We recently started managing a new property for an owner who had lost his tenant and really was not clear how. The tenant was a Army serviceman and was on reserve. The tenant had been called back into service and needed to immediately relocate. The owner, a very respectful and honest person, allowed the tenant to immediately move out and walk away from the lease. As we discussed what had happened, the owner looked at me and said he had wanted to honor this tenant’s service, but now wonders if he did not have some rights also.
The federal law that governs these situations and protects active duty members of the armed forces, including activated members of the National Guard , is the Servicemembers Civil Relief Act. This law provides several protections, including recognition that activated reservists are likely to receive a lower income than their normal income, making it difficult to pay current obligations. The protections of the law include:
- reduced interest rates on existing debts
- special treatment for tenants regarding lease cancellations and evictions,
and - protection from court actions and repossessions
As this law pertains to property owners with a lease (residential or commercial) the tenant has an obligation to pay their rent obligation for 30 days after the next date the rent is due when providing the owner with the proper notice. So, if the notice is provided on August 15, and rent is due at the beginning of each month, the tenant is obligated to pay the rent through September.
Proper notice is served by the tenant giving written notice with a copy of the military orders that are the basis for termination. In addition, the circumstances of the lease termination must be because the tenant’s permanent change of station orders (or a temporary change if for 60 days or more) will cause a move of 35 miles or more from the location of the rental premises or his orders require him to move into government quarters. Another situation covered by this law, that we have run into is a servicemember being prematurely discharged or involuntarily released from active federal or state duty.
One interesting note is this law only covers rent up to $2400 per month or less. This number, like many chosen in laws by Congress, is adjusted to account for inflation and cost of living increases. If your rent is about that level, and this becomes an issue, you may want to confirm the current number.
So, our new client did the honorable thing and let his tenant off the hook a little prematurely. As he said, considering the sacrifice these folks make for all of us, it was the least he could do and a mistake he could live with!
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Tags: Indianapolis Property Management, Indianapolis Property Manager, property management, Property Manager, tenant issues, tenant rights, Wilmoth
