Early lease termination for servicemembers and dependents
1. Q. I am an active duty SM and I have signed a lease for quarters in North Carolina for a twelve month period. There are six months left on the lease. Are there any laws that allow me to terminate the lease early and avoid paying rent for the rest of the lease term?
Whether you can get out of the lease early depends on the reason for termination. The Servicemembers’ Civil Relief Act (SCRA), a federal law, allows for early termination in five instances:
- The servicemember (SM) entered the lease before active duty service; or
- The SM entered the lease while on active duty and then received permanent change of station (PCS) orders; or
- The SM entered the lease while on active duty and then received orders to deploy in support of a military operation in excess of 90 days; or
-The SM died while in military or National Guard service and the spouse requests lease termination within one year of the SM’s death (2018 amendment to SCRA); or
-The SM suffered a catastrophic illness or injury during a period of military service or while performing full time National Guard duty and the spouse requests lease termination within one year of the catastrophic illness or injury (2019 amendment to the SCRA); or
-The SM, upon receipt of PCS orders or deployment orders in excess of 90 days, executes a lease and then the Secretary of Defense issues a stop movement order that prevents the SM or his dependents from occupying the lease (August 14, 2020 amendment to the SCRA).
2. Q. Are there any other laws that protect SM tenants and allow early lease termination?
Some states have enacted laws that give lease termination rights to SMs. In some cases, the protections under the state law are substantially the same as those under the SCRA. In other cases, state law provides different, or even greater protections than the SCRA. Where both the SCRA and a state statute apply, the SM can choose which to use, since the state can enlarge federal protections under the SCRA but can not diminish them. If circumstances are such that the SCRA does not afford the SM a right to lease termination, SM and legal counsel are well advised to review state law to determine whether any state statue applies. State lease termination protections (with the exception of North Carolina) are beyond the scope of this article.
3. Q. What about North Carolina? Does North Carolina provide early lease termination rights to SMs?
A simple question, but unfortunately requires a complicated answer. In 2005, North Carolina passed an amendment to North Carolina General Statute 42-45 allowing SMs to terminate their residential lease in circumstances similar to, but different that those outlined in the SCRA. NC law was amended again in 2012, expanding the circumstances giving rise to lease termination rights. However, in 2019, North Carolina passed the NC SCRA, adding a new section to chapter 127B. This section (a) incorporated the SCRA into NC law, (b) made the SCRA applicable to members of the North Carolina National Guard as well as to active duty service members, (c) prohibited waiver of SCRA rights, and (d) took previous state lease termination rights under NC GS 42-45 away from active duty SMs, applying them only to a very narrowly defined class of “military technician.”
4. Q. So, what’s the bottom line for NC law lease termination protection?
Under federal and North Carolina law, active duty SMs have the right to terminate a residential lease under all of the circumstances outlined in the SCRA. Further, any waiver of these SCRA rights is invalid under North Carolina law. Finally, these rights can be enforced by private lawsuit by the individual tenant, by the U.S. Department of Justice, and by the Attorney General of North Carolina.
In addition, members of the North Carolina National Guard serving on State active duty and members of the National Guard of other states serving on state active duty who reside in North Carolina also have a non-waivable North Carolina right to lease termination under circumstances described in the SCRA. These rights may be enforced by private lawsuit by the individual tenant or by the North Carolina Attorney General.
A “military technician,” who deploys with the armed forces for 90 days or more has a lease termination right described at NC Gen Stat 42-45. These rights are beyond the scope of this article.
5. Q. When is the effective date of lease termination under the SCRA?
In most circumstances, lease termination under the SCRA is effective 30 days after the next rental payment is due after the landlord receive notice of intent to terminate. For example, let’s say that your monthly rent is due on the fifth day of the month and you deliver proper notice of termination to your landlord on April 28th. Your lease terminates, and your obligation to pay rent terminates, 30 days after May 5th. In the case of stop movement orders, the lease is terminated as soon as the proper notice is delivered to the landlord.
