On September 29, the U.S. District Court for the Southern District of New York enjoined the New York attorney general from enforcing the core landlord-facing provision of New York’s algorithmic rent-pricing law, General Business Law Section 340-b(3) (N.Y. Gen. Bus. Law). The ruling comes as New Jersey prepares for its differently structured own law, the FAIR Act, which takes effect July 1, 2027.

RealPage Inc., a software provider serving owners and managers of residential properties, asked the court for a preliminary injunction, challenging the enforcement of Subsection (3) of N.Y. Gen. Bus. Law Section 340-b. Subsection (3) makes it an unlawful agreement for a residential owner or manager to knowingly or recklessly set or adjust rent, renewal terms, occupancy levels, or other lease terms based on recommendations from software performing a “coordinating function.”

In its order granting the injunction, the court held that, as written, Subsection (3) fails to adequately demonstrate “a reasonable fit between the Statute and the legislative goal” of protecting New York consumers.

The court interpreted Subsection (3) as making “it unlawful for a residential landlord to accept the recommendation of a consultant hired to: collect public data regarding rental prices in the area, evaluate that data using software, and make a recommendation about optimal rent prices.”

As a result, the court held that Subsection (3) likely restricts protected speech more broadly than necessary–in particular because the language of the subsection is “undiscerning in targeting software without regard to its use of public versus non-public data.”

The court did not enjoin Subsection (2), which prohibits facilitating agreements among landlords not to compete, including by operating or licensing such software.

While the ruling is significant, it is not a final decision, and it does not give landlords a safe harbor for using rent-setting software. On Oct. 14, the New York attorney general filed a motion for reconsideration asking the court to vacate the injunction.

What It Means for New York Landlords

For now, the attorney general cannot enforce Subsection (3) against landlords in New York. But the ruling does not:

  • Strike Section 340-b from the books
  • Resolve the merits or prevent New York from appealing
  • Enjoin the separate facilitator prohibition in Subsection (2)
  • Displace the Donnelly Act, the Sherman Act, or consumer-protection laws
  • Bar private plaintiffs, who are not covered by the injunction

You should not treat the decision as a green light to resume or expand the use of rent-setting software without review. Tools that pool competitors’ nonpublic data, discourage price reductions, standardize lease terms, or otherwise limit independent decision-making should be closely reviewed.

What It Means for New Jersey Landlords

The New York decision does not directly impact the validity or application of New Jersey’s Forbidding the Algorithmic Inflation of Rent (FAIR) Act, P.L. 2026, c. 43, signed July 20, 2026, and effective July 1, 2027.

The FAIR Act makes it a violation of the New Jersey Antitrust Act for:

  • An owner or its agents to subscribe to, contract for, or pay for the services of a covered “coordinator”
  • A coordinator (or its agents or subcontractors) to facilitate agreements or parallel pricing among owners
  • Anyone to perform a defined “coordinating function”

Unlike New York’s enjoined provision, the FAIR Act is tied to competitors’ nonpublic information and parallel pricing, which may make it harder to challenge on the same grounds. Note that information is “nonpublic” if it is not available free of charge and combining it with public data does not change that. The act excludes certain research, free public rent estimates, listing databases, affordable housing programs, and non-AI spreadsheets requiring human analysis.

Landlords operating in Jersey City or Hoboken should also note that those cities have their own algorithmic rent-setting ordinances that may conflict with the FAIR Act and, therefore, may be preempted. For example, Jersey City Ordinance 25-057, adopted May 21, 2025, covers data collected from two or more lessors “or from public databases.” The FAIR Act’s first two “coordinating function” provisions require competitively sensitive nonpublic information.

Key Takeaways

  • Proceed cautiously in New York. The injunction is preliminary, Subsection (2) and general antitrust laws still apply, and an appeal is possible.
  • Start preparing now in New Jersey. Inventory your pricing tools and vendor contracts and confirm whether any use competitors’ nonpublic data before the FAIR Act takes effect July 1, 2027.
  • Expect a patchwork. With other states (including California, Massachusetts, and Illinois) active in this area, the same software may be permitted in one state and restricted in another.

If you have any questions about the RealPage, Inc. v. James decision or the FAIR Act, please contact our Antitrust & Competition team or your usual Lowenstein Sandler contact.