Early Lease Termination due to Military Orders
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Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
6yHave them show you a copy of their orders. If the orders are valid, please don't hit them with a termination fee.
51 Replies
- Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes6y
Have them show you a copy of their orders. If the orders are valid, please don't hit them with a termination fee.
- Member since 2018 · 156 posts · 106 votes6y
@Terrell Garren they have given me the orders, but I have no idea how to go about verifying if they are valid. The report date on them is October, which I did find odd considering I got them today. I don’t want to have to charge, but need to know if I’m legally able to in case the house is left in poor condition and I’m suck paying the mortgage through the holidays. The first month they lived there they flooded the master bedroom. I replaced the flooring, and all appeared well, but I need to protect myself in the event additional issues present after they are out. I thought the military would cover the expenses associated with breaking a lease for the service member, but I’m not finding anything that indicates that’s the case. Which now thinking on it makes sense, considering it’s the government. If I’m not able to protect myself and my investment, it makes it hard to justify choosing a service member over other qualified candidates, which is terrible; if anything they should get first dibs. I had multiple strong applicants for this property, and hate that I’m now kicking myself for picking them.
- Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes6y
Orders are crazy hard to read. I'm a vet, my son shows me his orders and I still have trouble deciphering the text. It appears you already dealt with prior problems. I can tell you are a great American the way you are thinking through this and wanting to do what's right. The military will not directly cover your expenses. You may want to tweak your screening in case you missed any red flags. Best to you. Terrell
- Realtor · Fayetteville NC · Member since 2019 · 16 posts · 12 votes6y
@Alyssa K. I can’t speak for the lease that you are using exactly. However, in my market(Ft Bragg), as long as orders are valid, there’s usually nothing charged for early termination, outside of damages if any. The best way to verify is to call the active duty persons chain of command. If the orders are not valid then I’d seek further compensation for the early termination. I was told personally when terminating early due to my spouses orders that you can only do so for PCS or over 30 day deployments. I’m unsure the validity of that. Either way, proceed cautiously like you are! You don’t want to be on a military “blacklist” like some property managers in my area. It makes it extremely hard if your rents are in line with BAH of the common soldier in your area.
- Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes6y
@Alyssa K. take a look at this, it is the Texas law for the military clause. It’s basically the same law everywhere as well, same “theory” behind it. Veteran here and have used this clause before during a PCS.
https://codes.findlaw.com/tx/p...
TLDR : if the orders are legit, PM for further info if needed for ensuring the legitimacy of orders, then the last day of the following month after official notification they are released from the lease, minus damages.
So I’m assuming they told you in November, so On December 31st they are released from their lease, no early termination fee.
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- Member since 2018 · 156 posts · 106 votes6y
@Terrell Garren that they are! Prior to getting into Real Estate I was the Veteran Affairs representative for a large state university. I got the opportunity to work with many veterans of all ages in that role and have a great deal of respect for the sacrifices they and their families made so my family can enjoy the freedoms we have. And I think you are right about tweaking screening, looking back, I think they knew it was coming. From what I can tell, it looks like he put in for a promotion and was approved, which resulted in a new unit. Thankfully, even at a not so stellar time of year, it’s a great property that I’ve never had issues finding quality tenants for. I’ve told them no charges for breaking the lease. Surely the security deposit will make whole any damages, I’d hope after 2 months there wouldn’t be any, but my husband likes to joke that some people just “live hard” lol. I appreciate your feedback on this, and thank you for your service!
- Member since 2018 · 156 posts · 106 votes6y
@Mariah Bardwell thank you! I’ve decided not to charge them the fee and just chalk it up to a loss and hope for the best. Seems there is something wrong with the system when a service member is made to move without warning and the landlord is stuck with the bill; not fair for them (although I understand it’s necessary), and certainly not fair to me as a new investor who is playing a long term game rather than getting immediate cash flow. I’m surprised the military doesn’t have systems in place to make a landlord whole, not that we need more national debt, but that’s another issue. Nothing to do but keep pushing forward. I appreciate you sharing your experience!
