APRIL 13, 2020 – Soldiers and families locked into untenable lease agreements due to the COVID-19 stop-movement order can access legal support to reduce their financial obligation.
Under the Service Member Civil Relief Act, or SCRA, Soldiers can terminate their lease agreement with permanent-change-of-station or deployment orders that exceed 90 days, according to Army G-1 officials.
Some families might have entered a new lease agreement prior to a PCS, said Melissa Halsey, legal assistance policy division chief for the Office of the Judge Advocate General. When the stop-movement order nullified a Soldier’s PCS orders, they may now be forced to maintain multiple households, and the recourse is unclear.
Individuals caught in a leasing dispute should first reach out to their landlord or property management office to try and resolve the issue at the lowest, Halsey said. If that doesn’t work, Soldiers should notify their chain of command and consult with a Legal Assistance attorney.
“We are suggesting service members contact their landlords directly and explain their situation,” Halsey said. “They should then ask the landlord to end their lease voluntarily.”
Army G-1 recently released an all-Army activities message to provide impacted personnel with guidance, Halsey said. Within the ALARACT, Soldiers have access to example letters to help them cancel a lease agreement or pause rent obligations.
Individuals can also look into any state-specific laws or federal relief to provide support. For example, the Federal Housing Finance Agency is offering mortgage relief to borrowers impacted by COVID-19. At any point, Soldiers can contact their installation legal assistance office for further guidance or support, she added.
If personnel cannot reach a termination agreement with their landlord, they can work with their chain of command and legal office to obtain new orders, which will allow them to cancel their rent or lease contract under the SCRA.
Current lease
While under the stop-movement order, Soldiers should try to maintain their lease with their current property manager until they are authorized to PCS since there is no legal requirement for a landlord to re-lease a property to an existing tenant, Halsey said.
Soldiers should notify their chain of command if they terminated their lease in preparation for a move and if their landlord refuses to let them continue to occupy the property, Halsey said.
Personnel may be authorized a short-distance move with their household goods due to the involuntary tour extension, she said.
The Department of Justice, which enforces the SCRA, has been actively monitoring the COVID-19 situation, Halsey said.
“Since COVID-19 has come to our shores, active-duty service members and members of the National Guard and Reserve have shouldered new burdens as they work to protect our country,” said Eric S. Dreiband, the assistant attorney general with the civil rights division.
“We owe it to them to ensure that COVID-19 does not jeopardize their economic livelihood,” Dreiband said in a news release.
Lowered interest rate
Soldiers should also be aware of the 6% interest-rate reduction on all pre-service financial obligations under the SCRA, Halsey said. This applies to automobile loans, credit card debt, student loans and other forms of credit.
Soldiers called up to active duty to support COVID-19 efforts can also receive a reduced interest-rate benefit, Halsey added.
For mortgages, trust deeds, or other mortgage-related securities, the interest rate reduction to 6% extends for up to one year after their military service duration, officials said. For all other credit obligations, the interest rate reduction to 6% will remain in place until the Soldier leaves military service.
Individuals can apply for the interest-rate reduction at any point during their military careers, she added. When a valid interest rate reduction request is provided to a creditor, the credit must forgive all amounts charged over 6% from the point the Soldier entered military service, which could include retroactively forgiving any amount charged over the lowered rate.
“National Guard and Reserve members called up to support COVID-19 efforts should contact their lenders and inquire about the interest-rate reduction,” she added. “Legal Assistance attorneys are available to help Soldiers draft valid interest rate reductions.”
By Devon Suits, Army News Service