Whose Name Should Be on Your Lease?

Most of you have probably heard of the "military clause," a generic term used to describe any parts of a lease that deals with the military and being transferred or deployed. Under the terms of the Servicemember's Civil Relief Act (SCRA), a servicemember may terminate a lease earlier than the date named in the lease if the servicemember gives proper notice and is terminating the lease because of a PCS move or a deployment. It is important for military families to understand how the SCRA works, and how it does not apply to spouses, so that they can be fully protected by its provision.

First, for purposes of protection under the SCRA, the lease must be signed by the servicemember, or on behalf of the servicemember (by the use of a power of attorney.) If a spouse enters into a lease on their own name, without the servicemember, the SCRA does not apply. This is a really important distinction. Let's say Sergeant Jones is deployed, and while he is gone, the lovely Mrs. Jones changes apartments. If she chooses to put the lease in her name alone, which is often a lot easier, they then lose all the protections in the SCRA. But taking the extra effort of getting a Power of Attorney and using it to put Sergeant Jones on the lease, the family is now protected if they receive PCS orders.

Second, what is proper notice? Proper notice must be written, and it must be in advance of the termination of the lease. The Military​.com SCRA Lease Termination Page explains the timeline like this:

* For month to month rentals, the termination becomes effective 30 days after the first date on which the next rental payment is due subsequent to the date when the notice of termination is delivered. For example, if the rent is due on the first day of each month, and notice is mailed on August 1, then the next rental payment is due and payable on September 1. Thirty days after that date would be October 1, the effective date of termination.

* For all other leases, termination becomes effective on the last day of the month following the month in which proper notice is delivered. For example, if the lease requires a yearly rental and proper notice of termination is given on July 20, the effective date of termination would be August 31.

What defines a PCS or deployment?

A PCS is easy -- you're PCSing. While it isn't specified in the SCRA (that I could find), the IRS uses a distance of 50 miles further from your home than your previous job. For deployments, the SCRA states that it has to be in excess of 90 days. It seems reasonable to expect that a landlord might want to see copies of the servicemembers PCS or deployment orders.

In reality, there are lots of landlords who are willing to be even more flexible than the SCRA requires them to be. However, there are also landlords that will try to squeeze every last penny out of a servicemember or their family, even when the servicemember is protected by the SCRA. If you understand the law, and make sure to follow the details, you will have the legal standing to challenge landlords who aren't treating you right.

I have noticed a lot of questions regarding this topic, and so I wanted to make sure that we all understood. Similar protections apply to lots of other transactions as well. More information can be found in the full Servicemembers Civil Relief Act.

Kate Kashman is a military spouse, personal finance junkie, and author of The Paycheck Chronicles blog at Military.com.  She has four usually lovely daughters, two cats, and one husband. To read more from Kate at The Paycheck Chronicles, click here.

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