- Member since 2018 · 156 posts · 106 votes6y
@Eric C. Thank you! I stumbled on that page yesterday when searching and it was very helpful in deciding my course of action. I haven’t verified with his commander, in fact when I was doing employment verification I skipped that step for him because I couldn’t get anyone on the phone, so I’m unsure of my likelihood of getting ahold of someone now. Unfortunately due to all this I’ll have to be that much of a stickler on every item. When it comes to a service member especially, I had hoped to be able to give the benefit of the doubt.
- Realtor · Fayetteville NC · Member since 2019 · 16 posts · 12 votes6y
@Alyssa K. I would chat with a tax advisor and see if they have clients, with high military tenancy rates, and see if they can recommend best course of action for claiming those lost rents somehow. Even though the military doesn’t have a reimbursement system for defense needs, leading to PCS, I’m sure there’s some sort of recoup that can happen come tax season. I know here, when working with investors looking for rentals, I generally recommend they take the possibility of at some point having all military tenants into consideration, because those yearly occupancy averages tend to be different than in a non transient neighborhood. Sorry for the loss in rents and hope some of this helps to not see them go again!
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes6y
Originally posted by @Account Closed:
@Alyssa K. I would chat with a tax advisor and see if they have clients, with high military tenancy rates, and see if they can recommend best course of action for claiming those lost rents somehow. Even though the military doesn’t have a reimbursement system for defense needs, leading to PCS, I’m sure there’s some sort of recoup that can happen come tax season. I know here, when working with investors looking for rentals, I generally recommend they take the possibility of at some point having all military tenants into consideration, because those yearly occupancy averages tend to be different than in a non transient neighborhood. Sorry for the loss in rents and hope some of this helps to not see them go again!
No investor pays taxes on lost rents for vacancy. I am not aware of any tax credit when you have deployed tenants, but maybe there is some hidden rule that a CPA on here may be aware of. @Natalie Kolodij
- Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes6y
Originally posted by @Account Closed:
@Alyssa K. I would chat with a tax advisor and see if they have clients, with high military tenancy rates, and see if they can recommend best course of action for claiming those lost rents somehow. Even though the military doesn’t have a reimbursement system for defense needs, leading to PCS, I’m sure there’s some sort of recoup that can happen come tax season. I know here, when working with investors looking for rentals, I generally recommend they take the possibility of at some point having all military tenants into consideration, because those yearly occupancy averages tend to be different than in a non transient neighborhood. Sorry for the loss in rents and hope some of this helps to not see them go again!
Nope.
All landlords are cash basis.
You can't get a loss for something you never claimed income for.
Large businesses are accrual which means like if they sold something year 1 reported $10k but then year 2 the customer defaults and they never get $8k of that they write it off.
But landlords are cash not accrual
You just don't record that income, which results in lower reportable/taxable income on your taxes.
- Member since 2018 · 28 posts · 24 votes6y
Veteran here. You usually get notified on a PCS move like 3-4 months prior, but you don't get actual hard copy orders with the actual date on them until like 3-6 weeks out or so. Dates on orders always change due to the mystical Human Resources Command and their magic Ouigi board. Whenever I have PCS'ed I notified the landlord/ PM agency that I had a move upcoming with the expected date, and when I got the orders I would send them a copy. I own property near a military base, so I know the fear of having someone move out unexpectedly. However, the military usually moves people every 36 months so it "should" be 3 years of guaranteed income. Additionally, the Army ast least has moved to a system of moving 80% of its personnel in the summer months and 20% of its personnel in the winter months (see Ouigi board above. No idea why). So, that means there should be some people moving into the area during this season.
If the house is trashed or the security deposit doesn't cover the damage, contact the installation housing office about recovering damages. Its a big bureaucracy, but if you can be more pigheaded than the housing office personnel you can actually get their wages garnished for damages/ non-payment of rent. It's a process (I haven't personally had to experience on either end), but I know it is something that is commonly known in the military. If you destroyed someone's house or skipped out on rent, they can and will come after you. I'm sure there is some part of the uniform code of military justice that could be brought into play, but you would have to talk to a military lawyer about that. Bottom line is, you can get your money for damages or rent lost due to them not informing you of their move. Many states have a "If you are PCSing, you must provide the landlord a copy of your orders at least 30 days prior to leaving" or some language like that.
That's my 2 cents, at least.
