Greystar’s $1.4M Payout for Illegal Military Fees: Isolated Error or a Pattern of Deception by America’s Largest Landlord?

The U.S. Department of Justice (DOJ) recently announced a settlement that, on its surface, appears to be a standard enforcement action against a corporate landlord. Greystar Management Services LLC, the nation’s largest property management company, will pay over $1.4 million for imposing illegal fees on military servicemembers who were lawfully terminating their leases. For a global real estate behemoth with over 800,000 housing units under management and $76 billion in gross assets, this sum is a rounding error. However, to dismiss this settlement as a mere cost of doing business would be to miss the story’s profound and troubling implications.  

This case is not just about a fine; it is about a fundamental breach of trust with those who serve the nation. It raises critical questions about a company that publicly espouses values of “Integrity” and “Service” yet was found to have systematically violated a federal law designed to protect military families. The core of the DOJ’s allegation—that Greystar relied on software it knew would automatically impose these illegal charges—transforms the narrative from one of simple negligence to one of knowing disregard for the law.  

This report will conduct an exhaustive analysis of the Greystar settlement, placing it within the crucial context it demands. Is this $1.4 million penalty for harming military families an unfortunate, isolated mistake? Or is it a single, telling data point in a much larger, more disturbing pattern of behavior by America’s largest landlord? By examining Greystar’s extensive history of legal challenges, providing a comprehensive guide to the Servicemembers Civil Relief Act (SCRA), and dissecting the alarming role of automated software in corporate misconduct, this investigation seeks to uncover the truth behind the headlines and empower consumers with the knowledge to protect themselves.

The Settlement: Greystar Penalized for Systemic Violations Against U.S. Servicemembers

On June 24, 2025, the Department of Justice announced that Greystar Management Services LLC had agreed to a settlement to resolve allegations of widespread violations of the Servicemembers Civil Relief Act (SCRA). This federal law provides a shield of financial and legal protections for military personnel, allowing them to focus on their duties without facing undue civil hardships.  

Core Allegations and the Element of “Knowledge”

The DOJ’s primary allegation was that Greystar imposed illegal fees on military servicemembers who exercised their right to terminate residential leases after receiving military relocation orders. Under the SCRA, servicemembers who receive Permanent Change of Station (PCS) or deployment orders are legally entitled to break their leases without penalty. Greystar, however, systematically charged these protected individuals early termination fees, directly contravening federal law.  

Critically, the DOJ’s investigation concluded this was not a series of isolated clerical errors. The official announcement stated that Greystar “relied on software that it knew would automatically impose early termination charges on SCRA-protected servicemembers”. This element of knowledge is a damning indictment. It suggests a conscious or willfully blind decision at the corporate level to utilize a non-compliant system, allowing automated processes to violate the law at scale while the company profited. This moves the transgression from the realm of operational failure to one of institutional culpability.  

Financial Breakdown and Mandated Reforms

The settlement’s terms are designed not only to penalize past actions but also to force systemic change. The financial components include:

• A $1.35 million compensation fund: This money will be set aside to pay damages to the affected military members and any co-tenants on their leases.  
• Triple damages: In a clear punitive measure, servicemembers who had already paid the illegal early termination charges will receive triple the amount they paid, signaling the government’s view on the severity of the violation.  
• A $77,370 civil penalty: This fine is paid directly to the U.S. Treasury.  

While the monetary figures draw headlines, the most significant aspect of the settlement may be the mandated operational reforms. The DOJ is forcing Greystar to overhaul its internal processes by adopting new, SCRA-compliant software and lease forms across all of its properties. Furthermore, the company must implement new policies and conduct comprehensive training for its staff to ensure future compliance.  

This focus on mandating software and policy changes reveals that regulators identified a problem rooted not in individual mistakes, but in the very operational fabric of the company. A simple fine would merely punish past behavior. By requiring a complete overhaul of the systems that caused the harm, the DOJ is issuing a corrective mandate. This implies the problem was so ingrained in Greystar’s automated business processes that only a forced, top-to-bottom re-engineering could rectify it—a much more severe conclusion than a simple monetary penalty could convey.

