Western Rim (Briggs Ranch) SCRA Case: The Lease Waiver DOJ Rejected

What happened

On September 28, 2020 the United States sued Western Rim Investors 2011-4, L.P., which did business as The Estates at Briggs Ranch, and Western Rim Investors 2011-3, L.P., which did business as The Mansions at Briggs Ranch, in the San Antonio Division of the Western District of Texas, and DOJ announced a proposed consent order the same day. Each Texas limited partnership owned its complex from December 1, 2011 to March 31, 2020, and the complaint places both properties approximately ten miles from Joint Base San Antonio-Lackland (complaint paragraphs 9 to 11). Judge Jason Pulliam signed the order on September 30, 2020.

In January 2018, according to the complaint, the Justice Department received reports that servicemember-tenants at the Estates were being asked to pay back rent concessions or discounts after ending leases under the SCRA. It was also told that the Mansions had denied terminations outright because tenants handed in a commander's memo about an upcoming deployment instead of standard orders. DOJ opened its investigation by letter dated November 15, 2018 (paragraphs 12 to 14).

The instrument was a Texas Apartment Association form titled "Lease Addendum Regarding Limited Waiver and Modification of Rights Under U.S. Servicemembers Civil Relief Act." It told the servicemember "you will reimburse us for any free or discounted rent that you received prior to termination" if the lease ended early. The complaint alleges both owners enforced it from November 1, 2013 through November 15, 2018, with chargebacks of $116 to $1,012 on at least forty-one servicemembers, and that it was no valid waiver under 50 U.S.C. § 3918(a) because it was not executed as an instrument separate from the lease: it was expressly incorporated into the lease, signed at the same time, and backed by no additional consideration (paragraphs 16, 17 and 20 to 24).

The four refused terminations took two forms. Two servicemembers gave the Mansions a notification from their commanding officer in lieu of official orders; one was not allowed to terminate until he produced official orders, a delay that cost him two more months of rent, and the other had to have his girlfriend assume his lease before he deployed to Afghanistan. Two more presented orders honorably discharging them and were charged accelerated rent for the rest of the term, less rent from reletting, plus a "reletting charge" equal to 85% of the monthly rent (complaint paragraphs 25 to 29). The owners said they relied in good faith on the association's lease contracts, rent concession addenda and SCRA waiver addenda (consent order paragraph 13).

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 settlement sends a warning to apartment associations and landlords that they cannot avoid their obligations under the Servicemembers Civil Relief Act simply by pointing to fine print in boilerplate lease agreements.

This office takes its responsibility to protect and enforce the statutory rights of these men and women very seriously, so they can focus on their service to our nation.

Who was covered

Servicemembers on two lists the United States had already given the owners, covering November 1, 2013 to November 15, 2018: at least 41 required to pay back rent discounts or concessions received at signing when they terminated under the SCRA, and at least four whose early termination requests were improperly denied (consent order paragraphs 18 and 19). DOJ's case page counts them as 45. Payees then living in Oregon had to sign the release in Exhibit A before being paid; everyone else was to get a check with a letter saying that cashing it releases the Section 3955 claims (paragraphs 23 and 24).

What the settlement paid

• The owners had ten business days to deposit $71,149.50 in a separate account for the aggrieved servicemembers (consent order paragraph 20), which DOJ's case page and release report as over $71,000.
• Each servicemember on the first list (at least 41) was owed a refund of whatever termination charge they paid plus an additional payment equal to two times the fee charged; each on the second list (at least four) was owed an amount the United States specified (paragraphs 18 and 19). Checks were due within 60 days, after a search of the National Change of Address database, with skip tracing, calls or e-mails for anyone who did not respond, and no set-off for debts or refusal based on an earlier waiver, release or arbitration agreement (paragraphs 23, 25, 26 and 29).
• Three years after the order took effect, the money for anyone not located and compensated was to go to the Texas Comptroller of Public Accounts under the State of Texas Unclaimed Property Program, where an identified servicemember can file a signed claim form with photo identification (paragraph 28).
• A $64,715 civil penalty within 30 days (paragraph 33), written requests to Equifax, Experian and TransUnion to remove negative entries tied to the chargebacks or the denials, and a bar on pursuing related balances (paragraphs 31 and 32). The owners represented that they no longer owned, leased or managed real property, so their policy and training duties applied only if they reentered that business, on 60 days' notice to the United States (paragraph 17). The order ran three years from entry (paragraph 45).

Why this case matters

A waiver signed with the lease is not the separate instrument § 3918(a) demands, by the United States' reading, and this one was drafted by the Texas Apartment Association, not by the owners. If a Texas lease packet hands you an SCRA waiver addendum on the day you sign the lease, measure it against that rule. Right after describing the two discharge denials, the order cites § 3955(i)(3): "The term 'permanent change of station' includes separation or retirement from military service" (consent order paragraphs 11 and 12). The U.S. Code's notes show Congress added that paragraph on December 20, 2019. The denials all fell between November 1, 2013 and November 15, 2018, and the United States still determined that they were made "in violation of 50 U.S.C. § 3955" (paragraph 19).