Trust This. DOJ Sues RealPage – FL Condo Fees Skyrocket – Personal Branding

Trust This.

By Joseph E. Seagle, Esq. ● Aug 30, 2024

Smart Brevity^® count: 5.5 mins…1522 words

👋 Happy Friday! Today is National 🏖 Beach 🏄‍♂ Day. Living in the state with the longest coastline in the continental U.S. has perks on “holidays” like this. Could you make the most of it?

Situation Awareness: We’re getting a lot of questions from people with LLC’s who plan to dissolve them now to avoid having to file the FinCEN BOI report. However, one of the latest additions to the BOI FAQ page clarifies that if you dissolve the LLC after January 1, 2024, you must still file the report. Further, simple administrative dissolution for failure to file an annual report is not “dissolved” enough. Only when the dissolution is considered “permanent” in that jurisdiction is the company dissolved and no longer required to file a BOI report. We can help file the report for you if needed.

⚖ 1 big thing: DOJ Sues RealPage for Alleged Rent-Fixing Scheme

The U.S. Department of Justice (DOJ) and eight state attorneys general have filed a lawsuit against RealPage Inc., a software developer.

• The lawsuit alleges that the company facilitated a nationwide conspiracy among major landlords to fix rental prices.

• This legal action emerges as housing costs become a central issue in the 2024 election.

Why it matters: Landlords and real estate investors must know the legal landscape shaping the rental market as the DOJ focuses on algorithmic collusion. The outcome of this lawsuit could have significant implications for how rental pricing tools are utilized and regulated.

State of play:

• The Allegations: The DOJ accuses RealPage of orchestrating a scheme that reduced competition among landlords by enabling them to share sensitive pricing information through its software. This, according to the DOJ, allowed landlords to align their rents, thereby artificially inflating rental prices across the country.

• Legal Implications: The lawsuit suggests that using software to coordinate pricing does not shield landlords or software companies from antitrust liability. The DOJ’s focus on algorithmic collusion highlights the increasing scrutiny of technology’s role in market manipulation.

• RealPage’s Defense: RealPage denies the allegations, arguing that their software is pro-competitive and has been legally compliant for years. The company also maintains that its market share is small in most cities and that landlords frequently reject its pricing recommendations.

Broader Context:

• Political Backdrop: The lawsuit comes at a time when housing affordability is a critical issue, with rents rising over 30% since the pandemic began. The Biden administration has proposed measures targeting corporate landlords, including potential caps on rent increases.

• Industry Impact: If the DOJ prevails, this case could set a precedent for increased regulation of pricing tools and greater scrutiny of landlords’ use of technology in setting rents. Landlords using such software might need to reassess their practices to ensure compliance with antitrust laws.

What’s Next:

• Real estate investors and landlords should closely monitor this case as it unfolds.

• The DOJ’s actions indicate a broader trend of cracking down on corporate practices that may contribute to inflated housing costs.

• Ensuring transparency and legal compliance in rental pricing strategies will be crucial moving forward.

• Harlan Crow, a billionaire benefactor of Justice Clarence Thomas, is one of the largest owners of RealPage. The case will likely make its way to the U.S. Supreme Court. We’ll see again whether Justice Thomas will recuse himself from it. If history holds, he’ll weigh in to help the man who has often helped him over the decades.

The bottom line: This lawsuit could redefine the rules of engagement for large corporate landlords and the technology they use to set rental prices. Staying informed and proactive in adapting to potential regulatory changes will be key to navigating this evolving landscape.

💭 Our thought bubble: Is the next step for DOJ to go after the large corporate landlords who actually used RealPage’s technology? This could just be the beginning.

Go deeper: For the back story on this, see our November 25, 2022 edition and the July 12, 2024 edition of this newsletter.

2. Florida Condo Market in Crisis: Skyrocketing HOA Fees and Falling Prices

Florida’s condo market is in turmoil as homeowners’ association (HOA) fees surge, driven by rising insurance costs and stringent safety regulations following the Surfside collapse. These factors are causing a significant decline in condo prices across the state, making condos less attractive to buyers and investors.

