How Does The SCRA Affect Landlords: Key Impacts Explained

All landlords who offer rental properties to military customers, specifically active-duty service members, must learn and understand the Servicemembers Civil Relief Act (SCRA). This federal law provides legal and financial protections to military members who render active-duty service.

Why is it integral for landlords to understand the SCRA? Military tenants are provided legal protections to be able to focus on serving the country. If you disregard SCRA rights, the consequences can be expensive. We’ll discuss the special treatment a military tenant is provided because of the SCRA.

What is the Servicemembers Civil Relief Act?

Formerly known as the Sailors Civil Relief Act, the Servicemembers Civil Relief Act or SCRA is a federal law that grants financial and legal protections to military members rendering active service. The rationale behind this legislation is that legal and financial obligations might hinder service members from concentrating on their military duty.

This law helps ease the burdens of military service members, making it easier for them to perform their military duties. Landlords, especially those whose properties are near military installations, should understand how this law can affect their business. This law can affect a property owner’s rights, so it’s better to be safe than sorry.

Evicting a Military Service Member

Let’s say a tenant fails make their monthly rental payment for three consecutive months. In normal circumstances, nonpayment is grounds for eviction. However, the eviction process can be delayed if the tenant is a service member. The SCRA stipulates that service members, including National Guard members on active duty, cannot be evicted without a court order.

The eviction process can be delayed for at least three months if it can be proven that the service member’s active duty service prevents them from paying rent. A court may also help the military tenant manage their rental lease by changing the amount owed. It should be highlighted that this protection only applies to rent up to a certain amount.

While the SCRA prevents military tenants from getting evicted due to nonpayment, this federal law doesn’t exempt them from eviction due to material breaches. For example, if the rental lease stipulates that pets aren’t allowed to live on the property and the military tenant brings home one, that can be grounds for eviction.

Inclusion in the Rental Lease: A Necessity or Not?

Should the SCRA be explicitly incorporated into a rental lease agreement? In select cases, it can be a good idea, especially for properties near military bases. Supporters of this inclusion are concerned that it would protect all parties involved. Those against it claim that SCRA is an act that can’t be repeated under federal law.

While outright inclusion of SCRA protections isn’t mandatory in rental agreements, this portion can provide clarification and protection for all parties involved and offer guidance in case legal issues arise.

Why Consider SCRA Inclusion in Your Lease Agreements

The explicit inclusion of the SCRA is an excellent opportunity to educate service members on their SCRA rights while ensuring landlords adhere to the law.

Some military members may not fully understand their federal rights. Including vital information in one’s lease agreement can educate them accordingly. It can also demonstrate the property owner and landlord’s dedication to providing all clients fair treatment and complying with the law.

What Landlords Need to Know About the SCRA and Military Clause

The requirement for property owners to honor a military clause may be discouraging for those who want to safeguard their business’s best interests. A military tenant and their landlords can develop a military clause to explain the federal law’s repercussions and when it can be activated accordingly.

An excellent example of a military cause concerns a region with various military installations nearby. That region may have horrendous traffic, which makes commuting daunting.

Although a service member’s deployment orders may indicate an installation transfer, the distance may not warrant a Permanent Change of Station (PCS). Thus, SCRA protections can’t be activated. Including a military clause that permits service members to terminate their contract because of changes in installation can be an option if both the tenant and landlord agree.

Another military clause that can be explored is about an on-base housing waitlist. The military member may have preferred to live within their military base, but no housing options were available for their family.

Tenants can request a military clause to sever the lease if housing in the base becomes available. Landlords should know that there are cases wherein the military branch requires their service members to live within the base when housing becomes available.

State laws can sometimes affect a service member’s rental agreement. For example, the state may require the service member to present documentation that stipulates a home is available in the base for them to sever their lease agreement.

In addition to the SCRA, landlords should familiarize themselves with state laws that may affect their business when dealing with service members. The extra effort can prevent losses from tenants’ sudden vacations.

Requesting Deployment Orders

Active-duty service members aren’t automatically exempt from paying rent. They must prove that their SCRA rights are activated to break their lease early or be protected from eviction.

As a landlord, you have the legal right to ask for copies of your military tenant’s deployment orders. Alternatively, a letter from their commanding officer can suffice. What’s crucial is that the request can be validated. This procedure should be done efficiently to ensure the SCRA covers your tenants. The renter should furnish you with a copy before leaving the premises to ensure proper protocol is followed.

Sample SCRA Lease Clause

<Insert landlord’s business name here> acknowledges and agrees with the rights given to active duty service members under the Servicemembers Civil Relief Act (SCRA). These rights include lease termination under proper notice, the provision of rent, a security deposit, or other material lease violation protection for active duty members.

Landlord hereby recognizes and will provide the 6% interest rate limit on financial transactions made before military service, as indicated in SCRA 50 U.S.C. § 3937(c)(1).

If deployment orders prompt for early lease termination, the lease will be terminated on the final day of the month after proper notice is provided, in compliance with the SCRA.

Considering an SCRA Waiver

Aside from including an SCRA clause, property owners whose properties are conveniently located near military bases can consider developing an SCRA waiver. This waiver would permit the tenant to forfeit their SCRA rights, regardless of whether they’re on active duty.

However, the SCRA waiver should be separate from the main contract. The tenant shouldn’t be obligated to forfeit their SCRA rights to rent your property. Adding this clause without the tenant’s knowledge is illegal and can damage your business’s future.

The SCRA Allows Early Termination of Rental/Lease Contract

One of the most vital portions landlords should know about the SCRA is that it permits active-duty service members to sever their lease early without penalties if they can provide written notice and deployment orders or PCS.

The orders should indicate that the service member will be deployed for at least 90 days. This protection applies to service members whose names are displayed in the lease agreement. It doesn’t matter if only their dependents lived there when the PCS was provided.

The Foundation of SCRA in the Rental Sphere

It should be highlighted that not all rental properties are covered by the SCRA. As of 2022, the maximum monthly rent that the SCRA covered was $3,294.29. The maximum rent the SCRA covers depends on consumers’ city price index.

A ceiling is imposed so rent payments can still be controlled. This protects the interests of expensive properties whose businesses might be affected by the SCRA.

Consequences of Violating the SCRA

While violating the SCRA won’t necessarily incur jail time, the consequences can still be severe, especially for small business owners. Your first violation might cost you up to $50,000, while succeeding violations may incur $100,000. If your income depends on your rental properties, the fines can have long-term effects on your business.

Final Words

Following the SCRA is vital for landlords, so military status verification is a must for property owners dealing with people from the military community. You can seek assistance from SCRACVS to determine military status of your tenants. Click here to sign up at SCRAVS and verify the active duty status.

FAQs

Which individual is protected by the SCRA and the MLA?

The Servicemembers Civil Relief Act (SCRA) and Military Lending Act (MLA) cover active-duty military members and provide select protections for their dependents. The SCRA and MLA cover all full-time military members.

What does the Soldiers and Sailors Act cover?

Now known as the Servicemembers Civil Relief Act or SCRA, this law covers active-duty military members and their dependents.

What is the SCRA law in California?

In California, including a military clause that activates SCRA rights isn’t mandatory. Landlords don’t have to state SCRA rights in contracts. However, the military tenant and landlord should discuss including this clause.

Can active duty service members get evicted?

Yes, they can be evicted for material breaches of their rental agreement. The eviction process can also proceed if the landlord gets a court order that permits them to push through with it.