Official Condemnation and Broader Context

The language from government officials was unequivocal. Assistant Attorney General Harmeet K. Dhillon stated, “We honor the service and sacrifices of our military by defending their rights under the law… We are aggressively enforcing all laws, including the Servicemembers Civil Relief Act, to protect our military servicemembers and veterans”. U.S. Attorney Bryan Stirling for the District of South Carolina added that the SCRA “protects our military families from unfair hardships such as penalties for terminating a housing lease to fulfill military orders”.  

This enforcement action is part of a broader, sustained effort by the Justice Department. Since 2011, the DOJ has successfully obtained over $483 million in monetary relief for more than 148,000 servicemembers through its enforcement of the SCRA. Just one day before the Greystar announcement, the DOJ resolved a similar case against JWB Real Estate Management, a Jacksonville-based company that also imposed illegal early termination fees on military tenants. While smaller in scale, the JWB case underscores a persistent problem within the property management industry and the government’s increasing vigilance in combating it.  

A Pattern of Accusations: Greystar’s History Under the Legal Microscope

The $1.4 million SCRA settlement, while significant, does not exist in a vacuum. An examination of Greystar’s recent history reveals a consistent and growing pattern of legal and regulatory challenges across the country. These actions, originating from federal agencies, state attorneys general, and private class-action lawsuits, paint a picture of a company whose practices often appear to be in direct conflict with its publicly stated mission “To enrich the lives we touch by doing things the right way”.  

The “Junk Fee” Epidemic and Deceptive Pricing

One of the most prominent areas of legal scrutiny for Greystar involves allegations of deceptive pricing and the rampant use of so-called “junk fees.”

In a major lawsuit filed in January 2025, the Federal Trade Commission (FTC) and the State of Colorado joined forces to sue Greystar for what they termed a bait-and-switch rental scheme. The complaint alleges that Greystar systematically engages in deceptive advertising by luring prospective tenants with low monthly rent prices, only to tack on numerous mandatory fees that are not disclosed upfront. According to the FTC, these hidden fees have cost consumers “hundreds of millions of dollars” since at least 2019.  

The lawsuit details a practice known as “drip pricing,” where the advertised price is unattainable because of unavoidable, extra charges. These fees cover a range of services, some of dubious value, including “valet trash” services, package handling fees, utility administration fees, and even “verification fees” for tenants who use their own renters’ insurance instead of Greystar’s preferred provider. The complaint asserts that these fees are often revealed only after a prospective tenant has paid a substantial, non-refundable application fee or holding deposit and is presented with a dense, 40- to 60-page lease agreement.  

This federal action mirrors a separate class-action lawsuit filed in California in April 2025. That suit alleges Greystar illegally shifts costs for essential services like pest control and trash disposal to tenants, a violation of California law. The plaintiffs argue this practice violates the state’s new Honest Pricing Act, which prohibits advertising prices that do not include all mandatory fees.  

A Multi-State History of Fee-Related Settlements

Beyond the ongoing “junk fee” litigation, Greystar has already paid out millions to settle other fee-related lawsuits in several states, establishing a clear historical record of such practices.

• North Carolina (2022): Greystar agreed to a class-action settlement of nearly $4.7 million to resolve claims of improper eviction and fee practices. The lawsuit contended that the company regularly charged tenants illegal fees related to the eviction process, such as filing fees, sheriff service fees, and attorneys’ fees that were not permitted under North Carolina’s Residential Rental Agreements Act.  
• Washington (2022): The company paid $2.5 million to settle a class-action lawsuit alleging that it charged tenant screening fees to prospective applicants without providing the legally required disclosures in advance, a violation of Washington state law.  
• Massachusetts (Ongoing): Greystar is currently facing another class-action lawsuit in Boston. Plaintiffs allege that a Greystar-affiliated entity assessed hundreds of dollars in “eviction/legal recovery” fees against them, even though the eviction case was voluntarily dismissed by the landlord and no court had awarded any such fees.  

The Antitrust Elephant in the Room: The RealPage Lawsuit

Perhaps the most consequential legal challenge facing Greystar is its role as a key defendant in the DOJ’s landmark antitrust lawsuit against property management software provider RealPage. This case alleges that Greystar and a cohort of other major national landlords conspired to artificially inflate rental prices across the United States.  

The core allegation is that these companies abandoned competitive pricing and instead fed their sensitive, non-public pricing and supply data into RealPage’s “revenue management” software. The software’s algorithm would then generate “recommended” rental prices for all participating landlords in a given market, effectively creating a modern-day price-fixing cartel. The DOJ lawsuit, which Greystar has been added to, contends that this practice has stifled competition and unlawfully driven up rents for millions of tenants nationwide.  

The diverse nature of these legal challenges—spanning SCRA violations, deceptive advertising, illegal eviction fees, improper screening charges, and alleged antitrust conspiracies—points toward a potential overarching business strategy. The common thread is not a single faulty policy but a consistent pattern of extracting ancillary revenue from tenants at every stage of the rental lifecycle, often at the very boundaries of the law. This suggests a corporate culture that may view tenants less as customers to be served and more as revenue sources to be optimized. This pattern stands in stark contrast to the “blue-chip” company image that Greystar, a firm that has grown exponentially through acquisitions, projects to the public and its investors.  

The Shield of Service: A Comprehensive Guide to the Servicemembers Civil Relief Act (SCRA)

The repeated violations by Greystar and other landlords underscore the critical importance of the Servicemembers Civil Relief Act (SCRA). This federal law is a cornerstone of military readiness, designed to ensure that those who answer the nation’s call can “devote their entire energy to the defense needs of the Nation” without being entangled in financial or legal troubles at home. This section serves as an authoritative, plain-English guide to the SCRA’s lease termination provisions for servicemembers, their families, and landlords alike.  

Purpose and Protections of the SCRA

First enacted during World War I as the Soldiers’ and Sailors’ Civil Relief Act, the SCRA provides a wide range of protections covering everything from interest rate caps and foreclosure proceedings to lease terminations. The law applies to active-duty members of the Army, Navy, Air Force, Marine Corps, and Coast Guard; mobilized members of the National Guard and Reserve components; and, in some cases, their dependents.  

The Right to Terminate a Lease

One of the most powerful protections under the SCRA is the right for a servicemember to terminate a residential lease without penalty under specific circumstances. This is not considered “breaking a lease” but rather a lawful, statutory termination, as if the lease had run its full term.  

A servicemember can invoke this right under the following conditions:

1. Pre-Service Lease: The servicemember entered into the lease before entering active-duty military service.  
2. Permanent Change of Station (PCS): The servicemember, while already in the military, receives official orders for a permanent change of station.  
3. Deployment: The servicemember receives orders to deploy for a period of 90 days or more.  
4. Separation or Retirement: The servicemember receives orders for an honorable separation or retirement from the military. Under the Joint Federal Travel Regulations, a separation under honorable conditions is legally defined as a PCS, granting the same lease termination rights.  

Crucially, if a servicemember lawfully terminates a lease that was jointly signed with a dependent (such as a spouse), the dependent’s obligations under that lease are also terminated.  

The Legal Process: A Step-by-Step Guide to Termination

To correctly exercise their rights, a servicemember must follow a specific legal procedure. Failure to do so can give a landlord a pretext to deny the termination.

