Newport News, VA – McGowan Realty LLC, which operates as RedSail Property Management, has settled a federal lawsuit in response to allegations of violating the Servicemembers Civil Relief Act. The lawsuit accused the company and one of its landlord-homeowners of imposing charges and additional rent on a Navy sailor in Virginia Beach who received permanent change of station orders. The settlement, amounting to $13,225.65, was reached after a 14-month legal battle in the U.S. District Court for the Eastern District of Virginia.
Under the Servicemembers Civil Relief Act, service members are allowed to terminate a residential lease early if they receive permanent change of station orders or enter military service during the lease term. In such cases, landlords are prohibited from imposing any early termination fees or additional rent beyond the effective termination date.
According to court documents, the Navy sailor in question received orders to a new duty station approximately 12 miles away from his Virginia Beach residence. As a result, he had to pay $3,408.55 in early termination charges and additional rent to RedSail, a property management firm based in Newport News that operates across Hampton Roads and surrounding cities. The full termination fee was then given to the homeowner.
Brian McGowan, the principal broker for RedSail, claimed that the company acted in accordance with Virginia law and the advice of its attorney. He noted that Virginia law allows service members to qualify for lease termination if they are ordered to relocate 35 miles or more from their residence. However, federal law does not impose any mileage restrictions on service members’ lease termination rights.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division emphasized that this case should serve as a warning to all housing providers. She stated that service members who meet the requirements of the federal Servicemembers Civil Relief Act are entitled to its benefits, regardless of any state law provisions.
After 14 months and $50,000 in attorney fees, RedSail made the decision to settle the lawsuit. As part of the settlement, the company will pay $10,225.65 to the Navy sailor and an additional $3,000 in civil penalties. RedSail also agreed to provide Servicemembers Civil Relief Act training to its employees and refrain from imposing Virginia’s 35-mile limitation on qualifying service members or their dependents.
Service members and their dependents who believe their rights under the Servicemembers Civil Relief Act have been violated are encouraged to contact the nearest Armed Forces Legal Assistance office. The Justice Department’s Civil Rights Division’s Housing and Civil Enforcement Section, along with U.S. attorney’s offices across the country, handles the enforcement of the act.
In summary, RedSail Property Management has settled a federal lawsuit alleging violations of the Servicemembers Civil Relief Act. The company will pay $13,225.65 to a Navy sailor who faced charges and additional rent for terminating a lease due to permanent change of station orders. RedSail will also provide training to its employees and refrain from imposing Virginia’s mileage limitation on qualifying service members or their dependents. The settlement serves as a reminder to housing providers that service members are entitled to the benefits of the Servicemembers Civil Relief Act, regardless of state laws.