LAW REVIEW 110

January 2004:
Terminating a Vehicle Lease Upon Mobilization

By CAPT Samuel F. Wright, JAGC, USNR*

Q: I leased a Volvo several months ago. Now, I am being called to active duty for 545 days, and I will be deploying to Iraq. I cannot take the car to Iraq, and I cannot afford the lease payments on my greatly reduced income, after mobilization. I contacted the dealer and asked to be released from the lease, but the dealer told me to "pound sand." Help!

A: Good news! On 19 December 2003, President Bush signed the Servicemembers’ Civil Relief Act (SCRA), Public Law 108-189. This new law can be found in Volume 117 of Statutes at Large, beginning on page 2835. This law is a complete revision of the Soldiers’ and Sailors’ Civil Relief Act (SSCRA), with some major improvements, one of which is directly applicable to your situation.

Section 305 of the SCRA is entitled "Termination of Residential or Motor Vehicle Leases." Section 305(a)(1) provides: "The lessee on a lease described in subsection (b) may, at the lessee’s option, terminate the lease at any time after … the lessee’s entry into military service."

The right to terminate a lease applies to several categories of leases, one of which is as follows: "A lease of a motor vehicle used, or intended to be used, by a servicemember or a servicemember’s dependents for personal or business transportation if … the lease is executed by or on behalf of a person who thereafter and during the term of the lease enters into military service under a call or order specifying a period of not less than 180 days (or who enters military service under a call or order specifying a period of 180 days or less and who, without a break in service, receives orders extending the period of military service to a period of not less than 180 days)." There are also several other categories of leases to which the right to terminate applies.

Q: What, exactly, do I need to do to terminate the lease? When does the termination become effective?

A. "Termination of a lease under subsection (a) is made … (A) by delivery by the lessee [you] of written notice of such termination, and a copy of the servicemember’s military orders, to the lessor (or the lessor’s grantee), or to the lessor’s agent (or the agent’s grantee); and … (B) in the case of a lease of a motor vehicle, by the return of the motor vehicle by the lessee to the lessor (or the lessor’s grantee), or to the lessor’s agent (or the agent’s grantee), not later than 15 days after the delivery of the written notice under subparagraph (A)." [Section 305(c)(1).] The notice may be accomplished by hand delivery, by a private business carrier [e.g., Federal Express], or by certified mail. [Section 305(c)(2).] The termination becomes effective upon your completion of these required steps, including returning the vehicle. [Section 305(d)(2).]

The SSCRA gave you the right to terminate a lease for residential or business premises (house, apartment, office, etc.) upon entry on active duty, and that provision is continued in the SCRA. What is new, starting 19 December 2003, is the right to terminate a vehicle lease. As under the SSCRA, the right to terminate is not limited to involuntary mobilization orders. It also applies if you volunteer.

---

*Military title used for purposes of identification only. The views expressed in these articles are the personal views of the author and are not necessarily the views of the Department of the Navy, the Department of Defense, the Department of Defense or the U.S. government.

---