The Servicemembers Civil Relief Act (SCRA) is a federal law that, among other things, prohibits landlords from imposing early termination fees or any other penalties on a tenant who is a servicemember when the servicemember is terminating their lease early pursuant to orders to report to a new location. The prohibition in the SCRA overrules any provision to the contrary in the lease agreement. The Virginia Residential Landlord and Tenant Act (VRLTA) also prohibits imposing early termination fees or any other penalties on a servicemember-tenant in such a circumstance, but only when the servicemember-tenant is ordered to report to a new location that is 35 miles or more from the location of the dwelling unit.
Put simply, the SCRA and VRLTA are in conflict in regard to how to proceed when a servicemember-tenant terminates their lease early pursuant to an order to report to a new location that is within 35 miles of their current residence. This discrepancy begs the question: may a landlord impose an early termination fee when the servicemember-tenant is ordered to report to a new location within 35 miles? The answer is a definitive “no.”
The Department of Justice (DOJ) recently took up a case in which a landlord in Virginia imposed a fee against a servicemember-tenant who was ordered to report to a new location 33 miles from his current residence. The DOJ and the landlord reached a settlement agreement which was submitted to the federal district court for the Eastern District of Virginia. The settlement required the landlord to, among other things, repay the servicemember-tenant three times the amount that was charged in early termination fees (totaling over $10,000), as well as pay a $3,000 fine to the United States government.
So, what does all this mean for property managers? In short, it means to disregard the 35-mile requirement in the VRLTA; that provision in the VRLTA is invalid. Anytime a servicemember-tenant gives notice that they will be breaking their lease early due to orders to report to a new location, no early termination fee may be imposed, no matter where the servicemember-tenant is relocating.