Relating to residential rental property price fixing, and providing civil penalties

The bill prohibits any landlord, or any person acting on behalf of a landlord, from entering into or engaging in any price fixing with another landlord regarding rent for residential rental property. The bill also prohibits a landlord from using an algorithmic system that relies on nonpublic competitor data or coordinates with other landlords to set or adjust rent or occupancy levels for residential rental property. A provider of an algorithmic system is prohibited from providing an algorithmic system that uses or incorporates nonpublic competitor data in a manner that fixes, stabilizes, raises, or maintains the level of rent or occupancy for residential property; providing an algorithmic system that the provider of the algorithmic system knew or reasonably should have known would be used for price fixing; and entering into any agreement with two or more landlords to limit or restrain competition in setting rent or terms of tenancy using the algorithmic system. The bill provides that the attorney general, or a county attorney or city attorney may bring a civil action for a violation of the bill. Upon finding that a landlord or a provider of an algorithmic system violated the bill, a court may order civil penalties, to be deposited into the general fund of the state, of up to $5,000 per rental unit per month for each month a violation continues, or a higher amount as determined by rulemaking, injunctive relief, restitution, and reasonable attorney fees and costs. The bill provides that a tenant harmed by a violation of the bill may bring a civil action. Upon finding that a landlord or a provider of an algorithmic system violated the bill, a court may order injunctive relief, damages, and reasonable attorney fees. An action brought under the bill must be commenced within two years of the violation, and not afterward. The bill provides an affirmative defense to any claim or action alleging that a landlord or a provider of an algorithmic system violated the bill, if the landlord or a provider of an algorithmic system: (1) set the rent independently and without knowledge of any agreement, coordination, or shared nonpublic competitor data with other landlords; (2) did not rely on an algorithmic system that uses nonpublic competitor data to coordinate pricing; and (3) conducted due diligence to ensure that any algorithmic system used was not designed or intended to facilitate coordination among landlords. The burden of proof for the affirmative defense lies with the landlord or the provider of an algorithmic system. The bill requires a landlord or a provider of an algorithmic system to retain for five years records concerning the use of rent-setting algorithms, data sources, decisions, and human oversight of algorithmic rent-setting systems. The attorney general may adopt rules to administer the bill.