Property management company forced to pay $1.5 million for wrongfully evicting servicemembers

By NIKKI WENTLING | STARS AND STRIPES Published: March 18, 2019

WASHINGTON — A property management company in Virginia must pay nearly $1.5 million to 127 servicemembers who were wrongfully evicted, the Justice Department announced Monday.

The Justice Department discovered PRG Real Estate Management had evicted tenants from 2006 to 2017 without disclosing to state courts that they were active-duty servicemembers, a violation of the Servicemembers Civil Relief Act. The federal law protects servicemembers from getting evicted while on active duty and allows them to break rental contracts when they deploy or are relocated.

Under a settlement reached with the Justice Department, the property management company must also pay $35,000 to 10 servicemembers who were charged termination fees for breaking their leases early after they were given military orders. An additional $62,000 will go to the federal government as a civil penalty, bringing the total to about $1.6 million.

The settlement is the largest that a property management company has had to pay for breaking the Servicemembers Civil Relief Act, the Justice Department said.

“The incredible sacrifices our servicemembers make when they deploy and move frequently should never create financial or legal hardships for them,” G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, said in a statement. “This settlement helps ensure that these men and women are honored for, not disadvantaged by, their military service, and that servicemembers’ rights are protected going forward.”

The servicemembers were tenants at Linkhorn Bay Apartments and The Courtyards of Chanticleer in Virginia Beach, the Hilton Village Townhomes and Heritage Trace Apartments in Newport News and Hyde Park Apartments and Ashton Creek Apartments in Chester.

PRG Real Estate Management issued a statement Tuesday that the company has cooperated since January 2017 with the Department of Justice’s investigation.

“While PRG was surprised by the investigation and accusations made by the DOJ, it committed to be open, frank and diligent in responding to the Justice Department’s request for information,” the statement reads. “Over a two-year period, PRG produced thousands of pages of data to satisfy the Department of Justice that PRG was not engaged in the systematic exploitation of servicemembers.

"The investigation spanned a nine-year period of nine communities containing 2,800 units with approximately 50,000 residents. At the conclusion of the investigation a total of 137 servicemembers were identified as having eviction or collection action taken against them for non-payment of rent without strict adherence to the SCRA. PRG identified a specific issue with its training policies as the root cause of the issue and corrected it long before the investigation was completed. PRG has enjoyed a good working relationship with the DOJ to get this issue resolved and is committed to rectifying these circumstances.”

An independent administrator will be tasked with locating the servicemembers who are eligible to receive portions of the settlement.

The Justice Department said that since 2011, it’s obtained more than $470 million for about 119,000 servicemembers through the Servicemembers Civil Relief Act. In 2016, then-Attorney General Loretta Lynch added more resources to investigate and prosecute such cases.

“This substantial settlement clearly sends the message that the Department of Justice is committed to the vigorous enforcement of federal laws that protect servicemembers,” Assistant Attorney General Eric Dreiband said in a statement. “When landlords violate the SCRA, it causes disruption in the lives of servicemembers and their families.”

Twitter: @nikkiwentling

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