https://www.justice.gov/opa/pr/justice-department-obtains-its-largest-ever-settlement-against-property-management-company
The Justice Department today announced that PRG Real Estate Management and several related entities have agreed to pay up to $1,590,000 to resolve allegations that they violated the Servicemembers Civil Relief Act (SCRA) by obtaining unlawful court judgments against military tenants and by charging improper lease termination fees. This settlement is the largest ever obtained by the Department against a landlord or property management company for violations of the SCRA.
Under the settlement, PRG will pay up to $1,490,000 million to compensate 127 servicemembers who had 152 unlawful default judgments entered against them and $34,920.39 to compensate 10 servicemembers who were charged early lease termination fees in violation of the SCRA. PRG will also pay a civil penalty of $62,029 to the United States. The settlement also requires PRG to repair the credit of affected servicemembers, provide SCRA training to its employees and develop new policies and procedures consistent with the SCRA.
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The Department launched its investigation after Navy legal assistance attorneys in Norfolk, Virginia, reported that PRG had obtained eviction and money judgments against servicemember-tenants in Virginia state courts by filing affidavits that failed to accurately disclose the tenants’ military status. Under the SCRA, if a landlord files a civil lawsuit against a tenant and the tenant does not appear, the landlord must file an affidavit with the court stating whether the tenant is in the military before seeking a judgment. If the tenant is in military service, the court typically cannot enter judgment until it appoints an attorney to represent the tenant and the court must postpone the proceedings for at least 90 days.
In a complaint filed in the United States District Court for the Eastern District of Virginia, the Department alleged that from 2006 to 2017, PRG obtained at least 152 default judgments against 127 SCRA-protected servicemembers by failing to disclose their military service to the court or by falsely stating that they were not in the military. Landlords and lenders can verify an individual’s military status by searching the Defense Manpower Data Center’s free publicly available website or by reviewing their files to see if there are applications, military leave and earnings statements, or military orders indicating military status.
The complaint further alleged that PRG imposed unlawful charges against servicemember-tenants who attempted to terminate their leases early in order to comply with military orders. The SCRA allows military tenants to terminate a residential lease early if the servicemember receives deployment or permanent change of station orders or enters military service during the term of the lease. If a tenant terminates a lease pursuant to the SCRA, the landlord may not impose any early termination fee.
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