FPI Management SCRA Settlement: Free Rent Clawed Back on PCS Moves

What happened

On June 13, 2023 the United States sued FPI Management, Inc. in the Eastern District of California, and the court entered a consent order on June 14, 2023. The complaint describes FPI as a Folsom, California company managing more than 130,000 multifamily units across 16 states.

The mechanism was a Concession Addendum signed with the lease. FPI offered move-in incentives such as free months of rent, free parking and one-time credits, and the addendum required tenants to pay them back if they moved out before the lease term ended. The complaint says FPI enforced it against servicemembers leaving on orders at Orion Apartments in Oakland, California, a two-mile drive from Coast Guard Island Alameda and a common choice for people stationed there.

Two Coast Guard petty officers first class show how it worked. One received separation orders in May 2020, gave notice in June stating that the SCRA prohibits early termination charges, and was told he owed no lease break fee but had to return $8,590 in concessions; he and his wife, also in the Coast Guard, repaid it in full. The other received PCS orders to Charleston, South Carolina in February 2021 and was told more than once that he owed $7,838.58. Coast Guard Legal Assistance referred both cases to DOJ, which opened an investigation on April 13, 2021 and asked FPI not to collect from the second petty officer while it was pending.

FPI denied any unlawful act and did not concede that asking for incentives back is an early termination charge. It agreed to stop anyway. The order bars FPI from collecting any early termination charge, “including requiring the repayment of a lease incentive,” from a servicemember or dependent who lawfully terminates under Section 3955.

The law behind this: 50 U.S.C. § 3955

Termination of residential or motor vehicle leases: read the statute , or read § 3955 in plain English, with its enforcement record .

The right for servicemembers to terminate leases without penalty when military orders send them elsewhere is a critical protection for people who already sacrifice so much.

Who was covered

Nine servicemembers identified by the United States: eight who were made to repay rent discounts or concessions after terminating under the SCRA since April 13, 2016, and one who was charged a lease break fee. The DOJ case page describes all nine as concession repayments; the consent order separates them eight and one.

What the settlement paid

• $51,587 placed in an interest-bearing escrow account for the nine within ten business days (consent order paragraph 19); any amount not distributed within five years goes to the United States Treasury (paragraph 26).
• Each servicemember receives a refund of the charge paid, shared with any co-lessees, plus an additional payment set by the United States that goes to the servicemember alone (paragraph 17).
• A $22,500 civil penalty (paragraph 32). FPI must ask Equifax, Experian, TransUnion and any other database it reports to remove negative entries tied to these charges. It may not pursue any related balance and must indemnify servicemembers against a third party pursuing one (paragraphs 29 and 31).
• Revised standard lease forms, no enforcement of earlier SCRA waivers, a five-year term, and any funds left undistributed after five years paid to the Treasury.

Why this case matters

A concession you must repay to leave is a charge for leaving. FPI told one servicemember he would not owe a lease break fee and then required $8,590 from him under another name. Section 3955(e)(1) bars any early termination charge, and the United States treated the clawback of free rent and parking as one. If your lease has a concession or incentive addendum and you terminate on orders, that addendum is the line to dispute.