The recommendations, which constitute the most extensive update to the MLS Handbook in 20 years, will be reflected in the 2026 MLS Handbook, scheduled to be published in January 2026.
Owners who delegate rent-setting to third-party property managers, real estate brokerage firms and brokers that also offer property management services, or owners who use national “revenue management” platforms should review and update their contracts well before the Dec. 15, 2025, effective date.
By executing the Strategic Plan, NAR will modernize the association, deliver greater member value, respond to an evolving industry landscape, and provide transparent metrics to hold the association accountable.
Owners who delegate rent-setting to third-party property managers, real estate brokerage firms and brokers that also offer property management services, or owners who use national “revenue management” platforms should review and update their contracts well before the Dec. 15, 2025, effective date.
On Oct. 16, 2025, New York Gov. Kathy Hochul signed into law Senate Bill S.7882 (see https://bit.ly/4r5D82W) (the “Section 340-B”), making New York the first state in the country to explicitly ban certain algorithmic rent-setting tools used by landlords and property managers. The new law takes effect on Dec. 15, 2025.
The legislation amends New York’s antitrust statute, the Donnelly Act (see https://bit.ly/4oMsVXD), by adding General Business Law § 340-B, entitled “Agreements to not compete with respect to residential rental dwelling units.”
Over the past year, the U.S. Department of Justice and multiple state Attorneys General have sued RealPage and major landlords, alleging that the software they utilize allows landlords to share non-public, competitively sensitive data and align rents in violation of federal antitrust laws. In the August 2025 edition of Real Estate In-Depth, Legal Corner highlighted the lawsuit filed by the U.S. Department of Justice and eight states against RealPage and others. (See https://bit.ly/4p5tBaa) ; see also DOJ Press Release at https://bit.ly/4r6h8oK). New York’s decision to enact this new antitrust legislation comes amid this nationwide backlash against rent-setting algorithms.
Several cities have adopted local bans or restrictions on these tools. (See https://bit.ly/3LE05tP). California recently amended its Cartwright Act to restrict “common pricing algorithms” across industries, including housing. (See https://bit.ly/4iblAyf). New York is the first state to enact statewide legislation. New York’s statute is narrower in scope as it applies only to “residential rental dwelling units.” It specifically provides that the use of certain algorithmic tools is a “per se” violation of the Donnelly Act (New York’s antitrust law).
It is critical now for all property owners, property managers, lenders, and real estate professionals, including real estate brokers, agents and attorneys in New York, to understand that Section 340-B is not a simple technology rule. Section 340-B defines specific conduct involving algorithms as an antitrust violation under the Donnelly Act. The legislative summary explains that Section 340-B “prohibits a person or entity from knowingly or with reckless disregard facilitate an agreement between or among two or more residential rental property owners or managers to not compete with respect to residential rental dwelling units….”
The summary further explains that any actions by individuals or entities, “including by operating or licensing a software, data analytics service, or algorithmic device that performs a coordinating function on behalf of or between and among such residential rental property owners or managers,” will subject individuals and entities to liability under the Donnelly Act. This broad language may subject real estate brokerage firms and their agents to liability if they utilize these tools on behalf of their owner clients or their property managers.
Unlawful Facilitation by Vendors and Intermediaries
It is unlawful for any person or entity to “knowingly or with reckless disregard” facilitate an agreement between or among two or more residential rental property owners or managers “to not compete” with respect to residential units by: “operating, licensing, or otherwise providing software, a data analytics service, or an algorithmic device that performs a coordinating function on behalf of or between and among residential rental property owners or managers.” In other words, software providers and other intermediaries, such as real estate brokerage firms and management companies, can be direct antitrust violators when they offer tools that coordinate rent-setting with information received from multiple landlords.
Unlawful Agreements by Owners and Managers
Separately, the statute makes it an unlawful agreement for residential rental property owners or managers to: “set or adjust rental prices, lease renewal terms, occupancy levels, or other lease terms and conditions based on recommendations from a software, data analytics service, or algorithmic device that performs a coordinating function.” Using those recommendations as a basis for rent or lease decisions is enough to create liability.