• Step 1: Provide Written Notice. The servicemember must give the landlord or their agent written notice of their intent to terminate the lease. Oral notice is legally insufficient and will not protect the tenant.  
• Step 2: Provide a Copy of Orders. The written notice must be accompanied by a copy of the servicemember’s military orders. If formal orders are not yet available, a letter from the servicemember’s commanding officer verifying the future duty is also acceptable.  
• Step 3: Ensure Proper Delivery. The notice and orders must be delivered in a verifiable manner. This can be done via hand-delivery (obtaining a signed receipt is best practice), a private business carrier like FedEx or UPS, or U.S. mail with return receipt requested. A recent amendment to the SCRA now also permits electronic delivery, such as via email or a landlord’s online portal.  
• Step 4: Calculate the Effective Termination Date. This is the most frequently misunderstood part of the process. For a standard residential lease with monthly rent payments, the termination becomes effective 30 days after the first day on which the next rental payment is due after the notice is delivered.
  • Example: Rent is due on the 1st of each month. A servicemember delivers proper notice on May 15th. The next rental payment is due on June 1st. The lease termination is effective 30 days after that date, on June 30th. The servicemember is responsible for rent for both May and June.
  • Example 2: Rent is due on the 1st of each month. The servicemember delivers proper notice on May 31st. The next rental payment is still due on June 1st. The lease termination is still effective on June 30th. The timing of the notice within the month can significantly impact the amount of rent owed.

Prohibited Landlord Actions and Severe Penalties

The SCRA is explicit about what landlords cannot do when a tenant lawfully terminates a lease.

• No Early Termination Fees: Landlords are strictly forbidden from imposing any form of early termination charge or penalty.  
• No Forfeiture of Concessions: The DOJ has successfully argued that landlords cannot demand the repayment of upfront rent concessions (e.g., “first month free” or a discounted rate) as a disguised penalty for an SCRA termination.  
• Invalid Waivers: A servicemember can only waive their SCRA rights under very strict conditions. The waiver must be in writing, on a document separate from the lease, signed during or after the period of military service, and printed in at least 12-point font. Any “SCRA waiver” addendum included in an initial lease signing is almost certainly invalid and unenforceable.  
• Criminal Penalties: The law has teeth. A landlord who knowingly seizes, holds, or detains a servicemember’s personal property or security deposit in retaliation for a lawful SCRA termination can be found guilty of a misdemeanor, punishable by a federal fine and imprisonment for up to one year.  

To provide maximum practical value, the following checklist distills the complex requirements of the SCRA into a single, actionable tool for servicemembers and their families.

The Automated Landlord: When Software Systems Enforce Illegal Practices

The Greystar settlement casts a harsh light on a uniquely modern problem: the weaponization of automation, whether through deliberate action or gross negligence, to commit consumer harm on an industrial scale. The case moves beyond the actions of individual property managers and into the opaque world of the software and algorithms that now govern millions of tenancies.

The “Computer Did It” Defense and Corporate Culpability

In the wake of regulatory action, a common refrain from companies is to blame “administrative errors” or “system glitches.” JWB Property Management, in its smaller SCRA settlement, claimed “administrative errors within our system” were responsible for the illegal fees. This defense attempts to frame the issue as an impersonal, technical mistake, divorced from human intent.  

However, the DOJ’s finding against Greystar pierces this veil of plausible deniability. The allegation that Greystar knew its software was non-compliant is pivotal. It establishes that a company cannot hide behind its own technology. The decision to select, implement, and continue using a software platform is a corporate responsibility. If that software is incapable of complying with federal law, the liability rests not with the code, but with the corporation that deployed it. Automation scales not only efficiency but also error and, in some cases, malfeasance. The ultimate responsibility for a system’s output must lie with the entity that profits from its use.  

