaintiff has claimed.
The plaintiff has alleged that RealPage RMS uses competitively sensitive data, continuously gathered from its users, who are competitors in the operation and management of rental units, to recommend prices for rental units.
“By using RealPage RMS, the Defendants allow RealPage RMS, and not the free market, to determine the rental prices they will charge,” the statement of claim reads.
The plaintiff has also alleged that RealPage challenges the defendants if they do not accept the RMS recommendations.
The statement of claim further alleges that RealPage escalates and responds, through pricing advisors and other means, to instances in which individual users do not accept pricing recommendations.
In a press release issued earlier this month, RealPage stated that its RMS is purposely built to be legally compliant, enhances competition throughout the rental housing ecosystem and is highly configurable by customers.
“RealPage revenue management customers always have total discretion to accept or reject pricing recommendations — and customers regularly exercise that discretion in practice,” it said in a release.
The company has also stated that customers are never punished for declining recommendations.
The plaintiff is seeking damages and disgorgement of profits obtained by the defendants flowing from the relevant rental units during the class period.
The lawsuit also seeks a declaration that the defendants conspired, arranged and/or agreed with each other to fix, maintain, increase or control the price of rental units in Canada during the class period.
The plaintiff is also seeking a declaration that the defendants engaged in conduct contrary to the Competition Act and were unjustly enriched as a result of the alleged conspiracy.
In a statement, CAPREIT stated that it “has not used, does not use, and will never use Yieldstar, or any other software that is the subject of this claim” and noted that it will seek to have the action dismissed.
RealPage, RioCan and GWLRA did not immediately respond to a request for comment.
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