Justice Department Reaches Settlement with New Jersey Military Housing Provider for Charging Unlawful Lease Termination Fees to U.S. Servicemembers

The Justice Department today announced that United Communities, LLC, a private company that manages military housing at Joint Base McGuire-Dix-Lakehurst (JB-MDL), has agreed to pay $62,501.78 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by imposing early termination charges on 13 servicemembers who had exercised their right to terminate their residential leases upon receipt of qualifying military orders. The early termination charges ranged from $138 to $3,100. This case and the settlement with another company in United States v. Twin Creek, announced on Sept. 11, are the first two SCRA cases the Department has brought involving lease incentives.

The Department launched an investigation into United Communities’ leasing practices after receiving a referral from Air Force Community Legal Services. Army Captain Gregory Funk had sought to terminate his lease with United Communities after he received military orders to deploy to Qatar for up to 365 days as a part of Operation Inherent Resolve. United Communities agreed to release Captain Funk from the remainder of his lease term, but required him to pay back the $899.20 lease incentive that he had received when he signed the lease because he had not completed the 24-month term of the lease. The investigation revealed 12 other instances where SCRA-protected servicemembers were required to pay back their lease incentives.

Under the terms of the settlement, United Communities must pay a total of $45,001.78 in damages to 13 servicemembers. United Communities will also pay a civil penalty of $17,500 to the United States. In addition, United Communities must develop policies to ensure it complies with the SCRA, train its employees on the protections afforded by the SCRA, and report future SCRA-related complaints to the government.

“Members of the Army, Navy, and Air Force at Joint Base McGuire-Dix-Lakehurst, and servicemembers nationwide, have the right to terminate their leases without penalty when their military orders send them elsewhere,” said Acting Assistant Attorney General John Gore.  “We appreciate United Communities’ cooperation with the Department to compensate affected servicemembers.  We are resolute in our commitment to vigorously enforce the SCRA on behalf of our men and women in uniform.”

 “When the brave men and women of our armed services answer the call of duty, they should be confident that they and their families will receive every protection the SCRA offers,” said U.S. Attorney Craig Carpenito. “With this settlement agreement, I am proud to continue our robust enforcement of the SCRA in New Jersey.”

The SCRA extends various protections to servicemembers to allow them to devote their entire energy to the national defense. The SCRA provides protections for servicemembers in areas such as evictions, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. The SCRA also allows servicemembers to terminate their residential leases after entering military service or receiving military orders for a permanent change of station, deployment, or retirement. Landlords are prohibited from imposing an early termination charge on servicemembers who terminate their leases under the SCRA.

The agreement resolves a suit filed by the United States in the United States District Court for the District of New Jersey.

The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. Since 2011, the Department has obtained over $468 million in monetary relief for servicemembers through its enforcement of the SCRA. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php. 

Individuals who believe their civil rights have been violated in the District of New Jersey may also file a complaint with the U.S. Attorney’s Office for the District of New Jersey at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.