New Jersey Landlord To Compensate Service Members For Charging Illegal Lease Termination Fees

Landlord JAG Management Co. is expected to pay compensation to nine members of the U.S. military who JAG unlawfully charged lease termination fees of as much as $2,750 when the service members were required to move after receiving military orders, according to the Department of Justice.

Charging such fees is illegal under the Servicemembers Civil Relief Act, passed in 1940, which allows members of the armed forces to “terminate a residential lease without penalty upon entering into military service or upon receiving qualifying military orders,” Military Times reports.

As property manager of Jefferson Place, a 490-unit rental community in Mount Laurel, New Jersey, JAG Management demanded that service members repay thousands in rental concessions after terminating their leases because of new orders, according to a complaint filed by the Justice Department in September.

Sometimes the fees were paid, and in other cases, JAG Management allegedly used collection agencies to hound service members over unpaid fees, to the detriment of their credit scores.

Under the terms of the proposed consent order, which needs court approval, JAG Management must pay nearly $42K in damages to the nine service members, as well as a civil penalty of $20K to the federal government. The company must also agree to train employees to comply with the law.

JAG Management didn't reply to a query about the matter from Bisnow on Wednesday.

Housing for members of the military has been the subject of other legal disputes. In one case last year, residents of privately owned properties at Fort Belvoir, Virginia, filed a class-action lawsuit against their landlord, The Michaels Organization, over substandard housing conditions that allegedly included mold and other health hazards.

Separately, the DOJ fined Balfour Beatty Communities $65M in December 2021 for falsifying upkeep and maintenance records, an allegation to which the company pleaded guilty. In January 2022, another military housing contractor, Hunt Cos., paid $500K to settle a substandard housing case at Dover Air Force Base without admitting any fault.