Recently a Virginia-based rental company received a cease and desist letter after charging allegedly illegal fees to active duty individuals in violation of the Servicemembers Civil Relief Act, legislation which allows military members to terminate certain financial obligations while deployed.
LeRay 300 receives cease and desist letter
New York Attorney General Eric Schneiderman’s office issued a cease and desist letter to LeRay 300 regarding it’s Fort Drum-area collection of properties, Woodcliff Community, which was allegedly charging servicemembers move-out penalties. Located one mile from the base in Calcium, New York, the community of 150 stand-alone duplex homes is owned by Jeffrey Lewis, of Virginia. LeRay 300 has been charged with issuing undisclosed, nonrefundable fees called “reservation deposits.”
“Property owners have to be wary when implementing certain penalties.”
The attorney general’s office is investigating allegations that the community often levied move-out penalties against soldiers who attempted to assert their right to terminate their leases under the protections provided by the SCRA, according to WWNY TV 7. Property owners have to be wary when implementing certain penalties against renters who attempt to terminate their agreements early. Some of these people can be active duty servicemembers, who often have to travel as a result of deployment and thus have no need to rent anymore.
Verifying military status to avoid SCRA violations
When called for active duty service, people are legally allowed to terminate their contracts under the terms of the SCRA, and rental firms that deny that right could receive a cease and desist letter, or worse. The fees that LeRay 300 allegedly charged were in violation of servicemembers’ rights to terminate their rental agreements without consequence. Though Lewis explained to WWNY that his company tried to treat everybody fairly, under the terms of the SCRA charging servicemembers fees when they attempt to terminate their leases is not allowed.
The attorney general cannot comment on how many servicemembers were affected by the company’s illegal charges, but he did explain that the investigation into the community’s practices is ongoing and that the landlord faces other, similar charges to the SCRA violations.
The SCRA was established in order to ease the burden on servicemembers and their families when they are deployed, though it can often be an afterthought to lenders unaware of its exact terms. It is crucial that debt collectors of all sorts make an effort to verify individual’s active duty status to avoid charging them with illegal fees.