Office’s first use of 2014 amendments to state law
OLYMPIA — Attorney General Bob Ferguson announced today that a Portland, Ore.-based property management company must pay more than $16,000 for requiring service members to sign illegal lease addendums requiring them to forfeit rent concessions if they had to terminate their leases early as a result of change of station or deployment.
CTL Management included the addendum on more than 220 leases at Chambers Creek Estates, a large apartment complex in University Place, near Joint Base Lewis-McChord, which houses many military families. Under the agreement, filed in Thurston County Superior Court, the company will refund a total of $6,000 in rent concessions it illegally recouped from a total of 34 service members who were forced to cancel leases due to military service.
CTL will also pay $10,360 in attorney costs and fees. CTL stopped using the addendums following the AGO investigation, and will not enforce any addendums still in place. There are currently 67 tenants at Chambers Creek Estates who are service members.
The addendums violate the Washington state and federal Service Members Civil Relief Act (SCRA). The state law, which was amended by legislation requested by Ferguson in 2014, provides financial and legal protections for military service members ordered to federal and state active duty. Those protections include reduced interest rates on preexisting debts, and protections from default judgments.
CTL required service members to sign a “military addendum” to their leases. This addendum forced the service member to return any rent concessions they received at the time they signed their lease in the event they had to terminate the lease early because of deployment or an ordered change of station. These concessions usually were provided as reductions to first month’s rent or a gift card. When the service member had to terminate the lease, CTL recouped the full amount of the rent concession — typically $100 to $200 — as part of the final accounting by reducing the amount of the damage deposit refunded or requesting repayment. The service member lost the entire amount of the concession, regardless of how many months remained on the service member’s lease.
“Our men and women in uniform should not be burdened by unfair costs for serving their country,” Ferguson said. “I won’t allow companies to make our military service members pay for serving their country.”
Today’s agreement represents the Attorney General’s Office’s first case under the SCRA’s 2014 amendments, which made violations of the federal Act a violation of state law, as well. The legislation also gave the Attorney General’s Office authority to enforce the statute. Ferguson has proposed additional protections in an agency request bill this session, along with other legislation to benefit service members.
As part of the agreement, CTL is required to hold annual training for management and other employees on compliance with the SCRA for three years.
Assistant Attorney General John A. Nelson handled the case.
Proposed 2017 legislation
Ferguson has proposed legislation this session to update the SCRA to reflect wider uses of long-term contracts service members may be faced with canceling when they are called to active duty.
The measure, proposed as House Bill 1056 and Senate Bill 5041, expands the SCRA to include protections for cancelations or suspensions of more contracts, including gym memberships and internet, television, satellite radio and telecommunications services. The bills are sponsored by Rep. Christine Kilduff, D-University Place, and Sen. Michael Baumgartner, R-Spokane.
Ferguson has also proposed agency request legislation to improve service members’ access to legal services. House Bill 1055, also sponsored by Rep. Kilduff, and Senate Bill 5021, sponsored by Sen. Steve O’Ban, R-Pierce County, creates an Office of Military and Veteran Legal Assistance in the Attorney General’s Office, serving as a one-stop shop for legal assistance and pro bono services provided by community organizations and private attorneys.
All four bills have passed their respective houses of the Legislature and are being considered by the other chamber.
Standing up for Washington’s veterans and military families is a priority for Ferguson. Since taking office in 2013, he has released a legal resource guide to help educate veterans and military service members about their rights, requested legislation to improve their legal protections, and cracked down on unfair and deceptive schemes targeting veterans and military families.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov