RedSail Property Management SCRA Settlement: Virginia's 35-Mile Limit

What happened

On January 8, 2024 the United States sued McGowan Realty, LLC, which does business as RedSail Property Management, together with the owner of a Suffolk, Virginia home that RedSail managed, in federal court in Norfolk, and filed a proposed consent order. Judge Jamar K. Walker entered it on January 9, 2024. The complaint describes RedSail as a Virginia company based in Newport News that owns and manages homes across Hampton Roads, including Newport News, Hampton, Williamsburg, Virginia Beach, Norfolk, Chesapeake, Portsmouth and Suffolk (complaint paragraph 10). When read on October 10, 2026, DOJ's case page still described the order as proposed and awaiting court approval.

The dispute was Virginia's own military termination statute. As the complaint quotes it, § 55.1-1235(A) of the Virginia Residential Landlord and Tenant Act let a servicemember terminate on permanent change of station orders only "to depart 35 miles or more (radius) from the location of the dwelling unit" (complaint paragraph 4). Since at least August 2018, the complaint alleges, RedSail imposed or tried to impose that limit on servicemembers in Hampton Roads and treated a lease line reading "THIS LEASE SHALL BE GOVERNED BY THE VIRGINIA RESIDENTIAL LANDLORD TENANT ACT" as an SCRA waiver, though § 3918(a) requires a waiver executed as a separate instrument. In August 2018 it first declined a Navy seaman's termination in Portsmouth and relented only after Navy legal assistance attorneys showed his orders took him more than 35 miles away (paragraphs 5, 12, 14 to 16 and 34).

The case turned on a Navy fire controlman petty officer first class who, with his then-fiancée, leased the Suffolk home from July 30, 2021 to July 29, 2023 at $1,895 a month plus $30 in pet rent. He was assigned to the USS Stout, homeported in Norfolk, when they signed; PCS orders dated December 22, 2021 directed him to report by June 18, 2022 to the Surface Combat Systems Training Command at Naval Air Station Oceana, Dam Neck Annex, in Virginia Beach. The complaint puts the most direct route at approximately 33.3 miles, a minimum of 50 minutes each way in traffic. On April 18, 2022 he told RedSail he was terminating and e-mailed his orders, and RedSail refused by e-mail the same day because the new station was less than 35 miles away; a Navy legal assistance officer's April 22 e-mail citing the SCRA did not change its position (paragraphs 17 to 27).

The couple moved out by May 30, 2022 to a home within three miles of his new command but, at RedSail's insistence, kept paying until new tenants were found: $1,895 in June rent, $30 in pet rent and a $750 lease termination fee, with $733.55 withheld from their deposit for rent through July 12 and $100 for mismatched paint. The complaint totals what he paid at $3,408.55 in additional rent and a termination fee, which is the $1,895, $30, $750 and $733.55 together; the $100 paint charge is not part of it (paragraphs 28 to 31). RedSail gave the United States a spreadsheet of its lease terminations since June 1, 2018 and the related tenant files, and the order describes him as likely the only servicemember on whom RedSail imposed the 35-mile limit and from whom it obtained unlawful fees and additional rent (consent order paragraph 22).

The law behind this: 50 U.S.C. § 3955

Termination of residential or motor vehicle leases: read the statute , or read § 3955 in plain English, with its enforcement record .

This case should put all housing providers on notice that if a servicemember meets the requirements of the federal Servicemembers Civil Relief Act, they are entitled to all its benefits, regardless of what any state law may provide,

Our servicemembers sacrifice greatly, moving and deploying often in support of our nation’s defense.

Who was covered

The petty officer, called the Aggrieved Servicemember in the order, who terminated his lease at the Suffolk home in April 2022 (consent order paragraph 22); the complaint also counts his wife, as his dependent-spouse, among the aggrieved persons (complaint paragraph 44). For the order's term, RedSail's policies must also honor qualifying stop movement orders, a spouse's or dependent's right to terminate within a year after a servicemember dies in service, and a servicemember's right to terminate within a year after a catastrophic injury or illness (consent order paragraph 12(a) to (c)).

What the settlement paid

• $10,225.65 to the petty officer: the $3,408.55 he paid plus two times the unlawful fees and additional rent assessed (consent order paragraph 23). RedSail had seven days after entry to send him notice with the declaration and release, and 14 days after receiving them signed to mail the check, with no set-off for anything it claimed he owed (paragraphs 23, 24 and 26).
• Within 30 days of entry, a motion to set aside any judgment RedSail had obtained against him over those charges, and requests that all three major credit bureaus, and any other database RedSail reports to, delete related trade lines (paragraphs 28 and 29).
• A $3,000 payment to the Treasury, due within 30 days of entry, which the order calls a penalty under § 4041(b)(3) (paragraph 30) and DOJ's case page and the U.S. Attorney's release call a civil penalty; that release puts the total at $13,225.65.
• Revised lease forms stating that the 35-mile limit does not apply to a lawful SCRA termination, treatment of every SCRA termination as effective regardless of where the new duty station is, designated SCRA staff and a web page, annual training, and complaint reports every six months. The homeowner must make his agents, RedSail included, comply with § 3955 and may not deny a termination over the 35-mile rule (paragraphs 12, 15 to 17, 20 and 32). The order runs three years from entry (paragraph 46).

Why this case matters

DOJ's releases stated the principle plainly: the SCRA places no mileage restrictions on lease termination rights, and state statutes cannot deprive servicemembers of the full scope of their federal rights. Virginia then changed its own law. Chapter 28 of the 2024 Acts of Assembly, approved March 8, 2024 with an emergency clause putting it in force on passage, struck the 35-mile language from § 55.1-1235(A) for PCS and temporary duty orders, as the enacted text on Virginia's Legislative Information System shows. Read on October 10, 2026, the section lists permanent change of station orders with no distance condition. A Hampton Roads landlord who cites a 35-mile rule is relying on words Virginia removed.