6. Q. What kind of notice must I provide to the landlord under the SCRA?
You must provide written notice. Additionally, you must provide a copy of your military orders or a letter from your commanding officer verifying the reason that you are terminating the lease (e.g., that you received PCS orders, or that you have been ordered to deploy in excess of 90 days.)
7. Q. What about civilian spouses who sign the lease? Are their obligations terminated?
The SCRA makes it very clear that termination of the lease obligations of the SM tenant terminates the lease obligations of the SMs dependents. “Dependent” in accordance with section 3911 (4) of the SCRA includes the SM’s spouse, the SM’s children, and any other person for whom the SM provided more than one-half of the individual’s support for 180 days immediately preceding an application for relief (including lease termination) under the SCRA.
8. Q. What if my spouse signed the lease but I did not? Can my civilian spouse use the SCRA to terminate the lease?
If the spouse signed the lease on behalf of the SM (such as by using a power of attorney), then the lease is covered to the same extent as if the SM personally signed the lease. However, if the civilian spouse signed the lease in his/ her own capacity and the SM did not, there is no protection under the SCRA. Example: Sally Smith signs a one year lease for premises at 123 Main Street. Thereafter, she marries Johnny Jones, who signs a lease for premises at 234 Broadway. Johnny then receives orders to deploy. Johnny’s deployment orders are a basis to terminate Johnny’s lease at 234 Broadway, but not Sally’s lease at 123 Main Street.
9. Q. My lease has a military clause that addresses early lease termination. What effect does that clause have on my ability to terminate early?
Some leases may contain a so-called “military clause.” Such a clause states the circumstances under which a SM can terminate a lease prior to the expiration of the lease term. Many of these military clauses attempt to explain the law but get it wrong. In any event, the lease can give you more lease termination rights then you would otherwise have under the SCRA, but they cannot give you less. Any such lease provision that affords you with less protection than you are given under the SCRA is void.
10. Q. Is there any way that the landlord can make me waive, or give up, my right to early lease termination?
The SCRA specifically says that it can be waived, but to be legally effective, the waiver must comply with the following requirements.
a. The waiver must be in writing;
b. The waiver must be on a document separate from the lease;
c. The waiver must be signed by the SM;
d. The waiver must specify the legal instrument (e.g., the lease) to which it applies; and
e. The wavier must be in at least 12 point font.
HOWEVER, if your residence is in North Carolina, the NC SCRA (at section 127B-33) prohibits waiver of your right to terminate the lease.
11. Q. I received an up-front rent concession; the landlord gave me my first month’s rent free. Do I forfeit this rent concession if I terminate my lease under the SCRA?
The SCRA is very clear on this point. You do not forfeit the rent concession. Furthermore, the U.S. Department of Justice has successfully sued several property managers on this very issue.
12. Q. What happens if neither the SCRA nor any state lease termination statutes applies to my case?
If neither of these military lease termination statutes applies, there still may be some special circumstance addressed by state law that allows for early termination of your lease. In North Carolina these special circumstances include serious damage to the premises not caused by the tenant, foreclosure on the rented premises, or the tenant being the victim of sexual assault, stalking, or domestic violence.
13. Q. Can I terminate my lease early if the premises are seriously damaged by flood or hurricane or some other event not caused by the tenant?
North Carolina General Statute 42-12 provides that if the rental residence is damaged so badly that it cannot be made reasonably fit, except at a cost in excess of one year’s rent, the tenant may terminate the lease without penalty. However, the tenant must pay the landlord rent up to the time of the damage and must notify the landlord of intent to terminate in writing and within ten days of the damage. Read the lease carefully. This provision of the law only applies if the lease does not contain some other arrangement concerning destruction of the premises. Many of them do.
14. Q. Are there circumstances other than those addressed by North Carolina General Statute 42-12, under which I can terminate a lease as a result of significant damage that neither I nor my guests caused?
