A.G. Schneiderman Announces Settlement With Virginia Developer For Violating Servicemembers Civil Relief Act

News from Attorney General Eric T. Schneiderman

May 10, 2017

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LeRay 300, Military Housing Facility Developer, Will Update Business Practices; Pay $69K In Restitution And Penalties After Engaging In Renting Practices Predatory To Servicemembers

Schneiderman: I Will Continue To Defend Servicemembers’ Rights, As They Bravely Defend Ours

WATERTOWN – Attorney General Eric T. Schneiderman today announced a settlement with LeRay 300, LLC, a Virginia-based company that operates a community of 150 duplex-style townhomes near Fort Drum. The housing complex is known locally as the Woodcliff Community. With close proximity to Fort Drum, the business actively markets its housing to servicemembers and their families. The settlement concludes an investigation into several Woodcliff business practices, including charging unlawful fees to servicemembers who terminated their leases early pursuant to the Servicemembers Civil Relief Act, and using a lease agreement with numerous unconscionable provisions that violated New York State law. Under the terms of the agreement, Woodcliff Community will provide forms of financial relief in the amount of over $59,000 to over 125 servicemembers, change business practices to comply with state law, and pay a civil penalty of $10,000 to the State.

The Servicemembers Civil Relief Act allows servicemembers and their families to terminate a residential lease early without penalty when they are deployed or receive orders for a permanent change of station, or upon honorable termination of military service. The Attorney General’s investigation found Woodcliff Community routinely bypassed the SCRA protection by charging servicemembers an unlawful “lease processing fee” of $200 or $300 dollars when they exercised this right. The investigation further determined that Woodcliff Community wrongfully denied SCRA early termination rights in certain circumstances where the soldier should have been protected. As a result of this conduct, the agreement requires the business to provide over $59,000 in restitution to servicemembers through direct payment or debt forgiveness.

“Service to our nation should not lead to victimization by predatory businesses,” said Attorney General Eric T. Schneiderman. “New York stands beside our servicemembers, and I will do what it takes to defend their rights as they bravely defend ours.”

The settlement also requires Woodcliff to reform its lease and other business practices to comply with New York State law. For instance, the Woodcliff Community lease unlawfully restricted occupancy in violation of the Real Property Law and purported to permit the business to terminate leases early and engage in unlawful evictions in violation of the Real Property Actions and Proceedings Law. Additionally, Woodcliff Community will now more clearly and explicitly disclose to prospective tenants when they provide a “reservation deposit” that it may be non-refundable at times, and they will maintain all security deposits in a New York bank, as required by law. The settlement also requires Woodcliff Community to stop engaging in false advertising after investigation revealed that the company website advertised a list of “included amenities” in its units, despite the fact that many of the amenities were not included in rent and some were not available at all.

For many years and during the entirety of the Attorney General’s investigation, LeRay 300, LLC’s managing member was Jeffrey S. Lewis. Just before the execution of the settlement agreement, Jeffrey J. Maynor became the managing member of the LLC. 

This case was handled by Assistant Attorney General Alicia M. Lendon, Investigator Chad Shelmidine, and Legal Assistant Eric Taub, all of the Watertown Regional Office. The Watertown Regional Office is led by Assistant Attorney General in Charge Deanna R. Nelson and is part of the Division of Regional Offices led by Executive Deputy Attorney General for Regional Offices Martin J. Mack.