Justice Department Secures Agreement from Property Management Company and Landlord for Violating Servicemembers’ Rights

The Justice Department announced today that it has secured a settlement with McGowan Realty LLC, doing business as RedSail Property Management (RedSail), a property management company operating throughout Hampton Roads, Virginia, to resolve allegations that the company and one of its landlords violated the Servicemembers Civil Relief Act (SCRA) by imposing early lease termination charges and additional rent on a servicemember.

In the complaint filed today,  the United States alleged that the company had a policy of refusing to honor servicemembers’ lease terminations when servicemembers received permanent change of station (PCS) orders to a new duty station that was fewer than 35 miles (radius) from the dwelling unit.

“This case should put all housing providers on notice that if a servicemember meets the requirements of the federal Servicemembers Civil Relief Act, they are entitled to all its benefits, regardless of what any state law may provide,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department is committed to protecting the rights of our servicemembers and their families to ensure they do not face any unlawful treatment by housing companies or any other entities.”

“Our servicemembers sacrifice greatly, moving and deploying often in support of our nation’s defense,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “Such moves should never create financial hardship for our servicemembers.”

The SCRA allows servicemembers to terminate a residential lease early if they receive permanent change of station orders or enter military service during the term of the lease. If the tenant terminates a lease pursuant to the SCRA, the landlord may not impose any early termination fee or rent beyond the effective termination date. The SCRA places no mileage restrictions on servicemembers’ residential lease termination rights. State statutes cannot deprive servicemembers of the full scope of their rights under federal law.

The U.S. Attorney’s Office launched the investigation after a Navy legal assistance attorney reported that RedSail and a landlord had refused to honor a U.S. Navy Petty Officer First Class’ (Petty Officer) SCRA residential lease termination and were assessing early lease termination charges and additional rent against him. RedSail allegedly erroneously insisted that the Virginia Residential Landlord and Tenant Act (VRLTA) placed a 35-mile (radius) limitation on a servicemember’s SCRA residential lease termination rights. The complaint alleges that the Petty Officer paid $3,408.55 in early termination charges and additional rent to RedSail, which placed a considerable financial burden on him.

Under the proposed consent order, RedSail will pay $10,225.65 to the Petty Officer referenced in the United States’ complaint and a civil penalty. The consent order also requires that RedSail provide SCRA training to its employees and develop new policies and procedures consistent with the SCRA. RedSail and the landlord have also agreed to refrain from imposing or attempting to impose the state law’s 35-mile (radius) limitation on servicemembers who lawfully terminate a lease under the SCRA, imposing or seeking to collect any early termination charges from servicemembers or their dependents who lawfully terminate a lease pursuant to the SCRA, and denying SCRA lease terminations from servicemembers who qualify for lease termination under the SCRA. The proposed consent order is subject to approval by the court.

This case was the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia and the Civil Rights Division’s Housing and Civil Enforcement Section.

Servicemembers and their dependents who believe their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/. 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 $481 million in monetary relief for 147,000 servicemembers through its enforcement of the SCRA. Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.

The civil claims settled by this Servicemembers Civil Relief Act agreement are allegations only; there has been no determination of civil liability.

View the complaint here.

View the consent order here.