What Kentucky Landlords Need to Know About Servicemembers Civil Relief Act Lease Terminations

Formerly known as the Soldier’s and Sailor’s Civil Relief Act, the Servicemembers Civil Relief Act (SCRA) provides a number of benefits and protections to our military personnel; what many (most?) landlords don’t know is that there is a section (535) which allows – under certain circumstances – military members to terminate their lease. This is outside normal legal experience – it’s a federal law stepping into an area that is normally governed by state law – and usually a tenant can only terminate a lease without penalty if the landlord has breached their responsibilities. However, the SCRA section 535 has primarily to do with deployments and reassignments – things over which the servicemember has no control.

If you do rent to a servicemember (or a tenant joins the military after renting from you), as a property manager or landlord you need to observe their rights under SCRA 535. However, there are limitations and procedures the servicemember is under in order to assert a right to terminate the lease.

Who Is Eligible For an SCRA Lease Termination

  • Active duty service members who either receive permanent change of station (PCS) orders or deployment orders (for not less than 90 days)
  • Military members entering active duty for the first time
  • Activated Reservists and National Guardsmen when serving in federal active duty
  • In certain limited circumstances Activated Reservists and National Guardsmen when serving state duty.

So this does not allow a military member to simply decide to cancel a lease; it relates to their being moved or deployed, which makes sense.

What Types of Leases Can Be Terminated

Specifically the SCRA states ““a lease of premises occupied, or intended to be occupied, by a service member or a service member’s dependents for a residential, professional, business, agricultural or similar purposes”, so this includes not only residential but commercial leases. The SCRA also, in certain circumstances, allows for the termination of a car or truck lease (in this case a PCS has to be outside the U.S, and a few other differences).

The important thing for the lessor or property manager to understand here is that if the servicemember is eligible and proper notice is given, this is not elective; you must terminate the lease. You really don’t want to be the landlord making the news because you wouldn’t release a member of the military from the lease when it’s required by federal law. Being a federal law, of course there are no state-by-state exceptions or variances.

What Procedure Must the Servicemember Follow

They must provide the lessor with a written notice of termination , along with a copy of the military orders. The written notice to terminate lease may be delivered by mail (return receipt requested) to the address for notices designated by the landlord, private business carrier or hand delivered. Once delivered, the effective date of termination is 30 days after the next date rent is due. This is how typically month-to-month leases are supposed to operate. This means that if notice is given on July 15th for example, and the next rent is due August 1st, the date of termination would be August 30th. Sometimes there is confusion and people think it’s 30 days from the date of the notice, but it’s 30 days after the next rent date.

Keep in mind, though, a responsibility to mitigate damages; if the service member vacates before the effective termination date, you have an obligation in most cases to attempt to re-rent the property. Understandably, there often isn’t a lot of time between the date of vacating and the date of termination, but if there is you should proceed with any cleaning, repairs and marketing you would normally do. If you do re-rent before the termination date, refund the pro-rated rent to the service member if they have paid through the termination date.

Also keep in mind that everything else still applies; your obligation to return deposit money, the tenant’s obligation to pay for damages, etc. Treat it as if the termination date was the normal ending date of the lease contract. I would not keep the deposit as liquidated damages if your lease has such language in case of breach; the military member has not breached the lease, but rather federal law has modified it. However, if the tenant has damaged the property, document, notice, and deduct from the deposit as usual.

From a marketing standpoint, since you have to observe the SCRA anyway, it may not hurt to advertise that you respect the rights of service members under SCRA. While it never hurts to show a little patriotism, it also lets those service members know in advance that you understand the SCRA and won’t give them a hard time if they are moved to a new station or deployed.

Category: Property Management

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