On March 15, the United States Department of Justice announced a $1.59 million settlement – its largest ever – with PRG Real Estate Management for violations of the Servicemembers Civil Relief Act. The settlement resolves allegations that PRG obtained unlawful court judgments against military tenants and charged improper lease termination fees.
The SCRA provides numerous protections to tenants who are members of the military. One of these protections requires a landlord to 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. The SCRA also allows early lease termination due to deployment or permanent change of station, or if a tenant enters military service during the lease term.
Per the complaint – filed in the United States District Court for the Eastern District of Virginia, from 2006 to 2017 – PRG obtained default judgments against SCRA-protected servicemembers by failing to disclose their military service to the court or by falsely stating that they were not in the military. The DOJ also alleged that PRG improperly charged early termination fees.
PRG has agreed to pay up to $1,490,000 to compensate 127 servicemembers who had 152 unlawful default judgments entered against them and $34,920 to compensate ten 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. In addition to monetary relief, PRG has agreed to take steps in an attempt to repair the credit of affected servicemembers, provide SCRA training to its employees, and develop new policies and procedures consistent with the SCRA.
A copy of the DOJ press release can be accessed here.