On Monday, the Justice Department announced it had obtained a nearly $136,000 settlement from Texas company Western Rim Investors, which charged illegal apartment lease termination fees to 41 service members and illegally denied early lease termination to four others. From December 2011 to March, 2020, the company owned two apartment complexes — the Estates at Briggs Ranch and the Mansions at Briggs Ranch — near Joint Base San Antonio-Lackland, Texas.
The charges were under the Servicemembers Civil Relief Act. The law prohibits landlords from charging lease termination fees when military members receive orders for a permanent change of station, deployments longer than 90 days, separation, or retirement. In cases where orders aren’t immediately available, service members can provide other written notice from their commander, such as a memorandum.
According to the DoJ’s civil complaint:
Western Rim Investors attempted to have service members waive their SCRA rights as one of the conditions of their lease. The DoJ, however, concluded it “was not a valid waiver of SCRA rights,” because it was signed at the same time as the lease rather than independently. The apartment owners utilized lease templates from the Texas Apartment Association, believing that the waiver was legal.
Western Rim Investors used the improper waivers to implement a “concession chargeback” policy where service members who terminated their leases early would have to repay any rent discounts or promotions they had received during their lease term. In total, 41 troops incurred these fees when lawfully terminating their leases at Western Rim properties, each repaying amounts that varied between $116 and $1,012. These charges constituted illegal lease termination fees in violation of SCRA, said DoJ.
The company also improperly denied the requests of four service members to end their leases early. The apartment complex refused to accept commander’s letters in lieu of orders for two service members, forcing one to transfer his lease to his girlfriend during his Afghanistan deployment. Two other troops provided honorable discharge orders, but Western Rim denied their requests and “charged them accelerated rent for the remaining lease term…as well as a ‘reletting charge’ equal to 85 percent of the monthly rent,” per the complaint.
The settlement includes $71,149.50 for the affected service members. According to the consent order filed Monday, troops charged illegal termination fees will receive three times the amount they were charged, and the service members illegally denied early termination will receive an undisclosed higher amount specified by DoJ. The remaining portion of the settlement is a $64,715 civil penalty to the U.S. Treasury.
In a DoJ news release, Assistant Attorney General Eric Dreiband said, “This settlement sends a warning to apartment associations and landlords that they cannot avoid their obligations under the Servicemembers Civil Relief Act simply by pointing to fine print in boilerplate lease agreements. The Department of Justice will not accept these so-called ‘Waiver Addendums’ as valid waivers of servicemembers’ rights under [SCRA].”
Neither Marcus Hiles — CEO of Western Rim Investors’ parent company, Western Rim Properties — nor company attorney, R. David Fritsche immediately responded to requests for comment.
The Western Rim settlement is one of many recent SCRA enforcement actions by DoJ. The department has obtained more than $474 million in relief for service members since 2011, according to the news release. DoJ also announced a lawsuit against a Dallas, Texas towing company on Monday that alleged illegal vehicle auctions. Earlier this month, a Tampa, Florida towing company paid a settlement to a Marine veteran for illegally auctioning her car during a deployment. Another case is in progress against the City of San Antonio for allegedly illegally selling the cars of more than 200 troops.