How Greystar’s ‘Set-It-And-Forget-It’ Automation Led to a $1.4M DOJ Settlement

• Set it and don’t forget it: Greystar settled a lawsuit for failing to waive early termination fees for military members.

• The legend of the rent: Rents remain steady in most major metros due to record construction, but supply still lags demand, keeping prices from falling.

• A landlord’s worst nightmare: Zohran Mamdani’s surprise win in the NYC mayoral primary has shaken investor confidence in the city’s biggest landlords.

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Editor’s Pick

How Greystar’s ‘Set-It-And-Forget-It’ Automation Led to a $1.4M DOJ Settlement

The Department of Justice has settled with Greystar Management Services, LLC, resolving allegations that the nation’s largest property management company illegally charged early lease termination fees to active-duty service members, a violation of the Servicemembers Civil Relief Act (SCRA). The case highlights how even routine leasing practices may conflict with federal protections, particularly when automation and scale outpace oversight.

The violations stemmed from Greystar’s reliance on automated property management software such as Yardi, RealPage, and Entrata, which applied termination fees without consistently identifying when tenants had legal protections due to military orders.

Although the fees were supposed to be manually waived by staff, DOJ investigators found that Greystar failed to implement adequate controls to ensure compliance. As a result, service members were hit with fees ranging from several hundred to thousands of dollars, sometimes including retroactive charges from previously waived rent concessions.

Under the terms of the agreement, Greystar will pay a $77,370 civil penalty and conduct a comprehensive remediation process. This includes hiring an independent consultant to audit lease terminations dating back to 2018, creating an escrow fund to repay affected tenants, and reporting quarterly to the DOJ. 

Greystar must set aside $1.35 million to pay affected service members and their co-tenants. The company must also implement SCRA training for leasing agents and ensure future compliance through documentation. The agreement remains active for five years, during which the DOJ holds monitoring authority.

While Greystar agreed to the terms of the settlement, the company denies wrongdoing and explicitly states that the agreement does not constitute an admission of liability. Still, the scope of the remediation and the DOJ’s continued oversight make clear that the government viewed the violations as systemic, not incidental.

For commercial landlords, the settlement presents an interesting case study in how property management tech can inadvertently introduce compliance liabilities. Standardized lease templates and backend systems may introduce risk when they fail to account for federal tenant protections and rights. 

Greystar’s property management platforms automatically assessed fees but relied on staff to manually catch and reverse unlawful charges to service members. That didn’t happen consistently, exposing a common flaw in a “set-it-and-forget-it” approach to automation.

Greystar’s recent settlement highlights the importance of building back-end systems with front-end accountability. What appears to be routine revenue optimization on paper (or on the screen) can quickly become a liability if regulatory blind spots are overlooked.

Overheard

Rents Plateau, But Relief Eludes America’s Most Cost-Burdened Renters

Despite a historic boom in apartment construction, affordable housing remains out of reach for millions of U.S. renters. Harvard’s Joint Center for Housing Studies reports that a record 22.6 million renters are now cost-burdened, with 12.1 million spending more than half of their income on rent in 2023. Rising energy prices, “junk fees,” and shrinking federal aid are compounding the pressure.

Middle-income renters aren’t spared, as 45% of those earning between $45,000 and $75,000 are now rent-burdened, a rate that has doubled since 2001. Nationwide, average U.S. rents surged by 32 percent between 2019 and 2025. Market-rate housing construction has increased, but mainly at the high end: units under $1,000 per month have decreased by 30% since 2013, adjusted for inflation, while units priced at $ 2,000 or more have tripled.

Although new multifamily supply helped cool average rent growth to just 0.8% in the first quarter of 2025, it hasn’t translated to affordability. In fact, the median rent for newly completed apartments in late 2024 was $1,900.

With President Trump proposing deep cuts to the Department of Housing and Urban Development’s programs and costs for landlords and developers also rising fast, the affordable housing pipeline is expected to shrink further. The data suggest that without more public support, affordability gains won’t trickle down, regardless of how many units are built.

NY Real Estate Stocks Battered by Mamdani Win

n a close primary race, Zohran Mamdani won the Democratic nomination for NYC Mayoral candidate. This surprise win over former NY governor Andrew Cuomo has markets worried about real estate owners in America's largest city. New York's regional banks and REITs took a hit, mostly due to investor concern over his pledge to freeze rent hikes on stabilized apartments. Stocks of locally‑focused lenders like Flagstar (formerly NY Community Bank), Dime Community, and Flushing Financial dropped 4–5%, while property trusts SL Green, Vornado, Equity Residential, and Empire State Realty Trust slid 3–5%.

Analysts warn Mamdani's bold rent‑freeze platform escalates pressure on building owners already managing tighter budgets amid climbing expenses. With multifamily operators unable to adjust rents in line with costs, servicing debt becomes increasingly difficult. Brokerage Stephens cautioned that such political risks are “marching down a perilous path,” and Bank of America underscored that while broader economic hurdles persist, regulatory threats might weigh on regional banks in the short term.

That said, some market observers view the immediate fallout as limited. The cloud of regulatory uncertainty is enough to rattle investors already wary of rate-sensitive real estate assets but Mamdani's ability to execute on his campaign promise is yet to be seen. He would first need to appoint like-minded board members of the city's Rent Guideline Board, who would need to approve the freeze. Even with this freeze in place, there would be exemptions via the existing state Housing Stability and Tenant Protection Act. For those exemptions to be lifted, Mamdani would need to advocate for his policy change in the State capital, where there might not be the same enthusiasm for his agenda as he has found in the outer boroughs of NYC.

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