Good luck!
- Kansas City, MO · Member since 2019 · 7 posts · 10 votes6y
@Alyssa K. I am currently on Active Duty in the Army. I have PCSed (moved) many time in the last 22 years. If you need assistance understanding the orders please send me a message. I have know some folks to cheat the system, and that boils my blood, but those who are doing the right thing have the Soldier and Sailor Act to fall back on preventing landlords to take advantage of them.
- Member since 2018 · 156 posts · 106 votes6y
@Luke Sanderson thank you, that was very helpful/informative. I’m starting to have a feeling they knew they were getting ready to PCS, and just needed a place to lay their head in the meantime. They’ve only been in the property for 2 months, but when going through the screening process were extremely certain that they would be at their current base for a good while, they even asked to sign a 2 year lease. Sounds like they may have been blowing smoke. I appreciate you sharing points of contact that could help me recoup losses if they’ve trashed the house. That’s the only reason I have a fee in my lease for early termination, typically people that break leases, in my experience, don’t take stellar care of the property. They also have two HUGE service dogs, that were great when I met them, but could cause a great deal of damage if they wanted to. And I mentioned earlier in the thread that the flooded the master, resulting in me having to pull up brand new LVP and replace because they didn’t tell tell me as soon as they noticed an issue (floor is floating so water was trapped underneath, for some reason didn’t think I’d care to know water was seeping up through the baseboards). I’ll certainly never get board in this line of work. Thanks again, I appreciate you!
- Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes6y
Just 2 days ago I had a house in Milton, FL that went vacant due to the occupants PCSing. It's a common thing near military installations and there's not much that can be done about it other than not renting to military.
- Member since 2018 · 156 posts · 106 votes6y
@Chris Lockwood thank you! I appreciate the offer. The wife is a lawyer, so I find it hard to believe they would fake papers; although Matt Cox appeared trustworthy as well lol. The form is a DA 4187, and from what I can tell he got promoted and transferred to a new base. Although no report date is on there, just that it was “approved” in October. But I’d love the opportunity to understand what I’m looking at. I’ll send you a message. Thank you very much for the offer!
- Kansas City, MO · Member since 2019 · 7 posts · 10 votes6y
A 4187 is much different than orders. I deal with orders and 4187s daily. I look forward to helping if I can.
- Member since 2018 · 28 posts · 24 votes6y
Originally posted by @Alyssa K.:
@Chris Lockwood thank you! I appreciate the offer. The wife is a lawyer, so I find it hard to believe they would fake papers; although Matt Cox appeared trustworthy as well lol. The form is a DA 4187, and from what I can tell he got promoted and transferred to a new base. Although no report date is on there, just that it was “approved” in October. But I’d love the opportunity to understand what I’m looking at. I’ll send you a message. Thank you very much for the offer!
I'll second the above. A DA 4187 is a Personnel Action Form, not orders. A 4187 is used to record any personnel action such as promotion or a move, but is different than PCS orders. Orders will always have a report date, a no earlier than report date (sometimes you can show up early), and other pertinent information such as number of days travel authorized. Chris Lockwood says he has more experience with this, so he probably does something HR or legal related (I'm guessing). A 4187 is not good enough to break a lease, based on everything I know. You need no sh*t orders to do that, because you can't screw over the property owner like this person is trying to do to you. Look at the form and find Section 5, block 12 (at the bottom of page 1), it will show who approved the form. If the service member gave you both pages, look on page 2 and it should have an address and phone number for the soldier's superior. Might be easiest to give them a call and see what is going on, they should be able to provide you with the proper documents if the soldiers wont.
- Member since 2018 · 156 posts · 106 votes6y
@Chris Lockwood thank you Chris. I sent you a connection request, but it doesn’t appear I’m able to upload an image to the messages. Would you mind messaging me an email? Thanks again! Do you know the da number for the property form I should be asking for?
- Kansas City, MO · Member since 2019 · 7 posts · 10 votes6y
@Alyssa K. I sent you a message.
- Member since 2018 · 28 posts · 24 votes6y
Originally posted by @Alyssa K.:
@Luke Sanderson thank you so much for this! They didn’t give me the second page of the 4187. Do you by chance know what the name/da number would be for the proper paperwork?