By the numbers:

• Tampa: HOA fees spiked by 17.2% year-over-year, the highest among 43 U.S. metros analyzed. Condo prices dropped 4.9%, with the median price now at $237,750.

• Orlando: Saw a 16.7% rise in HOA fees, with condo prices falling slightly by 0.5%.

• Fort Lauderdale: Experienced a 16.2% increase in HOA fees, accompanied by a 4.2% decrease in condo prices.

Why it matters: The sharp increase in HOA fees is attributed to two factors:

1. Insurance Costs: Florida’s insurance crisis, exacerbated by natural disasters and market exits by insurers, has forced HOAs to hike fees to cover rising premiums.

2. Safety Regulations: New laws requiring structural inspections and reserve funds for repairs are pushing HOA dues even higher.

The Impact: The surge in fees is making it increasingly difficult for many condo owners, particularly those on fixed incomes, to keep up with payments.

• This has led to an exodus of owners, further depressing condo prices.

• The situation is particularly dire in markets like Tampa and Fort Lauderdale, where HOA fees are among the highest and condo prices are falling.

What’s Next: As fees continue to rise and prices fall, Florida’s condo market may see a shift in investor interest. Real estate professionals should brace for continued volatility and consider advising clients on the risks associated with condo investments in the current climate.

Go deeper: Redfin

In this week’s Tactics and Tips edition of the Trust This. podcast, I discuss asset protection for landlords and the special issues they face every day.

Listen in or watch on your favorite streaming platform.

3. Catch up fast

1. NAR has petitioned SCOTUS to stop re-opening its case against the Association, seeking to prohibit any discussion of commissions between real estate brokers on a transaction. WRE News

2. Mini-documentary: “We went to Florida: The Housing Insurance Crisis Will Shock You. More Perfect Union

3. Second quarter U.S. GDP revised up to 3%. ABC News

4. Weekly jobless claims fell last week, but the labor market is still slowing at at orderly pace. Reuters

5. The Fed is going to reduce its lending rate in September, but by how much? CNN

4. Closing Thought: What is your personal brand?

A signature logo alone is not your brand.

Real estate brokers, investors, and any other business owner understands the importance of their own personal “brand,” but how one goes about building one is a process.

Why it matters: Personal branding isn’t just buzzwords — it’s a critical tool for real estate professionals and entrepreneurs. In a crowded marketplace, your personal brand is what sets you apart, builds trust, and turns potential clients into loyal customers.

The big picture: A strong personal brand isn’t just about having a recognizable logo or catchy tagline.

• It’s about the reputation you cultivate through every interaction, the expertise you demonstrate, and the values you uphold.

• In real estate, where relationships and trust are paramount, a well-crafted personal brand can be the difference between closing a deal and missing out.

• Also, with a strong personal brand, spending on marketing to build trust and confidence can be reduced since the brand alone comes with that cache’ of trust and confidence.

The strategy:

1. Self-Assessment: Start by understanding who you are as a professional.

• What are your strengths, passions, and values?

• How do you want to be perceived by clients?

• This introspection will form the foundation of your brand.

2. Define Your Unique Selling Proposition (USP): Identify what sets you apart from other real estate professionals.

• Is it your deep market knowledge, your negotiation skills, or your commitment to customer service?

• Your USP should be clear and consistently communicated across all platforms.

3. Create a Consistent Image: Your online presence—social media profiles, website, and email communications—should consistently reflect your brand.

• Use professional photos, a consistent color scheme, and a tone of voice that resonates with your target audience.

4. Content Creation: Share your expertise through blogs, social media posts, or videos.

• Position yourself as a thought leader in real estate by providing valuable insights that solve your clients’ problems.

5. Networking: Build and maintain industry and client relationships.

• Your network can amplify your brand through referrals and testimonials.

The bottom line: Personal branding isn’t optional in today’s competitive real estate market.

• It’s a strategic asset that, when done right, can elevate your career and open new opportunities.

• Start now by defining your brand and consistently showcasing it to your clients.

We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below.

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