January 27, 2022

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Justice Department Reaches Settlement with San Antonio Housing Providers for Charging Unlawful Lease Termination Fees to Servicemembers

16 min read
<div>The Justice Department today announced that it has reached an agreement with the former owners of two apartment complexes in San Antonio, Texas, to resolve allegations that they violated the Servicemembers Civil Relief Act (SCRA) by imposing unlawful lease termination charges on 41 servicemembers and by refusing to allow four other servicemembers to terminate their leases early.</div>

The Justice Department today announced that it has reached an agreement with the former owners of two apartment complexes in San Antonio, Texas, to resolve allegations that they violated the Servicemembers Civil Relief Act (SCRA) by imposing unlawful lease termination charges on 41 servicemembers and by refusing to allow four other servicemembers to terminate their leases early.

The former owners — Western Rim Investors 2011-4, L.P. and Western Rim Investors 2011-3, L.P. — owned the Estates at Briggs Ranch and the Mansions at Briggs Ranch from Dec. 1, 2011 to March 31, 2020. Both properties are located within 10 miles of Joint Base San Antonio-Lackland. 

Under the proposed consent order, the owners must pay over $71,000 to compensate servicemembers and a $64,715 civil penalty to the U.S. Treasury. The consent order, which is subject to court approval, resolves a suit filed today by the Department of Justice in the U.S. District Court for the Western District of Texas.

“Our men and women in uniform risk their lives and liberty to preserve our freedom, and we enjoy liberty and security because of their sacrifices,” said Assistant Attorney General Eric Dreiband of the Civil Right Division. “These patriots should not be charged a financial penalty when an unexpected reassignment or rapid deployment requires them to move. This settlement sends a warning to apartment associations and landlords that they cannot avoid their obligations under the Servicemembers Civil Relief Act simply by pointing to fine print in boilerplate lease agreements. The department of Justice will not accept these so-called ‘Waiver Addendums’ as valid waivers of servicemembers’ rights under the Servicemembers Civil Relief Act.”

“The Western District of Texas is proud to be home to one of the largest concentrations of military members and their families in the country,” said U.S. Attorney John Bash for the Western District of Texas. “This office takes its responsibility to protect and enforce the statutory rights of these men and women very seriously, so they can focus on their service to our nation.”

The SCRA allows servicemembers to terminate a lease early after entering military service or receiving qualifying military orders. Under the law, qualifying orders include orders for a permanent change of station, orders for a deployment of at least 90 days, and separation or retirement orders. If a servicemember terminates a lease under the SCRA, the law prohibits the landlord from imposing any early termination charges.

The suit alleges that the servicemember-tenants at the Estates and the Mansions at Briggs Ranch who terminated their leases pursuant to the SCRA were required to pay back rent concessions or discounts that they had received during their tenancies. These so-called “concession chargeback” fees ranged from $116 to $1,012 per servicemember. The department’s suit also alleges that the owners wrongfully denied lease termination requests made by four other servicemembers. 

The former apartment owners claim that they relied on lease contracts and other forms provided by the Texas Apartment Association. One of those forms was a lease addendum that claimed to waive a tenant’s rights under the SCRA. The department alleges that the waiver addendum used by the owners was invalid, because it was not executed as an instrument separate from the lease, was expressly incorporated into the lease, was signed at the same time as the lease and was not supported by any additional benefit to the servicemember.

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 $474 million in monetary relief for over 120,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit www.servicemembers.gov

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

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