AN ACT relating to the use of algorithmic devices in setting the amount of rent to be charged to a residential tenant.

UNOFFICIAL COPY 26 RS BR 831
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AN ACT relating to the use of algorithmic devices in setting the amount of rent to 1
be charged to a residential tenant. 2
WHEREAS, recent national data indicates th at landlords of residential rental 3
housing use property management software to collude and raise residential rental housing 4
prices; and 5
WHEREAS, landlords engaging with the software supply real -time prices and 6
additional lease information to companies mana ging the software, who proceed to use 7
algorithms to fix rental prices; and 8
WHEREAS, agreements or conspiracies between competitors to fix prices or other 9
commercial terms are illegal under Kentucky law, and algorithmic devices have made 10
illegal agreements more challenging to detect; and 11
WHEREAS, attorneys general in multiple states, including Kentucky, have filed 12
lawsuits alleging that the use of algorithmic devices in setting rent violates antitrust laws; 13
and 14
WHEREAS, several municipalities around the coun try have prohibited the use of 15
algorithmic devices in setting rent; 16
NOW, THEREFORE, 17
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 18
SECTION 1. A NEW SECTION OF KRS CHAPTER 383 IS CREATED TO 19
READ AS FOLLOWS: 20
(1) As used in this section, "algorithmic device": 21
(a) Means a device that uses one (1) or more algorithms to perform 22
calculations of data, including data concerning local or statewide ren t 23
amounts being charged to tenants by landlords, for the purpose of advising 24
a landlord concerning the amount of rent that the landlord may consider 25
charging a tenant; 26
(b) Includes a product that incorporates an algorithmic device; and 27
UNOFFICIAL COPY 26 RS BR 831
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(c) Does not include a product designed internally and used exclusively by a 1
landlord or a landlord's affiliates. 2
(2) A landlord shall not employ, use, or rely upon, or cause another person to 3
employ, use, or rely upon, an algorithmic device in setting the amount of rent to 4
be charged to a tenant for the occupancy of a dwelling unit. 5
(3) (a) A violation of this section shall be deemed an unfair, false, misleading, or 6
deceptive practice in the conduct of trade or commerce in violation of KRS 7
367.170 and an illegal restraint of trade or commerce in violation of KRS 8
367.175. 9
(b) All of the remedies, powers, and duties provided to the Attorney General by 10
the Consumer Protection Act, KRS 367.110 to 367.300, appertaining to acts 11
declared unlawful by KRS 367.170 and 367.175 shall appl y with equal force 12
and effect to acts or practices declared unlawful under this section. 13
Section 2. Section 1 of this Act shall apply to a landlord's calculation of the 14
amount of rent for a rental agreement executed on or after the effective date of this Act. 15