I don't think it has a document number, now that I think of it (and Google didn't tell me). Can you get in touch with the soldier to ask for the orders, not the 4187? Or the second page of the 4187? If it has the commander's name on the bottom of the first page you can probably find them on Facebook, honestly. Do you know what rank this person was, by any chance?
- Member since 2018 · 156 posts · 106 votes6y
@Luke Sanderson I’ve got an email in the works now to request the second page and “official” orders. The bottom of the first page does have a name of his commander (MSG). The tenant is currently a SGT being promoted to Commander.
Great idea, I’ll check and see if I can find him. Thank you!
- Colorado Springs, CO · Member since 2018 · 85 posts · 144 votes6y
@Alyssa K. - This is critically important, but as far as I can tell nobody has yet mentioned it. However, this is something every landlord near a military installation should be aware of:
The Servicemembers Civil Relief Act (50 U.S.C. §§ 3901-4043) is a FEDERAL law aimed at establishing civil protections for active duty servicemembers. It offers many protections for active duty servicemembers, including against certain default judgments, certain foreclosures, repossessions, and, among other things, early termination of leases.
Hearkening back to civics class - the supremacy clause means that Federal laws trump all State laws. States can offer MORE civil protections for citizens than the Federal government, but not fewer.
Now, to your specific situation: 50 U.S.C § 3955 is the statute dealing with early termination of residential leases for active duty servicemembers. Section (e)(1) details that a landlord may not impose any early termination fees for an early-termination of the lease that qualifies under the statute. To do so could be (depending on the circumstances) a misdemeanor (!!!) under this statute (see section H - withholding of property). Hopefully that answers your question long-term.
For further clarification on the supremacy clause and the SCRA generally, see below.
Navigating the supremacy clause specifically - Let's use a hypothetical: Let's say there's a statute in State X that says "Military members shall be allowed to terminate their lease early so long as they deploy for a period of no fewer than 15 days". This state is doing okay so far. They have further extended civil protections beyond what the Federal Government requires. That's constitutionally correct. Now let's say State Y says "Military members shall be allowed to terminate their lease early so long as they deploy for a period of no fewer than 360 days." That's a big no-no. Boooooo State Y! The Federal Government has already established 90 days as the minimum, so you can't further restrict their civil protections to make them less protective than the Federal Government has. Make sense? The upshot is that if the Federal Government has a statute on point, and if there are any state statutes that cover the same ground they will offer further protections to servicemembers.
Side note - lots of landlords will include a "military clause" in their lease that repeats the protections of the SCRA. I've had landlords tout that to me as if they're doing me a favor. I'm like "Cool story, bro. But I'm covered by the Federal Government already, so that language is superfluous. If you didn't have it in the lease, the Federal Government laws would still apply. So don't act like you're doing me a favor."
All that said, you must ensure that your lessee actually qualifies under this statute. The active duty servicemember must, to qualify under the SCRA, receive either PCS orders or be deploying for a period of over 90 days. (Alternately, instead of orders, they can give notice via a letter from their commander, because as @Luke Sanderson mentions above, orders can come in much, MUCH later than when a servicemember is notified that they will PCS. My buddy, for example, knew in April that he would PCS to the National Capital Region last summer from Fort Carson, CO. He didn't receive his official orders until two weeks before the move in June (it caused all sorts of issues).) Keep in mind that many official-looking documents are not, in fact, orders. Like a DA 4187, for example. We use those for interpost transfers and for marking people AWOL - they're certainly not PCS orders. In other words, ensure that the orders are in fact orders and that they qualify under the SCRA.
Likewise, don't be afraid to call the installation and ensure that the orders are legit. Sadly, some servicemembers try to take advantage of the generous benefits bestowed on them by the Government and use it to their advantage. I've seen fake orders to break a lease come up three times so far in my Army career. It's upsetting, but be aware that there are dirtbags in the military just like there are dirtbags in the civilian population. And a commander will want to know if one of their servicemembers is trying to take advantage of the good will of the civilian population for their own personal gain.
Hopefully that covers what you were asking about. If you have other questions about the special protections of the military in the context of residential leasing, please don't hesitate to reach out.
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