The Anatomy of a Non-Compliant System

The failure of Greystar’s systems is particularly glaring because the features required for SCRA compliance are not technologically complex. Modern property management and lending software can, and often does, include robust compliance tools. A compliant system would be designed to:

• Flag and Track Servicemembers: Integrate with services that can verify a tenant’s military status, allowing for the automatic flagging of SCRA-protected accounts.  
• Automate Compliance Workflows: Upon receiving a valid SCRA termination notice, the system should automatically block the application of any early termination fees or penalties.  
• Provide Staff Checklists: Guide property managers through the legally required steps for processing an SCRA termination, ensuring no part of the process is missed.  
• Maintain an Immutable Audit Trail: Keep a clear, unalterable record of all communications, notices, and actions taken on an SCRA-protected account to demonstrate compliance in case of a dispute.  

The absence of such fundamental features in the platforms used by the nation’s largest landlord cannot be dismissed as a simple oversight. It represents a fundamental design flaw, pointing to a corporate culture where legal compliance was deprioritized in favor of operational simplicity or revenue generation.

When the SCRA case is viewed alongside the RealPage antitrust lawsuit, a more disturbing picture emerges. These cases reveal a trend in the property technology (“PropTech”) sector where automation is creating systemic risks for consumers. The SCRA violations stem from a failure of compliance automation, where a system automatically makes illegal mistakes at scale. The RealPage allegations point to malicious automation, where a system is allegedly designed to algorithmically manipulate an entire market.

The common denominator is the replacement of human judgment and discretion with inflexible, automated systems that appear to be optimized for revenue above all else. This creates a profound power imbalance. A tenant is no longer negotiating with a local property manager who might understand the law or exercise compassion, but with a vast, impersonal, and potentially illegal corporate algorithm. The Greystar cases are a stark warning of the consequences of this shift, where the “computer” is not just making an error—it is being used as a tool to enforce policies that a human might, and legally should, question.

Conclusion: Empowering Tenants in the Face of Corporate Negligence

The Department of Justice’s $1.4 million settlement with Greystar is a critical victory for military families and a clear affirmation that the protections of the Servicemembers Civil Relief Act are not optional. However, the true value of this enforcement action lies in the warnings it provides to all consumers. It exposes a potential pattern of widespread, fee-based consumer harm by the nation’s largest landlord and highlights the grave dangers of unchecked corporate reliance on non-compliant, automated systems. In an increasingly depersonalized rental market, knowledge is the tenant’s most powerful tool.

Actionable Guidance for Servicemembers and Their Families

• Know Your Rights: The SCRA is your shield. Understand its protections, especially regarding lease termination. This article and the resources below are your starting point.
• Document Everything: Maintain a file with copies of your lease, all military orders, your written termination notice, proof of delivery, and all email or written correspondence with your landlord.
• Follow the Process Meticulously: Use the checklist provided in this report to ensure you terminate your lease correctly and give the landlord no room to claim a procedural error.
• Do Not Accept an Unlawful “No”: If a landlord refuses to honor your legal SCRA termination, do not give up or agree to pay illegal fees. This is precisely the behavior the law is designed to prevent.

Actionable Guidance for All Tenants

• Scrutinize Your Lease: Read every line of your lease agreement and any addendums before you sign. Be wary of any clauses that waive your rights or impose vaguely defined fees.
• Question Every Fee: Demand a written explanation for any mandatory fee that was not clearly and conspicuously included in the advertised rental price.
• Create a Paper Trail: Whenever possible, communicate with your landlord or property manager in writing. An email history is a powerful tool in any dispute.

Where to Seek Help

If you believe your rights have been violated, there are official channels ready to provide assistance.

• For Military Servicemembers and Dependents: The first and most important resource is the Armed Forces Legal Assistance Program Office. You can find the office nearest you using their official locator tool at legalassistance.law.af.mil. Their services are provided at no cost.  
• For General SCRA Information: The Department of Justice maintains a dedicated website for its Servicemembers and Veterans Initiative, which contains valuable information and updates on SCRA enforcement at www.servicemembers.gov.  
• To Report Violations: Servicemembers can report potential SCRA violations to the Department of Justice through the Civil Rights Division’s Housing and Civil Enforcement Section.