EDVA Settles Lawsuit Against Property Management Company and Landlord for Violating Servicemembers’ Rights

ALEXANDRIA, Va. – A property management company operating throughout Hampton Roads has agreed to pay $13,225.65 to settle a complaint alleging that the company and one of its landlord-homeowners violated the Servicemembers Civil Relief Act (SCRA).

According to court documents, McGowan Realty LLC, doing business as RedSail Property Management (RedSail), agreed to settle a complaint that it and one of its landlord-homeowners violated the SCRA by imposing early lease termination charges and additional rent on a servicemember. The United States alleged that the company had a policy of refusing to honor servicemembers’ lease terminations when the servicemember received permanent change of station (PCS) orders to a new duty station that was less than 35 miles (radius) from the dwelling unit.

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

“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.”

The SCRA allows a servicemember to terminate a residential lease early if the servicemember receives permanent change of station orders or enters 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 a servicemember’s residential lease termination rights. State statutes cannot deprive servicemembers of the full scope of their rights under federal law.

EDVA launched its investigation after a Navy legal assistance attorney reported that RedSail and the landlord had refused to honor the SCRA residential lease termination of a U.S. Navy Petty Officer First Class 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 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 $3,000 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. In the proposed consent order, RedSail and the landlord have agreed to refrain from imposing or attempting to impose the VRLTA’s 35-mile 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.

The matter was investigated by Assistant U.S. Attorney Deirdre G. Brou.

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 https://legalassistance.law.af.mil/. The Justice 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 https://www.justice.gov/servicemembers.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER.

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