Greystar To Pay $1.4M In Settlement Over Military Members' Lease Termination Fees
Greystar has agreed to pay $1.4M to settle allegations by the Justice Department that U.S. service members given relocation orders were unlawfully charged lease termination fees.
According to the DOJ, the U.S.'s largest property management company "relied on software that it knew would automatically impose early termination charges" on military personnel protected by the Servicemembers Civil Relief Act. These third-party platforms include RealPage, Yardi and Entrata.
Charges ranged from several hundred to several thousand dollars. Some of the fees were imposed in the form of tenant discount chargebacks for rent concessions. Greystar employees were told to reverse the automatic charges by hand, but that execution was inconsistent, the filing alleged.
Greystar, which manages 800,000 properties, denied that it violated any laws.
As part of the settlement agreement, the company has six months to move all residential properties it manages to software platforms that don’t impose early termination charges on service members. Greystar also agreed to not charge military personnel fees if they lawfully end their lease.
The company has 30 days to come up with lease termination rules in compliance with the SCRA and must annually train employees on the guidelines after the U.S. approves them.
The DOJ’s suit isn’t the only litigation Greystar has been involved in this year, as the FTC brought forth a lawsuit Jan. 16 alleging the landlord charged tenants hidden fees for services like pest control and background checks.
RealPage’s algorithm-based rent-setting software has been the subject of over 30 rent collusion suits, which were rolled into one in August 2023. That case with the FTC is ongoing.
Some states have taken action against RealPage’s software in tandem with the DOJ. North Carolina, Colorado, California, Washington, Connecticut, Minnesota, Tennessee and Oregon’s August federal antitrust suit claims the company lets landlords conspire to inflate prices.
Philadelphia passed legislation to ban rent-setting software altogether in October, and several localities are on the same path, including San Jose, California, and New Jersey. New Jersey would be the first state to successfully ban the platforms, as legislation proposed in Colorado was struck down in May.
