A New Jersey company that manages privatized military family housing at Joint Base McGuire-Dix-Lakehurst has agreed to pay $45,002 to 13 service members in a settlement with the Justice Department over allegations it charged them unlawful fees when they tried to terminate their leases for military reasons.
Justice officials alleged the fees were in violation of the Servicemembers Civil Relief Act (SCRA).
United Communities, LLC, allegedly imposed early termination charges on the service members ranging from $138 to $3,100, and involved repaying a lease incentive the service members received when they initially signed the lease.
The company will also pay a civil penalty of $17,500 to the United States.
Under the SCRA, service members can end their residential leases after entering military service, or upon receiving military orders for a permanent change of station (PCS), deployment, or retirement, and landlords are prohibited from charging an early termination fee.
Justice Department officials filed a lawsuit, as well as the settlement agreement, on Thursday in federal court in New Jersey. According to the agreement, United Communities has not admitted that the required repaying of the lease incentive resulted in an early termination charge prohibited by SCRA. Officials with United Communities could not be reached for comment.
“We appreciate United Communities’ cooperation with the [Justice Department] to compensate affected service members,” said Acting Assistant Attorney General John Gore, in a Justice Department announcement. “We are resolute in our commitment to vigorously enforce the SCRA on behalf of our men and women in uniform.”
“Members of the Army, Navy, and Air Force at Joint Base McGuire-Dix-Lakehurst and service members nationwide, have the right to terminate their leases without penalty when their military orders send them elsewhere,” Gore stated.
According to the complaint, Army Capt. Gregory Funk signed a lease with United Communities in September, 2014, and received a lease incentive in the form of the first month being “rent-free,” in return for the lease running for a term of 24 months. The lease addendum he signed included a clause stating that the lease incentive was equal to $899.20, and that if he received orders for PCS, separation or retirement, he wouldn’t be responsible for the full lease term if he lived there at least six months.
It also stated that if the term couldn’t be fulfilled for any other reason, he would be responsible for paying back the amount of the incentive.
In April 2016, five months before his lease was up, Funk received orders to deploy to Qatar for up to 365 days, and provided notice of termination of his lease to United Communities. They charged him $899.20.
Through the Justice Department investigation, officials determined that the company allegedly charged at least 12 additional service members early termination fees.
This is the second SCRA case the Justice Department has brought involving lease incentives.
Service members and their dependents who believe their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office.