The Soldiers' and Sailors' Relief Act of 1940:

How Does It Effect Your Community?

The war on terrorism is now in full force. Homeowners in your communities may already have been, or will be, called to active duty to serve our nation. Many homeowner's associations have been wondering how they can help their neighbors understand the issues related to the impact of military service on their communities.

Despite being called to active service and deployed overseas, military personnel do not become exempt from their financial obligations during their period of service. However, the United States Congress did recognize the need to protect those in the military who may fall into financial difficulty because of their military service.  To protect those persons called to active duty from eviction, foreclosure and debt collections, Congress passed The Soldiers' and Sailors' Civil Relief Act of 1940 (“SSCRA” or “the Act”).

Military personnel called to active duty may fall into financial hardship due to a decrease in income. Even if there is no decrease in income, there may be difficulty in sending and receiving communications regarding financial obligations while deployed overseas. It may take months to receive notification of pending litigation against them. It may be impossible to attend court dates, or retain legal counsel for representation.

SSCRA §510 addresses suspending civil liabilities to those serving in the military. It provides: “In order to provide for, strengthen, and expedite the national defense under emergent conditions which are threatening the peace and security of the United States and to enable the United States more successfully to fulfill the requirements of the national defense, provision is made to suspend enforcement of civil liabilities, in certain cases, of persons in the military service of the United States in order to enable such persons to devote their entire energy to the defense needs of the Nation, and to this and the following provisions are made for the temporary suspension of legal proceedings and transactions which may prejudice the civil rights of persons in such service during the period herein specified over which this Act remains in force.”

The Act allows an active duty military member, who is a defendant to civil proceedings, to suspend all legal action against him under certain circumstances. The court on its own motion, the military member, or a representative of the member may file a motion to suspend the proceedings until his period of active duty is completed, or within sixty (60) days thereafter. The proceedings will be suspended if the court finds that the ability of the member to conduct his defense is materially affected by reason of his military service. The Act protects all persons on active duty in the United States Army, Navy, Marine Corps, Air Force, and Coast Guard. Reservists and National Guard members called to active duty are also protected. The period of protection begins on the date which the person enters active service, and terminates within thirty (30) to (90) days after the date of discharge from active duty.

SSCRA §536 also extends protection to dependents of those in the military.  Although the Act does not define the term “dependent”, the courts have provided the following definitions: A dependent is a spouse, parent or  “a person who looks to a military member for support and maintenance for the reasonable necessities of life.” Tucson Telco Fed. Credit Union v. Bowser, 9 Ariz. App. 242, 451 P.2d 322 (1969); Reid V. Margolis, 44 NYS2d 518 (1943); Patrikes v. J.C.H. Service Stations, Inc., 46 NYS2d 233 (1943). The Act does limit the protection of dependents. If a court determines that ability of a dependent to comply with the terms of a financial obligation was not “materially impaired by reason of the military service”, the dependent will not be afforded the protection of the Act.

Many mortgage companies and lending institutions offer deferral programs to military personnel deployed overseas during times of war. It is highly recommended that associations also offer this option to those called to active service if the homeowner can show financial hardship due to military service. Associations should also consider leniency for late fees and fines incurred by a homeowner during the time of active service.

Associations should mail notices or newsletters to all its members discussing the options available to military personnel called to active service. All deferrals should be in writing. Request the service member to provide active duty orders, Leave and Earnings Statement (military equivalent to a pay stub), proof of financial hardship, and the name, address and telephone number of a family member who may accept communications from the association on behalf of the service member. Associations should also encourage automatic debiting for payment of assessments if available.

Filing Lawsuits, Entering Default Judgments and Foreclosures

If a member of the military has not experienced economic hardship due to military service and has simply chosen to ignore his or her obligations to the community, the association may have no other option but to file suit against the homeowner for non-payment of assessments. If an association chooses to file suit against a member of the military on active duty, it is subject to requirements set forth in the Act. These requirements can be complicated to follow. An attorney well versed in the Act should be contacted to assist the association in resolving these matters.

Association Times' Staff Writer