In June 2025, the U.S. Department of Justice announced that Greystar Management Services LLC. the nation’s largest property management company, managing over 800,000 housing units. would pay more than $1.4 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by imposing illegal early lease termination fees on military servicemembers.
The case is a cautionary tale for every property manager relying on generic software to handle SCRA compliance.
What Happened
When active-duty servicemembers received military relocation orders, the SCRA entitled them to terminate their leases without penalty. But Greystar’s property management software. Yardi, RealPage, and Entrata. automatically assessed early termination fees without identifying tenants who had legal protections under the SCRA.
The DOJ found that Greystar’s systems relied on a “set-it-and-forget-it” approach: fees were applied automatically, and staff were supposed to manually waive them for protected servicemembers. That manual override failed systematically. Servicemembers were charged fees “ranging from several hundred to thousands of dollars, sometimes including retroactive charges from previously waived rent concessions.”
The DOJ determined that Greystar “relied on software that it knew would automatically impose early termination charges on SCRA-protected servicemembers” and “failed to implement adequate controls to ensure compliance.” These were not isolated errors. they were systemic procedural breakdowns across the company’s operations.
The Settlement
Greystar agreed to:
- Pay $1.35 million into an escrow fund for affected servicemembers and their co-tenants
- Pay a $77,370 civil penalty to the United States
- Pay triple damages to servicemembers who were charged the illegal fees
- Adopt SCRA-compliant software and forms at all properties
- Submit to quarterly DOJ reporting for five years
- Hire an independent consultant to audit lease terminations dating back to July 2018
- Implement SCRA training for all leasing agents
- Remove negative credit marks from affected servicemembers’ credit reports
These requirements mirror the standard DOJ consent decree framework used in virtually every SCRA enforcement action: retroactive audits, ongoing monitoring, software adoption, and multi-year federal oversight.
In September 2025, Washington State’s Attorney General secured an additional $50,000 settlement with Greystar for the same conduct, further requiring a nationwide audit to identify every affected servicemember.
Why Generic Software Is the Problem
Yardi, RealPage, and Entrata are not SCRA compliance tools. They are property management platforms built for lease administration, accounting, and operations. SCRA compliance is not part of their core design.
When the DOJ investigated, they didn’t find a rogue employee or an honest mistake. They found a structural gap: automated systems that applied fees by default, with no built-in mechanism to check military status before taking action against a tenant.
The Propmodo analysis of the case put it plainly: “property management tech can inadvertently introduce compliance liabilities” when “standardized lease templates and backend systems may introduce risk when they fail to account for federal tenant protections.”
This is exactly the problem. SCRA compliance requires:
- Proactive military status verification. before any adverse action, not after
- Automated safeguards. systems that block violations before they happen, not processes that depend on manual waivers
- Continuous monitoring. servicemembers cycle in and out of active duty, so a one-time check is never enough
- Audit-ready documentation. complete records of every verification and decision for regulators
None of the generic PM platforms provide this.
The Enforcement Landscape Is Only Getting Harsher
Greystar is not an isolated case. The DOJ has been accelerating SCRA enforcement:
- Since 2011, federal agencies have recovered over $400 million for servicemembers through SCRA enforcement
- The CFPB found fewer than 10% of eligible auto loans held by activated Guard and Reserve members received the legally required SCRA interest rate reduction (CFPB, Protecting Those Who Protect Us, Dec 2022)
- Servicemember complaints to the CFPB reached 84,600 in 2023. up 98% from 2021
- SCRA enforcement is bipartisan: 24 enforcement actions under Trump, 27 under Biden
- In December 2024, the DOJ and CFPB issued a joint warning letter to financial institutions about SCRA compliance
Other notable settlements include:
| Company | Settlement | Issue |
|---|---|---|
| Balfour Beatty Communities | $65.4M (2022) | Military housing fraud. falsified maintenance records (not an SCRA case, but shows regulatory scrutiny of military housing operators) |
| USAA | $149.2M (cumulative) | Combined SCRA/MLA penalties ($85M OCC, 2020) and class action settlement ($64.2M, 2024) |
| Lincoln Military Housing | $200K (2016) | Filed false affidavits denying tenants were active-duty military |
The pattern is clear: manual processes and generic software create SCRA violations. The DOJ is finding them and prosecuting them.
What This Means for Property Managers
If your organization manages residential properties, you are exposed to SCRA risk. Ask yourself:
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Do your systems automatically check military status before applying termination fees, filing evictions, or taking any adverse action? If the answer is no, you have the same structural gap that cost Greystar $1.4 million.
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Are you relying on staff to manually waive fees for protected tenants? The DOJ has now established that “manual override” processes are not adequate SCRA compliance.
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Can you produce an audit trail of every military status verification you’ve conducted? The Greystar consent decree required an independent audit going back to 2018. If a regulator asked you for the same, could you deliver?
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Do you continuously monitor tenant military status? Reservists and Guard members cycle between civilian and active-duty status. A tenant who wasn’t protected last month may be protected today.
Purpose-Built Compliance vs. Bolted-On Workarounds
The Greystar case proves that property management software with SCRA compliance as an afterthought. or no thought at all. creates real legal and financial risk.
civrel.io is purpose-built SCRA compliance automation. We verify military status against the Defense Manpower Data Center (DMDC), block adverse actions against protected tenants before they happen, monitor status changes continuously, and maintain audit-ready documentation for regulators.
The DOJ consent decree now requires Greystar to adopt “SCRA-compliant software.” That’s what we build.
For a complete overview of every SCRA obligation for property managers and lenders, see our SCRA compliance guide.
Don’t wait for your own consent decree to find out your software has a structural compliance gap.
Sources: U.S. Department of Justice Press Release, June 24, 2025; Propmodo; Washington State Attorney General; Multifamily Dive; CFPB: Protecting Those Who Protect Us, Dec 2022
152 default judgments. $1.59 million. That’s what PRG Real Estate paid for filing evictions without checking military status. How many evictions did you file last year without a DMDC verification?
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