Property Management Blog

Understanding the Military Clause in a Lease Agreement: Implications for Landlords

Lease agreements are legally binding contracts that establish the terms and conditions under which a tenant can occupy a rental property. These agreements often contain various clauses to address different situations that may arise during the tenancy. One such clause is the military clause, which holds specific importance for both landlords and tenants, especially in areas with a significant military presence. In this article, we will delve into what the military clause in a lease means to a landlord and how it impacts their rental property.

Defining the Military Clause:

The military clause, also known as the Servicemembers Civil Relief Act (SCRA) clause, is a provision included in lease agreements to accommodate the unique circumstances faced by military personnel. This clause grants certain rights and protections to active-duty service members who are required to relocate due to military orders. It allows them to terminate their lease early without incurring penalties or breaking the terms of the contract.

Key Points for Landlords:

• Tenant's Right to Terminate Lease: The primary implication of the military clause for landlords is that a tenant who is a member of the military has the right to terminate the lease early if they receive military orders for a permanent change of station (PCS) or deployment. This means that the tenant can move out before the lease term ends without being held responsible for the remaining rent.
• Notice Requirements: Generally, military tenants are required to provide written notice along with a copy of their military orders to exercise their right to terminate the lease under the military clause. The notice period may vary depending on state laws and the terms of the lease agreement, but it typically ranges from 30 to 60 days. In Virginia tenants are required to give 30+ days notice and pay until the next rent due date (First of the month); so you usually get just over 30 days notice.
• Rent Obligations: While the tenant can terminate the lease early, they are still responsible for paying rent and utilities up until the date their notice period expires. However, they are not obligated to pay rent for the remaining period of the lease.
• Security Deposits: Landlords should follow the standard procedures for returning security deposits. Any deductions should be based on the condition of the property, taking into account normal wear and tear.
• Replacement Tenant: Landlords can mitigate the impact of an early termination by working with the military tenant to find a suitable replacement tenant. This can help minimize the financial disruption caused by sudden vacancies. This is our standard procedure - to get the home back on the market asap!
• Communication and Flexibility: Establishing open lines of communication with military tenants is crucial. Landlords should be understanding of the challenges military personnel face and be willing to accommodate their needs within the boundaries of the law.
• Legal Compliance: It's essential for landlords to stay informed about federal and state laws regarding the military clause. Compliance with the SCRA ensures that both parties' rights are upheld and prevents any potential legal issues. Tenants (and usually landlords too) can get free legal advice from the local military JAG (Attorneys) who will help explain and enforce the SCRA terms.

Benefits and Challenges for Landlords:

Benefits:

• Positive Reputation: By demonstrating flexibility and understanding towards military tenants, landlords can build a positive reputation within the military community, potentially leading to referrals and steady occupancy rates.
• Reduced Vacancy Periods: By actively assisting military tenants in finding suitable replacements, landlords can minimize the duration of vacancies, thereby reducing income losses.
• Payment Security: Landlords can be comfortable that military tenants are more likely to pay their rent knowing that landlords can contact their superiors to resolve late payments. Be sure to gather those contacts during the application and contact them to confirm they are accurate.

Challenges:

• Financial Impact: The sudden departure of a tenant due to the military clause can lead to financial challenges, as landlords may need to quickly find new tenants and cover any temporary gaps in rental income.
• Tenant Turnover: Frequent turnover due to military deployments can lead to increased maintenance and cleaning costs between tenants.

Conclusion:

The military clause in a lease agreement serves to protect the rights of military tenants while also presenting challenges for landlords. Balancing legal compliance, financial considerations, and tenant relations is crucial for landlords navigating the implications of the military clause. By understanding the rights and responsibilities outlined in the clause, landlords can establish fair and respectful relationships with their military tenants and navigate potential disruptions to their rental income more effectively.

While many landlords prefer military tenants for their reliability of payment, some fear the risk of sudden lease terminations. Both are important factors, but remember that in much of the country there are laws preventing landlords from discriminating against military applicants (through source of income or occupation protections, etc), so it's important to understand and respect the rules that you may one day encounter.