SFR3 Lawsuit: Kennedy Case, Evictions, and Rental Scams

The most recent SFR3 lawsuit is Kennedy v. American Avenue Property Management LLC, a federal case filed in June 2025 in the Northern District of California against American Avenue Property Management, SFR3 Operator LLC, and SFR3 Properties LLC under the Fair Labor Standards Act. The case is still active. Separately, SFR3 and its property manager have drawn years of tenant habitability complaints, a high-profile mass eviction dispute in Peoria, Illinois, and rental scam reports in South Bend, Indiana.

The Kennedy Federal Lawsuit

Christopher Kennedy and Claire Gardulski filed suit in June 2025 in the United States District Court for the Northern District of California against American Avenue Property Management LLC, SFR3 Operator LLC, and SFR3 Properties LLC. The case was assigned to Judge Jon S. Tigar and filed under the Fair Labor Standards Act, which points to wage and hour claims rather than tenant issues.¹

Summons were issued to all three defendants in June 2025, and an initial case management conference was scheduled for September 2025. As of mid-2026 the case remains open, and the specific allegations and any interim rulings are not detailed in publicly available records.¹

Tenant Habitability Complaints

The larger volume of grievances against SFR3 has come from tenants, not employees. A 2021 Shelterforce investigation followed Jazmin Murphy and Curtis West, who rented a 61-year-old three-bedroom home in Kansas City, Missouri, owned by an SFR3 entity and managed at the time by Darwin Homes. When they moved in that summer, the house had no water heater, no stove, and a broken refrigerator, and it took weeks to get basic appliances delivered.²

The wiring worried them more. The home had two-pronged outlets, flickering lights, and burning smells, and an electrician who inspected it called the wiring a “serious fire hazard.” The couple later reported a rotting smell from the crawl space, which they attributed to a dead animal that had chewed through electrical wires. Darwin Homes offered a mutual release that would have ended the lease and reimbursed move-in costs, rent, and lost wages in two installments, but Murphy and West refused to sign, fearing the second payment would not arrive once they moved out. They stopped paying rent and stayed in the house while pressing for full upfront reimbursement.²

Darwin Homes, which reportedly managed more than 11,000 properties nationally and handled much of SFR3’s portfolio, has an extensive Better Business Bureau file. As of 2026, the BBB logged 397 complaints against Darwin Homes over the prior three years, with 132 closed in the most recent twelve months, and it has flagged an active “Pattern of Complaints” alert. Service and repair issues led the list, followed by billing disputes. Specific complaints have included properties deemed uninhabitable at move-in, suspected mold left unaddressed, non-functional plumbing, and disputes over withheld security deposits.³

The Peoria Mass Eviction Dispute

SFR3’s most visible public conflict came in late 2022 in Peoria, Illinois. In November of that year, Darwin Homes, then managing SFR3’s Peoria portfolio, issued 30-day notices to vacate to tenants in roughly 59 rental units in the East Bluff neighborhood, with a December 30 deadline. No reason was given. Every affected tenant was on a month-to-month lease, which made the terminations legal under Illinois law.⁴

The pre-Christmas timing set off a backlash. Community members packed a December 2022 city council meeting to demand action, and Kristen Meierkord, president of the East Bluff Neighborhood Association and the local ACLU chapter, suggested the mayor could issue an emergency declaration to impose a temporary stay.⁵

The city eventually contacted SFR3 directly and negotiated an extension of the deadline into late January 2023. Joe Dulin, Peoria’s director of community development, said the company had followed the “letter of the law” but that the city intervened because the timing was “terrible.”⁴ Tenant advocates pushed for staggered timelines for longer-term residents and a short-term winter eviction moratorium. By that point, SFR3 had picked up more than 200 properties in Peoria in the previous year, and reports put its central Illinois holdings at around 300 homes.⁶

Rental Scam Reports in South Bend

In December 2023, the South Bend Tribune reported that rental scams in South Bend, Indiana, had been linked to SFR3. A family, Kayli Miller and Aaron Smith, moved with their four children into a home at 214 E. Irvington Ave. after finding it advertised as “newly remodeled” on Facebook. They later faced eviction, which raised questions about whether the listing had been legitimate and whether SFR3 had authorized the marketing of the property.⁷

Who SFR3 Is

SFR3 LLC is a Delaware entity organized in 2018, with its principal office at 609 Summit Avenue in Mill Valley, California. It was co-founded by Jonathan Kibera and Tom Fallows, who together lead SFR3 Operator LLC.⁸ The business buys distressed houses, renovates them using local contractors, and rents them out through its property management subsidiary, American Avenue Property Management.⁹

The founders made their first acquisition on October 31, 2017, buying 56 properties in Milwaukee for $4.55 million. By late 2022, the Milwaukee holdings alone had grown to 258 properties, and the company describes its national footprint as “thousands of rentals.”¹⁰⁹

1
PACER Monitor. Kennedy et al v. American Avenue Property Management LLC et al
2
Shelterforce. Tech Company Promises More Than It Delivers to Tenants of Single-Family Rental
3
Better Business Bureau. Darwin Homes Property Management Complaints
4
Peoria Journal Star. Corporate Landlords Are Causing Problems in Peoria and Around the World
5
WCBU. Community Members Demand Peoria City Council Take Action on East Bluff Evictions
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25 News Now. Renters, Activists Discuss Ideas to Protect Renters Ahead of Vacate Deadline by Darwin Homes
7
South Bend Tribune. Rental Scams in South Bend Linked to Out-of-State Company SFR3
8
SEC. SFR3 LLC Form D Filing
9
American Avenue. Our Approach
10
Shelterforce. Corporate Landlords Profit From Segregation at Cost of Black Homeownership and Wealth