Renting to Military Tenants: What Landlords Need to Know About SCRA and Fast-Filling Vacancies

Renting to service members can be a rewarding part of your investment strategy, especially if your properties are near a military installation. But this unique rental opportunity comes with a specific federal law you must understand: the Servicemembers Civil Relief Act (SCRA). After reading this guide, you will be able to navigate the SCRA confidently, screen tenants fairly, and market your property effectively to minimize vacancies.

Understanding the Servicemembers Civil Relief Act (SCRA)

The SCRA is a federal law that provides a range of protections for people in military service. It covers issues like interest rates, court proceedings, and, most importantly for landlords, housing leases. The goal is to allow service members to focus on their duties without worrying that their legal and financial affairs back home are in jeopardy.

Key Protections Landlords Should Know

• Lease Termination: The most significant part of the SCRA for landlords is the lease termination provision. If a service member receives military orders for a permanent change of station (PCS) or to deploy for 90 days or more, they have the right to terminate their lease agreement early. This is a legal right, not a request you can deny.
• Eviction Protections: The SCRA can also provide temporary protection from eviction. If a service member’s ability to pay rent is materially affected by their service, a judge may delay an eviction for a period of time. This is not rent forgiveness, and the tenant will still owe the rent. It is a temporary stay granted by a court.
• Security Deposits: The SCRA does not create special rules for security deposits. You must handle the return of a security deposit according to your state and local laws, just as you would for any other tenant.

What This Means for You

The SCRA should be viewed as a predictable part of doing business, not a risk to be avoided. It provides clear rules for ending a lease, which can be less complicated than negotiating a lease break with a civilian tenant. Always remember that state laws might offer additional protections for service members, so it is crucial to understand both federal and local regulations. When in doubt about a specific situation, consult with a qualified legal professional.

The Benefits of Renting to Military Personnel

While you must treat all applicants equally, you may find that renting to military members offers some distinct advantages for your rental business.

Stable and Reliable Income

Members of the armed forces have a steady, reliable income paid by the U.S. government. Many also receive a tax-free Basic Allowance for Housing (BAH) when they do not live in government-provided housing. This allowance is based on rank, dependency status, and the cost of living in their duty station's area, making it a predictable source of funds for rent payments.

A Culture of Responsibility

Military life emphasizes discipline, order, and accountability. While you must screen every applicant using the same criteria, many landlords find that service members are responsible tenants who maintain the property well and adhere to lease terms. This background can be a positive attribute, but it is no substitute for thorough screening.

High Demand Near Military Bases

If your rental property is near a military base, you are in a market with a constant influx of new residents. Military personnel are always moving in and out of the area due to new assignments, creating a consistent pool of potential applicants. This can significantly reduce the time your property sits vacant.

Fair and Compliant Tenant Screening

Your screening process must be consistent and fair for every applicant to comply with the Fair Housing Act and other regulations. This is the cornerstone of good property management.

Create Standardized Screening Criteria

Before you advertise your vacancy, establish your rental criteria in writing. Apply these standards uniformly to everyone. Common criteria include:

• Income Verification: A standard requirement is an income of three times the monthly rent. For all applicants, you should have a clear process for verifying this.
• Credit Check: A consistent credit score threshold helps assess financial responsibility.
• Rental History: Contacting previous landlords provides insight into an applicant's past behavior as a tenant.
• Criminal Background Check: If you run background checks, ensure your policies comply with all federal, state, and local laws, including guidance from the Department of Housing and Urban Development (HUD).

Verifying Military Status and Income

You can verify a service member's income by requesting a Leave and Earnings Statement (LES), which is their official paystub. The BAH is listed clearly on this document. You should not ask for military orders during the application process unless it is relevant to a specific detail like the move-in date.

Most importantly, you cannot deny an applicant simply because they are in the military. Refusing to rent to a service member because they might use their SCRA right to terminate the lease in the future could be considered discrimination. Base your decision on financial qualifications and rental history, not their military status.

Marketing Your Rental to Fill Vacancies Fast

When an SCRA lease termination occurs, your goal is to find a new, qualified tenant quickly. Effective marketing is key.

Where to List Your Property

Start by listing your rental on the major online platforms where most renters are looking. To reach military personnel specifically, consider contacting the housing referral office on the local military base. These offices provide resources and guidance to service members and their families looking for off-base housing and are often looking for available local properties.

Crafting a Compliant and Appealing Listing

Your property listing should always focus on the property itself, not on who you think should live there. This practice ensures Fair Housing compliance and attracts a wider pool of qualified applicants.

• Describe the property's proximity to a base in factual terms, such as, “A 10-mile drive to [Base Name]” or “15 minutes from the main gate.”
• Highlight features that appeal to anyone moving, like the availability of virtual tours, online applications, or flexible move-in dates.
• Use clear, high-quality photos and write a detailed description of the unit, amenities, and neighborhood features without using subjective or discriminatory language.

Fair Housing Tip: Instead of writing “Great for a military couple,” describe the property's features: “Modern one-bedroom apartment with updated appliances and an on-site fitness center.”

Handling Lease Terminations Under SCRA

When you receive a termination notice from a service member, a clear process will make the transition smooth for everyone.

What Triggers the Right to Terminate?

A tenant can legally terminate their lease under the SCRA after entering the lease and then receiving military orders for either:

• A permanent change of station (PCS).
• A deployment for 90 consecutive days or more.

The Tenant's Responsibility

To properly terminate the lease, the tenant must provide you with written notice and a copy of their military orders. Email can often suffice for written notice, but check your lease and local laws. The tenant is still responsible for rent for the remainder of the lease term, as defined by the SCRA.

When the Lease Actually Ends

For monthly leases, the termination becomes effective 30 days after the first day on which the next rent payment is due after the notice is delivered. For example, if rent is due on the 1st of the month and the tenant gives you notice on June 20th, the next rent payment is due July 1st. The 30-day period starts then, and the lease terminates on July 31st. The tenant owes rent for all of July. This timing is a common point of confusion, so be sure to communicate it clearly.

Your Next Steps

Once you receive a valid notice, acknowledge it in writing. Calculate the final prorated rent and manage the security deposit return according to your state's deadline. Most importantly, start marketing the property immediately. Using property management tools to syndicate your listing across top rental sites can save you time and help you find your next great tenant faster.

Your Next Step: Prepare Your Lease

Renting to military tenants does not have to be complicated. With a solid understanding of the SCRA and a commitment to fair screening, you can build a successful rental business that serves all members of your community. The predictability of the SCRA and the stability of the applicant pool can be significant assets for any landlord.

Your concrete next step is to review your lease agreement. Make sure it is compliant with all current landlord-tenant laws in your state and city. For peace of mind, consider having a landlord-tenant attorney review your lease to ensure you are prepared and protected for any situation, including an SCRA lease termination.