Dive Brief:
- The Department of Justice announced last month that Greystar Management Services — a division of Charleston, South Carolina-based multifamily firm Greystar — has agreed to pay over $1.4 million to resolve allegations that the company had imposed illegal lease termination fees on military servicemembers.
- The Servicemembers Civil Relief Act prohibits apartment providers from charging members of the military with lease termination fees if they are ordered to relocate. The DOJ alleges that the company used software that automatically imposed these fees regardless of military status.
- Greystar will pay $1.35 million to affected military members and co-tenants, including triple damages for any tenants who paid the fees. The company must also pay a civil fine of $77,370, change its training and policies and adopt SCRA-compliant software and forms.
Dive Insight:
The department alleged that Greystar left it up to individual employees to identify and manually reverse lease termination fees where necessary. These fees ranged from hundreds to thousands of dollars.
“The Servicemembers Civil Relief Act protects our military families from unfair hardships such as penalties for terminating a housing lease to fulfill military orders,” said Bryan Stirling, U.S. Attorney for the District of South Carolina, in the news release. “We will continue to defend and support those who keep our country safe.”
Greystar has denied the DOJ’s allegations, and both parties agreed to settle in order to “avoid the delay, uncertainty, inconvenience and expenses of protracted litigation,” according to the agreement.
In an official statement on the situation, Greystar told Multifamily Dive that it did not at any point knowingly use software that violated the SCRA, and that the fee issues stemmed from human error. The company intends to strengthen its internal processes and improve team member training.
“We actively and cooperatively engaged with the DOJ to bring this matter to a resolution,” the statement read. “We have long had procedures in place to support compliance with the SCRA, which we continue to refine and strengthen. … We are proud of our longstanding commitment to supporting servicemembers, veterans and their families who have sacrificed so much to serve and protect their country, including the thousands we provide housing for across the U.S.”