North Carolina General Statute 42-41 provides, in general, that the tenant's obligation to pay rent and the landlord’s obligation to comply with building codes, provide habitable premises, and comply with other specific requirements concerning maintenance of the property are “mutually dependent.” At its most basic level, this statute means that if the landlord fails in its obligation to provide habitable premises, the tenant is not required to pay rent. Failure to provide habitable premises is recognized by North Carolina courts as a defense to the non-payment of rent. However, unless the premises is completely demolished, simply moving out and thereafter refusing to pay any rent can be a very risky strategy for a tenant. It will ultimately be up to a court to determine how much the rent should be diminished based on the damage. Tenants are therefore advised to discuss the specific situation carefully with legal counsel prior to engaging in such a strategy.
15. Q. What are the rules about lease termination of foreclosed property?
The person who owns the rental property - your landlord - probably took out a mortgage to buy it. If the landlord fails to make timely monthly payments to the lender, the lender can take legal action to repossess the property. This legal action is called foreclosure. Under North Carolina law [NC General Statute 42-45.2] if the tenant lives in property containing less than 15 units that is being foreclosed on, and receives written, legal notice of foreclosure, that tenant can terminate the lease early. To do so, the tenant must provide the landlord with written notice of intent to terminate. The notice must state the intended date of termination and that date must be at least ten days after the date of the notice of sale. The tenant is liable to pay rent only through the effective date of lease termination. There are no liquidated damages or other penalties imposed on the tenant for lease termination under this statute.
16. Q. What are the rules about lease termination and sexual assault, stalking, and domestic violence?
Under North Carolina law [NC General Statute 42-45.1] a tenant who is the victim of domestic violence, sexual assault, or stalking can terminate the lease early, but only by providing the landlord with written notice of intent to terminate the lease. The notice must state the intended date of termination and that date must be at least 30 days after the landlord receives the notice. The tenant is liable to pay rent through the effective date of termination. There are no liquidated damages or other penalties imposed on the tenant for lease termination under this statute. However, there are other documents that the tenant must provide to the landlord to terminate the lease under this statute. The tenant must provide one of the following: (a) a domestic violence protection order issued by a North Carolina court under Chapter 50B or 50C of the North Carolina General Statutes, (b) a criminal order restraining a person from contact with the tenant, or (c) an Address Confidentiality Program card issued under North Carolina General Statute 15C-4. Finally, victims of domestic violence or sexual assault must provide the landlord with a copy of a safety plan provided by a sexual assault / domestic violence program that recommends relocation of the tenant.
17. Q. What if none of the early lease termination laws described above applies?
If none of these lease termination statutes applies, you should review the lease to see if it gives you any special lease termination rights. Since leases are typically written entirely by landlords, chances are the lease won’t contain any special tenant protections, but it’s worth checking out.
Assuming that none of the situations described above apply and there is no special lease termination right provided in the lease, then you are bound by the terms of the lease contract. If you leave early in breach of the lease, the landlord is entitled to damages you caused as a result of the breach. These damages include the loss of rent due to any vacancy of the premises during the lease term. The landlord must take reasonable steps to mitigate the damages, that is, to re- rent the premises. The landlord may withhold the security deposit to satisfy these damages and may also sue you for any additional damages not covered by the security deposit.
18. Q. My landlord claims that I caused physical damage to the residence and is
withholding my security deposit and threatening to sue me for the cost of fixing the damage in excess of the security deposit. Is that legal?
This article addresses only a certain kind of damage, loss of rent due to early termination of the lease. A landlord is also entitled to compensation for the tenant’s destruction or physical damage to the premises beyond ordinary wear and tear. The rules concerning such physical damage are beyond the scope of this article.
19. Q. What if I have other questions about lease termination or about my rights as a tenant?
Contact a private attorney or your military legal assistance office. In either case, when you meet with a lawyer, make sure to bring a copy of you lease, any eviction notice, and any other pertinent documents, photos, or records. These records can help your attorney to advise you.
(Revised October 13, 2020; written by Major Michael Archer, USMC-Ret)
The TAKE-1 series of client handouts is a project of the North Carolina State Bar’s Standing Committee on Legal Assistance for Military Personnel. For comments or corrections, contact Committee member Mark E. Sullivan at: email@example.com or at 5511 Capital Center Drive, Suite 320, Raleigh, NC 27606 [919-832-8507].