Lease termination and the SCRA
The summer move season is here and many of you will soon be leaving your rental residence, perhaps with several months to go on the lease term. A federal law, the Servicemembers’ Civil Relief Act (SCRA) allows servicemembers (SMs) to end their lease early without the requirement of paying rent through the end of the lease. But there are requirements, and you need to make sure you comply.
When does the SCRA apply? The SCRA allows early lease termination if the lease is signed before the tenant entered military service, or if an active duty tenant signed the lease and then received orders to deploy or to execute permanent change of station (PCS) orders. Effective January 1, 2019, the SCRA was amended to give the co-tenant spouse the right to terminate the lease upon the death of the SM. This article focuses on termination for PCS orders.
What is a PCS Order? Typically, PCS orders assign a SM to a new duty station for non-temporary duty; for example, transferring a Marine from Camp Lejeune, North Carolina to Camp Pendleton, California. The orders themselves usually say that they are PCS orders. However, PCS orders also include such matters as retirement, or separation from active duty service under honorable conditions. For a complete listing of the types of orders that are considered PCS, see appendix A of the Joint Travel Regulation, or consult your legal assistance attorney.
Notice requirements. The tenant must provide written notice to the landlord of intent to terminate the lease. Notice must also include a copy of the orders, or a letter from the tenant’s commanding officer verifying that the tenant has been issued such orders. Your legal assistance attorney can assist you to draft the tenant demand and CO verification letters. Hopefully, by the time this article is published, such forms will also be posted to the legal assistance sites at Camp Lejeune, Cherry Point, and Parris Island. If so, use those web posts as a guide, adjusting as needed to suit your situation.
By direction authority. Commanders often delegate authority to subordinate officers, who sign documents within “by direction” of the CO. Can a subordinate officer sign the orders verification letter by direction of the CO? The SCRA does not specifically address this issue. An appellate court would almost certainly rule that a letter signed by a person with by direction authority to do so is sufficient verification of orders. The SCRA says that the letter must be “from” the commanding officer. It does not require that the letter be “signed” by the commander. Furthermore, it is common practice within the armed forces to delegate authority in this manner. Finally, the U.S. Supreme Court has long held that the SCRA should be interpreted liberally with an eye towards assisting SMs. However, it is unlikely that such a case will ever reach an appellate court; the sums involved in litigation vastly outweigh the sums involved in lease termination. The better practice therefore is to have the orders verification letter signed by the CO actual, so as not to give the landlord any excuse, however flimsy, to claim noncompliance with the notice requirements of the SCRA.
When does the lease end? The lease terminates, as does the tenant’s obligation to pay rent, thirty days after the next rent is due after the tenant provides satisfactory notice. For example, if the lease calls for rent to be paid on the first day of each month, and the tenant provides notice on April 15th, the lease terminates thirty days after 1 May. Termination of the lease obligations of the SM under the SCRA also terminate the lease obligations of the co-tenant spouse.
Forfeiture of Up Front Rent Concessions. Sometimes landlords entice tenants to sign a lease by providing some concession, such as the first month’s rent free, and require forfeiture of that concession if the tenant leaves before the end of the lease term. However, it is unlawful to apply such forfeiture provisions to a tenant that is terminating the lease under the SCRA.
What if the tenant doesn’t have to move for several months? It is the receipt of the orders, rather than the required date of their execution that gives rise to the right to terminate the lease. Thus, a tenant who receives PCS orders today for reassignment to the Pentagon three months from now, can provide the required notice to the landlord immediately.
What about physical damage to the premises? Under North Carolina law, the tenant is responsible for damage caused by the tenant or his guests that is beyond ordinary wear and tear.
Similarly, the SCRA allows the landlord to impose reasonable charges for “excess wear.”
State Lease Termination Rights. Many states, including North Carolina, have enacted laws giving military tenants the right to terminate a lease early. These state laws can add rights, but can not detract from federal rights already provided. There is much overlap between the NC military lease termination law (NC Gen Stat 42-45) and SCRA section 3955, but they are not identical. For example, tenants who have completed more than nine months of the tenancy and received PCS orders are usually required to pay less to the landlord by using the state law to terminate the lease. Under NC law, PCS orders terminate the lease thirty days after the landlord receives notice, not thirty days after the next rent is due. Further, if the tenant has completed over nine months of the tenancy, the landlord is not allowed to charge a “liquidated damages” penalty. Tenants wishing to use the state law to terminate the lease should tailor their notice accordingly, and are strongly encouraged to provide a copy of the law to the landlord and discuss the matter with legal counsel.
Where can I get help? Your legal assistance attorney can review your case with you and, as necessary, prepare a written demand on your landlord. If the landlord fails to take remedial action and your complaint concerns a violation of the SCRA, you should contact the U.S. Department of Justice, which has been aggressive in enforcing the SCRA. https://www.justice.gov/servicemembers In North Carolina, you can also make an on line complaint against property managers to the North Carolina Real Estate Commission (www.ncrec.gov). You can make an on line complaint about property managers, or about homeowners renting their own home, to the North Carolina Attorney General (www.ncdoj.gov).