Privatized housing companies that are asking service members to sign agreements promising to keep silent about their poor housing conditions must immediately stop, Sen. Thom Tillis, R-N.C., told the service secretaries and service chiefs during a hearing Thursday.
“These organizations wave a non-disclosure agreement in front of them and say, if you sign this agreement, there may be a bonus or payment you’ll be entitled to if you don’t bring up what may be inadequate housing,” Tillis said, during a hearing of the Senate Armed Services Committee.
“I can’t imagine on any level why it would make sense to have a new tenant, these young kids, sign an agreement, not understanding the implications of it,” Tillis said, noting it could well be the first lease that service member has ever signed.
Non-disclosure agreements, or confidentiality agreements, are legal contracts that outline information that will be kept secret.
“I’ve been a landlord before and it never would have occurred to me to say I want you to sign away your right to say you’re living in inadequate conditions,” Tillis said.
Senators have been exploring issues with housing that some military families have faced with black mold, pest infestations, water leaks, and other problems, and their inability to get satisfactory responses from their privatized housing managers.
“If any of these are enforced, I expect them to be rescinded over the next 30 days,” Tillis said. “And over the next 30 days, if they’re not rescinded, I want to know what housing company wants to come before me and tell me why it makes sense. Tell me the business reason why it makes sense. Tell me the reason why it’s for the good of the tenant. I’d love to have that conversation.
“But I’ll guarantee you, this has got to stop.”
Tillis said he learned about the agreements from families at Fort Bragg, North Carolina, when he and Army Secretary Mark Esper visited there recently. Esper said that was the first time he’d heard about the agreements, too. “I don’t understand it, I’ve never heard of it before in my life. ... We’ve definitely got to dig into this,” Esper said. “There’s no reason why people should be signing [nondisclosure agreements].”
Officials at Corvias Military Living, which is the property manager at Fort Bragg, couldn’t immediately be reached for comment.
Navy Secretary Richard Spencer said he planned to call all of the chief executive officers at the privatized housing companies the afternoon following the hearing. “If they have any of these documents in their files, they are to be accounted for, and we’re going to talk about them this afternoon.”
Air Force Secretary Heather Wilson, who announced her resignation Thursday, said in her visits to bases, “I did not come across anyone who told me about one of those, but we’re going to go back and check.”
Wilson visited MacDill, Tinker and Shaw Air Force bases in recent weeks to explore residents’ issues with privatized housing.
One military spouse said the privatized housing company at MacDill Air Force Base asked her and her husband, an Air Force master sergeant, to sign a different sort of non-disclosure agreement in January – when they moved out.
Traci Lenz and her husband had complained to the company about mold problems in their house, and moved off base after living there for just six months, because of concerns for their children’s health.
Traci Lenz said the company, Harbor Bay, wanted them to sign an agreement that would also release the company from claims – meaning the Lenzes, their children and heirs – wouldn’t file lawsuits or initiate any other legal actions. In return, the company would waive the two-month early termination fee of $4,524 because the Lenzes were breaking their lease early.
According to a copy of the unsigned agreement provided by Traci Lenz, the agreement would have required the Lenzes to keep the agreement secret, and to “refrain from making or encouraging any negative, adverse, or disparaging statements, comments, or remarks, whether oral or written and including all media, internet, and social media” about the company.
The agreement specified the payment was not to be considered an admission of liability, and the company denies any liability.
In the Lenzes’ efforts to get their concerns addressed, Harbor Bay management denied there was mold, and stated that it was safe for occupancy. Harbor Bay maintenance had hired a third-party company to inspect the house; the Lenzes also hired a third-party company. The results differed.
The Lenzes refused to sign the agreement. Traci Lenz said ultimately the company did agree to waive the two-month early termination fee. “They stated it was ‘an accommodation’ after we involved media and filed a congressional,” she said.
Ron Hansen, president of Michaels Management Services, the property manager for Harbor Bay, said these non-disclosure agreements are not common, and are triggered only when the tenant involves an attorney or discusses attorney involvement. “In the past 20 years, I think I’ve been involved in four” related to military privatized housing, he said.
It’s a condition of a settlement when legal is involved, he said. “Where legal is involved, 100 percent there will be a non-disclosure agreement.
“In our case, we referred it to Harbor Bay’s attorney, who said if we do have a settlement, we have to have a non-disclosure agreement.” Just as in the Lenzes’ case, he said, no one is required to sign the agreement.
Hansen said his company doesn’t use non-disclosure agreements in other situations, and has responded with that information to some CEOs of other housing projects on Navy installations. Those CEOs contacted him in the wake of Navy Secretary Spencer’s comment that he would be calling those CEOs about the agreements.
Although his company doesn’t operate any Navy projects, he said, those CEOs wanted to ensure Hansen’s projects at other installations don’t use them with their tenants, because some sailors and Marines live in some Michaels Management properties at other services’ installations.