The definition of a “coordinating function” is the heart of the statute. A tool has a coordinating function if it does all three of the following, using information from two or more residential owners/managers that are not under common ownership:
“(i) collecting historical or contemporaneous prices, supply levels, or lease or rental contract termination and renewal dates of residential dwelling units from two or more residential rental property owners or managers, provided that at least two such residential rental property owners or managers are not wholly-owned subsidiaries of the same parent entity or otherwise owned or managed by the same residential rental property owner or manager;
(ii) analyzing or processing the information described in subparagraph (i) of this paragraph using a system, software, or process that uses computation, including by using that information to train an algorithm; and
(iii) recommending rental prices, lease renewal terms, ideal occupancy levels, or other lease terms and conditions to a residential rental property owner or manager.”
If a tool only uses one owner’s own portfolio (plus, for example, public market listings) and does not ingest or analyze proprietary data from unaffiliated landlords, it will generally fall outside this definition.
The parties covered under Section 340-B are “residential rental property owners or managers,” which are defined as “any individual or entity that owns or is a beneficial owner of, directly or indirectly, in whole or in part, or manages one or more residential rental dwelling units in New York State.”
Section 340-B also covers any person or entity that “knowingly or with reckless disregard facilitate[s] an agreement between or among two or more residential rental property owners or managers to not compete with respect to residential rental dwelling units, including by operating or licensing a software, data analytics service, or algorithmic device that performs a coordinating function on behalf of or between and among such residential rental property owners or managers.”
Since Section 340-B is part of the Donnelly Act, existing antitrust remedies would apply. Enforcement of any antitrust violation would come under the authority of the New York State Attorney General. Additionally, any private individual suing under Section 340-B would be entitled to “treble” (i.e., triple) damages as well as attorney’s fees. Lastly, there is potential parallel exposure under federal antitrust law (Sherman Act) on the same facts.
Property Management and Vendor Agreements
Owners who delegate rent-setting to third-party property managers, real estate brokerage firms and brokers that also offer property management services, or owners who use national “revenue management” platforms should review and update their contracts well before the Dec. 15, 2025, effective date. There is not much time left, but failing to do so could expose owners and property managers to severe risk and extensive monetary damages relating to antitrust violations. It is recommended that there be a review of management agreements and vendor contracts for representations, covenants, and indemnities relating to compliance with antitrust and other laws.
Property Management, Vendor and Software Agreements
Owners should add express prohibitions in property management agreements with their property managers that: (i) the property manager will not use any software or service that performs a “coordinating function” under GBL § 340-B for New York units, and (ii) the property manager will not base rent, renewal, or occupancy decisions for New York units on recommendations from such tools.
Owners should also add representations and disclosures that the property manager (i) does not currently use prohibited tools in connection with the property, (ii) will disclose all pricing and revenue-management tools used, and (iii) will not adopt any new tools without the owner’s prior written consent. Additionally, the owner should add express indemnifications and indemnitees arising from the property manager’s violation of Section 340-B, and also add express termination provisions.
Owners and managers should also review and include pertinent representations and indemnification provisions in any vendor and/or software contracts with their counsel, and require vendor representations that the software does not perform a “coordinating function” in violation of Section 340-B.
Brokers and other real estate professionals should be prepared to raise the issue with their clients. It is recommended that brokers and agents instruct their clients to consult with their legal counsel regarding their use of pricing or revenue-management tools. Attorneys should alert their owner, property manager and other clients to the new requirements of the Section 340-B.
As with all antitrust discussions, real estate brokers and agents must inform their clients of this new antitrust exposure, and that these issues can result in regulatory investigations; civil lawsuits (including potential class actions); and disputes between the parties over undisclosed legal risks. Brokers who also provide property-management or asset-management services through affiliated entities must be especially careful that any in-house tools or third-party platforms they use for rent-setting compliance are reviewed and, if necessary, reconfigured or replaced.
About the author: Legal Corner Column author John Dolgetta, Esq. is the principal of the law firm of Dolgetta Law, PLLC. For information about Dolgetta Law, PLLC and John Dolgetta, Esq., please visit http://www.dolgettalaw.com. The foregoing article is for informational purposes only and does not confer an attorney-client relationship and shall not be considered legal advice. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views or positions of HGAR, its affiliates, or any other entity.
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