Harbor Group Management Lawsuit: AI Bias Consent Decree

The Harbor Group Management lawsuit was a 2023 fair housing case alleging that an AI leasing chatbot on the company’s property websites automatically rejected rental applicants who used Housing Choice Vouchers. It was filed in the Northern District of Illinois by the nonprofit Open Communities and a voucher holder named Elizabeth Richardson, and it ended on January 23, 2024 when Judge Sara L. Ellis approved a consent decree that barred the practice, imposed two years of monitoring across eight states, and required cooperation on new AI responses for voucher applicants.¹²

What the Chatbot Did

Richardson, a Black woman and Housing Choice Voucher recipient, tried to rent an apartment at Northgate Crossing Apartments in Wheeling, Illinois. When she asked the AI leasing agent on the property’s website about her voucher, the chatbot told her the property would not accept her source of income assistance.³

She contacted Open Communities. The nonprofit ran a six-month investigation covering more than 100 Harbor Group properties before filing suit on September 25, 2023 against Harbor Group International, Harbor Group Management, and PERQ Software, the vendor behind the chatbot.¹

The Legal Claims

The complaint alleged that PERQ’s chatbot was preprogrammed to issue blanket denials to anyone in the Housing Choice Voucher program. Because voucher holders are disproportionately Black (the lawsuit cited a figure of 78% for Illinois voucher recipients), the plaintiffs argued the automated rejections created a racially discriminatory effect in violation of the federal Fair Housing Act.⁴

State law reinforced the claim. As of January 1, 2023, source of income became a protected class under the Illinois Human Rights Act, so denying housing based on a tenant’s use of vouchers or public benefits is itself a civil rights violation in Illinois.⁵

What the Consent Decree Requires

The case moved quickly to resolution. The financial terms were not disclosed, and Harbor Group did not admit wrongdoing; the decree states it “does not constitute an admission of any of the allegations in the Complaint” and was entered “solely to avoid the cost of additional litigation.”³ The claims were dismissed with prejudice, but the court retained jurisdiction to enforce the decree.²

Substantively, the decree does four things:

Bars Harbor Group from denying applicants housing based solely on source of income.³
Bars PERQ from providing automated leasing services that produce chatbot responses violating the Fair Housing Act by automatically denying voucher applicants, and commits the parties to develop appropriate AI responses for prospects asking about income support and vouchers.³
Requires two years of reporting to Open Communities on voucher applications and denials at Harbor Group properties in Illinois, California, Colorado, Massachusetts, Maryland, New Jersey, Virginia, and Washington.³
Requires nationwide fair housing training for Harbor Group and PERQ employees, using a training video produced by Open Communities.¹

As of mid-2026, no enforcement motions or compliance disputes have appeared on the court docket.²

Why the Vendor Was Named

Suing PERQ alongside Harbor Group was a deliberate choice, and the decree’s terms confirmed it: liability for discriminatory AI outputs ran to both the property manager deploying the tool and the software company that built it. PERQ’s AI leasing assistant uses natural language processing to answer prospect questions, schedule tours, and follow up with leads, and it integrates with major property management systems including Yardi, RealPage, and Entrata.⁶ The company did not make public statements about the lawsuit.

For operators using third-party leasing bots, the practical takeaway from the decree is that pointing to a vendor’s compliance assurances does not shift responsibility. HUD reinforced the same point in May 2024 guidance clarifying that the Fair Housing Act applies to AI-based tenant tools and that housing providers remain liable for discriminatory rental decisions even when screening is outsourced. Screening companies can also face liability where their practices contribute to discriminatory outcomes.⁷ HUD’s recommendations to providers include customizing screening criteria rather than using off-the-shelf products, monitoring models for bias, and maintaining a process for applicants to challenge negative results.⁸

Where This Case Fits Among AI Housing Lawsuits

Harbor Group’s case is part of a wider set of fair housing challenges to algorithmic tools. The theory shared across them is disparate impact under the Fair Housing Act: a practice can violate the law if it produces unjustified discriminatory effects on a protected class, even without discriminatory intent.

The closest parallel is Louis v. SafeRent Solutions, filed in the District of Massachusetts against the tenant screening company formerly known as CoreLogic Rental Property Solutions. Plaintiffs alleged SafeRent’s algorithmic score gave disproportionately low ratings to Black and Hispanic voucher holders because it leaned heavily on credit history while ignoring the financial cushion of vouchers, which cover on average more than 73% of monthly rent.⁹ On November 20, 2024, a federal judge approved a $2.275 million settlement that also barred SafeRent from using its AI-powered scores to evaluate voucher holders unless the model has been validated for fairness by civil rights experts.¹⁰

Not every vendor case has gone the plaintiffs’ way. In Connecticut Fair Housing Center v. CoreLogic Rental Property Solutions, the Second Circuit agreed that the Fair Housing Act does not categorically exclude software vendors from liability, but held that CoreLogic “did not cause the denial of housing” on the facts of that case and found the plaintiff organization lacked standing.¹¹ The scope of vendor liability is still being worked out, though both the Harbor Group decree and the SafeRent settlement treated the technology provider as a proper defendant.

Other Harbor Group Lawsuits

Harbor Group has faced other class and individual actions unrelated to AI screening.

In Roberts v. Harbor Group Management Co., filed in the Circuit Court for Baltimore City (Case No. 24-C-17-00509), tenants alleged the company overcharged them for court costs, legal fees, and attorneys’ fees during rent nonpayment proceedings. The case settled, and class members received checks of $102.58.¹²

White v. Harbor Group Management Co. (S.D. Fla. 1:23-cv-20298) was a Fair Labor Standards Act claim brought by an employee. It ended in December 2023 after a settlement was approved at a fairness hearing; terms were not publicly detailed.¹³

In Harbor Group Management Co. v. Molloy, the Massachusetts Appeals Court reversed a default judgment Harbor Group had obtained for back rent. The defendant claimed his brother had used his identity to sign the lease. The appeals court held that the trial judge should have accepted his uncontested sworn statement that he was never properly served and never lived at the property.¹⁴

Outside of court, Harbor Group holds an F rating from the Better Business Bureau, based on 197 complaints and 17 unanswered complaints as of mid-2026. Tenant grievances on the BBB profile describe duplicate rent charges through the company’s online portal, unresolved maintenance including mold and HVAC failures, and poor communication from property staff.¹⁵

1
Open Communities. Press Release: Open Communities Reaches Accord in Case Addressing Artificial Intelligence Communications
2
CourtListener. Open Communities v. Harbor Group Management Co., LLC
3
Evanston Now. Fair Housing Group Wins Voucher Discrimination Settlement
4
Daily Northwestern. Open Communities Lawsuit Alleges Racial, Income-Based Housing Discrimination
5
Shriver Center on Poverty Law. Increasing Access to Housing
6
PERQ. AI Leasing Assistant
7
HUD Archives. HUD Issues Guidance on Application of Fair Housing Act to AI and Algorithmic Tools
8
Fair Housing of the Carolinas. FHEO Guidance on Screening of Applicants for Rental Housing
9
Cohen Milstein. Louis, et al. v. SafeRent Solutions, et al.
10
Civil Rights Litigation Clearinghouse. Louis v. SafeRent Solutions, LLC
11
NY Daily Record. Second Circuit Fair Housing Act: CFHC v. CoreLogic Rental Property Solutions
12
SVO Law. Thousands of Tenants Receive $102 Checks in Class Action Settlement
13
CourtListener. White v. Harbor Group Management Co., LLC
14
FindLaw. Harbor Group Management Co., LLC v. Molloy
15
BBB. Harbor Group Management Co., LLC BBB Profile